SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
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Filed by the Registrant / X /
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Filed by a Partyparty other than the Registrant / /
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CHECK THE APPROPRIATE BOX:Check the appropriate box:
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/ / Preliminary Proxy Statement
- ----
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/ / Preliminary Additional Materials
-Confidential, for Use of the Commission Only (as
---- permitted by Rule 14a-6(e) (2))
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/ X / Definitive Proxy Statement
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/ / Definitive Additional Materials
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/ / Soliciting Material Pursuant to Sec. 240.14a-11(e) 240.14a-
---- 11(c)or
- ---- Sec. 240.14a-12
PUTNAM NEW OPPORTUNITIES FUND
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX)Statement if other than
Registrant)
Payment of Filing Fee (Check the appropriate box):
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/ xX / $125 per Exchange Act Rules 0-11(c)(1)(ii),
-No fee required
---- 14a-6(i)(1), or 14a-6(i)(2).
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/ / $500 per each party to the controversy pursuant
- ---- to Exchange Act Rule 14a-6(i)(3).
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/ / Fee computed on table below per Exchange Act
Rules
- ---- Rule 14a-6(i)(4)(1) and 0-11.0-11
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11:0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of
transaction:
(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
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/ / Check box if any part of the fee is offset as provided
- ---- by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
IMPORTANT INFORMATION
FOR SHAREHOLDERS IN
PUTNAM NEW OPPORTUNITIES FUND
ONE POST OFFICE SQUAREThe document you hold in your hands contains your proxy statement
and proxy card. A proxy card is, in essence, a ballot. When you
vote your proxy, it tells us how to vote on your behalf on
important issues relating to your fund. If you complete and sign
the proxy, we'll vote it exactly as you tell us. If you simply
sign the proxy, we'll vote it in accordance with the Trustees'
recommendations on pages 5 and 6 .
We urge you to spend a couple of minutes with the proxy
statement, fill out your proxy card, and return it to us. When
shareholders don't return their proxies in sufficient numbers, we
have to incur the expense of follow-up solicitations, which can
cost your fund money.
We want to know how you would like to vote and welcome your
comments. Please take a few moments with these materials and
return your proxy to us.
(PUTNAM LOGO APPEARS HERE)
BOSTON MASSACHUSETTS 02109
April 25 , 1994* LONDON * TOKYO
Table of contents
A Message from the Chairman. . . . . . . . . . . . . . . . . 1
Notice of Shareholder Meeting. . . . . . . . . . . . . . . . 2
Trustees' Recommendations. . . . . . . . . . . . . . . . .
. 5
Proxy card enclosed
If you have any questions, please contact us at the special toll-
free number we have set up for you (1-800-225-1581) or call your
financial adviser.
A Message from the Chairman
(Photograph of George Putnam appears here)
Dear Shareholder:
YouI am writing to you to ask for your vote on important questions
that affect your investment in your fund. While you are, cordially invitedof
course, welcome to attendjoin us at your fund's meeting, most
shareholders cast their vote by filling out and signing the
1994 Meetingenclosed proxy. We are asking for your vote on the following
matters:
1. Electing Trustees to oversee your fund;
2. Ratifying the selection by the Trustees of Shareholdersthe independent
auditors of your Fund, which will be held on July 7, 1994 at
1:00 p.m., Boston time, onfund for its current fiscal year;
3. Approving amendments to certain of your fund's fundamental
investment restrictions; and
4. Approving the twelfth floorelimination of One Post Office
Square, Boston, Massachusetts.
THE MATTERS TO BE ACTED UPON AT THE MEETING -- (1) ELECTING
TRUSTEES, (2) RATIFYING THE TRUSTEES' SELECTION OF COOPERS &
LYBRAND AS INDEPENDENT AUDITORS OF THE FUND FOR ITS CURRENT
FISCAL YEAR, (3) CONSIDERING A PROPOSAL TO ELIMINATE THE FUND'S
FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO INVESTMENTS IN
INVESTMENT COMPANIES AND (4) CONSIDERING A PROPOSAL TO AMEND THE
FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO
INVESTMENTS IN RESTRICTED SECURITIES -- ARE DESCRIBED IN THE
ATTACHED NOTICE AND PROXY STATEMENT.certain of your fund's
fundamental investment restrictions.
