The following constitutes Amendment No. 10 to the Schedule 13D filed by the undersigned (“Amendment No. 10”). This Amendment No. 10 amends the Schedule 13D as specifically set forth.
Item 3. | Source and Amount of Funds or Other Consideration. |
Item 3 is hereby amended and restated to read as follows:
The aggregate purchase price of the 2,123,176.24 Shares beneficially owned by WILLC is approximately $36,708,331. The Shares beneficially owned by WILLC consist of 1,337.24 Shares, 1,100 of which were acquired with WILLC’s working capital and 237.24 of which were acquired through the Issuer’s dividend repurchase plan, 530,570 Shares that were acquired with WIHP’s working capital, 530,328 Shares that were acquired with WIAP’s working capital, 531,032 Shares that were acquired with WITRP’s working capital and 529,909 Shares that were acquired with WITRL’s working capital.
The aggregate purchase price of the 14,475 Shares owned directly by Mr. Lipson is approximately $113,701. The Shares owned directly by Mr. Lipson were acquired with Mr. Lipson’s personal funds.
The aggregate purchase price of the 889,983 Shares beneficially owned by BPM is approximately $10,575,079. The Shares beneficially owned by BPM consist of 456,903 Shares that were acquired with BPIP’s working capital and 433,080 Shares that were acquired with BPP’s working capital.
The aggregate purchase price of the 1,437.1 Shares owned directly by Mr. Daniels is approximately $22,353. The Shares owned directly by Mr. Daniels were acquired with Mr. Daniels’ personal funds.
The 100 Shares owned by Ms. Schultz were a gift from WILLC.
Item 4. | Purpose of Transaction. |
Item 4 is hereby amended to add the following:
On March 4, 2010, WILLC filed an amended complaint (the “Amended Complaint”) in the United States District Court for the Southern District of New York against the Issuer. Civil Action No. 10 cv 1399. In addition to the relief sought in the Complaint filed by WILLC on February 22, 2010, the Amended Complaint seeks declaratory and injunctive relief to prevent the Issuer from consummating acts which would constitute a fundamental deviation and change in its investment objective and policy by vote of an unelected Board of Directors and without stockholder approval.
On January 20, 2010, the Issuer announced that it had approved and intended to change its business. Whereas, consistent with the Issuer’s name, historically the Issuer had invested at least 80% of its assets in large capitalization stocks whose businesses had exposures to commodities ((e.g., Exxon – oil; Monsanto – corn; Rio Tinto – minerals; etc.) with the remainder in cash equivalents (85%-15% at 12/31/09), the Issuer announced it would no longer do so and instead concentrate its investments into pure commodity plays with direct exposure to commodity fluctuations through the purchase and sale of commodities-linked derivatives and swaps. To accomplish this, the Issuer announced it would effect a complete replacement of its portfolio managers and of necessity would change the Issuer’s name to reflect it was no longer a “stock” fund whose objective was to realize capital appreciation from investing in stocks, to “DWS Enhanced Commodity Strategy Fund, Inc.” In the January 20, 2010 press release, the Issuer stated that these changes reflected a change in the Issuer’s principal investment objective, stated in its prospectus, of capital appreciation, with a secondary objective of total return. The Issuer issued a second press release on January 29, 2010, purporting to “clarify” the first release and claim that the wholesale changes it intended to implement would not constitute a fundamental change of investment objective and therefore would not require stockholder approval. The Issuer plans to implement these changes on or about March 31, 2010, without a vote of stockholders, despite the fact that the Issuer’s registration statement states that “the Issuer’s investment objectives and certain investment policies are considered fundamental and may not be changed without shareholders approval.” In addition, this fundamental change of investment objective was approved in 2010 by a board, 9 of whose 13 directors’ terms expired in 2008 and 2009. WILLC believes the proposed change is illegal because of the composition of the board which approved it and the lack of stockholders’ approval. Accordingly, the Amended Complaint seeks, among other things, a temporary restraining order and preliminary and/or permanent injunctions restraining and enjoining the Issuer from implementing such changes prior to stockholders’ election of directors and the Issuer’s receipt of stockholder approval.
A copy of the Amended Complaint is attached hereto as exhibit 99.1 and incorporated herein by reference.
