As filed on May 28, 2003
File No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FIRST FOCUS FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
1620 Dodge Street
Omaha, Nebraska 68197
(Address of Principal Executive Offices)
(402) 341-0500
(Area Code and Telephone Number)
Meg Davies
c/o First Focus Funds, Inc.
1620 Dodge Street, Stop 1071
Omaha, Nebraska 68197
(Name and Address of Agent for Service)
Copies to:
Donald F. Burt, Esq. John C. Munch, Esq.
Cline, Williams, Wright, c/o SEI Investments Company
Johnson & Oldfather, L.L.P. Oaks, Pennsylvania 19456
1900 U.S. Bank Building
233 South 13th Street
Lincoln, Nebraska 68508
Title of Securities Being Registered: First Focus Income Fund Common Stock.
Approximate Date of Proposed Public Offering: As soon as possible after the
effective date of this Registration Statement.
No filing fee is required under the Securities Act of 1933 because an indefinite
number of shares of Common Stock of Registrant have previously been registered
pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended.
It is proposed that this Registration Statement will become effective on June
27, 2003, pursuant to Rule 488 under the Securities Act of 1933.
1
FIRST FOCUS FUNDS, INC.
1620 Dodge Street
Omaha, Nebraska 68197
June 27, 2003
Dear Shareholder:
On behalf of the Board of Directors of the First Focus Funds, Inc. (the
"Company"), we are pleased to invite you to a special meeting of shareholders of
First Focus Bond Fund (the "Acquired Fund") and First Focus Income Fund (the
"Acquiring Fund") to be held at 11:00 a.m. (Eastern time) on July 25, 2003 at
the offices of SEI Investments, One Freedom Valley Drive, Oaks, Pennsylvania
19456 (the "Special Meeting").
At the Special Meeting, you will be asked to approve a proposed
Agreement and Plan of Reorganization, dated as of May 6, 2003 (the
"Reorganization Agreement"), by and between the Acquired Fund and the Acquiring
Fund, which contemplates the reorganization (the "Reorganization") of the
Acquired Fund into the Acquiring Fund, with the Acquiring Fund continuing after
the Reorganization.
In considering these matters, you should note:
o The individuals managing the Acquired Fund will not change as
a result of the reorganization. FNB Fund Advisers currently
serves as the investment adviser for the Acquired Fund and the
Acquiring Fund, and will continue to serve as investment
adviser to the Acquiring Fund.
o The objectives and policies of the Acquiring Fund are
substantially the same as those of the Acquired Fund and the
Reorganization is expected to result in operating expenses
that are lower before any fee waivers are taken into account
and also lower after taking into account fee waivers.
o The Acquired Fund will be paying all expenses relating to the
Reorganization.
o The Reorganization is not expected to cause you to recognize
any taxable gains or losses on your shares of the Acquired
Fund or the Acquiring Fund.
As part of the transaction, shareholders in the Acquired Fund will
receive shares of the Acquiring Fund equal in value to their shares of the
Acquired Fund. The Acquired Fund will then be liquidated.
2
The Board of Director of the Company believes the Plan of
Reorganization is in the best interests of the Acquired Fund and Acquiring Fund
shareholders.
Your vote on the transaction is important. The Reorganization will be
effected only if approved by the holders of a majority of the outstanding shares
of both the Acquired Fund and the Acquiring Fund. The term "majority of the
outstanding shares" means the vote of: (i) 67% or more of a fund's outstanding
shares present or represented by proxy at a meeting, if holders of more than 50%
of the outstanding shares are present or represented by proxy, or (ii) more than
50% of the fund's outstanding shares, whichever is less. We hope you will
participate by casting your vote in person, or by proxy if you are unable to
attend the meeting. Please read the enclosed Proxy Statement/Prospectus
carefully before you vote.
THE BOARD OF DIRECTORS OF FIRST FOCUS FUNDS, INC. BELIEVES THAT THE
REORGANIZATION IS IN THE BEST INTERESTS OF THE ACQUIRED FUND, THE ACQUIRING FUND
AND THEIR RESPECTIVE SHAREHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
ITS APPROVAL.
Thank you for your prompt attention and participation.
Sincerely,
/s/ David P. Greer
President
IMPORTANT PROXY INFORMATION ENCLOSED.
-IMMEDIATE ACTION REQUIRED!
3
FIRST FOCUS FUNDS, INC
PROXY Q&A
THE FOLLOWING IS IMPORTANT INFORMATION TO HELP YOU TO UNDERSTAND THE PROPOSALS
ON WHICH YOU ARE BEING ASKED TO VOTE. PLEASE READ THE ENTIRE PROXY STATEMENT.
WHY IS THIS REORGANIZATION TAKING PLACE? FNB Fund Advisers, the investment
adviser to First Focus Income Fund (the "Acquiring Fund") and First Focus Bond
Fund (the "Acquired Fund") has made a recommendation to combine the assets of
the Acquired and Acquiring Funds, which have very similar investment objectives.
To effectuate this decision, the Acquired Fund and Acquiring Fund must
reorganize.
WHEN WILL THIS REORGANIZATION BECOME EFFECTIVE? The Reorganization is currently
anticipated to occur on or about July 31, 2003 assuming shareholder approval is
obtained. Shortly after the Reorganization has been approved, Acquired Fund
shareholders will receive new account information on your new ownership in the
Acquiring Fund.
WHO IS ELIGIBLE TO VOTE ON THIS REORGANIZATION? Shareholders of record of the
Acquiring Fund and Acquired Fund as of the close of business on June 16, 2003
are entitled to vote on this Reorganization.
HOW CAN I VOTE ON THIS REORGANIZATION? Shareholders are being asked to approve
this Reorganization through voting at the Special Meeting of Shareholders, which
is scheduled to occur on July 25, 2003. Your vote is very important. You have
the flexibility to cast your vote either in person or by mail. Upon approval of
the Reorganization, each Acquired Fund shareholder's account will automatically
be transferred to the Acquiring Fund on or about July 31, 2003.
WHAT WILL HAPPEN TO MY ACQUIRED FUND ACCOUNT? After the Reorganization,
shareholders will be assigned a new account with the Acquiring Fund and then the
Acquired Fund account will be closed. This process will occur automatically,
with no action required by you.
4
WILL I INCUR TAXES AS A RESULT OF THIS REORGANIZATION? This Reorganization is
expected to be a tax-free event. Generally, shareholders of the Acquired Fund
will not incur gains or losses on the conversion from Acquired Fund shares into
Acquiring Fund shares as a result of this Reorganization. Shareholders will
incur gains or losses if they sell their Acquired Fund shares before the
Reorganization becomes effective or sell their Acquiring Fund shares after the
Reorganization becomes effective. Shareholders will also be responsible for tax
obligations associated with monthly or periodic dividend and capital gains
distributions that occur prior to and after the reorganization. Acquiring Fund
shareholders will experience no tax consequences as a result of the
Reorganization, nor any change in tax consequences after the Reorganization.
WHERE CAN I GET MORE INFORMATION ABOUT THIS REORGANIZATION? Contact Meg Davies
at 402-633-3305.
5
FIRST FOCUS FUNDS, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 25, 2003
A Special Meeting of the shareholders of First Focus Funds, Inc. (the
"Company"), with respect to its First Focus Bond Fund (the "Acquired Fund") and
First Focus Income Fund (the "Acquiring Fund") will be held at offices of SEI
Investments, One Freedom Valley Drive, Oaks, Pennsylvania 19456 on July 25,
2003, at 11:00 a.m. (Eastern time) to consider the following proposals:
Proposal 1: To approve or disapprove a proposed Agreement and
Plan of Reorganization (the "Reorganization
Agreement") between the Acquired Fund and the
Acquiring Fund, whereby the Acquiring Fund would
acquire all of the assets of the Acquired Fund in
exchange for Acquiring Fund shares to be distributed
pro rata to the shareholders of the Acquired Fund in
complete liquidation and termination of the Acquired
Fund.
Proposal 2: To transact such other business as may properly
come before the Special Meeting or at any
adjournments thereof.
Shareholders of record of the Acquired Fund and Acquiring Fund as of
the close of business on Monday, June 16, 2003 are entitled to notice of and to
vote at the Special Meeting, or at any adjournment thereof.
By Order of the Board of Directors
--------------------------------------
John C. Munch
Secretary
- --------------------------------------------------------------------------------
IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY SO THAT THE REQUIRED QUORUM MAY BE REPRESENTED AT THE SPECIAL
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
- --------------------------------------------------------------------------------
6
PROXY STATEMENT/PROSPECTUS
Dated June 27, 2003
Relating to the Acquisition of the Assets of First Focus Bond Fund
By and in exchange for Shares of First Focus Income Fund
This Proxy Statement/Prospectus describes the proposed Agreement and
Plan of Reorganization (the "Reorganization Agreement") whereby the assets and
liabilities of First Focus Bond Fund (the "Acquired Fund"), would be transferred
to First Focus Income Fund (the "Acquiring Fund") (together, the "Funds"), in
return for shares of the Acquiring Fund (the "Reorganization"). Immediately
after the transfer of the Acquired Fund's assets and liabilities, the Acquired
Fund will make a liquidating distribution to its shareholders of the Acquiring
Fund's shares. Following the completion of the Reorganization, the Acquired Fund
will be terminated. Both the Acquiring Fund and the Acquired Fund are series of
First Focus Funds, Inc., (the "Company") a Nebraska corporation, 1620 Dodge
Street, Omaha, Nebraska 68197.
The Reorganization will take place only if shareholders of both the
Acquired Fund and the Acquiring Fund approve the Reorganization. If shareholders
of either Fund do not approve the Reorganization, the Board of Directors of the
Company will consider an alternate course of action for the Acquired Fund.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY
RECOMMENDS APPROVAL OF THE REORGANIZATION AGREEMENT.
This Proxy Statement/Prospectus should be retained for future
reference. It sets forth concisely the information about the Acquiring Fund that
a prospective investor should know before investing. This Proxy
Statement/Prospectus is accompanied by the Prospectus of the Company dated July
31, 2002, as supplemented on November 8 and December 12, 2002 and May 9, 2003,
which is incorporated herein by reference. The Statement of Additional
Information for the Company dated January 7, 2003 (relating to that Prospectus)
and June 27, 2003 (relating to this Proxy Statement/Prospectus), both containing
additional information, have been filed with the Securities and Exchange
Commission and are incorporated herein by reference. Copies of the Statements of
Additional Information may be obtained without charge by calling 1-800-662-4203
or writing: First Focus Funds Service Center, P.O. Box 219022, Kansas City,
Missouri 64121-9022.
7
For a comparison of the investment policies of the Acquiring Fund and
the Acquired Fund, see "Summary - Investment Objectives, Policies and
Restrictions." For a more detailed discussion of the investment objectives,
policies, risks and restrictions of the Acquiring Fund see the aforementioned
Prospectus and Statement of Additional Information of the Acquiring Fund.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES, OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
8
TABLE OF CONTENTS
SUMMARY OF EXPENSES...........................................................
SUMMARY.......................................................................
About the Proposed Reorganization....................................
Investment Objectives and Policies...................................
Adviser and Advisory Fees............................................
The Administrator....................................................
Distribution Arrangements............................................
Purchase, Exchange and Redemption Procedures.........................
Dividends............................................................
Tax Consequences.....................................................
Risk Factors.........................................................
BACKGROUND AND REASONS FOR THE PROPOSED REORGANIZATION........................
DESCRIPTION OF THE REORGANIZATION AGREEMENT...................................
DESCRIPTION OF ACQUIRING FUND SHARES..........................................
FEDERAL INCOME TAX CONSEQUENCES...............................................
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS AND OBLIGATIONS.................
General..............................................................
Shares of the Funds..................................................
Voting Rights........................................................
Directors............................................................
Liability of Directors and Officers..................................
Termination..........................................................
CAPITALIZATION................................................................
INFORMATION ABOUT THE COMPANY AND THE FUNDS...................................
VOTING INFORMATION............................................................
Outstanding Shares and Voting Requirements...........................
Dissenter's Right of Appraisal.......................................
AGREEMENT AND PLAN OF REORGANIZATION - EXHIBIT A..............................
9
SUMMARY OF EXPENSES
Acquired Acquiring Acquiring
Fund (1) Fund (1) Fund Pro
Forma (1)
---------------------------------
SHAREHOLDER FEES (fees paid
directly from your investment)....... None None None
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from
Fund assets).........................
Management Fees............................... 0.60% 0.60% 0.60%
Distribution and Service (12b-1) Fees......... None None None
Other Expenses................................ 0.55% 0.54% 0.50%
Total Fund Operating Expenses................. 1.15% 1.14% 1.10%
Fee Reduction and/or Expense Reimbursement.... 0.18% 0.25% 0.25%
Total Annual Operating Expenses (2)........... 0.97% 0.89% 0.85%
(1) The fees and expenses shown for the Acquired and Acquiring Funds are
for the fiscal year ended March 31, 2003. The fees and expenses shown
for the Acquiring Fund Pro Forma are estimated fees and expenses
expected to be incurred for the fiscal year ending March 31, 2004,
before waivers.
(2) The table above reflects all fees the Funds' service providers were
entitled to receive during the fiscal year ended March 31, 2003
pursuant to their contracts with the Funds or others. However, certain
service providers voluntarily waived a portion of their respective
fees. Taking these waivers into account, the actual annual Management
Fees for the fiscal year ended March 31, 2003 for the Acquired Fund and
the Acquiring Fund were 0.50% and 0.43%, respectively. These waivers by
the service providers are voluntary and therefore may be eliminated at
any time.
The following Example is intended to help you compare the cost of
investing in the Acquired Fund with the cost of investing in the Acquiring Fund.