Although we would like very much to have each shareholder attend
the 1994 Meeting,his or her fund's meeting, we realize this is not
possible. Whether or not you plan to be present, atwe need your
vote. We urge you to complete, sign, and return the meeting, WE NEED
YOUR VOTE. WE URGE YOU TO COMPLETE, SIGN AND RETURN THE ENCLOSED
PROXY CARD PROMPTLY.enclosed
proxy card promptly. A POSTAGE-PAID ENVELOPE IS ENCLOSED FOR
THIS PURPOSE.
Ifpostage-paid envelope is enclosed.
I'm sure that you, like most people, lead a busy life and are
tempted to put this proxy aside for another day. Please don't.
When shareholders do not return your proxy promptly, you can help your Fund
avoidtheir proxies, their fund may
have to incur the expense of follow-up mailingssolicitations. All
shareholders benefit from the speedy return of proxies.
Your vote is important to achieve a quorum sous. We appreciate the time and
consideration that the meeting can be held.I am sure you will give this important matter.
If you decide between now and July
that you can attendhave questions about the meeting in person, you can revokeproposals, contact your proxyfinancial
adviser or call a Putnam customer service representative at
that time and vote your shares at the meeting. If your
shares are held in street name, only your bank or broker can vote
your shares, and only upon receipt of your specific instructions.
Please contact the person responsible for your account and
instruct him or her to execute a proxy card today.
We look forward to seeing you at the meeting or receiving
your proxy so that your shares may be voted at the meeting.1-800-225-1581.
Sincerely yours,
/s/(signature of George PutnamPutnam)
George Putnam, Chairman
PUTNAM NEW OPPORTUNITIES FUND
NOTICE OF THE 1994 MEETING OF SHAREHOLDERSNotice of a Meeting of Shareholders
This is the formal agenda for your fund's shareholder meeting.
It tells you what matters will be voted on and the time and place
of the meeting, if you can attend in person.
To Thethe Shareholders of Putnam New Opportunities Fund:
The 1994A Meeting of Shareholders of Putnam New Opportunities
Fund (the "Fund")your fund will be held on
July 7, 1994February 6, 1997 at 1:2:00 p.m., Boston time, on the twelftheighth floor
of One Post Office Square, Boston, Massachusetts, forto consider the
following purposes:following:
1. Electing Trustees. See page 7 .
2. Ratifying the selection by the Trustees as described in Part I of the attached Proxy Statement. (p. 1)
2. Ratifying or rejecting the selectionindependent
auditors of independent
accountants as auditorsyour fund for the Fund for theits current fiscal year, as described in Part II ofyear. See page
25 .
3.A. Approving an amendment to the attached
Proxy Statement. (p. 11)
3.fund's fundamental investment
restriction with respect to diversification. See page
26 .
3.B. Approving or disapproving a proposalan amendment to eliminate the Fund'sfund's fundamental investment
restriction with respect to investments in the voting
securities of a single issuer. See page 28 .
3.C. Approving an amendment to the fund's fundamental investment
companies, as describedrestriction with respect to making loans. See page
29 .
3.D. Approving an amendment to the fund's fundamental investment
restriction with respect to investments in Part IIIcommodities. See
page 31 .
3.E. Approving an amendment to the fund's fundamental investment
restriction with respect to senior securities. See page
32 .
4.A. Approving the elimination of the attached Proxy Statement. (p.
12)
4.fund's fundamental
investment restriction with respect to investments in
securities of issuers in which management of the fund or
Putnam Investment Management owns securities. See page
33 .
4.B. Approving or disapproving a proposalthe elimination of the fund's fundamental
investment restriction with respect to amendmargin transactions.
See page 34 .
4.C. Approving the Fund'selimination of the fund's fundamental
investment restriction with respect to short sales. See
page 35 .
