1940 Act File No. 811-10081
As filed with the Securities and Exchange Commission on November 22, 2000.
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT UNDER
/X/ THE INVESTMENT COMPANY ACT OF 1940
Select Asset Fund III
(Exact name of Registrant as Specified in Charter)
Select Asset Fund III
c/o Comerica Bank & Trust, National Association
411 W. Lafayette Boulevard, Mail Code 3460
Detroit, Michigan 48226
Attention: James A. McIntosh
President
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (313) 222-5783
James A. McIntosh
Comerica Bank & Trust, National Association
411 W. Lafayette Boulevard, Mail Code 3460
Detroit, MI 48226
(Name and Address of Agent for Service)
With copies to:
Richard T. Prins, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Time Square
New York, NY 10036-6522
(212) 735-3000
FORM N-2
CROSS REFERENCE SHEET
as required by Rule 495(a)
Part A
Item No. Caption Prospectus Caption
------- ------------------
1. Outside Front Cover.................Not Applicable
2. Cover Pages, Other Offering
Information.........................Not Applicable
3. Fee Table and Synopsis..............Costs and Expenses; Synopsis;
Information Pertaining to
Business Development Companies
4. Financial Highlights................Not Applicable
5. Plan of Distribution................Not Applicable
6. Selling Shareholders................Not Applicable
7. Use of Proceeds.....................Not Applicable
8. General Description of the
Registrant .........................General; Investment Objectives
and Policies; Risk Factors and
Other Policies
9. Management..........................General; Control Persons
10. Capital Stock, Long-Term
Debt, and Other Securities..........Capital Stock; Long
Term Debt; Taxes;
Outstanding Securities
11. Defaults and Arrears on
Senior Securities...................Not Applicable
12. Legal Proceedings...................Legal Proceedings
13. Table of Contents of
Statement of Additional
Information.........................Not Applicable
Part B Statement of
Item No. Additional Information
14. Cover Page..........................Not Applicable
15. Table of Contents...................Not Applicable
16. General Information and
HistorNot Applicable
17. Investment Objective and
Policies............................Investment Objective
and Policies
18. Management..........................Management Table; Positions
with Affiliated Persons or
Principal Underwriters; Non-
Resident Trustees and Offi-
cers; Compensated Persons;
Codes of Ethics
19. Control Persons and Principal
Holders of Securities...............Control Persons and Principal
Holders of Securities
20. Investment Advisory and Other
Services............................Investment Advisory and Other
Services; Independent Public
Accountant; Affiliated Person
as Custodian, Transfer Agent
or Dividend-Paying Agent
21. Brokerage Allocation and Other
Practices...........................Brokerage Allocation and Other
Practices
22. Tax Status..........................Tax Status
23. Financial Statements................Not Applicable
Part C
Item No.
Information required to be included in Part C is set forth, under the
appropriate item so numbered, in Part C of this registration statement.
PART A -- INFORMATION REQUIRED IN A PROSPECTUS
Item 1. OUTSIDE FRONT COVER.
Not applicable.
Item 2. COVER PAGES; OTHER OFFERING INFORMATION.
Not applicable.
Item 3. FEE TABLE AND SYNOPSIS.
3.1 Costs and Expenses.
Shareholder Transaction Expenses:
Sales Load (as a percentage of
offering price) ........................................None
Dividend Reinvestment and Cash
Purchase Plan Fees .....................................None
Annual Expenses (as a percentage of net assets attributable to
common shares):
Management Fees ..........................................0.10%
Interest Payments on Borrowed Funds.......................0.01%
Other Expenses* ..........................................0.10%
Total Annual Expenses** ..................................0.21%
---------------------
Example 1 year 3 years 5 years 10 years
------- ------ ------- ------- --------
You would pay the
following expenses
on a $1,000 invest-
ment, assuming a 5%
annual return: $ 2 $ 6 $ 10 $ 22
This example should not be considered a representation of
future expenses, which may be greater or lesser than those
shown.
* Other Expenses are based on estimated amounts for the current
fiscal year. The example above should not be considered a
representation of future expenses, which may be higher or
lower.
** Total Annual Expenses are based upon the assumption that the
aggregate amount of capital invested at year end will be
$291,065,574.
3.2 Synopsis.
Not applicable.
3.3 Information Pertaining to Business Development
Companies.
Not applicable.
Item 4. FINANCIAL HIGHLIGHTS.
Not applicable.
Item 5. PLAN OF DISTRIBUTION.
Not applicable.
Item 6. SELLING SHAREHOLDERS.
Not applicable.
Item 7. USE OF PROCEEDS.
Not applicable.
Item 8. GENERAL DESCRIPTION OF THE REGISTRANT.
8.1 General.
Select Asset Fund III (the "Company") is a closed-end
diversified management investment company which was formed as a
business trust under the laws of the State of Delaware on
August 17, 2000.
8.2 - 8.4 Investment Objectives and Policies; Risk
Factors and Other Policies.
The Company's investment objective is long term capital
appreciation with income as a secondary objective. The Company
may seek to realize its investment objective primarily through
investing and trading in securities of various types, including
common stock, preferred stock, convertible debentures,
non-convertible debentures, bonds, notes and various money
market instruments such as commercial paper, bankers
acceptances and money market funds. Such securities may be
issued by U.S. or non-U.S. issuers, may be denominated in U.S.
dollars or any non-U.S. currency, may be, if a debt obligation,
of any term, either secured or unsecured and of any credit
quality at least investment grade at the time of investment,
and may be traded primarily in the U.S. or in non-U.S. markets.
The Company has issued $60,000,000 in preferred stock and may,
in the future, issue additional preferred stock and, so long as
any preferred stock is outstanding, expects to invest primarily
in common stocks of large and medium capitalization U.S.
companies, non-U.S. companies whose shares are listed on a U.S.
exchange and American depositary receipts ("ADRs") of non-U.S.
companies that are traded in the U.S.
The Company's investment objective is fundamental and cannot be
changed without shareholder approval. There can be no assurance
that the Company will achieve its investment objective.
The following sets forth certain of the Company's significant
investment policies, which are not fundamental and may be
changed without shareholder approval. The Company will provide
prior notice to its securityholders if it determines to
commence any practice as to which it states herein that it does
not currently propose to engage in such practice or to expand
materially any practice identified herein as insignificant to
the Company.