The Example assumes that you invest $10,000 in the Acquired Fund and Acquiring
Fund for the time periods indicated and then redeem all of your shares at the
end of those periods. The Example assumes that your investment has a 5% return
each year, that you reinvest all dividends and distributions, and that the
Acquired Fund, Acquiring Fund and Pro Forma operating expenses are as shown
above in the table and remain the same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
10
1 year 3 years 5 years 10 years
------ ------- ------- --------
Acquired Fund $117 $365 $633 $1,398
Acquiring Fund $116 $362 $628 $1,386
Acquiring Fund (Pro Forma) $112 $350 $606 $1,340
11
SUMMARY
This summary is qualified in its entirety by reference to the
additional information contained elsewhere in this Proxy Statement/Prospectus,
the Prospectus of the Company dated July 31, 2002, as supplemented on November 8
and December 12, 2002 and May 9, 2003 (the "First Focus Prospectus"), the
Statement of Additional Information of the Company dated January 7, 2003, (the
"First Focus SAI") and the Reorganization Agreement, a copy of which is attached
to this Proxy Statement/Prospectus as EXHIBIT A.
ABOUT THE PROPOSED REORGANIZATION
The Board of Directors of the Company has voted to recommend to holders
of the shares of the Acquired Fund the approval of the Reorganization Agreement
whereby the Acquiring Fund would acquire all of the assets of the Acquired Fund
in exchange for the Acquiring Fund's shares to be distributed pro rata by the
Acquired Fund to its shareholders in complete liquidation and dissolution of the
Acquired Fund (the "Reorganization"). As a result of the Reorganization, each
Acquiring Fund shareholder will become the owner of shares of the Acquiring Fund
having a total net asset value equal to the total net asset value of his or her
holdings in the Acquired Fund on the date of the Reorganization, as set forth in
the Reorganization Agreement. The Company's Articles of Incorporation require
that shareholders of the Acquiring Fund also approve the Reorganization
Agreement.
As a condition to the Reorganization transaction, the Company will
receive an opinion of counsel that the Reorganization will be considered a
tax-free "reorganization" under applicable provisions of the Internal Revenue
Code of 1986, as amended (the "Code"), so that no gain or loss will be
recognized by the Acquired Fund, Acquiring Fund or the shareholders of either.
The adjusted tax basis of the Acquiring Fund shares received by the Acquired
Fund shareholders will be the same as the adjusted tax basis of their
corresponding shares in the Acquired Fund. After the Reorganization is
completed, the Acquired Fund will be terminated.
INVESTMENT OBJECTIVES AND POLICIES
This section will help you compare the investment objectives, policies
and limitations of the Successor Funds with the Acquired Funds.
12
Acquiring Fund Acquired Fund
- ------------------------------------------------------- ----------------------------------------------------
INVESTMENT OBJECTIVE
o Seeks to maximize current income consistent with the o Seeks current income consistent with preservation
preservation of capital. of capital.
PRINCIPAL INVESTMENTS
Under normal market conditions, the Under normal market conditions, the
Fund intends to invest primarily all, Fund intends to invest primarily all,
but must invest at least 65%, of its but must invest at least 80%, of its
assets in fixed income securities, assets in fixed income securities,
consisting of: consisting of:
o bonds, notes and debentures from a wide range of U.S. o bonds, notes and debentures from a wide range of
corporate issuers; U.S. corporate issuers;
o mortgage-related securities; o mortgage-related securities;
o state, municipal or industrial revenue bonds; o state, municipal or industrial revenue bonds;
o obligations issued or guaranteed by the U.S. o obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities; government, its agencies or instrumentalities;
o fixed income securities that can be o fixed income securities that can be
converted into or exchanged for converted into or exchanged for
common stock; or common stock; or
o repurchase agreements. o repurchase agreements.
13
STRATEGICS
o dollar-weighted average portfolio maturity of four o dollar-weighted average portfolio maturity of five
years or more under normal conditions. years or more under normal market conditions.
o average portfolio duration comparable to Lehman U.S. o average portfolio duration comparable to Lehman U.S.
Aggregate Bond Index (currently 3.85 years) Government/Credit Index (currently 5.41 years).
o fixed income securities will be "investment grade," o fixed income securities will be "investment grade,"
i.e., rated within the four highest categories of a i.e., rated within the four highest categories of a
nationally recognized rating service, or of comparable nationally recognized rating service, or of
quality as determined by the adviser. comparable quality as determined by the adviser.
o will invest no more than 50% of its value in o will invest no more than 25% of its value in
mortgage-related securities. mortgage-related securities.
CERTAIN INVESTMENT RESTRICTIONS
o will not, as to 75% of total assets, Same as Acquiring Fund
invest more than 5% of total assets
in, or own more than 10% of voting securities
of, an issuer
o will not concentrate more than 25% of assets
in the same industry (excluding government
securities and subject to other exceptions)
o will not borrow more than 10% of the value
of its total assets
o will not loan money (but may buy debt securities
and enter into repurchase agreements)
o will not purchase investment securities on margin,
engage in short sales, underwrite securities of
others, purchase or sell commodities or commodities
contracts or purchase or sell real estate (excluding
securities of real estate companies).
14
Please be aware that this is only a brief discussion. In addition to
the investments and strategies described in this summary, the Acquiring Fund and
the Acquired Fund also may invest in other securities, use other strategies and
engage in other investment practices. The Acquiring Fund and Acquired Fund are
subject to certain additional investment policies and limitations described in
the First Focus Prospectus and First Focus SAI referred to above, which set
forth in full the investment objective, policies and investment limitations of
the Acquiring Fund and the Acquired Fund, all of which are incorporated herein
by reference thereto.
The investments and strategies described in these summaries are those
used under normal conditions. During unusual economic or market conditions, or
for temporary defensive or liquidity purposes, the Acquiring Fund and Acquired
Fund may invest up to 100% of their assets in cash, cash equivalents, and high
quality, short-term debt securities and money market instruments for temporary
defensive purposes. During such period, a Fund may not be pursuing its
investment objectives.
ADVISER AND ADVISORY FEES
FNB Fund Advisers, a division of First National Bank of Omaha ("FNB" or
the "Adviser") is the adviser to the Acquired Fund and the Acquiring Fund. FNB
manages mutual funds and private and institutional accounts. Its principal
office is located at 1620 Dodge Street, Omaha, Nebraska 68197. As of March 31,
2003, FNB managed $1.9 billion in assets. For investment advisory services
provided by FNB, the Acquired Fund and Acquiring Fund paid $192,451 (after fee
waivers of $38,490) and $296,946 (after fee waivers of $117,396), respectively,
to FNB for the fiscal year ended March 31, 2003.
The annual investment advisory fees for the Acquiring Fund will be
identical to the advisory fees for the Acquired Fund, that is, 0.60% of the
average daily net assets of the Acquiring Fund, calculated daily and paid
monthly.
THE ADMINISTRATOR
SEI Investments Mutual Funds Services serves as Administrator for the
Acquiring Fund and the Acquired Fund and in that capacity will continue to
provide certain administrative personnel and services necessary to operate the
Acquiring Fund. The Administrator provides clerical, compliance, regulatory,
accounting and other services.
15
DISTRIBUTION ARRANGEMENTS
SEI Distribution Co. (the "Distributor"), will continue to serve as the
principal underwriter and distributor for shares of the Acquiring Fund. Shares
of the Acquired Fund and the Acquiring Fund bear no sales charges or
distribution fees. Both the Acquired Fund and the Acquiring Fund have adopted a
Rule 12b-1 Distribution Plan (the "Distribution Plan") pursuant to which each
may pay a distribution fee to the Distributor in an amount computed at an annual
rate of 0.25% of the average daily net asset value of the shares to compensate
brokers, dealers, and service providers who provide administrative and/or
distribution services to the shareholders or their customers who beneficially
own such shares. Neither the Acquired Fund nor the Acquiring Fund is actually
paying 12b-1 fees at present, and there is no plan to begin paying such fees
after the Reorganization is completed.
For a complete description of distribution arrangements, reference is
hereby made to the First Focus Prospectus and First Focus SAI referred to above,
which is incorporated herein by reference thereto.
PURCHASE, EXCHANGE, AND REDEMPTION PROCEDURES
The transfer agent and dividend-disbursing agent for the Acquiring Fund
and the Acquired Fund is First National Bank of Omaha, which has contracted with
DST Systems, Inc. to perform the actual transfer and dividend-disbursing
functions. The custodian for the Acquiring Fund and the Acquired Fund is First
National Bank of Omaha. Procedures for the purchase, exchange and redemption of
the shares of the Acquiring Fund are identical to the procedures applicable to
the purchase, exchange and redemption of the shares of the Acquired Fund.
Reference is made to the First Focus Prospectus for a complete description of
the purchase, exchange and redemption procedures applicable to purchases,
exchanges and redemptions of the shares of both Funds.
Purchases of shares of the Acquiring Fund and the Acquired Fund may be
made through an investment professional or by telephone, mailing a written
request, or wire. The minimum initial investment in shares of the Acquiring Fund
and the Acquired Fund is $1,000. This minimum may be waived for shares purchased
through an Individual Retirement Account or other retirement plan. The Acquired
Fund and the Acquiring Fund reserve the right to reject any purchase request.
Except in limited circumstances, the net asset value per share for the
Acquired Fund and the Acquiring Fund are calculated as of the close of trading
(normally 4:00 p.m., Eastern time) on the New York Stock Exchange (the "NYSE")
on each day on which the NYSE is open for business. If received before 4:00
p.m., Eastern time, purchase orders for shares of the Acquired Fund or the
Acquiring Fund are considered received that same day.
16
Acquired Fund shares and Acquiring Fund shares may be exchanged, at net
asset value, for shares of another First Focus Fund.
Redemptions of the Acquired Fund's and Acquiring Fund's shares may be
made through a broker, by telephone or by mailing a written request. Shares of
the Acquired Fund and Acquiring Fund are each redeemed at their net asset value,
next determined after the redemption request is received on each day on which
the net asset value is computed. Proceeds will ordinarily be distributed by
check or by wire promptly, but not later than seven days after receipt of a
redemption request.
Any questions about the foregoing procedures in effecting purchases,
exchanges or redemptions of the shares of the Acquiring Fund or the Acquired
Fund may be directed to 1-800-662-4203.
DIVIDENDS
The Acquired Fund and Acquiring Fund distribute net investment income
and capital gains, if any, at least annually. If you own shares on the record
date, you will be entitled to receive the distribution. With respect to both the
Acquired Fund and the Acquiring Fund, unless a shareholder otherwise instructs,
dividends and capital gains distributions will be reinvested automatically in
additional shares at net asset value.
TAX CONSEQUENCES
As a condition to the Reorganization transaction, the Company will
receive an opinion of counsel that the Reorganization will be considered a
tax-free "reorganization" under applicable provisions of the Code so that no
gain or loss will be recognized by either the Acquired Fund, the Acquiring Fund
or the shareholders of either. The adjusted tax basis of the Acquiring Fund
shares received by the Acquired Fund shareholders will be the same as the
adjusted tax basis of their shares in the Acquired Fund.
17
RISK FACTORS
The principal risk factors associated with investing in the Acquiring
Fund and the Acquired Fund are the same, as shown in the table below:
Acquiring Fund Acquired Fund
-------------- -------------
o not a bank deposit and not insured Same as Acquiring Fund
by the FDIC or any
other government agency
o shares may fluctuate in value
o adviser may not accurately predict
economic and political events
affecting securities, prices and
interest rates
o changing interest rates will affect
the value of the Fund's portfolio
and the income it generates
o Issuers of debt securities and sellers
of repurchase agreements may not meet
their financial obligations
BACKGROUND AND REASONS FOR THE PROPOSED REORGANIZATION
Both the Acquired Fund and the Acquiring Fund (including predecessor
entities) have existed for more than 10 years, under the management of FNB.
Because the investment objectives and policies of the two Funds are so similar,
FNB has recommended that they be combined in the hope of realizing certain
economies of scale that will benefit shareholders of both Funds.
The Board of Directors considered the recommendation of FNB, the
similarity of the investment objectives and policies of the two Funds and the
structure of the Reorganization. The Board also took into consideration: (1)
that the expense ratios of the Acquiring Fund would be lower before any fee
waivers are taken into account and also lower after taking into account fee
waivers, and that there was no intention to raise expense ratios in the future;
(2) that there will be no change in the investment adviser of the Funds or the
fees paid for its services; (3) that the respective net asset values per share
of the Acquired Fund and Acquiring Fund are substantially the same; and (4) that
the Reorganization would be tax free to both Funds and to their shareholders.
18
The Board of Directors of the Company, including a majority of the
independent Directors, determined that participation in the Reorganization is in
the best interest of each Fund and that the interests of each Fund's
shareholders would not be diluted as a result of its effecting the
Reorganization. Based upon FNB's reasons for recommending the Reorganization,
the Board of Directors of the Company unanimously voted to approve, and
recommends to each Fund's shareholders the approval of, the Reorganization
Agreement.
DESCRIPTION OF THE REORGANIZATION AGREEMENT
The Reorganization Agreement provides that all of the assets of the
Acquired Fund will be transferred to the Acquiring Fund, subject to the
liabilities of the Acquired Fund. Each shareholder of the Acquired Fund will
receive the same aggregate value of shares of the Acquiring Fund as the
shareholder had in the Acquired Fund immediately prior to the Reorganization.
The Acquired Fund's shareholders will not pay a sales charge, commission or
other transaction cost in connection with their receipt of shares of the
Acquiring Fund.