4.D. Approving the elimination of the fund's fundamental
investment restriction with respect to pledging assets. See
page 36 .
4.E. Approving the elimination of the fund's fundamental
investment restriction with respect to investments in
restricted securities, as described
in Part IVsecurities. See page 37 .
4.F. Approving the elimination of the attached Proxy Statement. (p.
13)fund's fundamental
investment restriction with respect to investments in
certain oil, gas and mineral interests. See page 39 .
4.G. Approving the elimination of the fund's fundamental
investment restriction with respect to investing to gain
control of a company's management. See page 40 .
5. SuchTransacting other mattersbusiness as may properly come before the
meeting.
By the Trustees
GEORGE PUTNAM, CHAIRMAN
WILLIAMGeorge Putnam, Chairman
William F. POUNDS, VICE CHAIRMAN
JAMESONPounds, Vice Chairman
Jameson A. BAXTER ROBERTBaxter Robert E. PATTERSON
HANSPatterson
Hans H. ESTIN DONALDEstin Donald S. PERKINS
JOHNPerkins
John A. HILL GEORGE PUTNAM,Hill George Putnam, III
ELIZABETHRonald J. Jackson Eli Shapiro
Elizabeth T. KENNANKennan A.J.C. SMITH
LAWRENCESmith
Lawrence J. LASSERLasser W. NICHOLAS THORNDIKE
April 25 , 1994Nicholas Thorndike
WE URGE YOU TO MARK, SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN
THE ENCLOSEDPOSTAGE-PAID ENVELOPE PROVIDED SO YOU WILL BE REPRESENTED AT
THE MEETING.
November 18 , 1996
PUTNAM NEW OPPORTUNITIES FUND
ONE POST OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109
PROXY STATEMENT
THE ENCLOSED PROXY IS SOLICITED BY THE TRUSTEES OF PUTNAM
NEW OPPORTUNITIES FUND (the "Fund"Proxy Statement
This document will give you the information you need to vote on
the matters listed on the previous pages. Much of the
information in the proxy statement is required under rules of the
Securities and Exchange Commission ("SEC"); some of it is
technical. If there is anything you don't understand, please
contact us at our special toll-free number, 1-800-225-1581, or
call your financial adviser.
Who is asking for my vote?
The enclosed proxy is solicited by the Trustees of Putnam New
Opportunities Fund for use at the 1994 Meeting of Shareholders of the
fund to be held on July 7, 1994,February 6, 1997, and, if your fund's meeting
is adjourned, at any adjournments thereof,later meetings, for the purposes set forthstated in
the
accompanying Notice of Meeting (see previous pages).
How do your fund's Trustees recommend that shareholders vote on
these proposals?
The Trustees recommend that you vote
1. For the election of Shareholders.all nominees;
2. For selecting Coopers & Lybrand L.L.P. as the independent
auditors of your fund;
3.A. For amending the fund's fundamental investment restriction
with respect to diversification;
3.B. For amending the fund's fundamental investment restriction
with respect to investments in the voting securities of a
single issuer;
3.C. For amending the fund's fundamental investment restriction
with respect to making loans;
3.D. For amending the fund's fundamental investment restriction
with respect to investments in commodities;
3.E. For amending the fund's fundamental investment restriction
with respect to senior securities;
4.A. For eliminating the fund's fundamental investment
restriction with respect to investments in securities of
issuers in which management of the fund or Putnam Investment
Management owns securities;
4.B. For eliminating the fund's fundamental investment
restriction with respect to margin transactions;
4.C. For eliminating the fund's fundamental investment
restriction with respect to short sales;
4.D. For eliminating the fund's fundamental investment
restriction with respect to pledging assets;
4.E. For eliminating the fund's fundamental investment
restriction with respect to investments in restricted
securities;
4.F. For eliminating the fund's fundamental investment
restriction with respect to investments in certain oil, gas
and mineral interests; and
4.G. For eliminating the fund's fundamental investment
restriction with respect to investing to gain control of a
company's management.
Who is eligible to vote?