Foreign Securities. From time to time, the Company may invest
and trade in securities of non-U.S. issuers and securities
denominated or quoted in non-U.S. currencies. Investments in
securities of non-U.S. issuers and securities denominated or
whose prices are quoted in non-U.S. currencies pose currency
exchange risks (including blockage, devaluation and non-
exchange-ability) as well as a range of other potential risks
which could include, depending on the country involved,
expropriation, confiscatory taxation, political or social
instability, illiquidity, price volatility and market
manipulation. In addition, less information may be available
regarding securities of non-U.S. issuers and non-U.S. issuers
may not be subject to accounting, auditing and financial
reporting standards and requirements comparable to or as
uniform as those of U.S. issuers. Transaction costs of
investing in non-U.S. securities markets are generally higher
than in the U.S. There is generally less government supervision
and regulation of exchanges, brokers and issuers than there is
in the U.S. The Company might have greater difficulty taking
appropriate legal action in non-U.S. courts. Non-U.S. markets
also have different clearance and settlement procedures which,
in some markets, have at times failed to keep pace with the
volume of transactions, thereby creating substantial delays and
settlement failures that could adversely affect the Company's
performance.
The Company may purchase ADRs, which are receipts issued by
U.S. banks or trust companies in respect of securities of
foreign issuers held on deposit for use in the U.S. securities
markets. While ADRs may not necessarily be denominated in the
same currency as the securities into which they may be
converted, many of the risks associated with foreign securities
may also apply to ADRs.
Investment Grade Fixed Income Securities. The Company may also
invest and trade in (i) mortgage-backed securities and other
securities issued or guaranteed by the U.S. government or its
agencies and instrumentalities, (ii) mortgage-backed and asset-
backed securities rated AAA by Standard & Poor's Ratings
Services ("S&P") or Aaa by Moody's Investors Service, Inc.
("Moody's") and (iii) corporate debt securities rated at the
time of investment no lower than the fourth highest rating
category by either S&P or Moody's. Securities rated in the
fourth highest rating category "BBB" (including those rated as
low as BBB-) by S&P or "Baa" (including those rated as low as
Baa3) by Moody's are investment grade securities and are
considered by S&P "as having an adequate capacity to pay
interest and repay principal. Such securities normally exhibit
adequate protection parameters, but adverse economic conditions
or changing circumstances are more likely to lead to a weakened
capacity to pay", and are considered by Moody's "as medium
grade obligations, i.e., they are neither highly protected nor
poorly secured. Interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well."
Lending Securities. By lending its portfolio securities, the
Company attempts to increase its income through the receipt of
interest on the loan. Any gain or loss in the market price of
the securities loaned that may occur during the term of the
loan will be for the account of the Company. The Company may
lend its portfolio securities so long as the terms and the
structure of such loans are not inconsistent with requirements
of the Investment Company Act of 1940 (the "1940 Act"), which
currently require that (i) the borrower pledge and maintain
with the Company collateral consisting of cash, a letter of
credit issued by a domestic U.S. bank, or securities issued or
guaranteed by the U.S. Government having a value at all times
not less than 100% of the value of the securities loaned, (ii)
the borrower add to such collateral whenever the price of the
securities loaned rises (i.e., the value of the loan is "marked
to the market" on a daily basis), (iii) the loan be made
subject to termination by the Company at any time and (iv) the
Company receive reasonable interest on the loan (which may
include the Company's investing any cash collateral in interest
bearing short-term investments), any distributions on the
loaned securities and any increase in their market value. The
Company will not lend portfolio securities if, as a result, the
aggregate of such loans exceeds the value of the Company's
total assets (including such loans). Loan arrangements made by
the Company will comply with all other applicable regulatory
requirements. All relevant facts and circumstances, including
the creditworthiness of the institution to which the loan is
made, will be monitored by the Company, and will be considered
in making decisions with respect to lending of securities,
subject to review by the Company's Board of Trustees.
The Company may pay reasonable negotiated fees in connection
with loaned securities, so long as such fees are set forth in a
written contract and approved by the Company's Board of
Trustees. In addition, voting rights may pass with the loaned
securities, but if a material event were to occur affecting
such securities, the loan must be called and the securities
voted.
Short Selling. The Company may make short sales of securities.
A short sale is a transaction in which the Company sells a
security it does not own in anticipation that the market price
of that security will decline. The Company may make short sales
both as a form of hedging to offset potential declines in long
positions in similar securities and in order to maintain
portfolio flexibility.
When the Company makes a short sale, it must borrow the
security sold short and deliver it to the broker-dealer through
which it made the short sale as collateral for its obligation
to deliver the security upon conclusion of the sale. The
Company may have to pay a fee to borrow particular securities
and is often obligated to pay over any payments received on
such borrowed securities. The Company's obligation to replace
the borrowed security will be secured by collateral deposited
with the broker-dealer, usually cash, U.S. government
securities or other high grade liquid securities similar to
those borrowed. The Company will also be required to deposit
similar collateral with its custodian to the extent, if any,
necessary so that the value of both collateral deposits in the
aggregate is at all times equal to at least 100% of the current
market value of the security sold short. Depending on
arrangements made with the broker-dealer from which it borrowed
the security regarding payment over any payments received by
the Company on such security, the Company may not receive any
payments (including interest) on its collateral deposited with
such broker- dealer.
If the price of the security sold short increases between the
time of the short sale and the time the Company replaces the
borrowed security, the Company will incur a loss; conversely,
if the price declines, the Company will realize a gain. Any
gain will be decreased, and any loss increased, by the
transaction costs described above. Although the Company's gain
is limited to the price at which it sold the security short,
its potential loss is theoretically unlimited.
The Company may also make short sales "against the box," which
involves the short sale of a security already owned by the
Company with delivery of other units of such security borrowed
from others.
When-Issued and Forward Commitment Securities. The Company may
purchase securities on a "when-issued" basis and may purchase
or sell securities on a "forward commitment" basis in order to
hedge against anticipated changes in interest rates and prices.
When such transactions are negotiated, the price, which is
generally expressed in yield terms, is fixed at the time the
commitment is made, but delivery and payment for the securities
take place at a later date. When- issued securities and forward
commitments may be sold prior to the settlement date, but the
Company will enter into when-issued and forward commitments
only with the intention of actually receiving or delivering the
securities, as the case may be. If the Company disposes of the
right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive
against a forward commitment, it can incur a gain or loss. At
the time the Company enters into a transaction on a when-issued
or forward commitment basis, it will segregate with the
custodian cash or other liquid high grade debt securities with
a value not less than the value of the when-issued or forward
commitment securities. The value of these assets will be
monitored daily to ensure that their marked to market value
will at all times exceed the corresponding obligations of the
Company. There is always a risk that the securities may not be
delivered and that the Company may incur a loss. Settlements in
the ordinary course are not treated by the Company as
when-issued or forward commitment transactions and accordingly
are not subject to the foregoing restrictions.
