SC 13D
1
pif-pfd13d1tag.txt
PREFERRED INCOME FUND, INC. (EFF.DATE 8/5/02)
United States
Securities and Exchange Commission
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Preferred Income Fund, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
74037G-10-6
(CUSIP Number)
The Commerce Group, Inc.
211 Main Street
Webster, MA 01570
(508) 943-9000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 5, 2002
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box: [X]
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
Page 1 of 14
CUSIP No.: 74037G-10-6 THE COMMERCE GROUP, INC.
SCHEDULE 13D
AMENDMENT No. 1
AUGUST 13, 2002
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. ID NO. OF ABOVE PERSON
The Commerce Group Inc.
ID# 04-2599931
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS [WC]
5 CHECK BOX IF DISCLOSURE OF LEGAL [ ]
PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Massachusetts
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
SOLE VOTING POWER 2,860,600
SHARED VOTING POWER 0
SOLE DISPOSITIVE POWER 2,860,600
SHARED DISPOSITIVE POWER 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,860,600
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.7%
14. TYPE OF REPORTING PERSON
[HC]
Page 2 of 14
CUSIP No.: 74037G-10-6 THE COMMERCE GROUP, INC.
SCHEDULE 13D
AMENDMENT No. 1
AUGUST 13, 2002
ITEM 1. SECURITY AND ISSUER
This Schedule 13D relates to the shares of beneficial interest (the
"Shares"), of Preferred Income Fund, Inc. (the "Fund"), a Maryland business
trust registered as an investment company under the Investment Company Act
of 1940, as amended (the "Investment Company Act"). The principal
executive offices of the Fund are located at 301 E. Colorado Blvd., Ste
720, Pasadena, California, 91101.
ITEM 2. IDENTITY AND BACKGROUND
(a) - (c) This Schedule 13D is being filed by The Commerce Group Inc.
(the "Reporting Person"), a corporation formed under the laws of
Massachusetts. The Reporting Person is a corporation whose principal
offices are located at 211 Main Street Webster, MA 01570. The name,
business address and principal occupation of each director and officer of
the Reporting Person are set forth on Annex A hereto, which is incorporated
by reference. All information in this Schedule 13D with respect to the
persons listed on Annex A is given to the knowledge of the Reporting
Person.
(d) During the past five years, neither the Reporting Person nor any
of the persons listed on Annex A has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) During the past five years, neither the Reporting Person nor any
of the persons listed on Annex A has been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) All of the individuals listed in Annex A are citizens of the
United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The source of the funds used by the Reporting Person to purchase
Shares listed in Item 5(a) was working capital. The remaining cost of
shares held aggregates approximately $42,862,016.
Page 3 of 14
CUSIP No.: 74037G-10-6 THE COMMERCE GROUP, INC.
SCHEDULE 13D
AMENDMENT No. 1
AUGUST 13, 2002
ITEM 4. PURPOSE OF TRANSACTION
The shares of beneficial interest of the Fund ("Shares") held by the
Reporting Person were acquired and are being held in the ordinary course of
business by the Reporting Person for the purpose of investment and capital
appreciation. In pursuing this investment philosophy, the Reporting Person
routinely monitors the performance, trading prices, investment strategy and
portfolio securities of the Fund, and of other investment funds in which it
invests, and may discuss such matters with fund management, shareholders,
or others.
From time to time, the Reporting Person may sell Shares or purchase
additional Shares, depending on various factors, including the Fund's
business and prospects, the level of discount in Share market prices from
net asset value ("NAV"), the performance of the Funds' investments, the
availability of funds to the Reporting Person, alternative uses of funds,
stock and money market conditions, and general economic conditions. The
Reporting Person does not have a specific plan or proposal that relates to
or would result in any of the actions described in items (b) through (j) of
Item 4 of General Reporting Rules, though the Reporting Person reserves the
right to take or not take any action it deems to be in its best interest or
to change its intention as set forth in this Item 4.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) The Fund's reports with the Securities and Exchange Commission
report that 9,964,988 Shares are outstanding. Based upon such number, the
Reporting Person beneficially owns 28.7% of the Fund's outstanding Shares.
(b) The Reporting Person is the beneficial owner (through its
insurance subsidiaries as listed below) of 2,860,600 Shares, over which it
has sole power of disposition and voting. Such number of Shares represents
approximately 28.7% of the outstanding Shares.
Shares Cost
The Commerce Insurance Company 2,619,900 $39,547,332
American Commerce Insurance Company 220,700 3,035,453
Commerce West Insurance Company 20,000 279,231
Totals 2,860,600 $42,862,016
Page 4 of 14
CUSIP No.: 74037G-10-6 THE COMMERCE GROUP, INC.