Following the transfer of assets and assumption of liabilities of the
Acquired Fund to and by the Acquiring Fund, and the issuance of shares by the
Acquiring Fund to the Acquired Fund, the Acquired Fund will distribute the
shares of the Acquiring Fund among the shareholders of the Acquired Fund in
proportion to the number of shares each such shareholder holds in the Acquired
Fund. In addition to receiving shares of the Acquiring Fund, each shareholder of
the Acquired Fund will have a right to receive any declared and unpaid dividends
or other distributions of the Acquired Fund. Following the Reorganization,
shareholders of the Acquired Fund will be shareholders of the Acquiring Fund and
the Company will take all steps necessary to effect the termination of the
Acquired Fund.
The Reorganization is subject to certain conditions, including:
approval of the Reorganization Agreement and the transactions and exchange
contemplated thereby as described in this Proxy Statement/Prospectus by the
shareholders of the Acquiring Fund and the Acquired Fund; the receipt of a legal
opinion described in the Reorganization Agreement regarding tax matters; the
receipt of certain certificates from the parties concerning the continuing
accuracy of the representations and warranties in the Reorganization Agreement
and other matters; and the parties' performance, in all material respects, of
the agreements and undertakings in the Reorganization Agreement. Assuming
satisfaction of the conditions in the Reorganization Agreement, the
Reorganization is expected to occur on or about July 31, 2003 ("Closing Date").
19
The Acquired Fund is responsible for the payment of all expenses of the
Reorganization incurred by either party, whether or not the Reorganization is
consummated. Such expenses include, but are not limited to, legal fees,
registration fees, transfer taxes (if any), the fees of banks and transfer
agents and the costs of preparing, printing, copying and mailing proxy
solicitation materials to shareholders.
The Reorganization may be terminated at any time prior to its
consummation by the Company if circumstances should develop that, in the opinion
of the Board of Directors of the Company, make proceeding with the
Reorganization Agreement inadvisable. The Reorganization Agreement provides
further that at any time prior to the consummation of the Reorganization: (i)
the parties thereto may amend or modify any of the provisions of the
Reorganization Agreement provided that such amendment or modification would not
have a material adverse effect upon the benefits intended under the
Reorganization Agreement and it would be consistent with the best interests of
shareholders of the Acquired Fund and the Acquiring Fund; and (ii) either party
may waive any of the conditions set forth in the Reorganization Agreement if, in
the judgment of the waiving party, such waiver will not have a material adverse
effect on the benefits intended under the Reorganization Agreement to the
shareholders of the Acquired Funds or the shareholders of the Acquiring Fund, as
the case may be.
DESCRIPTION OF ACQUIRING FUND SHARES
Shares of the Acquiring Fund to be issued in connection with the
Reorganization are identical to the Acquired Fund's shares concerning rights and
preferences. Full and fractional shares of the Acquiring Fund will be issued
without the imposition of a sales charge or other fee to the shareholders of the
Acquired Fund in accordance with the procedures described above. Shares of the
Acquiring Fund to be issued to shareholders of the Acquired Fund under the
Reorganization Agreement will be fully paid and nonassessable by the Company
when issued and transferable without restriction and will have no preemptive or
conversion rights. Reference is hereby made to the First Focus Prospectus
provided herewith for additional information about shares of the Acquiring Fund.
FEDERAL INCOME TAX CONSEQUENCES
As a condition to the Reorganization, the Company on behalf of the
Acquired Fund and the Acquiring Fund, will receive an opinion of counsel to the
Company, to the effect that, on the basis of the existing provisions of the
Code, current administrative rules and court decisions, for federal income tax
purposes: (1) the Reorganization as set forth in the Reorganization Agreement
will constitute a tax-free "reorganization" under Section 368(a)(1)(F) of the
Code, and the Acquired Fund and the Acquiring Fund will be "a party to a
reorganization" within the meaning of Section 368(b) of the Code; (2) no gain or
20
loss will be recognized by an Acquiring Fund upon its receipt of the Acquired
Fund's assets (subject to the liabilities of the Acquired Fund) in exchange for
Acquiring Fund shares; (3) no gain or loss will be recognized by the Acquired
Fund upon the transfer of its assets (subject to the liabilities of the Acquired
Fund) to the Acquiring Fund in exchange for Acquiring Fund shares or upon the
distribution of the Acquiring Fund shares to the Acquired Fund shareholders in
exchange for their shares of the Acquired Fund; (4) no gain or loss will be
recognized by shareholders of the Acquired Fund upon the exchange of their
shares for Acquiring Fund shares; (5) the adjusted tax basis of the Acquired
Fund's assets acquired by the Acquiring Fund will be the same as the adjusted
tax basis of such assets to the Acquired Fund immediately prior to the
Reorganization; (6) the adjusted tax basis of Acquiring Fund shares received by
shareholders of the Acquired Fund pursuant to the Reorganization will be the
same as the adjusted tax basis of the Acquired Fund shares held by shareholders
immediately prior to the Reorganization; (7) the holding period of the assets of
the Acquired Fund in the hands of the Acquiring Fund will include the period
during which those assets were held by the Acquired Fund; and (8) the holding
period of the Acquiring Fund's shares received by shareholders of the Acquired
Fund pursuant to the Reorganization will include the period during which the
Acquired Fund shares exchanged therefor were held by such shareholder, provided
the Acquired Fund shares were held as capital assets on the date of the
Reorganization.
The Company has not sought a tax ruling from the Internal Revenue
Service ("IRS"), but is acting in reliance upon the opinion of counsel discussed
in the previous paragraph. That opinion is not binding on the IRS and does not
preclude the IRS from adopting a contrary position. Shareholders should consult
their own tax adviser concerning the potential tax consequences to them,
including state and local income taxes.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS AND OBLIGATIONS
GENERAL
The Acquiring Fund and the Acquired Fund each is a series of an
open-end management investment company registered under the 1940 Act. The
Company is organized as a corporation under the laws of the State of Nebraska
and is governed by its Articles of Incorporation, By-Laws and Board of
Directors, in addition to applicable state and federal law. The rights of
shareholders of the Acquiring Fund and the Acquired Fund, as set forth in the
Articles of Incorporation of the Company, are identical. Set forth below is a
brief summary of the significant rights of the shareholders of the Acquiring
Fund and the Acquired Fund.
21
SHARES OF THE FUNDS
The Company is authorized to issue one billion shares of Common Stock
with a par value $.00001 per share. The Company is authorized to issue more than
one class of shares, and could do so in the future. At present, the Company has
only one class of Common Stock outstanding. Issued and outstanding shares of the
Acquiring Fund and the Acquired Fund are fully paid and nonassessable by the
Company and are freely transferable.
VOTING RIGHTS
The Company is not required to hold annual meetings of shareholders,
except as required under the 1940 Act. Shareholder approval is necessary for
certain changes in operations, the election of Directors under certain
circumstances, and certain amendments to the Articles of Incorporation. The
Company requires that a special meeting of shareholders be called for any
permissible purpose upon the written request of the holders of at least 10% of
the outstanding shares of the series or class of the Company entitled to vote.
Each share of the Acquiring Fund and the Acquired Fund gives the shareholder one
vote in Director elections and other matters submitted to shareholders for vote.
Nebraska law provides for cumulative voting of shares in any election of
Directors. All shares of each portfolio or class in each portfolio of the
Company have equal voting rights except that in matters affecting only a
particular portfolio or class, only shares of that portfolio or class are
entitled to vote.
DIRECTORS
The Articles of Incorporation for the Company provide that the term of
office of each Director shall be until the earlier of his or her death,
resignation, retirement, or the election and qualification of a successor. A
vacancy on the Board may be filled by a majority of the Directors remaining in
office. A meeting of shareholders will be required for the purpose of electing
additional Directors whenever fewer than two-thirds of the Directors then in
office were elected by shareholders.
LIABILITY OF DIRECTORS AND OFFICERS
Under the Articles of Incorporation of the Company, and Nebraska law,
corporate directors are not normally liable for their good-faith actions. The
Articles of Incorporation of the Company further provide that Directors will be
indemnified by the Company, to the fullest extent permitted by law, against
liability and against all expenses in connection with litigation unless the
person's conduct is determined to constitute willful misfeasance, bad faith,
gross negligence or reckless disregard of the person's duties.
22
TERMINATION
In the event of the liquidation or dissolution of the Company or any
portfolio or class of the Company, the shareholders of the respective portfolio
or class are entitled to receive, when and as declared by its Directors, the
excess of the assets belonging to the respective portfolio or class over the
liabilities belonging to the respective portfolio or class. In either case, the
assets belonging to the portfolio or class will be distributed among the
shareholders in proportion to the number of shares of the respective portfolio
or class held by them.
CAPITALIZATION
The following table sets forth the unaudited capitalization of the
Acquiring Fund and the Acquired Fund as of April 30, 2003, and on a pro forma
combined basis as of that date.
NET ASSET
NET ASSETS VALUE PER SHARES
(000) SHARE OUTSTANDING
----------- ---------- -----------
Acquired Fund $34,752,545 $10.51 3,305,717
Acquiring Fund $74,792,143 $10.28 7,277,527
Pro Forma Combined $109,544,688 $10.28 10,655,972
INFORMATION ABOUT THE COMPANY AND THE FUNDS
Information about the Company and the Funds is contained in the First
Focus Prospectus, the First Focus SAI and the Statement of Additional
Information dated June 27, 2003 (relating to this Proxy Statement/Prospectus),
each of which is incorporated herein by reference. Copies of the Statements of
Additional Information, which have been filed with the Securities and Exchange
Commission (the "SEC"), may be obtained upon request and without charge by
contacting the Company at 1-800-662-4203, or by writing to the Company at First
Focus Funds Service Center, P.O. Box 219022, Kansas City, Missouri 64121-9022.
The Company is subject to the informational requirements of the Securities Act
of 1933, as amended (the "1933 Act"), the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and the 1940 Act and in accordance therewith files
reports and other information with the SEC. Reports, proxy and information
statements, charter documents and other information filed by the Company can be
obtained by calling or writing the Company and can also be inspected and copied
by the public at the public reference facilities maintained by the SEC in
Washington, D.C. located at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549. Copies of such material can be obtained from the Public Reference Branch,
Office of Consumer Affairs and Information Services, SEC, 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates or from the SEC's Internet site
at http://www.sec.gov.
23
This Proxy Statement/Prospectus, which constitutes part of a
Registration Statement filed by the Company with the SEC under the 1933 Act,
omits certain of the information contained in the Registration Statement.
Reference is hereby made to the Registration Statement and to the exhibits
thereto for further information with respect to the Company and the Funds and
the shares offered hereby. Statements contained herein concerning the provisions
of documents are necessarily summaries of such documents, and each such
statement is qualified in its entirety by reference to the copy of the
applicable document filed with the SEC.
VOTING INFORMATION
This Proxy Statement/Prospectus is furnished in connection with the
solicitation by the Board of Directors of the Company of proxies for use at the
Special Meeting of Shareholders (the "Special Meeting") to be held at 11:00 a.m.
(Eastern time) on July 25, 2003 at the offices of SEI Investments, One Freedom
Valley Drive, Oaks, Pennsylvania 19456, and at any adjournments thereof. The
proxy confers discretionary authority on the persons designated therein to vote
on other business not currently contemplated which may properly come before the
Special Meeting. A proxy, if properly executed, duly returned and not revoked,
will be voted in accordance with the specifications thereon; if no instructions
are given, such proxy will be voted in favor of the Reorganization Agreement. A
shareholder may revoke a proxy at any time prior to use by filing with the
Secretary of the Company an instrument revoking the proxy, by submitting a proxy
bearing a later date or by attending and voting in person at the Special
Meeting.
The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by the Acquired Fund. In addition to
solicitations through the mails, proxies may be solicited by officers, employees
and agents of the Funds, the Adviser or others at no additional cost to the
Acquired Fund. Such solicitations may be by telephone, other electronic media or
personal contact. The Adviser will reimburse custodians, nominees and
fiduciaries for the reasonable costs incurred by them in connection with
forwarding solicitation materials to the beneficial owners of shares held of
record by such persons.
OUTSTANDING SHARES AND VOTING REQUIREMENTS
The Board of Directors of the Company has fixed the close of business
on June 16, 2003, as the record date for the determination of shareholders of
the Funds entitled to notice of and to vote at the Special Meeting and at any
adjournments thereof. As of the record date, _____________ shares of the
Acquiring Fund and ______________ shares of the Acquired Fund were outstanding
and entitled to vote. Each share is entitled to one vote and fractional shares
have proportionate voting rights.
24
On the record date, the Directors and officers of the Company as a
group owned less than 1% of the outstanding shares of each of the Funds. To the
best knowledge of the Company as of the record date, no person, except as set
forth in the table below, owned beneficially or of record 5% more of either
Fund's outstanding shares.
- --------------------------------------------------------------------------------
Shares Owned of Record Percent of
Name and Address and Beneficially Outstanding Shares
- --------------------------------------------------------------------------------
ACQUIRING FUND
ACQUIRED FUND
25
Approval of the Reorganization Agreement with respect to each Fund
requires the affirmative vote of a majority of the outstanding shares voted of
that Fund. A majority of the outstanding shares means the vote of: (i) 67% or
more of that Fund's outstanding shares present at a meeting, if holders of more
than 50% of the outstanding shares of that Fund are present or represented by
proxy, or (ii) more than 50% of that Fund's outstanding shares, whichever is
less. Fifty percent (50%) of the shares of a Fund entitled to vote shall
constitute a quorum at the Special Meeting for the purpose of voting on the
proposed Reorganization. For purposes of determining the presence of a quorum,
shares represented by abstentions and "broker non-votes" will be counted as
present, but not as votes cast, at the Special Meeting. Approval of the
Reorganization is determined on the basis of a percentage of votes present at
the Special Meeting, which would have the effect of treating abstentions and
"broker non-votes" as if they were votes against the Reorganization.