Leverage. The Company has issued and may issue additional
shares of auction market preferred stock, liquidation
preference $100,000 per share (the "Preferred Stock") in
transactions not involving any public offering of securities.
The Company has also issued $379,500 in principal amount of
adjustable rate notes due 2025 (the "Notes") in transactions
not involving the public offering of any securities. The
issuance of the Preferred Stock and Notes result in the
leveraging of the Company's outstanding common stock (the
"Common Stock"). Utilization of leverage through the issuance
of preferred stock and debt involves certain risks. So long as
the Company is able to realize a higher net return on its
incremental investment portfolio than the then current dividend
rate of any preferred stock together with other related
expenses, the effect of the leverage will be to cause holders
of common stock to realize a higher current net investment
income than if the Company were not so leveraged. On the other
hand, to the extent that the then current dividend rate and
interest rate on any preferred stock and debt approaches the
net return on the Company's incremental investment portfolio,
the benefit of leverage to holders of common stock will be
reduced, and if the then current dividend rate and interest
rate on any preferred stock and debt were to exceed the net
return on the Company's incremental portfolio, the Company's
leveraged capital structure would result in a lower rate of
return to holders of common stock than if the Company were not
so leveraged. If the Company's current investment income were
not sufficient to meet dividend requirements on any preferred
stock and other expenses, it could be necessary for the Company
to liquidate certain of its investments, thereby reducing the
net asset value attributable to the Company's common stock.
Under the requirements of the 1940 Act, the value of the
Company's total assets, less all liabilities and indebtedness
of the Company, must at least be equal, immediately after any
such issuance of preferred stock, to 200% of the aggregate
liquidation value of any outstanding preferred stock. Such
percentage must also be met any time the Company pays a
dividend or makes any other distribution on common stock (other
than a distribution in common stock) or any time the Company
repurchases common stock, in each case after giving effect to
such dividend, distribution or repurchase. In order to maintain
passthrough tax status under Subchapter M of the Internal
Revenue Code of 1986 (the "Code"), the Company must distribute
at least 90% of its investment income each year. Failure to
maintain such status might impair the ability of the Company to
make required payments on its preferred stock.
Under the 1940 Act, the holders of Preferred Stock, voting as a
class, must have the right to elect at least two trustees at
all times, and, subject to the prior rights, if any, of the
holders of any other class of senior securities outstanding, to
elect a majority of the trustees if at any time dividends on
such class of securities shall be unpaid in an amount equal to
two full years' dividends on such securities, and to continue
to be so represented until all dividends in arrears shall have
been paid or otherwise provided for. In addition, the vote of a
majority of the holders of Preferred Stock, voting as a class,
is required to approve any plan of reorganization adversely
affecting the Preferred Stock, or any action requiring a vote
of security holders pursuant to Section 13(a) of the 1940 Act,
including, among other things, changes in the Company's
subclassification as a closed-end investment company or changes
in its fundamental investment policies.
The Company is authorized to borrow money from banks or
otherwise. In addition to the Notes, the Company expects to
borrow money in connection with short term clearance of
transactions and other temporary uses. See response to Section
10.2 regarding the Company's leverage limitation on debt.
The Company expects that some of its borrowings may be made on
a secured basis. In such situations, either the custodian will
segregate the pledged assets for the benefit of the lender or
arrangements will be made with (i) the lender to act as a
subcustodian if the lender is a bank or otherwise qualifies as
a custodian of investment company assets or (ii) a suitable
subcustodian.
Although the Company may purchase and sell futures contracts
and options thereon on stock and bond indices, as well as
options on particular securities, the Company does not expect
to do so.
8.5 Share Price Data.
Not Applicable.
8.6 Business Development Companies.
Not Applicable.
Item 9. MANAGEMENT.
9.1 General.
The Company's investment activities will be managed by World
Asset Management L.L.C. (the "Adviser"), its investment adviser
pursuant to an investment advisory agreement (the "Advisory
Agreement") and the Company's other activities and affairs will
be managed by its administrator, Comerica Bank & Trust,
National Association, in each case subject to overall
supervision by the Company's Board of Trustees, which will act
in what it believes to be the best interests of the Company.
The Adviser is a Delaware limited liability company with
principal offices at 255 E. Brown Street, Suite 250,
Birmingham, Michigan 48009. The sole member of the Adviser with
a 100% ownership interest is Munder Capital Management, a
Delaware general partnership, the owner and general partners of
which are WAM Holdings, Inc. and WAM Holdings II, Inc. (the
"Comerica Partners") and Munder Group L.L.C. The Comerica
Partners have offices at 500 Woodward Avenue, 33rd Floor,
Detroit, Michigan 48226, and are wholly owned subsidiaries of
Comerica Investment Services, Inc., which, in turn, is a wholly
owned subsidiary of Comerica Bank, which, in turn, is a wholly
owned subsidiary of Comerica Incorporated, a publicly held bank
holding company. The Comerica Partners are the controlling
partners in Munder Capital Management with a 95.5% ownership
interest. The Administrator is a wholly owned subsidiary of
Comerica Incorporated and an affiliate of Comerica Bank.
With over $23 billion in assets under management tracking,
4,500 individual securities representing over 45 countries, the
Adviser's portfolios include collective funds, mutual funds,
and separately managed accounts for equity, fixed income and
REIT investments. The Adviser has set a goal of continually
exceeding client expectations in professionalism and related
services.
The Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940.
Under the terms of the Advisory Agreement, the Adviser will
have the discretion to supervise, manage and direct the
Company's assets, in accordance with the objectives, policies
and restrictions set forth in this registration statement and
as amended from time to time or as set forth in written
instructions furnished by the Company. It will be the Company's
responsibility to advise the Adviser of any modifications
thereof as they occur. The Adviser may, without prior
consultation with the Company and at such times when the
Adviser deems appropriate, (a) purchase, sell, invest,
reinvest, exchange, convert, trade in and otherwise deal with
such assets; and (b) place all orders for the purchase or sale
of portfolio securities with or through brokers, dealers or
issuers selected by it or designated by the Company. The
Adviser will, if requested by the Board of Trustees, vote the
proxies solicited by or with respect to the issuers of the
Company's portfolio securities.