SCHEDULE 13D
AMENDMENT No. 1
AUGUST 13, 2002
(c) During the period from December 2, 2000 through August 5, 2002
the Reporting Person has effected the following purchases and sales in the
shares of Common Stock, all of which were made on the New York Stock
Exchange (see attached Annex B). All purchases prior to December 2, 2000
were reported on previous Schedule 13D filings.
(d) No person other than the Reporting Person has the right to receive
or the power to direct the receipt of dividends from, or the proceeds from
the sale of, the shares of Common Stock owned by the Reporting Person.
(e) It is inapplicable to state the date on which the Reporting Person
ceased to be the beneficial owner of more than five percent of the Common
Stock.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER
The Reporting Person does not have any contract, arrangement,
understanding or relationship (legal or otherwise) with any person with
respect to any securities of the Fund, including, but not limited to, the
transfer or voting of any such securities, finders' fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits, division
of profits or loss, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Annex A Officers and Directors of Reporting Person and Insurance
Subsidiaries
Annex B Item 5(c) Information
Page 5 of 14
CUSIP No.: 74037G-10-6 THE COMMERCE GROUP, INC.
SCHEDULE 13D
AMENDMENT No. 1
AUGUST 13, 2002
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
August 13, 2002 THE COMMERCE GROUP INC.
/s/ Gerald Fels
Gerald Fels
Executive Vice President &
Chief Financial Officer
Page 6 of 14
ANNEX A
THE COMMERCE GROUP, INC.
211 Main Street, Webster, MA 01570
DIRECTORS
Herman F. Becker..................... President and owner, Sterling Realty and Huguenot
Development Corporation
Joseph A. Borski, Jr................. Self-employed Certified Public Accountant
Eric G. Butler....................... Retired Vice President and General Claims Manager
of Commerce and Citation
Henry J. Camosse..................... Retired President, Henry Camosse & Sons Co., Inc.,
a building and masonry supplies company
Gerald Fels.......................... Executive Vice President and Chief Financial
Officer of the Company; President and Chief
Operating Officer of Commerce and Citation
David R. Grenon...................... Retired CEO, President and Chairman Emeritus of
The Protector Group Insurance Agency, Inc.;
President E-C Realty Corporation
Robert W. Harris..................... Retired Treasurer, H.C. Bartlett Insurance Agency,
Inc.
Robert S. Howland.................... Retired Clerk, H.C. Bartlett Insurance Agency,
Inc.
John J. Kunkel....................... President and Treasurer, Kunkel Buick and GMC
Truck; Treasurer, Kunkel Bus Company
Raymond J. Lauring................... Retired President, Lauring Construction Company
Normand R. Marois.................... Retired Chairman of the Board, Marois Bros., Inc.,
a contracting firm
Suryakant M. Patel................... Retired physician who specialized in internal
medicine
Arthur J. Remillard, Jr.............. President, Chief Executive Officer and Chairman
of the Board of the Company
Arthur J. Remillard, III............. Senior Vice President and Assistant Clerk of
the Company; Senior Vice President of Commerce
and Citation in charge of Policyholder Benefits
Regan P. Remillard................... Senior Vice President of the Company; President
and Secretary of Commerce West Insurance Company;
President of ACIC Holding Co., Inc.; President,
Vice Chairman of the Board and Chief Executive
Officer of American Commerce Insurance Company
Gurbachan Singh...................... Retired physician who specialized in general
surgery
John W. Spillane..................... Clerk of the Company and practicing attorney
Page 7 of 14
ANNEX A
DIRECTORS OF
COMMERCE HOLDINGS, INC.
The Commerce Insurance Company
Commerce West Insurance Company
Citation Insurance Company
211 Main Street, Webster, MA 01570
Arthur J. Remillard, Jr........... President and Chairman of the Board of Commerce
Holdings, Inc.; Chief Executive Officer and Chairman
of the Board of The Commerce Insurance Company, Inc.;
Chairman of the Board Commerce West Insurance Company
Gerald Fels....................... President, Chief Operating Officer and Chief
Financial Officer of The Commerce Insurance Company
and Citation Insurance Company; Treasurer, Commerce
Holdings, Inc.; Investment Officer of Commerce West
Insurance Company
Arthur J. Remillard, III.......... Senior Vice President and Clerk
Regan P. Remillard................ Senior Vice President; President and Secretary of
Commerce West Insurance Company
James A. Ermilio.................. Senior Vice President and General Counsel
David R. Grenon................... Retired CEO, President and Chairman Emeritus of
The Protector Group Insurance Agency, Inc.;
President E-C Realty Corporation
John M. Nelson.................... Chairman of Commonwealth National Bank
Suryakant M. Patel................ Retired physician who specialized in internal
medicine
William G. Pike................... Executive Vice President and Chief Financial Officer
of Granite State Bankshares, Inc.