DISSENTER'S RIGHT OF APPRAISAL
Shareholders of the Acquired Fund and the Acquiring Fund objecting to
the Reorganization have no appraisal rights under the Company's Articles of
Incorporation or Nebraska law.
Management of the Company knows of no other matters that may properly
be, or which are likely to be, brought before the Special Meeting. However, if
any other business shall properly come before the Special Meeting, the persons
named in the proxy intend to vote thereon in accordance with their best
judgment.
If at the time any session of the Special Meeting is called to order, a
quorum is not present in person or by proxy, the persons named as proxies may
vote those proxies which have been received to adjourn the Special Meeting to a
later date. In the event that a quorum is present but sufficient votes in favor
of one or more of the proposals have not been received, the persons named as
proxies may propose one or more adjournments of the Special Meeting to permit
further solicitation of proxies with respect to any such proposal. All such
adjournments will require the affirmative vote of a majority of the shares
present in person or by proxy at the session of the Special Meeting to be
adjourned. The persons named as proxies will vote those proxies which they are
entitled to vote in favor of the proposal, in favor of such an adjournment, and
will vote those proxies required to be voted against the proposal, against any
such adjournment.
26
Whether or not shareholders expect to attend the Special Meeting, all
shareholders are urged to complete, sign and return the enclosed proxy form
promptly.
27
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION dated as of May 6, 2003 (the
"Agreement"), is between First Focus Income Fund ("Acquiring Fund") and First
Focus Bond Fund ("Acquired Fund"), each a portfolio of First Focus Funds, Inc.,
a Nebraska corporation (the "Company") with its principal place of business at
1620 Dodge Street, Omaha, Nebraska 68197.
WHEREAS, Company was incorporated on October 12, 1994, under Nebraska
law and operates as an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), with authorized
capital consisting of one billion (1,000,000,000) shares of common stock,
issuable in series; and
WHEREAS, Acquiring Fund and Acquired Fund each is a separate portfolio
of Company;
NOW, THEREFORE, in consideration of the mutual promises herein
contained and intending to be legally bound hereby, the parties hereto hereby
agree to effect the transfer of all of the assets of the Acquired Fund solely in
exchange for the assumption by the Acquiring Fund of all of the liabilities of
the Acquired Fund and issuance of shares of stock of the Acquiring Fund
("Acquiring Fund Shares") followed by the distribution, at the Effective Time
(as defined in Section 12 of this Agreement), of such Acquiring Fund Shares to
the holders of shares of the Acquired Fund ("Acquired Fund Shares") on the terms
and conditions hereinafter set forth, in liquidation of the Acquired Fund. The
parties hereto hereby covenant and agree as follows:
1. PLAN OF REORGANIZATION. At the Effective Time, the Acquired Fund
shall assign, deliver and otherwise transfer all of its assets and good and
marketable title thereto, and assign all of the liabilities as are set forth in
a statement of assets and liabilities, to be prepared as of the Valuation Time
(as defined in Section 5 of this Agreement) (the "Statement of Assets and
Liabilities"), to the Acquiring Fund, free and clear of all liens, encumbrances
and adverse claims except as provided in this Agreement, and the Acquiring Fund
shall acquire all assets, and shall assume all liabilities of the Acquired Fund,
and the Acquiring Fund shall deliver to the Acquired Fund a number of Acquiring
Fund Shares (both full and fractional) equivalent in value to the Acquired Fund
Shares outstanding immediately prior to the Effective Time. The assets and
liabilities of the Acquired Fund shall be exclusively assigned to and assumed by
the Acquiring Fund. All debts, liabilities, obligations and duties of the
Acquired Fund, to the extent that they exist at or after the Effective Time,
shall after the Effective Time attach to the Acquiring Fund and may be enforced
against such Acquiring Fund to the same extent as if the same had been incurred
by the Acquiring Fund. The events outlined in this Section 1 are the
"Reorganization."
28
2. TRANSFER OF ASSETS.
(a) The assets of the Acquired Fund to be acquired by the
Acquiring Fund and allocated thereto shall include, without limitation, all
cash, cash equivalents, securities, receivables (including interest and
dividends receivable) as set forth in the Statement of Assets and Liabilities,
as well as any claims or rights of action or rights to register shares under
applicable securities laws, any books or records of the Acquired Fund and other
property owned by the Acquired Fund at the Effective Time.
(b) The Acquired Fund shall direct First National Bank of
Omaha as custodian for the Acquired Fund (the "Custodian"), to deliver, at or
prior to the Effective Time, a certificate of an authorized officer stating
that: (i) assets have been delivered in proper form to the Acquiring Fund within
two business days prior to or at the Effective Time, and (ii) all necessary
taxes in connection with the delivery of the assets, including all applicable
federal and state stock transfer stamps, if any, have been paid or provision for
payment has been made. The Custodian shall deliver prior to or as of the
Effective Time by book entry, in accordance with the customary practices of any
securities depository, as defined in Rule 17f-4 under the 1940 Act, in which the
Acquired Fund's assets are deposited, the Acquired Fund's assets deposited with
such depositories. The cash to be transferred by the Acquired Funds, if not
already held by Custodian, shall be delivered by wire transfer of federal funds
prior to or as of the Effective Time.
(c) The Acquired Fund shall direct First National Bank of
Omaha, or its sub-agent (the "Transfer Agent"), on behalf of the Acquired Fund,
to deliver prior to or as of the Effective Time a certificate of an authorized
officer stating that its records contain the names and addresses of the holders
of the Acquired Fund Shares and the number and percentage ownership of
outstanding shares owned by each shareholder immediately prior to the Effective
Time. The Acquiring Fund shall provide evidence satisfactory to the Acquired
Fund that such Acquiring Fund Shares have been credited to the Acquired Fund's
account on the books of the Acquiring Fund. No later than the Effective Time
each party shall deliver to the other such bill of sale, checks, assignments,
share certificates, if any, receipts or other documents as such other party or
its counsel may reasonably request.
3. CALCULATIONS.
(a) The number of Acquiring Fund Shares issued to the Acquired
Fund pursuant to Section 1 hereof will be equal to the value of the net assets
of the Acquired Fund, divided by the net asset value per share of the Acquiring
Fund, both as determined as of the Valuation Time.
29
(b) The net asset value of Acquiring Fund Shares shall be the
net asset value computed at the Valuation Time in the manner set forth in the
Acquiring Fund's then current prospectus under the Securities Act of 1933 (the
"1933 Act").
4. VALUATION OF ASSETS. The value of the assets of the Acquired Fund
shall be the value of such assets computed as of the Valuation Time (as
hereinafter defined). The net asset value of the assets of the Acquired Fund to
be transferred to the corresponding Acquiring Fund shall be computed by the
Company. In determining the value of the securities transferred by the Acquired
Fund to the Acquiring Fund, each security shall be priced in accordance with the
pricing policies and procedures of the Acquired Fund as described in the then
current prospectus and statement of additional information.
5. VALUATION TIME. The valuation time shall be 4:00 p.m., Eastern
Time, on July 31, 2003, or such earlier or later date and time as may be
mutually agreed in writing by an authorized Representative of each of the
parties (the "Valuation Time"). Notwithstanding anything herein to the contrary,
in the event that at the Valuation Time, (a) the New York Stock Exchange shall
be closed to trading or trading thereon shall be restricted, or (b) trading or
the reporting of trading on such exchange or elsewhere shall be disrupted so
that, in the judgment of the Company, accurate appraisal of the value of the net
assets of the Acquired Fund is impracticable, the Valuation Time shall be
postponed until the first business day after the day when trading shall have
been fully resumed without restriction or disruption, reporting shall have been
restored and accurate appraisal of the value of the net assets of the Acquired
Fund is practicable.
6. LIQUIDATION OF THE ACQUIRED FUND AND CANCELLATION OF SHARES. At the
Effective Time, the Acquired Fund will liquidate and the Acquiring Fund Shares
(both full and fractional) received by the Acquired Fund will be distributed to
the shareholders of record of the Acquired Fund as of the Effective Time in
exchange for the Acquired Fund Shares and in complete liquidation of the
Acquired Fund. Each Acquired Fund shareholder shall receive Acquiring Fund
Shares equal in value to the Acquired Fund Shares held by that shareholder. Such
liquidation and distribution will be accompanied by the establishment of an open
account on the share records of the Acquiring Fund in the name of each
shareholder of the Acquired Fund that represents the number of Acquiring Fund
Shares due such shareholder. All of the issued and outstanding shares of the
Acquired Fund shall be cancelled on the books of the Company at the Effective
Time and shall thereafter represent only the right to receive Acquiring Fund
Shares. The Acquired Fund's transfer books shall be closed permanently. The
Company also shall take any and all other steps as shall be necessary and proper
to effect a complete termination of the Acquired Fund.
30
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE ACQUIRING
FUND. The Company, on behalf of the Acquiring Fund, represents and warrants to
the Acquired Fund as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Company is a corporation
duly organized and validly existing under the laws of the State of Nebraska and
has the power to carry on its business as it is now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Company is
registered under the 1940 Act as an open-end management investment company; such
registration has not been revoked or rescinded and is in full force and effect.
(c) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring
Fund Shares issued and outstanding immediately prior to the Effective Time, and
to be issued by the Acquiring Fund in connection with the Reorganization, have
been duly authorized and are (or upon consummation of the Reorganization will
be) validly issued, fully paid and non-assessable by the Company.
(d) AUTHORITY RELATIVE TO THIS AGREEMENT. The Company, on
behalf of the Acquiring Fund, has the power to enter into this Agreement and to
carry out its obligations hereunder. The execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated hereby,
have been duly authorized by the Company's Board of Directors, and upon approval
of the Reorganization by the shareholders of the Acquiring Fund, no other
proceedings by the Acquiring Fund will be necessary to authorize the Company's
officers to effectuate this Agreement and the transactions contemplated hereby.
The Acquiring Fund is not a party to or obligated under any charter, by-law,
indenture or contract provision or any other commitment or obligation, or
subject to any order or decree, which would be violated by its executing and
carrying out this Agreement.
(e) LIABILITIES. There are no liabilities of the Acquiring
Fund, whether or not determined or determinable, other than liabilities incurred
in the ordinary course of business subsequent to the Effective Time or otherwise
disclosed to the Acquired Fund, none of which has been materially adverse to the
business, assets or results of operations of the Acquiring Fund. The Company's
Registration Statement, which is on file with the Securities and Exchange
Commission (the "SEC"), does not contain an untrue statement of material fact or
omit a material fact that is required to be stated therein or that is necessary
to make the statements therein not misleading.
31
(f) LITIGATION. Except as disclosed to the Acquired Fund,
there are no claims, actions, suits or proceedings pending or, to the actual
knowledge of the Acquiring Fund, threatened which would materially adversely
affect the Acquiring Fund or its assets or business or which would prevent or
hinder in any material respect consummation of the transactions contemplated
hereby.
(g) CONTRACTS. Except for contracts and agreements disclosed
to the Acquired Fund, under which no default exists, the Acquiring Fund is not a
party to or subject to any material contract, debt instrument, plan, lease,
franchise, license or permit of any kind or nature whatsoever with respect to
the Acquiring Fund.
(h) TAXES. As of the Effective Time, all Federal and other tax
returns, information returns, and other tax-related reports of the Acquiring
Fund required by law to have been filed by such date (including extensions)
shall have been filed, and all other taxes shall have been paid so far as due,
or provision shall have been made for the payment thereof, and to the best of
the Acquiring Fund's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to any of such returns.
(i) SUBCHAPTER M. For each taxable year of its operation, the
Acquiring Fund has met the requirements of Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code") for qualification as a regulated
investment company, has been eligible to and has computed its federal income tax
under Section 852 of the Code.
8. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED FUND. The Company,
on behalf of the Acquired Fund, represents and warrants to the Acquiring Fund as
follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nebraska and has the power to carry on its business as it is now being
conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Company is
registered under the 1940 Act as an open-end management investment company; such
registration has not been revoked or rescinded and is in full force and effect.
32
(c) FINANCIAL STATEMENTS. The audited financial statements of
the Company relating to the Acquired Fund for the fiscal year ended March 31,
2003 (the "Acquired Fund's Financial Statements"), as delivered to the Acquiring
Fund, fairly present the financial position of the Acquired Fund as of the dates
thereof, and the results of its operations and changes in its net assets for the
periods indicated. There are no known contingent liabilities of the Acquired
Fund required to be reflected on a balance sheet (including notes thereto) in
accordance with generally accepted accounting principles as of such date not
disclosed therein.
(d) MARKETABLE TITLE TO ASSETS. The Acquired Fund will have,
at the Effective Time, good and marketable title to, and full right, power and
authority to sell, assign, transfer and deliver, the assets to be transferred to
the Acquiring Fund. Upon delivery and payment for such assets, the Acquiring
Fund will have good and marketable title to such assets without restriction on
the transfer thereof free and clear of all liens, encumbrances and adverse
claims.
(e) AUTHORITY RELATIVE TO THIS AGREEMENT. The Company, on
behalf of the Acquired Fund, has the power to enter into this Agreement and to
carry out its obligations hereunder. The execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated hereby,
have been duly authorized by the Company's Board of Directors, and, upon
approval of the Reorganization by the shareholders of the Acquired Fund, no
other proceedings by the Acquired Fund are necessary to authorize the Company's
officers to effectuate this Agreement and the transactions contemplated hereby.
The Acquired Fund is not a party to or obligated under any charter, by-law,
indenture or contract provision or any other commitment or obligation, or
subject to any order or decree, which would be violated by its executing and
carrying out this Agreement.