The Adviser's fee for services as Adviser will be .00005
percent per annum of the average of the month end aggregate
fair market value of the equity securities held in the
Company's portfolio and will be computed and payable as of the
last business day of each calendar quarter. In the event that
services commence or terminate other than at the beginning of a
quarter, the fee will be prorated accordingly.
The Advisory Agreement also provides that in the absence of
willful misfeasance, bad faith or negligence in the performance
of its duties, or by reason of its reckless disregard of its
obligations and duties thereunder, the Adviser is not liable to
the Company for any act or omission by the Adviser in the
supervision or management of its respective investment
activities or for any loss sustained by the Company.
The Advisory Agreement may be terminated at any time on 30
days' notice by one party to the other, provided that such
termination by the Company must be directed or approved in
accordance with the 1940 Act.
Mr. James McIntosh, a Trustee and President of the Company, is
an officer of both Comerica Bank and Comerica Bank & Trust,
National Association, wholly owned subsidiaries of Comerica
Incorporated which are affiliated with the Adviser as described
above. Ms. Jane S. Miller, a Trustee of the Company, is also an
officer of both Comerica Bank and Comerica Bank & Trust,
National Association. Mr. Robert H. Bockrath II, the Secretary
and Treasurer of the Company, is also an officer of Comerica
Bank and an officer of Comerica Bank & Trust, National
Association.
Mr. Todd B. Johnson will be primarily responsible for
making day-to-day portfolio decisions. Mr. Johnson is
the Adviser's President and Chief Executive Officer and
has fourteen years of experience in the area of indexed
and quantitative investments. Mr. Johnson has been the
Adviser's Chief Investment Officer from 1996 to 1999
and a Director of the Adviser since 1994.
Comerica Bank & Trust, National Association, with principal
offices at 101 North Main Street, Ann Arbor, Michigan, 48104,
will act as the Company's custodian and administrator. Comerica
Bank & Trust, National Association will be paid a fee for its
services as custodian and administrator, consisting of a
percentage of assets, currently expected to be 0.10% per year
in the aggregate.
The Bank of New York, with principal offices at 100 Church
Street, New York, New York 10286, will act as the Company's
transfer agent and dividend paying agent.
The Company is responsible for all of its expenses, including
organization expenses, brokerage expense, management of its
assets and business affairs, custody of its assets, insurance,
legal counsel, accounting services and interest on
indebtedness.
9.2 Non-resident Managers.
Not Applicable
9.3 Control Persons.
As of the date hereof, Comerica Bank & Trust, National
Association, as trustee for various employee benefit plans,
owns all of the outstanding common stock of the Company. No
officer or trustee of the Company owns any common stock of the
Company. Comerica Incorporated is the ultimate parent of
Comerica Bank & Trust, National Association.
Item 10. CAPITAL STOCK, LONG-TERM DEBT AND OTHER SECURITIES.
10.1 Capital Stock.
The Company shall have authority to issue an unlimited number
of shares of capital stock, having a par value $.01 per share.
Except as the Board of Trustees shall provide otherwise,
pursuant to the authority granted in the Company's Declaration
of Trust, all the authorized shares of the Company are
designated as common stock. The shares of common stock have no
preemptive, conversion, exchange or redemption rights. Each
share of common stock has equal voting, dividend, distribution
and liquidation rights. Shares of common stock are not subject
to further calls or to assessment by the Company. In the event
of liquidation, each share of common stock is entitled to its
proportion of the Company's assets after payment of debts and
expenses and after payment of the aggregate liquidation
preferences to holders of preferred stock, plus accumulated but
unpaid dividends (whether or not earned or declared), or any
applicable liquidation premium, on the outstanding shares of
preferred stock. Holders of shares of common stock are entitled
to one vote per share and do not have cumulative voting rights.
The Board of Trustees is authorized to classify or reclassify
any unissued shares of stock (into one or more series or
classes of common stock or preferred stock) by setting,
changing or eliminating the preferences, conversion or other
rights, voting powers, restrictions, limitations as to
dividends, qualifications or terms and conditions of or rights
to require redemption of the stock. The Board of Trustees has
classified and issued 600 shares as preferred stock.
The outstanding Preferred Stock of the Company is preferred to
the Common Stock with respect to the payment of dividends and
rights upon liquidation and each series of Preferred Stock is
redeemable at any time at the option of the Company, in whole
but not in part, and is subject to mandatory redemption in
whole or in part upon the occurrence of certain events such as
failure to maintain adequate asset coverage to support a AAA
rating or comply with the 1940 Act limitations discussed in
response to Items 8.2-8.4 above. The 1940 Act requires, among
other things, that the holders of Preferred Stock, voting
together as a separate class, have the right to elect at least
two trustees at all times. If at any time accumulated dividends
on the outstanding shares of Preferred Stock equal to at least
two full years' dividends are due and unpaid, then until the
full amount of such unpaid dividends are paid or duly provided
for, holders of the shares of Preferred Stock (together with
the holders of shares of any other preferred stock entitled to
elect a majority of the trustees of the Company) will be
entitled to elect the smallest number of new trustees that,
when added to the number of trustees then constituting the
Board of Trustees, will constitute a majority of the Board of
Trustees. The holders of Preferred Stock have certain other
voting rights as required under the Company's Declaration of
Trust, Delaware law and the 1940 Act.
The Company will distribute to the holders of its Common Stock
from time to time during each year substantially all of its
taxable investment income in excess of the dividends paid to
holders of the Preferred Stock and any other preferred stock.
No dividend distributions will be made to the holders of the
Common Stock if dividends on the Preferred Stock are in arrears
or if, after giving effect thereto, an S&P Required Asset
Coverage test would not be satisfied or the asset coverage (as
defined in the 1940 Act) with respect to the outstanding shares
of preferred stock would be less than 200%. Certain amendments
affecting the outstanding Preferred Stock may be made without
shareholder approval.
No holder of shares of the capital stock of the Company
has any preemptive right to acquire from the Company any
capital stock of the Company whether now or hereafter
authorized.
Any additional offerings of shares of capital stock, if
made, will require approval by the Board of Trustees. Any
additional offering of common stock will be subject to the
requirements of the 1940 Act that shares of common stock may
not be issued at a price below the then current net asset value
(exclusive of underwriting discounts and commissions) except in
connection with an offering to existing stockholders or with
the consent of the holders of a majority of the outstanding
common stock.