H. Thomas Rowles.................. Chairman of the Board of ACIC Holding Co., Inc.;
Chairman of the Board of American Commerce Insurance
Company; Director of AAA Southern New England
Mark A. Shaw ..................... Treasurer of ACIC Holding Co., Inc.; President, Chief
Executive Officer and Director of AAA Southern New
England
Page 8 of 14
ANNEX A
DIRECTORS OF
American Commerce Insurance Company
3590 Twin Creeks Drive, Columbus, OH 43204
H. Thomas Rowles.................. Chairman of the Board of ACIC Holding Co., Inc.;
Chairman of the Board of American Commerce Insurance
Company; Director of AAA Southern New England
Regan P. Remillard................ President of ACIC Holding Co., Inc.; President, Vice
Chairman of the Board and Chief Executive Officer of
American Commerce Insurance Company; Senior Vice
President of The Commerce Group, Inc.; President and
Secretary of Commerce West Insurance Company
Mark A. Shaw...................... Treasurer of ACIC Holding Co., Inc.; President,
Chief Executive Officer and Director of AAA Southern
New England
Gerald Fels....................... Executive Vice President and Chief Financial Officer
of The Commerce Group, Inc.
Patrick W. Doherty................ President and Chief Executive Officer of AAA Oklahoma
Terry R. Farias................... President and Chief Executive Officer of AAA Hoosier
Motor Club
Richard S. Hamilton............... President of AAA West Pennsylvania/West
Virginia/South Central Ohio
Charles B. Liekweg................ President and Chief Executive Officer of AAA
Washington
D. James McDowell................. President and Chief Executive Officer of AAA Arizona
Peter C. Ohlheiser................ President of Ohio Motorists Association
John D. Porter.................... President and Chief Executive Officer of AAA
Oregon/Idaho
Otto T. Wright.................... President and Chief Executive Officer of East
Tennessee Automobile Club, Inc.
Page 9 of 14
ANNEX A
THE COMMERCE GROUP, INC.
211 Main Street, Webster, MA 01570
OFFICERS OF THE COMMERCE GROUP, INC.
President, Chief Executive Officer and Chairman of the Board..... Arthur J. Remillard, Jr.
Executive Vice President and Chief Financial Officer............. Gerald Fels
Senior Vice President and Assistant Clerk........................ Arthur J. Remillard, III
Senior Vice President............................................ Regan P. Remillard
Senior Vice President and General Counsel........................ James A. Ermilio
Vice President................................................... Joseph J. Staffieri
Clerk............................................................ John W. Spillane
Treasurer and Chief Accounting Officer........................... Randall V. Becker
Vice President and Corporate Compliance Officer.................. Robert E. McKenna
Assistant Vice President and Assistant General Counsel........... Thomas D. Jungeberg
Assistant Treasurer.............................................. Thomas A. Gaylord
Officers of Massachusetts INSURANCE Subsidiaries
Chief Executive Officer and Chairman of the Board................ Arthur J. Remillard, Jr.
President, Chief Operating Officer and Chief Financial Officer... Gerald Fels
Senior Vice President and Secretary.............................. Arthur J. Remillard, III
Senior Vice President and General Counsel........................ James A. Ermilio
Senior Vice Presidents........................................... David H. Cochrane
Peter J. Dignan
Regan P. Remillard
Vice Presidents.................................................. Karen A. Lussier
Robert E. McKenna
Michael J. Richards
Angelos Spetseris
Joseph J. Staffieri
Henry R. Whittier, Jr.
Assistant Vice President and Assistant General Counsel........... Thomas D. Jungeberg
Assistant Vice Presidents...................... David P. Antocci James E. Gow
Robert M. Blackmer Susan A. Horan
Stephen R. Clark John V. Kelly
Raymond J. DeSantis Donald G. MacLean
Warren S. Ehrlich Patrick J. McDonald
Richard W. Goodus Robert L. Mooney
Emile E. Riendeau
Treasurer and Chief Accounting Officer........................... Randall V. Becker
Assistant Treasurer.............................................. Thomas A. Gaylord
Page 10 of 14
ANNEX A
Officers of American Commerce Insurance Company
211 Main Street, Webster, MA 01570
Chairman of the Board.............................................. H. Thomas Rowles
President, Vice Chairman of the Board and Chief Executive Officer.. Regan P. Remillard
Senior Vice President and Chief Financial Officer.................. Michael V. Vrban
General Counsel and Secretary...................................... James A. Ermilio
Treasurer.......................................................... Richard B. O'Hara
Vice President..................................................... Gregory S. Clark
Vice President..................................................... Joseph B. Phillips, Jr.
