SC 13D 1 pdif-pdi13d4tag.txt PUTNAM DIVIDEND INCOME FUND - EVENT DATE 4/11/01 United States Securities and Exchange Commission Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 4) Putnam Dividend Income Fund (Name of Issuer) Common Stock (Title of Class of Securities) 746706-10-0 (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) April 11, 2001 (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.: 746706-10-0 THE COMMERCE GROUP, INC. SCHEDULE 13D AMENDMENT NO. 4 APRIL 11, 2001 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 5,420,950 SHARED VOTING POWER 0 SOLE DISPOSITIVE POWER 5,420,950 SHARED DISPOSITIVE POWER 0 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,420,950 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 50.1% 14. TYPE OF REPORTING PERSON [HC] Page 2 of 13 CUSIP No.: 746706-10-0 THE COMMERCE GROUP, INC. SCHEDULE 13D AMENDMENT NO. 4 APRIL 11, 2001 ITEM 1. SECURITY AND ISSUER This Schedule 13D relates to the shares of beneficial interest (the "Shares"), of Putnam Dividend Income Fund (the "Fund"), a Massachusetts 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 One Post Office Square, Boston, MA. 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 executive 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 amount of the funds used to purchase such shares aggregated approximately $54,233,400. Page 3 of 13 CUSIP No.: 746706-10-0 THE COMMERCE GROUP, INC. SCHEDULE 13D AMENDMENT No. 4 APRIL 11, 2001 ITEM 4. PURPOSE OF TRANSACTION On April 6, 2001, the Board of Trustees of the Issuer announced that it would immediately and completely liquidate the Fund and forcibly redeem the interests of all shareholders. The announced plan of liquidation is purportedly to be implemented without shareholder consideration, and will result in a liquidating distribution to shareholders of record as of April 16, 2001. In its announcement, the Trustees conveyed that their decision to liquidate the Fund was intended to prevent shareholders from replacing the current Putnam trustees. The Reporting Person, by letter dated, April 11, 2001 (Attached hereto as Appendix A) has proposed to the Issuer that the Fund continue in existence and that all shareholders, other than the Reporting Person, be given the opportunity to be redeemed at net asset value, or to remain invested in the Fund. The Reporting Person believes that the Trustees' proposal would present shareholders with the risk of losing millions of dollars in value, since the Putnam action calls for an immediate sale or distribution of the Issuer's portfolio, regardless of current prices or market conditions. The Trustees' action also fails to distribute to the shareholders fair value for their pro rata share of the intangible assets of the Fund. The Reporting Person believes that it is inappropriate to force shareholders of a closed-end fund to either (i) accept a redemption in cash or securities, or (ii) exchange their interests into another Putnam managed fund. Instead, the Reporting Person believes that the current Trustees should reconsider the liquidation and permit shareholders to retain their interests and to do so before beginning to liquidate the Fund's assets. The Reporting Person had sought a meeting with the Trustees for several weeks prior to their April 6 announcement but was not given the opportunity to meet with them. The Reporting Person is continuing to evaluate alternative actions, including taking shareholder action to prevent or rescind the purported liquidation, pursing legal or regulatory relief against the Issuer, its trustees or the investment adviser to the Issuer, or making further proposals. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) The Fund's reports with the Securities and Exchange Commission report that 10,828,107 Shares are outstanding. Based upon such number, the Reporting Person beneficially owns 50.1% of the Fund's outstanding Shares. Page 4 of 13 CUSIP No.: 746706-10-0 THE COMMERCE GROUP, INC. SCHEDULE 13D AMENDMENT No. 4 APRIL 11, 2001 The Reporting Person is the beneficial owner (through its insurance subsidiaries as listed below) of 5,420,950 Shares, over which it has sole power of disposition and voting. Such number of Shares represents approximately 50.1% of the outstanding shares.