(f) LIABILITIES. There are no liabilities of the Acquired
Fund, whether or not determined or determinable, other than liabilities
disclosed or provided for in the Acquired Fund's Financial Statements and
liabilities incurred in the ordinary course of business prior to the Effective
Time, or otherwise disclosed to the Acquiring Fund, none of which has been
materially adverse to the business, assets or results of operations of the
Acquired Fund. The Company's Registration Statement, which is on file with the
SEC, does not contain an untrue statement of a material fact or omit a material
fact that is required to be stated therein or that is necessary to make the
statements therein not misleading.
(g) LITIGATION. Except as disclosed to the Acquiring Fund,
there are no claims, actions, suits or proceedings pending or, to the knowledge
of the Acquired Fund, threatened which would materially adversely affect the
Acquired Fund or its assets or business or which would prevent or hinder in any
material respect consummation of the transactions contemplated hereby.
33
(h) CONTRACTS. Except for contracts and agreements disclosed
to the Acquiring Fund, under which no default exists, the Acquired Fund, at the
Effective Time, is not a party to or subject to any material contract, debt
instrument, plan, lease, franchise, license or permit of any kind or nature
whatsoever.
(i) TAXES. As of the Effective Time, all Federal and other tax
returns, information returns, and other tax-related reports of the Acquired Fund
required by law to have been filed shall have been filed by such date (including
extensions), and all other taxes shall have been paid so far as due, or
provision shall have been made for the payment thereof, and to the best of the
Acquired Fund's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to any of such returns.
(j) SUBCHAPTER M. For each taxable year of its operation, the
Acquired Fund has met the requirements of Subchapter M of the Code for
qualification as a regulated investment company, has been eligible to and has
computed its federal income tax under Section 852 of the Code.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND. The
obligations of the Acquiring Fund to complete the Reorganization is expressly
contingent on the following:
(a) All representations and warranties on behalf of the
Acquired Fund contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Effective Time, with
the same force and effect as if made on and as of the Effective Time. At the
Effective Time, the Company shall have prepared a certificate from its President
or Vice President, dated as of such date, certifying on behalf of the Company
that as of such date the conditions set forth in this clause (a) have been met.
(b) The Acquiring Fund shall have received an opinion of
counsel on behalf of the Acquired Fund, dated as of the Effective Time,
addressed to, and in form and substance satisfactory to, Acquiring Fund, to the
effect that: (i) the Company is duly organized and in good standing under the
laws of the State of Nebraska and the Acquired Fund is a validly existing series
of the Company; (ii) the Company is an open-end management investment company
registered under the 1940 Act and such registration has not been revoked or
rescinded and is in full force and effect; (iii) the Company, on behalf of the
Acquired Fund, has power to sell, assign, convey, transfer and deliver the
Acquired Fund's assets contemplated hereby and, upon consummation of the
transactions contemplated hereby in accordance with the terms of this Agreement,
the Acquired Fund will have duly sold, assigned, conveyed, transferred and
delivered such assets to the Acquiring Fund; (iv) the execution and delivery of
this Agreement will not, and the consummation of the transactions contemplated
34
hereby will not, violate the Company's Articles of Incorporation or Bylaws or
any provision of an agreement known to such counsel (without any independent
inquiry or investigation) to which the Company, with respect to the Acquired
Fund, is a party or by which it is bound; (v) this Agreement and the
Reorganization provided for herein and the execution of this Agreement have been
duly authorized and approved by all requisite corporate action on behalf of the
Company and this Agreement has been duly executed and delivered by the Company
on behalf of the Acquired Fund and is a valid and binding obligation of the
Company on behalf of the Acquired Fund, subject to applicable bankruptcy,
insolvency, fraudulent conveyance and similar laws or court decisions regarding
enforcement of creditors' rights generally; and (vi) to the best of counsel's
knowledge, no consent, approval, order or authorization of any court,
governmental authority or agency is required for the Company to enter into this
Agreement on behalf of the Acquired Fund or carry out its terms, except such as
has been obtained under the 1933 Act, the Securities Exchange Act of 1934 (the
"1934 Act"), the 1940 Act (together with the 1933 Act and the 1934 Act, the
"Federal Securities Laws"), and Nebraska state law as it relates to the
treatment of corporations (including, in the case of each of the foregoing, the
rules and regulations thereunder) or where the failure to obtain any such
consent, approval, order or authorization would not have a material adverse
effect on the operations of the Acquired Fund or the consummation of the
transactions contemplated by this Agreement. Such opinion may rely on a
certificate of the President or Vice President of the Company as to factual
matters.
(c) The Acquired Fund shall have delivered to the Acquiring
Fund at the Effective Time the Acquired Fund's Statement of Assets and
Liabilities, prepared in accordance with generally accepted accounting
principles consistently applied, together with a certificate of the Treasurer or
Assistant Treasurer of the Company as to the aggregate asset value of the
Acquired Fund's portfolio securities.
(d) At the Effective Time, the Company shall have performed
and complied in all material respects with each of its agreements and covenants
required by this Agreement to be performed or complied with by the Company prior
to or at the Effective Time and the Company shall have received a certificate
from the President or Vice President of the Company, dated as of such date,
certifying on behalf of the Company that the conditions set forth in this clause
(d) have been and continue to be, satisfied.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUNDS. The
obligation of the Acquired Fund to complete the Reorganization is expressly
contingent on the following:
(a) All representations and warranties on behalf of the
Acquiring Fund contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Effective Time, with
35
the same force and effect as if made on and as of the Effective Time. At the
Effective Time, the Company shall have prepared a certificate from its President
or Vice President, dated as of such date, certifying on behalf of the Company
that as of such date that the conditions set forth in this clause (a) have been
met.
(b) The Acquired Fund shall have received an opinion of
counsel on behalf of the Acquiring Fund, dated as of the Effective Time,
addressed to, and in form and substance satisfactory, to the Acquired Fund, to
the effect that: (i) the Company is duly organized under the laws of the State
of Nebraska and the Acquiring Fund is a validly existing series of the Company;
(ii) the Company is an open-end management investment company registered under
the 1940 Act and such registration has not been revoked or rescinded and such
registration is in full force and effect; (iii) the execution and delivery of
this Agreement will not, and the consummation of the transactions contemplated
hereby will not, violate the Company's Articles of Incorporation or Bylaws or
any provision of an agreement known to such counsel (without any independent
inquiry or investigation) to which the Company, with respect to the Acquiring
Fund, is a party or by which it is bound; (iv) this Agreement and the
Reorganization provided for herein and the execution of this Agreement have been
duly authorized and approved by all requisite corporate action on behalf of the
Company and this Agreement has been duly executed and delivered by the Company
on behalf of the Acquiring Fund and is a valid and binding obligation of the
Company on behalf of the Acquiring Fund, subject to applicable bankruptcy,
insolvency, fraudulent conveyance and similar laws or court decisions regarding
enforcement of creditors' rights generally; (v) to the best of counsel's
knowledge, no consent, approval, order or authorization of any court,
governmental authority or agency is required for the Company to enter into this
Agreement on behalf of the Acquired Fund or carry out its terms, except such as
has been obtained under the Federal Securities Laws and Nebraska state law as it
relates to treatment of corporations (including, in the case of each of the
foregoing, the rules and regulations thereunder) or where the failure to obtain
any such consent, approval, order or authorization would not have a material
adverse effect on the operations of the Acquired Fund or the consummation of the
transactions contemplated by this Agreement; and (vi) the Acquiring Fund Shares
to be issued in the Reorganization have been duly authorized and upon issuance
thereof in accordance with this Agreement will be validly issued, fully paid and
non-assessable by the Company. Such opinion may rely on a certificate of the
President or Vice President of the Company as to factual matters.
(c) At the Effective Time, the Company shall have performed
and complied in all material respects with each of its agreements and covenants
required by this Agreement to be performed or complied with by the Company prior
to or at the Effective Time and the Company shall have received a certificate
from the President or Vice President of the Company, dated as of such date,
certifying on behalf of the Company that the conditions set forth in this clause
(c) have been, and continue to be, satisfied.
36
11. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
AND THE ACQUIRING FUND. The obligations of the Acquired Fund and the Acquiring
Fund to effectuate this Agreement shall be subject to the satisfaction of each
of the following conditions:
(a) The Company will call a meeting of shareholders of the
Acquired Fund and the Acquiring Fund to consider and act upon this Agreement and
to take all other actions reasonably necessary to obtain the approval by
shareholders of the Acquired Funds of this Agreement and the transactions
contemplated herein, including the Reorganization and the termination of the
Acquired Fund if the Reorganization is consummated. The Company has prepared or
will prepare a notice of meeting, form of proxy, and a combined Proxy
Statement/Prospectus on Form N-14 (collectively, the "Proxy Materials") to be
used in connection with such meeting.
(b) The Registration Statement on Form N-14 of the Acquiring
Fund shall be effective under the 1933 Act and, to the best knowledge of the
Acquiring Fund, no investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the 1933 Act.
(c) The shares of the Acquiring Fund shall have been duly
qualified for offering to the public in all states of the United States, the
Commonwealth of Puerto Rico and the District of Columbia (except where such
qualifications are not required) so as to permit the transfer contemplated by
this Agreement to be consummated.
(d) The Acquired Fund and the Acquiring Fund shall have
received on or before the Effective Time an opinion of counsel satisfactory to
the Acquired Fund and the Acquiring Fund, based on customary officers'
certificates provided by each, substantially to the effect that with respect to
the Acquired Fund and the Acquiring Fund for Federal income tax purposes:
(i) No gain or loss will be recognized by the
Acquired Fund upon the transfer of its assets in exchange solely for Acquiring
Fund Shares and the assumption by the Acquiring Fund of the Acquired Fund's
stated liabilities.
(ii) No gain or loss will be recognized by the
Acquiring Fund on its receipt of Acquired Fund assets in exchange for Acquiring
Fund Shares and the assumption by the Acquiring Fund of the Acquired Fund's
liabilities;
37
(iii) The adjusted tax basis of the Acquired Fund's
assets in the Acquiring Fund's hands will be the same as the adjusted tax basis
of those assets in the Acquired Fund's hands immediately before the Effective
Time;
(iv) The Acquiring Fund's holding period for the
assets received from the Acquired Fund will include the holding period of those
assets in the Acquired Fund's hands immediately before the Effective Time;
(v) No gain or loss will be recognized by the
Acquired Fund on the distribution of Acquiring Fund Shares to the Acquired
Fund's shareholders in exchange for their Acquired Fund Shares;
(vi) No gain or loss will be recognized by any
Acquired Fund shareholder as a result of the Acquired Fund's distribution of
Acquiring Fund Shares to such shareholder in exchange for such shareholder's
Acquired Fund Shares;
(vii) The adjusted tax basis of the Acquiring Fund
Shares received by each Acquired Fund shareholder will be the same as the
adjusted tax basis of that Acquired Fund shareholder's Acquired Fund Shares
surrendered in exchange therefor; and
(viii) The holding period of the Acquiring Fund
Shares received by each Acquired Fund shareholder will include such
shareholder's holding period for the Acquired Fund Shares surrendered in
exchange therefor, provided that said Acquired Fund Shares were held as capital
assets as of the Effective Time.
(e) This Agreement and the Reorganization contemplated hereby
shall have been approved by at least a majority of the outstanding shares of the
Acquired Fund and Acquiring Fund entitled to vote on the matter.
(f) The Board of Directors of the Company shall have approved
this Agreement and authorized the issuance by the Acquiring Fund of Acquiring
Fund Shares at the Effective Time in exchange for the assets of the Acquired
Fund pursuant to the terms and provisions of this Agreement.
12. EFFECTIVE TIME OF THE REORGANIZATION. The exchange of the Acquired
Funds' assets for the Acquiring Fund Shares shall be effective as of opening of
business on August 1, 2003, or at such other time and date as fixed by the
mutual consent of the parties (the "Effective Time").
13. TERMINATION. This Agreement and the transactions contemplated
hereby may be terminated and abandoned without penalty by resolution of the
Board of Directors of the Company, at any time prior to the Effective Time, if
circumstances should develop that, in the opinion such Board, make proceeding
with the Agreement inadvisable.
38
14. AMENDMENT. This Agreement may be amended, modified or supplemented
in such manner as may be mutually agreed upon in writing by the parties;
provided, however, no such amendment may have the effect of changing the
provisions for determining the number or value of Acquiring Fund Shares to be
paid to the Acquired Fund's shareholders under this Agreement to the detriment
of such Acquired Fund's shareholders.
15. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Nebraska.
16. NOTICES. Any notice, report, statement or demand required or
permitted by any provision of this Agreement shall be in writing and shall be
given by prepaid telegraph, telecopy, certified mail or overnight express
courier addressed as follows:
If to the Acquiring Fund or the Acquired Fund:
First Focus Funds, Inc.
1620 Dodge Street, Stop 1071
Omaha, Nebraska 68197
Attention: Meg Davies
with copies to:
Donald F. Burt John Munch
Cline, Williams, Wright, SEI Investments
Johnson, & Oldfather, L.L.P. One Freedom Valley Drive
233 So. 13th Street, Suite 1900 Oaks, PA 19456
Lincoln, NE 68508
17. FEES AND EXPENSES. Except as otherwise provided for
herein, all expenses of the Reorganization contemplated by this Agreement will
be borne by the Acquired Fund. Such expenses include, without limitation: (i)
expenses incurred in connection with the entering into and the carrying out of
the provisions of this Agreement; (ii) expenses associated with the preparation
and filing of the Proxy Materials under the 1934 Act; (iii) registration or
qualification fees and expenses of preparing and filing such forms as are
necessary under applicable state securities laws to qualify the Acquiring Fund
Shares to be issued in connection herewith in each state in which the Acquired
Fund's shareholders are resident as of the date of the mailing of the Proxy
Materials to such shareholders; (iv) postage; (v) printing; (vi) accounting
fees; (vii) legal fees; and (viii) solicitation costs related to obtaining
shareholder approval of the transactions contemplated by this Agreement.
