United States
Securities and Exchange Commission
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
Preferred Income Opportunity Fund
(Name of Issuer)
Common Stock
(Title of Class of Securities)
74037H-10-4
(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)
July 16, 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 13
CUSIP No.: 74037H-10-4 THE COMMERCE GROUP, INC.
SCHEDULE 13D
AMENDMENT No. 2
JULY 25, 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 3,875,143
SHARED VOTING POWER 0
SOLE DISPOSITIVE POWER 3,875,143
SHARED DISPOSITIVE POWER 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,875,143
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.8%
14. TYPE OF REPORTING PERSON
[HC]
Page 2 of 13
CUSIP No.: 74037H-10-4 THE COMMERCE GROUP, INC.
SCHEDULE 13D
AMENDMENT No. 2
JULY 25, 2002
ITEM 1. SECURITY AND ISSUER
This Schedule 13D relates to the shares of beneficial interest (the
"Shares"), of Preferred Income Opportunity Fund (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 cost of such shares aggregated
approximately $46,712,768.
Page 3 of 13
CUSIP No.: 74037H-10-4 THE COMMERCE GROUP, INC.
SCHEDULE 13D
AMENDMENT No. 2
JULY 25, 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. The Reporting Person, as an insurance company holding company, is
entitled to file securities ownership reports required by the Securities and
Exchange Act of 1934 on Schedule 13G. Under amended rules under the
Securities Exchange Act of 1934, a person reporting on Schedule 13G may elect
to convert such filing to a Schedule 13D, in part, to ensure that discussions
with management, or other actions by the Reporting Person, do not limit the
Reporting Person's ability to acquire additional Shares, or to vote the shares
it already owns. Accordingly, in order to maintain desired flexibility for
such transactions and discussions, the Reporting Person elected to convert its
ownership filing on Schedule 13G to a filing on Schedule 13D with the filing
of its initial Schedule 13D.
The matters which the Reporting Person intends to consider, discuss or
pursue may include additional purchases of Shares, ceasing the purchase of
additional Shares, sales of Shares or one or more of the items described in
items (a) through (j) of Item 4 of General Reporting Rules. Whether any of
such actions are taken by From time to time, the Reporting Person may sell
Shares or purchase additional Shares, depending on various factors, the
Reporting Person will depend upon the Reporting Person's evaluation of several
factors, including the Fund's business and prospects, future developments, 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. Such factors may materially
affect the Reporting Person's decision to purchase additional Shares, or take
other actions, and may result in the Reporting Person's increasing its
ownership to a majority or more of the outstanding Shares, and/or proposing
changes in operations, governance or capitalization of the Fund. 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 will review its
investment in the Fund from time to time and 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 11,151,287 Shares are outstanding. Based upon such number, the
Reporting Person beneficially owns 34.8% of the Fund's outstanding Shares.
(b) Reporting Person is the beneficial owner (through its insurance
subsidiaries as listed below) of 3,875,143 Shares, over which it has sole
power of disposition and voting. Such number of Shares represents
approximately 34.8% of the outstanding Shares.
Shares Cost
The Commerce Insurance Company 3,660,743 $44,349,854
American Commerce Insurance Company 200,000 2,200,000
Commerce West Insurance Company 14,400 162,914
Totals 3,875,143 $46,712,768
Page 4 of 13
CUSIP No.: 74037H-10-4 THE COMMERCE GROUP, INC.
SCHEDULE 13D
AMENDMENT No. 2
JULY 25, 2002
(c) Subsequent to January 23, 2001, 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
transactions prior to January 24, 2001 were reported on previous Schedule 13D
filings made with the Securities and Exchange Commission.
(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 13
CUSIP No.: 74037H-10-4 THE COMMERCE GROUP, INC.
SCHEDULE 13D
AMENDMENT No. 2
JULY 25, 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.
July 25, 2002 THE COMMERCE GROUP INC.
Gerald Fels
Executive Vice President &
Chief Financial Officer
Page 6 of 13
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 13
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 13
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 13
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 13
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 13
ANNEX B
Item 5 (c) - Information
As of July 16, 2002
SALES from 5/20/02 - 7/16/02
PFO 74037H-10-4 PREFERRED INCOME OPPORTUNITY FUND
TRADE SETTLEMENT SHARES SALES PRICE
DATE DATE SOLD PER SHARE CONSIDERATION
05/20/02 05/23/02 3,400 $12.68 ($43,095.00)
05/15/02 05/20/02 1,100 12.68 (13,942.50)
06/05/02 06/10/02 7,200 12.75 (91,800.00)
05/21/02 05/24/02 3,300 12.75 (42,075.00)
05/22/02 05/28/02 2,600 12.75 (33,150.00)
06/20/02 06/25/02 3,600 12.75 (45,900.00)
05/20/02 05/23/02 600 12.75 (7,650.00)
05/29/02 06/03/02 2,600 12.75 (33,150.00)
05/29/02 06/03/02 200 12.75 (2,550.00)
06/12/02 06/17/02 16,200 12.75 (206,550.00)
06/18/02 06/21/02 400 12.75 (5,100.00)
06/18/02 06/21/02 24,600 12.75 (313,650.00)
06/25/02 06/28/02 3,400 12.75 (43,350.00)
06/05/02 06/10/02 500 12.75 (6,375.00)
06/14/02 06/19/02 29,200 12.75 (372,300.00)
06/24/02 06/27/02 13,100 12.75 (167,025.00)
06/21/02 06/26/02 4,900 12.75 (62,475.00)
07/03/02 07/09/02 27,800 12.31 (342,207.66)
07/08/02 07/11/02 1,500 12.36 (18,539.44)
07/09/02 07/12/02 500 12.31 (6,154.81)
07/09/02 07/12/02 7,700 12.26 (94,399.15)
07/11/02 07/16/02 3,200 12.26 (39,230.81)
07/12/02 07/17/02 9,400 12.17 (114,394.54)
07/12/02 07/17/02 500 12.21 (6,104.82)
07/16/02 07/19/02 1,500 12.17 (18,254.45)
07/16/02 07/19/02 5,900 12.16 (71,741.83)
Total Sales: (174,900) ($2,201,165.01)
Page 12 of 13
ANNEX B
Item 5 (c) - Information
As of July 16, 2002
PURCHASES from 1/24/01 - 7/10/01
PFO 74037H-10-4 PREFERRED INCOME OPPORTUNITY FUND
TRADE SETTLEMENT SHARES PURCHASE PRICE ACQUISITION
DATE DATE PURCHASED PER SHARE COST
01/24/01 01/29/01 19,700 $10.35 $203,944.25
01/26/01 01/31/01 24,600 10.42 256,209.00
02/05/01 02/08/01 100 10.44 1,044.00
06/27/01 07/02/01 1,100 10.44 11,484.00
07/10/01 07/13/01 9,400 10.84 $101,896.00
Total Purchases: 54,900 $574,577.25
Net Sales/Purchases (120,000) ($1,626,587.76)
Page 13 of 13