10.2 Long-Term Debt.
The Company has issued $379,500 in principal amount of Floating
Rate Notes Due 2025 (the "Notes") in transactions not involving
any public offering of securities. The Notes are unsecured and
are not subordinated to other indebtedness of the Company. The
Notes are issued in registered form, without coupons. The Notes
are not subject to any sinking fund. The Notes are redeemable
at the option of the Company or as a result of a Mandatory
Redemption Event (as defined below). In addition, each holder
of Notes will have the option to require the Company to redeem
his Notes on each anniversary of the date of issuance, upon not
less than 60 nor more than 90 days' prior written notice.
Interest on the Notes will be payable on March 15 and September
15 of each year, commencing on September 15, 2000, and ending
at maturity (each, an "Interest Payment Date"). Interest
payable on each Interest Payment Date will include interest
accrued from and including the immediately preceding Interest
Payment Date (or the date of original issue in the case of the
first Interest Payment Date) to and excluding such Interest
Payment Date. The Notes will bear interest from the date of
issuance to and including March 14, 2001, at the rate of 10.25%
per annum. Thereafter, the Notes will bear interest, based on
their principal amount, for each Interest Period (as defined
below), until maturity, at a rate per annum equal to the sum of
(i) the Treasury Bill Rate (as defined in the Form of Note) as
of the first day of such Interest Period and (ii) 4% per annum.
Interest on the Notes will be computed and paid on the basis of
a 360-day year consisting of twelve months of 30 days each, and
in the case of incomplete months, on the number of days
actually elapsed divided by 30 days. The interest rate on the
Notes will in no event be higher than the maximum rate
permitted by applicable law. "Interest Period" shall mean a
yearly period beginning on March 15 and ending on March 14 of
the following year.
The Notes are subject to mandatory redemption in whole in the
event of a Mandatory Redemption Event, at a redemption price
equal to 100% of the principal amount thereof, together with
accrued interest to but excluding the date fixed for
redemption. A "Mandatory Redemption Event" will be deemed to
have occurred if the aggregate net asset value of the Company
does not exceed the aggregate principal amount of the Company's
liabilities for money borrowed, including the Notes, by a ratio
of at least 200 to 1. The Notes may be redeemed on any Interest
Payment Date, upon not less than 5 nor more than 60 days'
notice by mail, at the option of the Company, in whole or from
time to time in part, at a redemption price equal to 100% of
the principal amount thereof, together with accrued interest to
but excluding the date fixed for redemption; provided that, if
less than all the outstanding Notes are to be redeemed, the
redemption will be made by lot, on a pro rata basis, or in such
other manner as will not discriminate unfairly against any
holder of the Notes. The Notes held by each holder are subject
to redemption, in whole or in part (in whole multiples of $500,
provided that, in the event of a partial redemption, a Holder
shall not be permitted to reduce its holdings below the
principal amount of $1,000), at the option of such holder on
each March 15 (or if such day is not a Business Day, the next
preceding Business Day), upon not less than 60 nor more than 90
day's notice to the Company, at a redemption price equal to
100% of the principal amount thereof, together with accrued
interest to but excluding the date fixed for redemption.
Pursuant to certain restrictive covenants contained in the
Notes, the Company may not: (1) incur any indebtedness for
money borrowed except (a) the indebtedness evidenced by the
Notes, (b) in connection with the redemption of one or more
series of preferred stock or (c) other indebtedness in a
principal amount not to exceed at any one time outstanding an
amount equal to 10% of the Company's net asset value; (2)
declare dividends or make other distributions on shares of its
capital stock or purchase any such shares if, at the time of
the declaration, distribution or purchase, as applicable (and
after giving effect thereto), asset coverage (as defined in the
1940 Act) with respect to the Notes would be less than 300% (or
such other percentage as may in the future be required by law
or, if lower, such other percentage as may in the future be
permitted by order of the Securities and Exchange Commission
("SEC")), except that dividends may be declared upon any
preferred stock if asset coverage with respect to the Notes
would equal or exceed 200% (or such other percentage as may in
the future be required by law or, if lower, such other
percentage as may in the future be permitted by order of the
SEC) and except that any shares of preferred stock may be
acquired in any reorganization or recapitalization of the
Company in accordance with the 1940 Act; or (3) consolidate or
merge with or into any other entity or sell or transfer all or
substantially all of its properties and assets to another
entity unless (a) the successor entity is an entity organized
and existing under the laws of the United States of America or
a State thereof or the District of Columbia and assumes payment
of the principal of and interest on the Notes and the
performance and the observance of the other terms of the Notes,
and (b) no default or event of default under the Notes shall
have happened and be continuing.
Modifications and amendments of the Notes may be made by the
Company with the consent of the holders of a majority in
principal amount of the outstanding Notes; provided, however,
that no such modification or amendment may, without the consent
of the holder of each outstanding Note affected thereby, (a)
change the stated maturity date of the principal of, or any
installment of principal of or interest on, any Note, (b)
reduce the principal amount of, or interest on, any Note, or
(c) reduce the percentage in principal amount of outstanding
Notes, the consent of the holders of which is required for
modification or amendment of the Notes or for waiver of
compliance with certain provisions of the Notes or for waiver
of certain defaults. Modifications and amendments of the Notes
may be made by the Company without the consent of any holder of
Notes to evidence a successor to the Company, to add to the
Company's covenants or Events of Default, to change or
eliminate any provision not adversely affecting any interests
of holders of outstanding Notes in any material respect or to
cure any ambiguity or inconsistency. The holders of a majority
in principal amount of the outstanding Notes may on behalf of
the holders of all Notes waive compliance by the Company with
certain restrictive provisions of the Notes or waive any past
default under the Notes, except a default in the payment of the
principal of, or interest on, any Note or in respect of any
provision which under the Notes cannot be modified or amended
without the consent of the holder of each outstanding Note
affected.