Shareholders of record at the close of business on
April 15, 1994November 8, 1996, are entitled to be present and to vote at the
meeting or any adjourned session
thereof.meeting. The Notice of Meeting, the
proxy, and thisthe Proxy Statement have been mailed to such shareholders
of record on or about April
25November 18 , 1994.
A copy of the Annual Report of the Fund for its most recent
fiscal year, including financial statements, has previously been
mailed to shareholders. A representative of Coopers & Lybrand,
auditors of the Fund, is expected to be present at the meeting
with the opportunity to make statements and to respond to
appropriate questions.1996.
Each share of beneficial interest is entitled to one vote. Shares represented by duly
executed proxies will be voted forin accordance with shareholders'
instructions. If you sign the election of the persons named herein as Trustees, unless such
authority has been withheld. With respect to the other matters
specifiedproxy, but don't fill in the proxy,a vote,
your shares will be voted in accordance with the instructions made.Trustees'
recommendations. If no instructions are made,any other business is brought before the
proxymeeting, your shares will be voted forat the matters specified in the proxy. Proxies
may be revoked at any time before they are voted by a written
revocation received by the Clerk of the Fund, by properly
executing a later-dated proxy or by attending the meeting and
voting in person.
I.Trustees' discretion.
The Proposals
1. ELECTION OF TRUSTEES
Who are the nominees for Trustees?
The Nominating Committee of the Trustees have fixedrecommends that the
number of Trustees be fixed at fourteen and that you vote for the
election
at this meeting at twelve. The nominees for Trustees of the Fund
who are proposed for election atnominees described below. Each nominee is
currently a Trustee of your fund and of the meeting, their ages, and a
description of their principal occupations are set forth below.
All the nominees have been recommended by theother Putnam funds.
The Nominating Committee whichof the Trustees consists solely of
Trustees who are not "interested persons" (as defined in the
Investment Company Act of 1940) of the Fundyour fund or of Putnam
Investment Management, Inc., the
Fund'syour fund's investment manager
("Putnam Management").
All the
nominees are presently Trustees of the Fund. Each of the current
Trustees was elected by the shareholders in December, 1991
(except for Messrs. Lasser and Thorndike, who were elected by the
Trustees effective January 1, 1992, Mrs. Kennan, who was elected
by the Trustees effective May 7, 1992, and Mrs. Baxter, who was
elected by the Trustees effective January 6, 1994). All of the
Trustees are also Trustees of all of the other Putnam funds,
except that Mrs. Baxter and Mr . Smith do not
currently serve as Trustees of Putnam California Investment Grade
Municipal Trust, Putnam Investment Grade Municipal Trust II,
Putnam Investment Grade Intermediate Municipal Trust, Putnam
Managed High Yield Trust, Putnam Municipal Opportunities Trust
and Putnam New York Investment Grade Municipal Trust. Except as
shown, the principal occupations and business experience for the
last five years of the nominees have been with the employers
indicated, although in some cases they have held different
positions with such employers.
The term of office of each person elected as a Trustee will
be until the next meeting held for the purpose of electing
Trustees and until his or her successor is elected and qualified.
Each of the nominees has agreed to serve as a Trustee if elected.
If any of the nominees should be unavailable for election at the
time of the meeting (which is not presently anticipated), the
persons named as proxies may vote for other persons in their
discretion, or the Trustees may vote to fix the number of
Trustees at fewer than twelve.
PRINCIPAL OCCUPATION
NOMINEE FOR LAST FIVE YEARS
Jameson Adkins Baxter
(50)[Insert Picture]
Ms. Baxter, age 53, is the President of Baxter Associates, Inc.
(consultants to management).
Prior to 1992,
a management and financial consulting firm which she founded in
1986. During that time, she was also a Vice President and
Principal of the Regency Group, Inc., and a Consultant Theto First
Boston Corporation. Also,Corporation, both of which are investment banking firms.
From 1965 to 1986, Ms. Baxter held various positions in
investment banking and corporate finance at First Boston.