39
18. INDEMNIFICATION. The Company shall indemnify, defend and hold
harmless, its Directors, officers, employees and agents, to the maximum extent
permitted by applicable law, from and against all losses, claims, demands,
liabilities and expenses, including legal fees and costs of defense, incurred in
defending any third party claims, actions, suits or proceedings, including
amounts paid in the compromise or settlement thereof, arising out of any untrue
or alleged untrue statement of a material fact in, or any omission or alleged
omission to state a material fact necessary to make the statements made not
misleading from, any Proxy Materials, as filed and in effect with the SEC, or
any application filed with any state regulatory agency in connection with the
transactions contemplated in this Agreement. Any such indemnification shall be
made in accordance with the Company's by-laws as then in effect and the
applicable provisions of Nebraska law.
19. HEADINGS, COUNTERPARTS, ASSIGNMENT.
(a) The article and section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
(b) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
(c) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns, but
no assignment or transfer hereof or of any rights or obligations hereunder shall
be made by any party without the written consent of the other party. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person, firm or corporation other than the parties hereto and their
respective successors and assigns any rights or remedies under or by reason of
this Agreement.
(d) ENTIRE AGREEMENT. The Acquiring Fund and the Acquired Fund
agree that neither party has made any representation, warranty or covenant not
set forth herein and that this Agreement constitutes the entire agreement
between the parties. The representations, warranties and covenants contained
herein or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
(e) FURTHER ASSURANCES. Each of the parties shall take such
further action as may be necessary or desirable and proper to consummate the
transactions contemplated hereby.
40
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
FIRST FOCUS FUNDS, INC., on behalf of its portfolio, First Focus Income Fund
By: /s/ David P. Greer
------------------------------
Title: President
FIRST FOCUS FUNDS, INC., on behalf of its portfolio, First Focus Bond Fund
By: /s/ David P. Greer
-----------------------------
Title: President
41
FIRST OMAHA INCOME FUND
and
FIRST OMAHA BOND FUND
each a portfolio of
FIRST OMAHA FUNDS, INC.
SPECIAL MEETING OF SHAREHOLDERS
July 25, 2003
CUSIP NOS: 320269-798
320269-822
The undersigned shareholder(s) of First Omaha Income Fund (the "Acquiring Fund")
and First Omaha Bond Fund (the "Acquired Fund), collectively the "Funds", each a
portfolio of First Omaha Funds, Inc. (the "Company") hereby appoint(s) John
Munch and Laurie Brooks, and each of them, true and lawful proxies, with power
of substitution of each, to vote all shares of the Funds which the undersigned
is entitled to vote, at the Special Meeting of Shareholders to be held on July
25, 2002, at 11:00 a.m. (Eastern time) at the offices of SEI Investments, One
Freedom Valley Drive, Oaks, Pennsylvania 19456 (the "Special Meeting").
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The proxies named
will vote the shares represented by this proxy in accordance with the choice
made on this ballot. IF NO CHOICE IS INDICATED, THIS PROXY WILL BE VOTED FOR
THAT MATTER.
Proposal 1: To approve or disapprove a proposed Agreement and
Plan of Reorganization (the "Reorganization
Agreement") between the Acquired Fund and the
Acquiring Fund, whereby the Acquiring Fund will
acquire all of the assets of the Acquired Fund in
exchange for Acquiring Fund shares to be distributed
pro rata to the shareholders of the Acquired Fund in
complete liquidation and termination of the Acquired
Fund.
Proposal 2: To transact such other business as may properly
come before the Special Meeting or at any
adjournments thereof.
YOU CAN HELP THE COMPANY AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY SIGNING AND RETURNING THE ENCLOSED PROXY.
IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE MARK, DATE AND RETURN THE
ENCLOSED PROXY SO THAT THE REQUIRED QUORUM MAY BE REPRESENTED AT THE SPECIAL
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
42
PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND RETAIN
THE TOP PORTION.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: (X)
KEEP THIS PROTION FOR YOUR RECORDS
- -----------------------------------------------
FIRST FOCUS INCOME FUND
RECORD DATE SHARES:
------------------------
VOTE ON THE PROPOSAL
FOR AGAINST ABSTAIN
FIRST FOCUS BOND
RECORD DATE SHARES:
------------------------
VOTE ON THE PROPOSAL
FOR AGAINST ABSTAIN
Please sign EXACTLY as your name(s) appear(s) above. When signing as attorney,
executor, administrator, guardian, director, custodian, etc., please give your
full title as such. If a corporation or partnership, please sign the full name
by an authorized officer or partner. If stock is owned jointly, all owners
should sign.
- -------------------------------------
- -------------------------------------
Signature(s) of Shareholder(s)
Date:
------------------------------------
43
STATEMENT OF ADDITIONAL INFORMATION
Dated June 27, 2003
Relating to the Acquisition of the Assets of
FIRST OMAHA BOND FUND
By and in exchange for Shares of
FIRST OMAHA INCOME FUND
This Statement of Additional Information dated June 27, 2003 is not a
prospectus. A Proxy Statement/Prospectus dated June 27, 2003 related to the
above-referenced matter may be obtained from the First Omaha Funds, Inc. This
Statement of Additional Information should be read in conjunction with such
Proxy Statement/Prospectus.
44
TABLE OF CONTENTS
1. Statement of Additional Information of FIRST OMAHA FUNDS, INC., dated
June 27, 2003.
2. Statement of Additional Information of FIRST OMAHA FUNDS, INC., dated
January 7, 2003.
3. Annual report of FIRST OMAHA FUNDS, INC., dated March 31, 2003.
4. Pro Forma Combining Financial Statements (unaudited) of First Omaha
Income Fund and First Omaha Bond Fund as of March 31, 2003.
The Statement of Additional Information of the Company, dated January
7, 2003, is incorporated herein by reference to the Company's Rule 497(a) filing
under Registration Statement on Form N-1A (File Nos. 33-85982 and 811-8846)
which was filed with the Securities and Exchange Commission on or about January
7, 2003. A copy may be obtained, upon request and without charge, from First
Omaha Funds Service Center, P.O. Box 219022, Kansas City, Missouri 64121-9022,
telephone number 1-800-662-4203.
The audited financial statements of the Funds, dated March 31, 2003,
are incorporated herein by reference to the Company's Annual Report to
Shareholders, dated March 31, 2003, which was filed with the Securities and
Exchange Commission on or about May 28, 2003. A copy may be obtained,
upon request and without charge, from the Company at the address or telephone
number shown in the prior paragraph.
PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED)
45
Pro-Forma Schedule of Investments (Unaudited)
First Focus Bond Fund and First Focus Income Fund
March 31, 2003
------------------------- ---------------------- -------------------
Bond Income
Fund Fund Combined
------------------------- ---------------------- -------------------
Principal Principal Principal
Amount Value Amount Value Amount Value
------------------------- ---------------------- -------------------
U.S. Treasury Obligations
U.S. Treasury Bonds
13.750%, 08/15/04 - - 2,000,000 2,338,594 2,000,000 2,338,594
8.125%, 08/15/21 - - 1,500,000 2,111,655 1,500,000 2,111,655
7.250%, 05/15/16 - - 500,000 642,730 500,000 642,730
6.250%, 05/15/30 - - 500,000 596,679 500,000 596,679
5.500%, 08/15/28 250,000 269,482 750,000 808,448 1,000,000 1,077,930
------------- ------------ ----------
269,482 6,498,106 6,767,588
------------- ------------ ----------
U.S. Treasury Notes
U.S. Treasury Inflationary Index Notes
3.375%, 01/15/07 1,604,666 1,765,633 - - 1,604,666 1,765,633
3.000%, 07/15/12 1,439,236 1,566,068 - - 1,439,236 1,566,068
U.S. Treasury Notes
7.500%, 02/15/05 - - 1,500,000 1,667,220 1,500,000 1,667,220
7.250%, 05/15/04 - - 1,000,000 1,067,070 1,000,000 1,067,070
6.125%, 08/15/07 750,000 859,478 - - 750,000 859,478
5.875%, 11/15/04 1,250,000 1,339,600 - - 1,250,000 1,339,600
5.750%, 11/15/05 1,500,000 1,651,875 - - 1,500,000 1,651,875
5.250%, 08/15/03 - - 500,000 507,715 500,000 507,715
3.500%, 11/15/06 500,000 521,055 2,000,000 2,084,218 2,500,000 2,605,273
------------- ------------ ----------
7,703,709 5,326,223 13,029,932
------------- ------------ ----------
Total U.S. Treasury Obligations 7,973,191 11,824,329 19,797,520
------------- ------------ ----------
U.S. Government Agency Obligations
FHLB
7.375%, 02/12/10 - - 1,000,000 1,221,485 1,000,000 1,221,485
4.500%, 02/15/06 - - 750,000 797,196 750,000 797,196
3.500%, 11/15/07 1,400,000 1,430,599 - - 1,400,000 1,430,599
------------- ------------ ----------
1,430,599 2,018,681 3,449,280
------------- ------------ ----------
FHLMC
6.943%, 03/21/07 - - 760,000 882,630 760,000 882,630
6.250%, 03/05/12 - - 380,000 415,252 380,000 415,252
5.250%, 01/15/06 1,350,000 1,464,130 - - 1,350,000 1,464,130
4.875%, 03/15/07 1,350,000 1,463,144 - - 1,350,000 1,463,144
3.750%, 11/21/07 - - 600,000 602,010 600,000 602,010
------------- ------------ ----------
2,927,274 1,899,892 4,827,166
------------- ------------ ----------
FNMA
7.125%, 01/15/30 1,150,000 1,432,118 1,500,000 1,867,980 2,650,000 3,300,098
6.250%, 02/17/11 - - 1,000,000 1,038,641 1,000,000 1,038,641
5.500%, 10/18/11 - - 600,000 626,883 600,000 626,883
5.250%, 01/15/09 - - 3,000,000 3,300,060 3,000,000 3,300,060
5.250%, 04/15/07 1,300,000 1,427,215 - - 1,300,000 1,427,215
------------- ------------ -----------
2,859,333 6,833,564 9,692,897
------------- ------------ -----------
Total U.S. Government Agency Obligations 7,217,206 10,752,137 17,969,343
------------- ------------ -----------
U.S. Government Mortgage-Backed Obligations
FHLMC
7.000%, 02/15/29 - - 533,032 539,130 533,032 539,130
7.000%, 10/01/31 - - 810,937 854,156 810,937 854,156
6.500%, 02/01/31 - - 1,508,390 1,574,179 1,508,390 1,574,179
6.000%, 01/15/20 - - 1,434,698 1,480,880 1,434,698 1,480,880
6.000%, 01/15/29 - - 718,094 732,860 718,094 732,860
5.750%, 11/15/25 - - 1,150,000 1,166,405 1,150,000 1,166,405
5.500%, 07/15/13 - - 1,100,000 1,147,665 1,100,000 1,147,665
5.500%, 03/01/16 - - 1,004,422 1,042,955 1,004,422 1,042,955
------------- ------------ ----------
- 8,538,230 8,538,230
------------- ------------ ----------
FNMA
7.000%, 07/01/17 - - 771,762 823,678 771,762 823,678
7.000%, 05/01/29 - - 938,490 990,290 938,490 990,290
7.000%, 06/01/31 - - 949,808 1,001,611 949,808 1,001,611
7.000%, 09/01/31 - - 1,129,338 1,190,932 1,129,338 1,190,932
7.000%, 05/01/32 - - 680,327 717,435 680,327 717,435
6.500%, 03/01/32 - - 1,075,631 1,122,854 1,075,631 1,122,854
5.500%, 03/01/13 - - 3,275,071 3,449,954 3,275,071 3,449,954
5.000%, 04/01/13 - - 3,300,000 3,437,474 3,300,000 3,437,474
------------- ------------ ----------
- 12,734,228 12,734,228
------------- ------------ ----------
GNMA
7.000%, 12/15/27 - - 1,908,142 2,029,885 1,908,142 2,029,885
------------- ------------ -----------
Total U.S. Government Mortgage-Backed Obligations - 23,302,343 23,302,343
------------- ------------ -----------
Corporate Bonds
Aerospace & Defense
United Technologies Corp. 575,000 664,125 - - 575,000 664,125
------------- ------------ ----------
Banks
Bank One Corp. 550,000 691,625 - - 550,000 691,625
Bank One Corp. - - 1,011,000 1,343,047 1,011,000 1,343,047
Key Bank 700,000 772,625 - - 700,000 772,625
Northern Trust - - 375,000 424,985 375,000 424,985
SouthTrust Bank 750,000 827,640 - - 750,000 827,640
Wells Fargo & Co. 750,000 809,512 - - 750,000 809,512
------------- ------------ ----------
3,101,402 1,768,032 4,869,434
------------- ------------ ----------
Computers, Products & Services
Dell Computer Corp. 625,000 712,500 750,000 855,000 1,375,000 1,567,500
Electronic Data Systems 700,000 722,750 - - 700,000 722,750
Oracle Corp. - - 700,000 791,000 700,000 791,000
Oracle Corp. - - 650,000 680,063 650,000 680,063
------------- ------------ ----------
1,435,250 2,326,063 3,761,313
------------- ------------ ----------
Cosmetics & Toiletries
Avon Products, Inc. - - 493,000 576,810 493,000 576,810
Avon Products, Inc. - - 490,000 551,812 490,000 551,812
Kimberly-Clark Corp. - - 1,000,000 1,037,276 1,000,000 1,037,276
------------- ------------ ----------
- 2,165,898 2,165,898
------------- ------------ ----------
Data Processing
First Data Corp. 725,000 765,754 - - 725,000 765,754
------------- ------------ ----------
Financial Services
Block Financial Corp. 600,000 688,971 1,085,000 1,245,890 1,685,000 1,934,861
Countrywide Home Loan 625,000 661,719 - - 625,000 661,719
Countrywide Home Loan - - 1,000,000 1,065,388 1,000,000 1,065,388
Goldman Sachs Group, Inc. 650,000 652,158 - - 650,000 652,158
Household Finance Corp. 675,000 777,094 - - 675,000 777,094
XTRA, Inc. MTN, Ser C - - 1,025,000 1,099,983 1,025,000 1,099,983
------------- ------------ ----------
2,779,942 3,411,261 6,191,203
------------- ------------ ----------
Food, Beverage & Tobacco
Anheuser-Busch Cos., Inc. 625,000 728,906 1,025,000 1,195,406 1,650,000 1,924,312
Conagra Foods, Inc. - - 1,000,000 1,178,679 1,000,000 1,178,679
Nabisco, Inc. 650,000 740,188 - - 650,000 740,188
------------- ------------ ----------
1,469,094 2,374,085 3,843,179
------------- ------------ ----------
Foreign Governments
Province of Ontario 700,000 701,309 875,000 876,636 1,575,000 1,577,945
------------- ------------ ----------
Gas/Natural Gas
Duke Capital Corp. 700,000 723,282 - - 700,000 723,282