(c) No purchases of shares of Common Stock have been effected subsequent to March 31, 2001. Purchases prior to April 1, 2001, all of which were made on the New York Stock Exchange, were reported on previous Schedule 13D filings. (d) No person other than the Reporting Person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock owned by the Reporting Person. (e) It is inapplicable to state the date on which the Reporting Person ceased to be the beneficial owner of more than five percent of the Common Stock. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER The Reporting Person does not have any contract, arrangement, understanding or relationship (legal or otherwise) with any person with respect to any securities of the Fund, including, but not limited to, the transfer or voting of any such securities, finders' fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Annex A Officers and Directors of Reporting Person and Insurance Subsidiaries Appendix A Letter to John A. Hill, Chairman of the Trustees of Putnam Dividend Income Fund Page 5 of 13 CUSIP No.: 746706-10-0 THE COMMERCE GROUP, INC. SCHEDULE 13D AMENDMENT No. 4 APRIL 11, 2001 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. ARPIL 11, 2001 THE COMMERCE GROUP, INC. Gerald Fels Executive Vice President & Chief Financial Officer Page 6 of 13 ANNEX A

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Page 11 of 13 APPENDIX A THE COMMERCE GROUP, INC. April 11, 2001 Via Facsimile and Overnight Mail Mr. John A. Hill Chairman of the Trustees Putnam Dividend Income Fund One Post Office Square Boston, Massachusetts 02109 Dear Mr. Hill: We are writing to request that you and the independent Trustees meet with representatives of The Commerce Group, Inc. ("Commerce") to discuss the interests of shareholders of the Putnam Dividend Income Fund. The purpose of our meeting would be to discuss how Fund shareholders would be better served by the Trustees' considering an alternative to the complete liquidation of the Fund announced on Friday. The context of our request is important to review. As you know, for several years Commerce, with its affiliates, has held 30% or more of the outstanding shares of Putnam Dividend Income Fund. Like other shareholders, Commerce chose to invest in the Fund as a tax-efficient pooled investment vehicle, and an alternative to redeemable open-end funds. In fact, Putnam long advocated the closed-end structure as providing long-term value beyond the day-to-day market price of its investments. Over the past several weeks we have asked, but were not given the opportunity, to meet with one or more Trustees of the Fund to discuss means of furthering the interests of all shareholders. We have met with the Fund's advisor. Over this time, we have become convinced that there remains untapped value in the Fund, and that there are changes in structure and strategy that would enhance that value. We strongly believe that the announced plan of complete liquidation is not the best means to accomplish that goal. Instead, we are hereby proposing that the Fund continue in operation, with shareholders (other than Commerce) being given the choice to (i) receive a distribution of net asset value, in cash or in kind, or (ii) retain their ownership in the Fund. Page 12 of 13 Mr. John A. Hill April 11, 2001 Page 2 We believe that this alternative satisfies the goals announced on Friday by the Trustees, yet offers both large and small shareholders the opportunity to maintain their chosen long-term strategy in a tax efficient manner. Rather than a forced redemption of all shareholders in what may be an inopportune market, and an unplanned taxable event to shareholders, our proposal would offer shareholders the opportunity to continue having their assets managed by Putnam Investment Management, or a successor. Further, it allows current Trustees to offer an exit for those that choose liquidity, rather than continue with potentially new trustees or fund management. It is imperative that this course of action be discussed before irrevocable steps are taken that dissipate the value that is in the Fund and in its portfolio. Please contact me immediately at (508) 949-4113 to arrange for this meeting. Sincerely, Gerald Fels, Executive Vice President and Chief Financial Officer cc: (via facsimile and overnight mail) Jameson A. Baxter, Trustee Hans H. Estin, Trustee Ronald J. Jackson, Trustee Paul L. Joskow, Trustee Elizabeth T. Kennan, Trustee Lawrence K. Lasser, Trustee John H. Mullin, III, Trustee Robert E. Patterson, Trustee George Putnam, III, Trustee A.J.C. Smith, Trustee W. Thomas Stephens, Trustee W. Nicholas Thorndike, Trustee Page 13 of 13

PUTNAM DIVIDEND INCOME FUND SC 13D