Ms. Baxter currently also serves as a Director of Banta
Corporation, Avondale Federal Savings Bank, and ASHTA Chemicals,
Inc. She is also the Chairman Emeritus of the Board of Trustees
of Mount Holyoke College, having previously served as Chairman
for five years and as a Board member for thirteen years; an
Honorary Trustee and past President of the Board of Trustees of
the Emma Willard School; and Chair of the Board of Governors of
Good Shepherd Hospital. Ms. Baxter is a graduate of Mount
Holyoke College.
Hans H. Estin
[Insert Picture]
Mr. Estin, age 68, is a Chartered Financial Analyst and the Vice
Chairman of North American Management Corp., a registered
investment adviser serving individual clients and their families.
Mr. Estin currently also serves as a Director of The Boston
Company, Inc., a registered investment adviser which provides
administrative and investment management services to mutual funds
and other institutional investors, and Boston Safe Deposit and
Trust Company; a Corporation Member of Massachusetts General
Hospital; and a Trustee of New England Aquarium. He previously
served as the Chairman of the Board of Trustees Mount
Holyoke College. President of Boston
University and is currently active in various other civic
associations, including the BoardBoys & Girls Clubs of Trustees, Emma Willard
SchoolBoston, Inc.
Mr. Estin is a graduate of Harvard College and Member of Board of
Governors, Good Shepherd Hospital.
Hans H. Estin (65) Vice Chairman, North American
Management Corp. (a registered
investment adviser). Also,
Director, The Boston Company, Inc.holds honorary
doctorates from Merrimack College and Boston Safe Deposit and Trust
Company. Member, Massachusetts
General Hospital. Trustee, New
England Aquarium.University.
John A. Hill
(52)[Insert Picture]
Mr. Hill, age 54, is the Chairman and Managing Director of First
Reserve Corporation, (aa registered investment adviser).adviser investing in
companies in the world-wide energy industry on behalf of
institutional investors.
Prior to 1989, General Partner,
Meridien Capital Corporation (a
venture capitalacquiring First Reserve in 1983, Mr. Hill held executive
positions with several investment firm).
Also,advisory firms and held various
positions with the Federal government, including Associate
Director of the Office of Management and Budget and Deputy
Administrator of the Federal Energy Administration.
Mr. Hill currently also serves as a Director of Snyder Oil
Corporation, an exploration and production company which he
founded, Maverick Tube Corporation, a manufacturer of structural
steel, pipe and well casings, PetroCorp Incorporated, an
exploration and production company, Weatherford Enterra, Inc., an
oil field service company, various private companies controlled
by First Reserve Corporation, and various First Reserve Funds.
He is also a Member of the Board of Advisors of Fund Directions.
He is currently active in various business associations,
including the Economic Club of New York, and lectures on energy
issues in the United States and Europe. Mr. Hill is a graduate
of Southern Methodist University.
Ronald J. Jackson
[Insert Picture]
Mr. Jackson, age 52, was Chairman of the Board, President and
Chief Executive Officer of Fisher-Price, Inc., a major toy
manufacturer, from 1990 to 1993. He previously served as
President and Chief Executive Officer of Stride-Rite, Inc., a
manufacturer and distributor of footwear, from 1989 to 1990, and
as President and Chief Executive Officer of Kenner Parker Toys,
Inc., a major toy and game manufacturer, from 1985 to 1987.
Prior to that, he held various financial and marketing positions
at General Mills, Inc. from 1966 to 1985, including Vice
President, Controller and Vice President of Marketing for Parker
Brothers, a toy and game company, and President of Talbots, a
retailer and direct marketer of women's apparel.
Mr. Jackson currently serves as a Director of Safety 1st, Inc., a
company which markets a wide range of child care and safety
products. He also serves as a Trustee of Salem Hospital and
the Peabody Essex Museum. He previously served as a
Director of a number of public companies including Fisher-Price,
Inc., Kenner Parker Toys, Inc., Stride-Rite, Inc., and Mattel,
Inc., a major toy manufacturer. Mr. Jackson is a graduate of
Michigan State University Business School.