Laclede Group, Inc. 800,000 874,000 - - 800,000 874,000
TXU Corp. - - 1,000,000 990,000 1,000,000 990,000
------------- ------------ ----------
1,597,282 990,000 2,587,282
------------- ------------ ----------
Insurance
AMBAC Financial Group, Inc - - 1,250,000 1,593,058 1,250,000 1,593,058
Chubb Corporation 650,000 675,992 - - 650,000 675,992
General Reinsurance Corp. - - 1,100,000 1,392,240 1,100,000 1,392,240
------------- ------------ ----------
675,992 2,985,298 3,661,290
------------- ------------ ----------
Medical Products & Services
Bristol-Myers Squibb 625,000 720,478 - - 625,000 720,478
Cardinal Health, Inc. - - 1,250,000 1,445,312 1,250,000 1,445,312
Health Net, Inc. - - 965,000 1,128,149 965,000 1,128,149
Johnson & Johnson - - 1,000,000 1,146,250 1,000,000 1,146,250
McKesson Corp. - - 1,250,000 1,452,068 1,250,000 1,452,068
Wyeth 750,000 826,875 - - 750,000 826,875
------------- ------------ ----------
1,547,353 5,171,779 6,719,132
------------- ------------ ----------
Petroleum & Fuel Products
BJ Services Co., Ser B - - 115,000 125,707 115,000 125,707
BP Amoco Plc 600,000 716,250 - - 600,000 716,250
Tosco Corp. 550,000 697,125 - - 550,000 697,125
------------- ------------ ----------
1,413,375 125,707 1,539,082
------------- ------------ ----------
Photographic Equipment & Supplies
Eastman Kodak Co. MTN, Ser A - - 664,000 718,832 664,000 718,832
------------- ------------ ----------
Retail
Limited Brands (A) 650,000 660,627 900,000 914,714 1,550,000 1,575,341
Safeway, Inc. - - 1,025,000 1,096,170 1,025,000 1,096,170
Wal-Mart Stores 650,000 730,437 1,000,000 1,123,750 1,650,000 1,854,187
------------- ------------ ----------
1,391,064 3,134,634 4,525,698
------------- ------------ ----------
Semi-Conductors/Instruments
Applied Material, Inc - - 400,000 451,500 400,000 451,500
------------- ------------ ----------
Telephones & Telecommunications
Verizon Global Funding Corp. 575,000 695,573 - - 575,000 695,573
------------- ------------ ----------
Transportation
Fedex Corp. - - 1,010,000 1,151,941 1,010,000 1,151,941
------------- ------------ ----------
Utilities & Electrical Services
Allete, Inc. 600,000 654,856 825,000 900,426 1,425,000 1,555,282
Union Electric 650,000 749,937 - - 650,000 749,937
------------- ------------ ----------
1,404,793 900,426 2,305,219
------------- ------------ ----------
Total Corporate Bonds 19,642,308 28,552,092 48,194,400
------------- ------------ ----------
Investment Companies
Goldman Sachs FSF, Treasury Obligations Fund 859,397 1,087,268 1,087,268
------------- ------------ ----------
Total Investment Companies 227,871 859,397 1,087,268
------------- ------------ ----------
Total Investments 35,060,576 75,290,298 110,350,874
============= ============ ==========
FHLB --- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
MTN -- Medium Term Note
Plc -- Public Liability Company
Ser -- Series
(A) Security exempt from registration under Rule 144A of the Securities Act of 1933.
These securities may be resold in transactions exempt from registration normally to qualified institutions.
PRO FORMA COMBINING STATEMENTS OF NET ASSETS
For the year ended March 31, 2003
Bond Fund Income Fund
Other Assets and Liabilities, Net: Other Assets and Liabilities, Net:
Investment advisory fees payable $ (15,712) Investment advisory fees payable $ (27,620)
Fund administration fees payable (6,285) Fund administration fees payable (12,847)
Administrative services plan fees payable (1,571) Administrative services plan fees payable (3,211)
Transfer agent out of pocket fees payable (176) Transfer agent out of pocket fees payable (168)
Other Assets and Liabilities 464,010 Other Assets and Liabilities (135,815)
------------ ------------
Total Other Assets and Liabilities, Net 440,266 Total Other Assets and Liabilities, Net (179,661)
------------ ------------
Net Assets: Net Assets:
Paid-in-Capital of Institutional Class Shares Paid-in-Capital of Institutional Class Shares
(authorized 50,000,000 -- $0.00001 par value) (authorized 50,000,000 -- $0.00001 par value)
based on 3,390,868 outstanding shares of based on 7,313,206 outstanding shares of
beneficial interest 34,875,483 beneficial interest 73,053,027
Distributions in excess of net investment income (176,864) Distributions in excess of net investment income (748,677)
Accumulated net realized loss on investments (895,437) Accumulated net realized loss on investments 353,063
Net unrealized appreciation on investments 1,697,660 Net unrealized appreciation on investments 2,453,224
------------ ------------
TOTAL NET ASSETS $35,500,842 TOTAL NET ASSETS $75,110,637
============ ============
Net Asset Value, Offering and Redemption Net Asset Value, Offering and Redemption Price
Price Per Share -- Institutional Class Shares $10.47 Per Share -- Institutional Class Shares $10.27
============ ============
Pro Forma Combined
-----------------
Other Assets and Liabilities, Net:
Investment advisory fees payable $ (43,332)
Fund administration fees payable (19,132)
Administrative services plan fees payable (4,782)
Transfer agent out of pocket fees payable (344)
Other Assets and Liabilities 328,195
-------------
Total Other Assets and Liabilities, Net 260,605
-------------
Net Assets:
Paid-in-Capital of Institutional Class Shares
(authorized 50,000,000 -- $0.00001 par value)
based on 10,770,094 outstanding shares of
beneficial interest 107,928,510
Distributions in excess of net investment income (925,541)
Accumulated net realized loss on investments (542,374)
Net unrealized appreciation on investments 4,150,884
-------------
TOTAL NET ASSETS $110,611,479
=============
Net Asset Value, Offering and Redemption Price
Per Share -- Institutional Class Shares $10.27
============
PRO FORMA COMBINING STATEMENTS OF OPERATIONS
For the year ended March 31, 2003
Bond Income Pro Forma Pro Forma
Fund Fund Adjustments Combined
---------- ---------- ---------- ------------
- -----------------------------------------------------------------------------------------------------------------
Investment Income:
Interest $ 1,989,314 $3,702,633 $ - $5,691,947
---------- ---------- ---------- ------------
Total Investment Income 1,989,314 3,702,633 $5,691,947
- ----------------------------------------------------- ---------- ---------- ---------- ------------
Expenses:
- -----------------------------------------------------
Investment advisory fees 230,941 414,342 --- 645,283
- -----------------------------------------------------
Fund administration fees 76,981 138,115 --- 215,096
- -----------------------------------------------------
Transfer agent fees 30,305 58,894 (36,953) 52,246
- -----------------------------------------------------
Custody fees 11,547 20,717 - 32,264
- -----------------------------------------------------
Federal and state registration fees 22,309 16,172 (5,000) 33,481
- -----------------------------------------------------
Professional fees 17,319 39,420 (6,219) 50,520
- -----------------------------------------------------
Printing fees 7,230 13,675 - 20,905
- -----------------------------------------------------
Directors' fees 2,012 3,461 - 5,473
- -----------------------------------------------------
Pricing fees 3,468 9,059 - 12,527
- -----------------------------------------------------
Administrative services plan fees 38,490 68,983 - 107,473
- -----------------------------------------------------
Shareholder servicing fees --- Class B* --- 117 (117) ---
- -----------------------------------------------------
Distribution fees --- Class A* --- 66 (66) ---
- -----------------------------------------------------
Distribution fees --- Class B* --- 351 (351) ---
- -----------------------------------------------------
Other expenses 781 2,178 (771) 2,188
- ----------------------------------------------------- ---------- ---------- ---------- ------------
Total expenses 441,383 785,550 (49,477) 1,177,456
- -----------------------------------------------------
Less, waiver of:
- -----------------------------------------------------
Investment advisory fees (38,490) (117,396) (26,943) (182,829)
- -----------------------------------------------------
Custody fees (11,547) (20,717) - (32,264)
- -----------------------------------------------------
Administrative services plan fees (19,246) (34,493) - (53,739)
- ----------------------------------------------------- ---------- ---------- ---------- ------------
Net Expenses 372,100 612,944 (76,420) 908,624
- ----------------------------------------------------- ---------- ---------- ---------- ------------
Net Investment Income 1,617,214 3,089,689 - 4,783,323
- ----------------------------------------------------- ---------- ---------- ---------- ------------
Realized and Unrealized Gain:
Net realized gain on investments 1,024,926 1,294,308 - 2,319,234
- -----------------------------------------------------
Change in unrealized appreciation on investments 2,193,873 2,653,720 - 4,847,593
- ----------------------------------------------------- ---------- ---------- ---------- -------------
Net Realized and Unrealized Gain on Investments 3,218,799 3,948,028 - 7,166,827
- ----------------------------------------------------- ---------- ---------- ---------- -------------
Net Increase in Net Assets Resulting From Operations $ 4,836,013 $7,037,717 $ - $ 11,950,150
- ----------------------------------------------------- ========== ========== ========== =============
* Class A and B shares were fully liquidated on December 30, 2002.
The pro forma adjustments to these pro forma financial statements are comprised
of:
(a) Adjustment to decrease transfer agent fees specific to the Bond Fund and
closure of the Retail A and B Classes in Income on December 30, 2002.
(b) Adjustment to decrease registration fees specific to the Bond Fund,
based on estimate for fiscal year ending March 31, 2004.
(c) Adjustment to decrease legal and audit fees allocated to the Bond fund,
based on contractual information and estimates for the fiscal year
ending March 31, 2004.
(d) Adjustment to decrease miscellaneous fees allocated to the Bond Fund.
(e) Adjustment to increase the investment advisory fee waiver consistent
with the arrangement between FNB Fund Advisers and the Income Fund.
PART C
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C to this Registration Statement.
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
Section 21-2004 (15) of Nebraska Business Corporation Act allows
indemnification of officers and directors of the Registrant under circumstances
set forth therein. The Registrant has made such indemnification mandatory.
Reference is made to Article 8-D of the Articles of Incorporation (Exhibit 1)
and Article XIII of the Bylaws of Registrant (Exhibit 2).
The general effect of such provisions is to require indemnification of
persons who are in an official capacity with the corporation against judgments,
penalties, fines and reasonable expenses including attorneys' fees incurred by
said person if: (1) the person has not been indemnified by another organization
for the same judgments, penalties, fines and expenses for the same acts or
omissions; (2) the person acted in good faith; (3) the person received no
improper personal benefit; (4) in the case of a criminal proceeding, the person
had no reasonable cause to believe the conduct was unlawful; and (5) in the case
of directors, officers and employees of the corporation, such persons reasonably
believed that the conduct was in the best interest of the corporation, or in the
case of directors, officers or employees serving at the request of the
corporation for another organization, such person reasonably believed that the
conduct was not opposed to the best interests of the corporation. A corporation
is permitted to maintain insurance on behalf of any officer, director, employee
or agent of the corporation, or any person serving as such at the request of the
corporation, against any liability of such person.
Nevertheless, Article 8-D of the Articles of Incorporation prohibits
any indemnification which would be in violation of Section 17(h) of the
Investment Company Act of 1940, as now enacted or hereafter amended and Article
XIII of the Fund's Bylaws prohibits any indemnification inconsistent with the
guidelines set forth in Investment Company Act Releases No. 7221 (June 9, 1972)
and No. 11330 (September 2, 1980). Such Releases prohibit indemnification in
cases involving willful misfeasance, bad faith, gross negligence and reckless
disregard of duty and establish procedures for the determination of entitlement
to indemnification and expense advances.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification by the Registrant is against public policy as expressed in
the Act and, therefore, may be unenforceable. In the event that a claim for such
indemnification (except insofar as it provides for the payment by the Registrant
of expenses incurred or paid by a director, officer or controlling person in
successful defense of any action, suit or proceeding) is asserted against the
Registrant by such director, officer or controlling person and the Securities
and Exchange Commission is still of the same opinion, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
or not such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
In addition to the indemnification provisions contained in the
Registrant's Articles and Bylaws, there are also indemnification and hold
harmless provisions contained in the Investment Advisory Agreements, the
Sub-Advisory Agreement, Distribution Agreement, Administration Agreement and
Custodian Agreements. Finally, the Registrant has also included in its Articles
of Incorporation (See Article X of the Articles of Incorporation (Exhibit 1)) a
provision which eliminates the liability of outside directors to monetary
damages for breach of fiduciary duty by such directors. Pursuant to Neb. Rev.