10.3 General.
Not Applicable
10.4 Taxes.
The Company intends to qualify each year and elect to be
treated as a regulated investment company for federal income
tax purposes. In order to so qualify, the Company must, among
other things, (a) derive at least 90% of its gross income from
dividends, interest, payments with respect to loans of
securities and gains from the sale or other disposition of
securities or certain other related income and (b) diversify
its holdings so that at the end of each fiscal quarter (i) at
least 50% of the value of the Company's assets is represented
by cash, U.S. government securities, securities of other
regulated investment companies, and other securities which,
with respect to any one issuer, do not represent more than 5%
of the value of the Company's assets nor more than 10% of the
voting securities of such issuer, and (ii) not more than 25% of
the value of the Company's assets is invested in the securities
of any one issuer (other than U.S. government securities or the
securities of other regulated investment companies).
If the Company qualifies as a regulated investment company and
distributes to its stockholders at least 90% of its net
investment income (including tax-exempt interest and net
short-term capital gain but not net capital gain, which is the
excess of net long-term capital gains over net short-term
capital losses), then the Company will not be subject to
federal income tax on the income so distributed. However, the
Company would be subject to corporate income tax (currently at
a maximum marginal rate of 35%) on any undistributed income
other than tax-exempt income. In addition, the Company will be
subject to a nondeductible 4% excise tax on the amount by which
the income it distributes in any calendar year is less than a
required amount. The required distribution for a calendar year
equals the sum of (a) 98% of the Company's ordinary income
(excluding tax-exempt interest income) for such calendar year;
(b) 98% of the excess of capital gains over capital losses for
the one-year period ending October 31; and (c) 100% of the
undistributed ordinary income and gains from prior years. For
purposes of the excise tax, any income or capital gains
retained by, and taxed in the hands of, the Company will be
treated as having been distributed.
Any capital losses resulting from the disposition of securities
can only be used to offset capital gains and cannot be used to
reduce the Company's ordinary income. Such capital losses may
be carried forward by the Company for 8 years.
Except as described below, in general all distributions to
stockholders attributable to the Company's net investment
income (including any tax-exempt interest income distributed)
will be taxable as ordinary income.
To the extent the Company realizes net capital gains, it
intends to distribute such gains at least annually and
designate them as capital gain dividends. Capital gain
dividends are taxable as long-term capital gains, regardless of
how long the shares have been held. The Company may elect to
retain net capital gains and pay corporate income tax thereon.
In such event, the Company would most likely make an election
which would require each stockholder of record on the last day
of the Company's taxable year to include in income for tax
purposes his proportionate share of the Company's undistributed
net capital gain. If such an election is made, each stockholder
would be entitled to credit his proportionate share of the tax
paid by the Company against his federal income tax liabilities
and to claim refunds to the extent that the credit exceeds such
liabilities. In addition, the stockholder would be entitled to
increase the basis of his shares for federal income tax
purposes by an amount equal to 65% of his proportionate share
of the undistributed net capital gain.
Dividends distributed by the Company will be eligible for the
dividends received deduction in the hands of corporate
stockholders to the extent the Company derives eligible income
from dividends paid by U.S. corporations. In order to qualify
for the dividends received deduction, the Company must hold the
shares with respect to which the dividends are paid for more
than 45 consecutive days during the 90-day period beginning on
the date that is 45 days before the date on which the shares
become ex-dividend. The 45-day holding period is reduced for
periods in which the shares are subject to diminished risk of
loss. The dividends received deduction is also reduced by the
percentage, if any, of the cost of the shares that is
debt-financed.
Liquidating distributions which in the aggregate exceed a
stockholder's basis in shares will be treated as gain from the
sale of the shares; if a stockholder receives in the aggregate
liquidating distributions which are less than such basis, such
stockholder will recognize a loss to that extent.
Dividends and other distributions by the Company are generally
taxable to the stockholders at the time the dividend or
distribution is made. Any dividends declared by the Company in
October, November or December and made payable to stockholders
of record in such a month would be taxable to stockholders as
of December 31, provided that the dividend is paid in the
following January.
If a stockholder purchases shares at a cost that reflects an
anticipated dividend, such dividend will be taxable even though
it represents economically in whole or in part a return of the
purchase price. Investors should consider the tax implications
of buying shares shortly prior to a dividend distribution.
The Company will, within 60 days after the close of its taxable
year, send written notices to stockholders regarding the tax
status of all distributions made during the year.
In general, if a share is sold, the seller will recognize gain
or loss equal to the difference between the amount realized on
the sale and the seller's adjusted basis in the share. However,
any loss recognized by a stockholder within six months of
purchasing the shares will be treated as a long-term capital
loss to the extent of any long-term capital gain distributions
received by the stockholder and the stockholder's share of
undistributed long-term capital gains. In addition, any loss
realized on a sale of shares will be disallowed to the extent
the shares disposed of are replaced within a 61-day period
beginning 30 days before and ending 30 days after the
disposition of the shares. In such a case, the basis of the
shares acquired will be adjusted to reflect the disallowed
loss. Any gain or loss realized upon a sale of shares by a
stockholder who is not a dealer in securities will be treated
as capital gain or loss.
The Company may be required to withhold federal income tax at
the rate of 31% of any payments made to a stockholder if the
stockholder has not provided a correct taxpayer identification
number and certain required certifications to the Company, or
if the Secretary of the Treasury notifies the Company that the
number provided by a stockholder is not correct or that the
stockholder has not reported all interest and dividend income
required to be shown on the stockholder's federal income tax
return.
The Company expects to pay dividends on its shares out of its
net investment income at least once each year. The Company
expects to pay capital gains distributions on its net long-term
capital gains, if any, at least once each year unless the
Company elects to retain such distributions and pay corporate
tax as described above. The Company has no dividend
reinvestment plan.
10.5 Outstanding Securities.
(1) (2) (3) (4)
Amount Held byAmount Outstanding
Amount the Company or Exclusive of
Title of Class Authorized for its Account Amount in (3)
-------------- ---------- ---------------------------------
Common Stock 199,999,400 0 23,106,557.375
shares shares
Preferred Stock 600 0 600
shares shares
Notes $500,000 0 $379,500
10.6 Securities Ratings.
Not applicable.
Item 11. DEFAULTS AND ARREARS ON SENIOR SECURITIES.
Not applicable.
Item 12. LEGAL PROCEEDINGS.
The Company is not subject to any pending or, to its knowledge,
threatened legal proceedings.
Item 13. TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL
INFORMATION.
Not Applicable
PART B -- INFORMATION REQUIRED IN A STATEMENT OF
ADDITIONAL INFORMATION
Item 14. COVER PAGE.
Not Applicable
Item 15. TABLE OF CONTENTS.
Not Applicable
Item 16. GENERAL INFORMATION AND HISTORY.