On March 5, 2010, WILLC delivered a letter to the Issuer criticizing the entrenchment actions taken by the Issuer following the Issuer’s 2008 Annual Meeting at which stockholders voted by a margin of 64% to 36% to replace the Issuer’s incumbent directors. Specifically, the Letter criticizes (i) the Issuer’s failure to amend its Bylaws to eliminate majority voting in contested elections, (ii) the Issuer’s adoption of the voting restrictions of the Maryland Control Share Acquisition Act, which was clearly aimed at thwarting the ability of stockholders, including the Reporting Persons, to overcome the majority-vote rule now in place and (iii) the fundamental change to the Issuer’s investment objective, character of its investments, portfolio manager and name, adopted by the Issuer’s incumbent “holdover” Board without first seeking the approval of stockholders. The letter also reiterates WILLC’s position that unless the Issuer allows stockholders, the true owners of the Issuer, to decide who will manage via a fair election determined by a plurality vote of stockholders, WILLC will have little choice other than to have the Issuer’s fate decided by the courts. A copy of the letter is attached hereto as exhibit 99.2 and is incorporated herein by reference.
Item 5. | Interest in Securities of the Issuer. |
Item 5(a) is hereby amended and restated to read as follows:
(a) The aggregate percentage of Shares reported owned by each person named herein is based upon 15,961,840 Shares outstanding, which is the total number of Shares outstanding as of December 31, 2009, as reported in the Issuer’s annual report on Form N-CSR, filed with the Securities and Exchange Commission on March 2, 2010.
As of the close of business on March 5, 2010, WIHP, WIAP, WITRP and WITRL beneficially owned 530,570, 530,328, 531,032 and 529,909 Shares, respectively, constituting approximately 3.3%, 3.3%, 3.3% and 3.3%, respectively, of the Shares outstanding. As the managing member of WIAP, the investment manager of WITRL and the general partner of each of WIHP and WITRP, WILLC may be deemed to beneficially own the 2,121,839 Shares owned in the aggregate by WIHP, WIAP, WITRP and WITRL, constituting approximately 13.3% of the Shares outstanding, in addition to the 1,337.24 Shares it holds directly. As the managing member of WILLC, Mr. Lipson may be deemed to beneficially own the 2,123,176.24 Shares beneficially owned by WILLC, constituting approximately 13.3% of the Shares outstanding, in addition to the 14,475 Shares he owns directly. As members of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Western Entities may be deemed to beneficially own the 891,520.1 Shares owned by the other Reporting Persons. The Western Entities disclaim beneficial ownership of such Shares.
As of the close of business on March 5, 2010, BPIP and BPP beneficially owned 456,903 and 433,080 Shares, respectively, constituting approximately 2.9% and 2.7%, respectively, of the Shares outstanding. As the managing member of each of BPIP and BPP, BPM may be deemed to beneficially own the 889,983 Shares owned in the aggregate by BPIP and BPP, constituting approximately 5.6% of the Shares outstanding. As managing members of BPM, Messrs. Franzblau and Ferguson may each be deemed to beneficially own the 889,983 Shares beneficially owned by BPM, constituting approximately 5.6% of the Shares outstanding. As members of a group for the purposes of Rule 13d-5(b)(1) of the Exchange Act, the Benchmark Entities may be deemed to beneficially own the 2,139,188.34 Shares owned by the other Reporting Persons. The Benchmark Entities disclaim beneficial ownership of such Shares.
None of Messrs. Hellerman, Rappaport, Roberts, Chelo, Crouse or Dube or Professor Wood directly own any Shares. As members of a “group” for the purposes of Rule 13d-5(b)(1) of the Exchange Act, Messrs. Hellerman, Rappaport, Roberts, Chelo, Crouse and Dube and Professor Wood may each be deemed to beneficially own the 3,029,171.34 Shares beneficially owned in the aggregate by the other Reporting Persons. Each of Messrs. Hellerman, Rappaport, Roberts, Chelo, Crouse and Dube and Professor Wood disclaims beneficial ownership of such Shares.
Mr. Daniels owns 1,437.1 Shares directly, constituting less than 1% of the Shares outstanding. As a member of a “group” for the purposes of Rule 13d-5(b)(1) of the Exchange Act, Mr. Daniels may be deemed to beneficially own the 3,027,734.24 Shares beneficially owned in the aggregate by the other Reporting Persons. Mr. Daniels disclaims beneficial ownership of such Shares.
