N-23C3A 1 n23cdec01t.txt NOTIFICATION OF REPURCHASE OFFER PURSUANT TO RULE 23C-3 1. Investment Company Act File Number 811-8110 Date of Notification: November 26, 2001 2. Exact name of investment company as specified in registration statement: SPECIAL SITUATIONS FUND III, L.P. 3. Address of principal executive office: 153 East 53rd Street New York, NY 10022 A. [x] The notification pertains to a periodic repurchase offer under paragraph (b) of Rule 23c-3. B. [ ] The notification pertains to a discretionary repurchase offer under paragraph (c) of Rule 23c-3. C. [ ] The notification pertains to a periodic repurchase offer under paragraph (b) of Rule 23c-3 and a discretionary repurchase offer under paragraph (c) of Rule 23c-3. By: /s/ Austin W. Marxe Austin W. Marxe Individual General Partner SPECIAL SITUATIONS FUND III, L.P. 153 East 53rd Street New York, New York 10022 (212) 207-6500 ________________________ NOTICE OF OFFER TO REPURCHASE UNITS __________________ November 26, 2001 General Information Special Situations Fund III, L.P. (the "Fund") is a Delaware limited partnership and is registered as an investment company under the Investment Company Act of 1940 (the "1940 Act"). The Individual General Partners of the Fund are Austin W. Marxe, Stanley S. Binder, Vera Lavissiere Silverman and Peter W. Williams. The Fund, as a fundamental policy, offers to repurchase Units from its Partners at intervals of six months on June 30 and December 31 of each calendar year. The Fund has established certain policies for the repurchase of Units pursuant to the terms of its Agreement of Limited Partnership dated as of October 21, 1993 (the "Partnership Agreement"). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Partnership Agreement. Repurchase Offer The Fund hereby offers to repurchase (the "Repurchase Offer") up to 10% of the total number of Units outstanding on December 31, 2001 (the "Repurchase Offer Amount"), based upon the net asset value of such Units as of such date. The computations for the redetermination of Units and the net asset value per Unit with respect to this Repurchase Offer are more fully described below. The number of Units repurchased by the Fund is subject to increase by up to 2%, as described under "Repurchase Procedures" below. Repurchase Deadlines and Dates The following table sets forth the key deadlines and dates for the tender and payment of Units with respect to this Repurchase Offer: Description Date Repurchase Request Deadline--the last day to submit tenders of Units for repurchase and the last day to modify or withdraw any tender submitted to the Fund December 17, 2001 Repurchase Pricing Date--the effective date of the repurchase of Units and the day for determination of the net asset value per Unit December 31, 2001 Repurchase Payment Deadline--the last day for payment of repurchased Units January 7, 2001 The specific procedures for the repurchase of Units pursuant to this Repurchase Offer are more fully set forth below. A Partner who tenders Units will be subject to the risk of a decline in the value of the Fund during the 13-day period between the Repurchase Request Deadline and the Repurchase Pricing Date. Repurchase Procedures Tenders by Partners. The enclosed Repurchase of Units Tender Form must be completed and received by the Fund no later than December 17, 2001 (the "Repurchase Request Deadline"), in order to be effective. A Partner may tender any or all of the Units owned by such Partner. A Partner will be entitled to withdraw or modify any tender of Units by written notice received by the Fund prior to the Repurchase Request Deadline but may not thereafter withdraw or modify any tender of Units. Oversubscriptions. In the event that the number of Units tendered by Partners exceeds the Repurchase Offer Amount, the Individual General Partners may, in their sole discretion, increase the number of Units to be repurchased by up to 2% of the number of Units outstanding on December 31, 2001 (the "Repurchase Pricing Date"). If this Repurchase Offer is oversubscribed, Units tendered by Partners will be repurchased pro rata in accordance with the number of Units tendered by each Partner. Redetermination of Units. In order to maintain a fixed price per Unit of $25,000 for the repurchase of a Unit, the Fund will redetermine the number of Units held by each Partner on the Repurchase Pricing Date (immediately before any repurchases or additional sales of Units) to reflect allocations of Profit or Loss of the Fund. As a result, the number of Units owned by each Partner will equal the balance in such Partner's Book Capital Account on the Repurchase Pricing Date divided by $25,000. By way of example only, if the net asset value of a Unit is $37,500 immediately prior to such redetermination, a Partner will be credited with 1.5 Units for each Unit owned on the Repurchase Pricing Date. As a convenience to Partners, the enclosed Repurchase of Units Tender Form allows a Partner to tender a specified number of Units or a specified percentage of such Units, in each case at $25,000 per Unit. Payment for Units. The Fund will make cash payments for repurchased Units no later than January 7, 2002 (the "Repurchase Payment Deadline"). No fees will be payable by Partners in connection with repurchases of their Units. Suspension of Repurchase Offer. The Fund may suspend or postpone this Repurchase Offer pursuant to a vote of a majority of the Independent General Partners and only (i) for any period during which an emergency exists as a result of which disposal by the Fund of securities owned by it is not reasonably practicable, or during which it is not reasonably practicable for the Fund to fairly determine the value of its net assets, or (ii) for such other periods as the Securities and Exchange Commission may by order permit for protection of the Partners. Computation of Net Asset Value As of the close of business on November 19, 2001, the net asset value of a Unit held by a Limited Partner was $22,920 The Fund will compute its net asset value and the net asset value of such a Unit daily during the period from December 10, 2001, through December 14, 2001. A Partner may obtain information concerning the net asset value of the Fund or of a Unit held by a Limited Partner on any date by calling the Fund at telephone number (212) 207-6503, Attention: Rose Miloscio. A Partner's dated and executed Repurchase of Units Tender Form must be received by the Fund on or prior to December 17, 2001, in order to be effective. For convenience, the Fund has enclosed a self- addressed envelope. Any Partners who have any questions concerning this Offer to Repurchase Units should call Austin W. Marxe, at telephone number (212) 207-6500. ________________________________ Austin W. Marxe Managing Individual General Partner SPECIAL SITUATIONS FUND III, L.P. REPURCHASE OF UNITS TENDER FORM Special Situations Fund III, L.P. 153 East 53rd Street New York, NY 10022 Attention of Austin W. Marxe Dear Sirs: Reference is made to the Notice of Offer to Repurchase Units (the "Notice") of Special Situations Fund III, L.P. (the "Fund") dated November 26, 2001. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Notice. The undersigned hereby tenders Units for repurchase, at a price of $25,000 per Unit, as follows (complete one of the following): ________ Number of Units or ________% of Units The number or percentage of Units tendered herein will represent Units owned by the undersigned on the Repurchase Pricing Date (December 31, 2001). THIS REPURCHASE OF UNITS TENDER FORM MUST BE COMPLETED AND RECEIVED BY THE FUND ON OR BEFORE DECEMBER 17, 2001, IN ORDER TO BE EFFECTIVE. (To be signed and dated on the reverse side) If the Partner is an Individual: _______________________________ Print Name(s) _______________________________ Signature(s) ______________________ Date If the Partner is an Entity: _______________________________ Name of Entity By ____________________________ Print Name _____________________ Print Title ______________________ ______________________ Date -7- S5313/1 11/30/01 914251.02 -2- S5313/1 11/30/01 914251.02