Not Applicable
Item 17. INVESTMENT OBJECTIVE AND POLICIES.
The following information is provided in addition to the
information set forth in response to Item 8.
The Company's investment objective and the following investment
restrictions are fundamental and cannot be changed without the
approval of the holders of a majority of the Company's
outstanding voting securities (defined in the 1940 Act as the
lesser of (a) more than 50 percent of the outstanding shares or
(b) 67 percent or more of the shares represented at a meeting
at which more than 50 percent of the outstanding shares are
represented). All other investment policies or practices are
considered by the Company not to be fundamental and,
accordingly, may be changed without stockholder approval. If a
percentage restriction on investment or use of assets set forth
below is adhered to at the time a transaction is effected,
later changes in percentage resulting from changing market
values will not be considered a deviation from policy. The
Company may not:
1. invest more than 25 percent of the value of its
total assets in any one industry;
2. issue senior securities other than (a) preferred stock not
in excess of the maximum amount permitted by the 1940 Act or by
the SEC by rule or by order, whichever is greater, (b) senior
securities other than preferred stock (including borrowing
money, including on margin if margin securities are owned, and
providing guaranties) not in excess of the maximum amount
permitted by the 1940 Act or by the SEC by rule or by order,
whichever is greater, and (c) borrowings up to five percent of
its total assets for temporary purposes without regard to the
amount of senior securities outstanding under clauses (a) and
(b) above; provided, however, that the Company's obligations
under reverse repurchase agreements, interest rate swaps, when
issued and forward commitment transactions and similar
transactions are not treated as senior securities if covering
assets are appropriately segregated; or pledge its assets other
than to secure such issuances or in connection with hedging
transactions, short sales, when-issued and forward commitment
transactions and similar investment strategies;
3. make loans of money or property to any person,
except through loans and guaranties to entities, the
acquisition of fixed income obligations consistent with
the Company's investment objective and policies, the
acquisition of securities subject to repurchase agreements and
the loan of portfolio securities in accordance with such
regulatory requirements as may be applicable at the time of a
particular loan;
4. underwrite the securities of other issuers, except
to the extent that in connection with the disposition
of portfolio securities or the sale of its own
securities the Company may be deemed to be an
underwriter;
5. purchase or sell real estate or interests therein
in excess of the Company's total assets;
6. purchase or sell commodities or purchase or sell
commodity contracts except for hedging purposes; or
7. make any short sale of securities except in conformity with
applicable laws, rules and regulations and unless, giving
effect to such sale, the market value of the Company's
aggregate short sales of a particular class of securities,
except short sales "against the box" which are not subject to
such limitation, does not exceed 25 percent of the then-
outstanding securities of that class.
Although the Company expects that most of its investments will
be relatively long term in nature, changes in particular
portfolio holdings may be made at any time a particular
security is no longer considered to be appropriate.
Item 18. MANAGEMENT.
18.1 Management Table.
Set forth below are the names, ages, addresses, positions held
with the Company and principal occupations during the last five
years of the trustees and officers of the Company. There are no
family relationships between any of the persons listed.
Trustees who are interested persons of the Company are denoted
by an asterisk (*).
(1) (2) (3)
Name, Positions Held Principal Occupations
Age and Address With Company during Past 5 Years
--------------- -------------- ---------------------
James A. McIntosh, 50* President, First Vice President,
411 W. Lafayette Blvd., Chief Executive Comerica Bank & Trust,
Detroit, Michigan 48226 Officer and National Association,
Trustee since 1999; First Vice
President, Comerica Bank,
since 1994.
Jane S. Miller, 57* Trustee, Vice President, Comerica Bank
411 W. Lafayette Blvd., Assistant & Trust, National Association,
Detroit, Michigan 48226 Secretary, since 1998;Vice President,
Assistant Comerica Bank, since 1992.
Treasurer
John F. Sase, 49 Trustee Head of research
18823 San Quentin project, Focus Hope,
Lathrup Village, since 1992; Consultant,
Michigan 48076 Sase Associates, since
1992; Member of the
faculty at School of
Business Administration,
Oakland University,
since 1992; Ph.D. Urban
Industrial Economics,
Wayne State University.
Stephen E. Weiner, 59 Trustee Retired, since 1998;
4038 Cranbrook Ct. Associate Director of
Bloomfield, Michigan Trust Investments, Ford
48301 Motor Co., from 1984-
1997
Russell P. Flynn, 68 Trustee Retired, since 1998;
37288 Weymouth Drive Director of Pension Fund
Livonia, Michigan 48152 Investment, Chrysler
Corporation, from 1981-
1997
Robert H. Bockrath II, Secretary Assistant Vice
33 and Treasurer President, Comerica Bank
411 W. Lafayette Blvd., & Trust, National
Detroit, Michigan 48226 Association, since
November 2000; Assistant
Vice President, Comerica
Bank, since 1997; Trust-
Officer, Comerica Bank,
since 1995.
18.2 Positions with Affiliated Persons or Principal
Underwriters.
See response to Items 9.1 and 18.1.
18.3 Non-Resident Trustees and Officers.
The Company has no non-resident trustees or officers.
18.4 Compensated Persons.
The trustees who are affiliated persons of the Adviser and the
officers of the Company serve without compensation from the Company.
No trustee or officer of the Company, no affiliated person of the
Company and no affiliated person of an affiliate or principal
underwriter of the Company will receive as much as $5,000 in
aggregate remuneration from the Company for any fiscal year or any
annual pension or retirement benefits. Messrs. Weiner, Flynn and Sase
will each receive approximately $5,000 per year as non- interested
trustees for the Company.
18.5 Codes of Ethics.
The Company and its investment adviser have adopted codes of ethics
under Rule 17j-1 of the 1940 Act. These codes of ethics permit
personnel subject to the codes to invest in securities, including
securities that may be purchased or held by the Company, subject to
prior approval by a compliance officer in order to minimize potential
conflicts. These codes of ethics can be reviewed and copied at the
Commission's Public Reference Room in Washington, D.C.; information
on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-202-942-8090. The codes of ethics are
also available on the EDGAR Database on the Commission's Internet
site at http://www.sec.gov. Further, copies of the codes of ethics
may be obtained, after paying a duplicate fee, by electronic request
at [email protected], or by writing the Commission's Public
Reference Section, Washington, D.C. 20549-0102.
Item 19. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURI-
TIES.
See response to Item 9.3.