Stat. Section 21-2035 (2), such limitation of liability does not eliminate or
limit liability of such directors for any act or omission not in good faith
which involves intentional misconduct or a knowing violation of law, any
transaction from which such director derived an improper direct or indirect
financial benefit, for paying a dividend or approving a stock repurchase which
was in violation of the Nebraska Business Corporation Act and for any act or
omission which violates a declaratory or injunctive order obtained by the
Registrant or its shareholders.
ITEM 16. EXHIBITS
1-a Articles of Incorporation (incorporated by reference to Exhibit 1.1 to
PEA No. 5 on Form N-1A Registration Statement filed July 23, 1996)
1-b Amendment of Articles of Incorporation, dated December 19, 1994
(incorporated by reference to Exhibit 1.2 to PEA No. 5 on Form N-1A
Registration Statement filed July 23, 1996)
1-c Amendment to Articles of Incorporation, dated January 31, 1996
(incorporated by reference to Exhibit 1.3 to PEA No. 5 on Form N-1A
Registration Statement filed July 23, 1996)
1-d Amendment to Articles of Incorporation, dated July 29, 1996
(incorporated by reference to Exhibit 1.4 to PEA No. 6 on Form N-1A
Registration Statement filed December 10, 1996)
2
1-e Amendment to Articles of Incorporation, dated July 8, 1998 (incorporated
by reference to Exhibit a-5 to PEA No. 11 on Form N-1A filed July 28,
2000)
1-f Amendment to Articles of Incorporation, dated October 15, 1999
(incorporated by reference to Exhibit a-6 to PEA No. 11 on Form N-1A
filed July 28, 2000)
1-g Amendment to Articles of Incorporation, dated July 24, 2000
(incorporated by reference to Exhibit a-7 to PEA No. 11 on Form N-1A
filed July 28, 2000)
1-h Amendment to Articles of Incorporation, dated July 30, 2001
(incorporated by reference to Exhibit a-8 to PEA No. 14 on Form N-1A
filed July 30, 2001)
1-i Amendment to Articles of Incorporation dated July 25, 2002 (incorporated
by reference to Exhibit a-9 to PEA No. 16 on Form N-1A filed July 31,
2002)
2 Bylaws (incorporated by reference to Exhibit 2 to PEA No. 5 on Form N-1A
Registration Statement filed July 23, 1996)
3 Not applicable
4 Agreement and Plan of Reorganization is filed herewith as Exhibit A to
the Proxy Statement/Prospectus included in this Registration Statement
5 Provisions defining the rights of shareholders are incorporated by
reference from Exhibit 1-a above (Articles V and VIII) and Exhibit 2
above (Articles II and V).
6-a Investment Advisory Agreement, as amended (incorporated by reference to
Exhibit 5.1 to PEA No. 5 on Form N-1A Registration Statement filed July
23, 1996)
6-b Investment Advisory Agreement relating to the First Omaha Growth Fund
(incorporated by reference to Exhibit 5.2 to PEA No. 8 on Form N-1A
Registration Statement filed January 9, 1998)
6-c Amended Schedule A to Investment Advisory Agreements relating to First
Omaha Income Fund and First Omaha Nebraska Tax-Exempt Fund (incorporated
by reference to Exhibit d-3 to PEA No. 14 on Form N-1A filed July 30,
2001)
6-d Amended and Restated Schedule A to each Investment Advisory Agreement,
adding First Focus International Equity Fund and updating the names of
the Funds and the Advisers, (incorporated by reference to Exhibit d-4 to
PEA No. 16 on Form N-1A filed July 31, 2002)
3
6-e Form of Investment Sub-Advisory Agreement (incorporated by reference to
Exhibit d-5 to PEA No. 15 on Form N-1A Registration Statement filed
January 29, 2002)
7-a Distribution Agreement (incorporated by reference to Exhibit e-1 to PEA
No. 13 on Form N-1A Registration Statement filed September 29, 2000)
8 Not applicable
9-a Custodian Agreement, as amended (incorporated by reference to Exhibit
8.1 to PEA No. 5 on Form N-1A Registration Statement filed July 23,
1996)
9-b Amended Schedule A to the Custodian Agreement relating to First Omaha
Income Fund, First Omaha Nebraska Tax-Exempt Fund and First Omaha
Colorado Tax-Exempt Fund (incorporated by reference to Exhibit g-2 to
PEA No. 14 on Form N-1A filed July 30, 2001)
9-c Custodian Agreement between Northern Trust and the Registrant relating
to the International Equity Fund (incorporated by reference to Exhibit
g-3 to PEA No. 16 on Form N-1A filed July 31, 2002)
10 Not applicable
11 Opinion and Consent of Messrs. Cline, Williams, Wright, Johnson, &
Oldfather, L.L.P. is filed herewith
12 Tax Opinion of Messrs. Cline, Williams, Wright, Johnson, & Oldfather,
L.L.P. is filed herewith
13-a Administration Agreement (incorporated by reference to Exhibit h-1 to
PEA No. 13 on Form N-1A Registration Statement filed September 29, 2000)
13-b Administrative Services Plan and Servicing Agreement (incorporated by
reference to Exhibit 9.3 to PEA No. 5 on Form N-1A Registration
Statement filed July 23, 1996)
13-c Transfer Agency Agreement, as amended (incorporated by reference to
Exhibit 9.4 to PEA No. 5 on Form N-1A Registration Statement filed July
23, 1996)
13-d Amended Schedule A to the Transfer Agency Agreement by and between First
Omaha Funds, Inc. and First National Bank of Omaha (incorporated by
reference to Exhibit h-4 to PEA No. 14 on Form N-1A filed July 30, 2001)
4
13-e Form of Amended and Restated Servicing Agreement to Administrative
Services Plan (incorporated by reference to Exhibit 9.6 to PEA No. 6 on
Form N-1A Registration Statement filed December 10, 1996)
13-f Amended Appendix A to the Servicing Agreement to Administrative Services
Plan (incorporated by reference to Exhibit 9.9 to PEA No. 8 on Form N-1A
Registration Statement filed January 9, 1998)
13-g Amended and Restated Appendix A to the Servicing Agreement to
Administrative Services Plan is filed herewith
14 Consent of KPMG, L.L.P. is filed herewith
15 Not applicable
16 Manually signed powers-of-attorney are filed herewith
ITEM 17. UNDERTAKINGS
The registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is a part of this
registration statement by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c) of the Securities Act, the reoffering
prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
The registrant agrees that every prospectus that is filed under the
paragraph above will be filed as part of an amendment to the registration
statement and will not be used until the amendment is effective, and that, in
determining any liability under the 1933 Act, each post-effective amendment
shall be deemed to be a new registration statement for the securities offered
therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.
5
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement
has been signed on behalf of the Registrant, in the City of Omaha, State of
Nebraska, on this 6th day of May, 2003.
FIRST FOCUS FUNDS, INC.
By: /s/ David P. Greer
-------------------------------
David P. Greer
President
As required by the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
/s/ David P. Greer President, Principal Executive, May 6, 2003
- ---------------------------- Financial and Accounting
David P. Greer Officer
*-------------------------- Director May 6, 2003
Joseph Caggiano
*-------------------------- Director May 6, 2003
Robert A. Reed
*-------------------------- Director May 6, 2003
Harry A. Koch, Jr.
*-------------------------- Director May 6, 2003
Gary Witt
*By: /s/ David P. Greer
------------------------------
David P. Greer
Attorney-in-fact
6
EXHIBIT INDEX
1-a Articles of Incorporation (incorporated by reference to Exhibit 1.1 to
PEA No. 5 on Form N-1A Registration Statement filed July 23, 1996)
1-b Amendment of Articles of Incorporation, dated December 19, 1994
(incorporated by reference to Exhibit 1.2 to PEA No. 5 on Form N-1A
Registration Statement filed July 23, 1996)
1-c Amendment to Articles of Incorporation, dated January 31, 1996
(incorporated by reference to Exhibit 1.3 to PEA No. 5 on Form N-1A
Registration Statement filed July 23, 1996)
1-d Amendment to Articles of Incorporation, dated July 29, 1996
(incorporated by reference to Exhibit 1.4 to PEA No. 6 on Form N-1A
Registration Statement filed December 10, 1996)
1-e Amendment to Articles of Incorporation, dated July 8, 1998 (incorporated
by reference to Exhibit a-5 to PEA No. 11 on Form N-1A filed July 28,
2000)
1-f Amendment to Articles of Incorporation, dated October 15, 1999
(incorporated by reference to Exhibit a-6 to PEA No. 11 on Form N-1A
filed July 28, 2000)
1-g Amendment to Articles of Incorporation, dated July 24, 2000
(incorporated by reference to Exhibit a-7 to PEA No. 11 on Form N-1A
filed July 28, 2000)
1-h Amendment to Articles of Incorporation, dated July 30, 2001
(incorporated by reference to Exhibit a-8 to PEA No. 14 on Form N-1A
filed July 30, 2001)
1-i Amendment to Articles of Incorporation dated July 25, 2002 (incorporated
by reference to Exhibit a-9 to PEA No. 16 on Form N-1A filed July 31,
2002)
2 Bylaws (incorporated by reference to Exhibit 2 to PEA No. 5 on Form N-1A
Registration Statement filed July 23, 1996)
3 Not applicable
4 Agreement and Plan of Reorganization is filed herewith as Exhibit A to
the Proxy Statement/Prospectus included in this Registration Statement
5 Provisions defining the rights of shareholders are incorporated by
reference from Exhibit 1-a above (Articles V and VIII) and Exhibit 2
above (Articles II and V).
7
6-a Investment Advisory Agreement, as amended (incorporated by reference to
Exhibit 5.1 to PEA No. 5 on Form N-1A Registration Statement filed July
23, 1996)
6-b Investment Advisory Agreement relating to the First Omaha Growth Fund
(incorporated by reference to Exhibit 5.2 to PEA No. 8 on Form N-1A
Registration Statement filed January 9, 1998)
6-c Amended Schedule A to Investment Advisory Agreements relating to First
Omaha Income Fund and First Omaha Nebraska Tax-Exempt Fund (incorporated
by reference to Exhibit d-3 to PEA No. 14 on Form N-1A filed July 30,
2001)
6-d Amended and Restated Schedule A to each Investment Advisory Agreement,
adding First Focus International Equity Fund and updating the names of
the Funds and the Advisers, (incorporated by reference to Exhibit d-4 to
PEA No. 16 on Form N-1A filed July 31, 2002)
6-e Form of Investment Sub-Advisory Agreement (incorporated by reference to
Exhibit d-5 to PEA No. 15 on Form N-1A Registration Statement filed
January 29, 2002)
7-a Distribution Agreement (incorporated by reference to Exhibit e-1 to PEA
No. 13 on Form N-1A Registration Statement filed September 29, 2000)
8 Not applicable
9-a Custodian Agreement, as amended (incorporated by reference to Exhibit
8.1 to PEA No. 5 on Form N-1A Registration Statement filed July 23,
1996)
9-b Amended Schedule A to the Custodian Agreement relating to First Omaha
Income Fund, First Omaha Nebraska Tax-Exempt Fund and First Omaha
Colorado Tax-Exempt Fund (incorporated by reference to Exhibit g-2 to
PEA No. 14 on Form N-1A filed July 30, 2001)
9-c Custodian Agreement between Northern Trust and the Registrant relating
to the International Equity Fund (incorporated by reference to Exhibit
g-3 to PEA No. 16 on Form N-1A filed July 31, 2002)
10 Not applicable
11 Opinion and Consent of Messrs. Cline, Williams, Wright, Johnson, &
Oldfather, L.L.P. is filed herewith
12 Tax Opinion of Messrs. Cline, Williams, Wright, Johnson, & Oldfather,
L.L.P. is filed herewith
8
13-a Administration Agreement (incorporated by reference to Exhibit h-1 to
PEA No. 13 on Form N-1A Registration Statement filed September 29, 2000)
13-b Administrative Services Plan and Servicing Agreement (incorporated by
reference to Exhibit 9.3 to PEA No. 5 on Form N-1A Registration
Statement filed July 23, 1996)
13-c Transfer Agency Agreement, as amended (incorporated by reference to
Exhibit 9.4 to PEA No. 5 on Form N-1A Registration Statement filed July
23, 1996)
13-d Amended Schedule A to the Transfer Agency Agreement by and between First
Omaha Funds, Inc. and First National Bank of Omaha (incorporated by
reference to Exhibit h-4 to PEA No. 14 on Form N-1A filed July 30, 2001)
13-e Form of Amended and Restated Servicing Agreement to Administrative
Services Plan (incorporated by reference to Exhibit 9.6 to PEA No. 6 on
Form N-1A Registration Statement filed December 10, 1996)
13-f Amended Appendix A to the Servicing Agreement to Administrative Services
Plan (incorporated by reference to Exhibit 9.9 to PEA No. 8 on Form N-1A
Registration Statement filed January 9, 1998)
13-g Amended and Restated Appendix A to the Servicing Agreement to
Administrative Services Plan is filed herewith
14 Consent of KPMG, L.L.P. is filed herewith
15 Not applicable
16 Manually signed powers-of-attorney are filed herewith
9