Ms. Schultz directly owns 100 Shares, constituting less than 1% of the Shares outstanding. As a member of a “group” for the purposes of Rule 13d-5(b)(1) of the Exchange Act, Ms. Schultz may be deemed to beneficially own the 3,029,071.34 Shares beneficially owned in the aggregate by the other Reporting Persons. Ms. Schultz disclaims beneficial ownership of such Shares.
Item 5(c) is hereby amended to add the following:
(c) Schedule A annexed hereto lists all transactions in the securities of the Issuer since the filing of Amendment No. 9 to the Schedule 13D. All of such transactions were effected in the open market.
Item 7. | Material to be Filed as Exhibits. |
Item 7 is hereby amended to add the following exhibits:
99.1 Amended Complaint dated March 4, 2010.
99.2 Letter dated March 5, 2010.
SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: March 8, 2010 | WESTERN INVESTMENT LLC |
| | |
| By: | |
| | Name: | Arthur D. Lipson |
| | Title: | Managing Member |
| WESTERN INVESTMENT HEDGED PARTNERS L.P. |
| | |
| By: | Western Investment LLC |
| | General Partner |
| | |
| By: | |
| | Name: | Arthur D. Lipson |
| | Title: | Managing Member |
| WESTERN INVESTMENT ACTIVISM PARTNERS LLC |
| | |
| By: | Western Investment LLC |
| | Managing Member |
| | |
| By: | |
| | Name: | Arthur D. Lipson |
| | Title: | Managing Member |
| WESTERN INVESTMENT TOTAL RETURN PARTNERS L.P. |
| | |
| By: | Western Investment LLC |
| | General Partner |
| | |
| By: | |
| | Name: | Arthur D. Lipson |
| | Title: | Managing Member |
| WESTERN INVESTMENT TOTAL RETURN FUND LTD. |
| | |
| By: | Western Investment LLC |
| | Investment Manager |
| | |
| By: | |
| | Name: | Arthur D. Lipson |
| | Title: | Managing Member |
| BENCHMARK PLUS INSTITUTIONAL PARTNERS, L.L.C. |
| | |
| By: | Benchmark Plus Management, L.L.C. |
| | Managing Member |
| | |
| By: | |
| | Name: | Robert Ferguson |
| | Title: | Managing Member |
| | |
| By: | |
| | Name: | Scott Franzblau |
| | Title: | Managing Member |
| BENCHMARK PLUS PARTNERS, L.L.C. |
| | |
| By: | Benchmark Plus Management, L.L.C. |
| | Managing Member |
| | |
| By: | |
| | Name: | Robert Ferguson |
| | Title: | Managing Member |
| | |
| By: | |
| | Name: | Scott Franzblau |
| | Title: | Managing Member |
| BENCHMARK PLUS MANAGEMENT, L.L.C. |
| | |
| By: | |
| | Name: | Robert Ferguson |
| | Title: | Managing Member |
| | |
| By: | |
| | Name: | Scott Franzblau |
| | Title: | Managing Member |
| |
| ARTHUR D. LIPSON As Attorney-In-Fact for Neil Chelo |
| |
| ARTHUR D. LIPSON As Attorney-In-Fact for Matthew S. Crouse |
| |
| ARTHUR D. LIPSON As Attorney-In-Fact for Robert H. Daniels |
| |
| ARTHUR D. LIPSON As Attorney-In-Fact for Gregory R. Dube |
| |
| ARTHUR D. LIPSON As Attorney-In-Fact for Gerald Hellerman |
| |
| ARTHUR D. LIPSON As Attorney-In-Fact for Richard A. Rappaport |
| |
| ARTHUR D. LIPSON As Attorney-In-Fact for William J. Roberts |
| |
| ARTHUR D. LIPSON As Attorney-In-Fact for Robert A. Wood |
| |
| |
| ARTHUR D. LIPSON As Attorney-In-Fact for Lynn D. Schultz |
| |
SCHEDULE A
Transactions in the Securities of the Issuer Since the Filing of Amendment No. 9 to the Schedule 13D
Shares of Common Stock Purchased | Price Per Share ($) | Date of Purchase |
| | |
BENCHMARK PLUS PARTNERS, L.L.C. |
12,900 | | 7.7941 | 02/23/10 |
8,400 | | 7.7654 | 02/24/10 |
2,700 | | 7.6522 | 02/25/10 |
11,600 | | 7.7437 | 02/26/10 |
1,500 | | 7.7252 | 03/01/10 |
7,900 | | 8.0037 | 03/03/10 |
2,300 | | 8.0128 | 03/04/10 |