Assistant Vice President........................................... William J. Hafer
Assistant Vice President........................................... Jeffrey B. Alexander
Assistant General Counsel and Assistant Secretary.................. Thomas D. Jungeberg
Page 11 of 14
ANNEX B
Item 5 (c) - Information
As of August 5, 2002
SALES from 03/04/02 - 08/05/02
PFD 74037G-10-6 PREFERRED INCOME FUND
TRADE SETTLEMENT SHARES SALE PRICE
DATE DATE SOLD PER SHARE CONSIDERATION
03/04/02 03/07/02 (3,300) $15.60 ($51,347.22)
03/04/02 03/07/02 (500) 15.85 (7,904.88)
03/05/02 03/08/02 (2,200) 15.60 (34,231.48)
03/06/02 03/11/02 (5,400) 15.40 (82,942.75)
03/08/02 03/13/02 (1,300) 15.05 (19,512.70)
03/08/02 03/13/02 (300) 15.00 (4,487.93)
03/08/02 03/13/02 (1,500) 15.02 (22,466.24)
03/08/02 03/13/02 (200) 15.15 (3,021.96)
04/24/02 04/29/02 (1,700) 14.71 (24,938.25)
04/24/02 04/29/02 (2,500) 14.65 (36,523.89)
04/25/02 04/30/02 (4,200) 14.60 (61,150.15)
04/25/02 04/30/02 (800) 14.61 (11,655.65)
04/26/02 05/01/02 (5,600) 14.60 (81,533.53)
05/06/02 05/09/02 (6,500) 14.62 (94,767.13)
05/15/02 05/20/02 (1,500) 14.65 (21,914.33)
05/29/02 06/03/02 (5,000) 14.60 (72,797.80)
06/05/02 06/10/02 (5,000) 14.86 (74,097.76)
06/06/02 06/11/02 (300) 14.86 (4,445.86)
06/12/02 06/17/02 (13,900) 14.95 (207,242.74)
06/18/02 06/21/02 (200) 15.30 (3,051.91)
06/18/02 06/21/02 (3,500) 15.25 (53,233.39)
06/20/02 06/25/02 (1,000) 15.02 (14,979.55)
06/20/02 06/25/02 (1,400) 15.10 (21,083.36)
06/21/02 06/26/02 (100) 14.95 (1,490.95)
Page 12 of 14
SALES from 03/04/02 - 08/05/02 (CONTINUED)
PFD 74037G-10-6 PREFERRED INCOME FUND
TRADE SETTLEMENT SHARES SALE PRICE
DATE DATE SOLD PER SHARE CONSIDERATION
06/24/02 06/27/02 (100) 14.90 (1,485.95)
06/25/02 06/28/02 (6,700) 14.90 (99,558.99)
07/08/02 07/11/02 (4,300) 15.00 (64,326.05)
07/09/02 07/12/02 (10,800) 15.30 (164,803.02)
07/11/02 07/16/02 (1,200) 15.25 (18,251.44)
07/12/02 07/17/02 (9,500) 15.10 (143,065.68)
07/16/02 07/19/02 (5,800) 15.30 (88,505.32)
07/16/02 07/19/02 (200) 15.32 (3,055.91)
07/22/02 07/25/02 (500) 15.90 (7,929.76)
07/22/02 07/25/02 (4,800) 15.75 (75,405.72)
07/24/02 07/29/02 (200) 14.98 (2,987.90)
08/01/02 08/06/02 (3,100) 15.40 (47,614.56)
08/05/02 08/08/02 (5,800) 15.35 (88,795.32)
TOTAL SALES (120,900) ($1,816,607.03)
Page 13 of 14
PURCHASES from 12/15/00 - 12/28/00
PFD 74037G-10-6 PREFERRED INCOME FUND
TRADE SETTLEMENT PURCHASED PURCHASE PRICE ACQUISITION
DATE DATE SHARES PER SHARE COST
12/15/00 12/20/00 3,800 $11.8125 $ 45,039.50
12/18/00 12/21/00 1,800 11.9375 21,559.50
12/19/00 12/22/00 100 11.8750 1,191.50
12/20/00 12/26/00 3,900 11.9375 46,712.25
12/21/00 12/27/00 3,300 12.1250 40,144.50
12/26/00 12/29/00 2,500 12.1250 30,412.50
12/28/00 01/03/01 4,400 12.2500 54,076.00
TOTAL PURCHASES 19,800 $239,135.75
NET SALES/PURCHASES (101,100) ($1,577,471.28)
Page 14 of 14