Item 20. INVESTMENT ADVISORY AND OTHER SERVICES.
20.1 - 20.6 Investment Advisory and Other Services.
See Response to Item 9.1.
20.7 Independent Public Accountant.
Ernst & Young LLP, One Detroit Center, Suite 1700, 500 Woodward
Avenue, Detroit, Michigan 48226, are the Company's independent public
accountants. Such firm will provide accounting and auditing services
and tax services for the Company.
20.8 Affiliated Person as Custodian, Transfer Agent or
Dividend-Paying Agent.
See Response to Item 9.1.
Item 21. BROKERAGE ALLOCATION AND OTHER PRACTICES.
Subject to the policies established by the Board of Trustees of the
Company, the Adviser is primarily responsible for the execution of
the Company's portfolio transactions and the allocation of brokerage.
In executing such transactions, consideration is given to such
factors as price of the security, the size and difficulty of the
order, the reliability, integrity, financial condition and general
execution and operational capabilities of competitive brokers and
dealers and their expertise in particular markets. Although the
Adviser will generally seek reasonably competitive commission rates,
the Company will not necessarily pay the lowest commission available.
The Company has no obligations to deal with any broker or group of
brokers in executing transactions in portfolio securities.
Under the 1940 Act, affiliated persons of the Company are prohibited
from dealing with the Company as principal in the purchase and sale
of securities. Because transactions in the over-the-counter market
usually involve transactions with dealers acting as principal for
their own account, the Company will not deal with affiliated persons
of the Company in connection with such transactions. However,
affiliated persons of the Company may serve as its broker in the
over-the-counter market and other transactions conducted on an agency
basis subject to compliance with applicable regulatory requirements.
The Board of Trustees of the Company has adopted certain policies
incorporating the standards of Rule 17e-1 issued by the SEC under the
1940 Act, which require that the commissions paid to certain
affiliated persons of the Company must be reasonable and fair
compared to the commissions, fees or other remuneration received or
to be received by other brokers in connection with comparable
transactions involving similar securities during a comparable period
of time. The rule and procedures also contain review requirements and
require the Company to furnish reports to the Board of Trustees of
the Company and to maintain records in connection with such reviews.
Item 22. TAX STATUS.
See Response to Item 10.4.
Item 23. FINANCIAL STATEMENTS.
None.
PART C -- OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS.
24.1 Financial Statements.
None.
24.2 Exhibits.
The exhibits to this Registration Statement are listed in the Exhibit
Index located elsewhere herein.
Item 25. MARKETING ARRANGEMENTS.
Not applicable.
Item 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Not applicable.
Item 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
WITH COMPANY.
Not applicable.
Item 28. NUMBER OF HOLDERS OF SECURITIES.
(1) (2)
Number of
Title of Class Record Holders
Common Stock 1
Auction Market Preferred
Stock, Series A 1*
Floating Rate Notes
Due 2025 102
----------
* On the date hereof, the Auction Market Preferred Stock, Series
A, is held through The Depository Trust Company for the account
of approximately 7 holders.
Item 29. INDEMNIFICATION.
Under the Company's Declaration of Trust and By- Laws, the
trustees and officers of the Company will be indemnified to the
fullest extent allowed and in the manner provided by Delaware
law and applicable provisions of the 1940 Act, including
advancing of expenses incurred in connection therewith.
Indemnification shall not be provided however to any officer or
trustee against any liability to the Company or its
securityholders to which he or she would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of
his or her office. The Company has obtained directors and
officers and errors and omissions insurance which covers
expenses in connection with errors and omissions, subject to
exceptions for fraud and certain other acts and subject to
various deductible amounts. Under the Investment Advisory
Agreement, the Advisor is indemnified to substantially the same
extent.
Insofar as indemnification for liabilities under the Securities
Act of 1933, as amended (the "Act"), may be permitted to the
trustees and officers, the Company has been advised that in the
opinion of the SEC such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
If a claim for indemnification against such liabilities under
the Act (other than for expenses incurred in a successful
defense) is asserted against the Company by the trustees or
officers, the Company 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 such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
Item 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT
ADVISER.
See Schedules to the Form ADV filed by World Asset Management,
L.L.C. with the SEC on April 10, 2000, hereby incorporated by
reference, and Exhibit G filed in response to Item 24.2.
Item 31. LOCATION OF ACCOUNTS AND RECORDS.
Accounts, books and other records required to be maintained by
Section 31(a) of the 1940 Act and the rules promulgated
thereunder are maintained at (i) Comerica Bank & Trust,
National Association, Mail Code 3460, 411 West Lafayette
Boulevard, Detroit, Michigan 48226, Attention: Robert Bockrath
II, (ii) The Bank of New York, Corporate Trust Administration,
100 Church Street - 14th Floor, New York, New York 10286, and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, 4 World
Financial Center Floor 7, New York, New York 10080, Attention:
Auction Market Securities Desk.
Item 32. MANAGEMENT SERVICES.
Not applicable.
Item 33. UNDERTAKINGS.
Not applicable.
SIGNATURE
Pursuant to the requirements of the Investment Company Act of
1940, the Company has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Detroit, and State of Michigan, on the 22nd day of November, 2000.
Select Asset Fund III
By: /s/ James A. McIntosh
---------------------------------
Name: James A. McIntosh
Title: President
SCHEDULE OF EXHIBITS TO FORM N-2
Exhibit Exhibit Page
Number Number
Exhibit A Declaration of Trust, dated August 23, 2000
Exhibit B-1 Statement of Preferences...................
Exhibit B-2 By-Laws....................................
Exhibit C Not Applicable.............................
Exhibit D Not Applicable.............................
Exhibit E Not Applicable.............................
Exhibit F Not Applicable.............................
Exhibit G Investment Management Agreement between the
Company and World Asset Management L.L.C...
Exhibit H Not Applicable.............................
Exhibit I Not Applicable.............................
Exhibit J Custodian Contract between the Company and
Comerica Bank & Trust, National Association
Exhibit K Administration Agreement between the Company and
Comerica Bank & Trust, National Association
Exhibit L Not Applicable ............................
Exhibit M Not Applicable.............................
Exhibit N Not Applicable.............................
Exhibit O Not Applicable.............................
Exhibit P Not Applicable.............................
Exhibit Q Not Applicable.............................
Exhibit R-1 Codes of Ethics of the Company ............
Exhibit R-2 Code of Ethics of World Asset Management L.L.C.