Elizabeth T. Kennan
(56)[Insert Picture]
Ms. Kennan, age 58, is President Emeritus and Professor of Mount
Holyoke College. Also,From 1978 through June 1995, she was President
of Mount Holyoke College. From 1966 to 1978, she was on the
faculty of Catholic University, where she taught history and
published numerous articles.
Ms. Kennan currently also serves as a Director of NYNEX
Corporation, a telecommunications company, Northeast Utilities,
the Kentucky Home Life Insurance Companies, and Talbots. Trustee,She
also serves as a Member of The Folger Shakespeare Library
Committee. She is currently active in various educational and
civic associations, including the Committee on Economic
Development and the Council on Foreign Relations. Ms. Kennan is
a graduate of Mount Holyoke College, the University of Notre Dame.
PRINCIPAL OCCUPATION
NOMINEE FOR LAST FIVE YEARS
*LawrenceWashington
and St. Hilda College at Oxford University and holds several
honorary doctorates.
Lawrence J. Lasser*
[Insert Picture]
Mr. Lasser, (51)age 54, is the Vice President of your fund and the
other Putnam funds. He has been the President, Chief Executive
Officer and a Director of Putnam Investments, Inc. and Putnam
Management.Management since 1985, having begun his career there in 1969.
Mr. Lasser currently also serves as a Director of Marsh &
McLennan Companies, Inc., the parent company of Putnam
Management, and INROADS/Central New England, Inc., a job market
internship program for minority high school and college students.
He is a Member of the Board of Overseers of the Museum of
Science, the Museum of Fine Arts and the Isabella Stewart Gardner
Museum in Boston. Also,He is also a Trustee of the Beth Israel
Hospital and Buckingham, Browne and Nichols School. Mr. Lasser
is a graduate of Antioch College and Harvard Business School.
Robert E. Patterson
(49)[Insert Picture]
Mr. Patterson, age 51, is the Executive Vice President and
Director of Acquisitions of Cabot Partners Limited Partnership, (aa
registered investment adviser to
institutional clients in the
acquisition and management of theirwhich manages real estate
portfolios). Also,
Trustee, Joslin Diabetes Center.
Director, Brandywine Trust Company.
From May, 1987investments for institutional investors. Prior to October, 1990, he was
the Executive Vice President of Cabot, Cabot & Forbes Realty
Advisors, Inc. (predecessor, the predecessor company of Cabot Partners
Limited Partnership).Partners. Prior
to that, he was a Senior Vice President of the Beal Companies, a
real estate management, investment and development company. He
has also worked as an attorney and held various positions in
state government, including the founding Executive Director of
the Massachusetts Industrial Finance Agency.
Mr. Patterson currently also serves as Chairman of the Joslin
Diabetes Center and as a Director of Brandywine Trust Company.
Mr. Patterson is a graduate of Harvard College and Harvard Law
School.
Donald S. Perkins*
[Insert Picture]
Mr. Perkins, (67)age 69, is the retired Chairman of the Board of
Jewel Companies, Inc., a diversified retailer, where among other
roles he served as President, Chief Executive Officer and
Chairman of the Board from 1965 to 1980. He currently also
serves as a Director of various other public corporations,
including American Telephone &
Telegraph Company, AON Corp., an insurance company, Cummins Engine
Company, Inc., an engine and power generator equipment
manufacturer and assembler, Current Assets L.L.C., a corporation
providing financial staffing services, Illinova and Illinois
Power Co., Inland Steel Industries, Inc., K mart
Corporation, LaSalle Street Fund,
Inc., a real estate investment trust, Lucent Technologies Inc.,
Springs Industries, Inc., a textile manufacturer, and Time
Warner, Inc. Also,, one of the nation's largest media conglomerates.
He previously served as a Director of several other major public
corporations, including Corning Glass Works, Eastman Kodak
Company, Firestone Tire & Rubber Company and Kmart Corporation.
Mr. Perkins currently also serves as a Trustee and Vice Chairman
of Northwestern University. Chairman, TheUniversity and as a Trustee of the Hospital
Research and Education Trust. Member, TheHe is currently active in various
civic and business associations, including the Business Council.
Founding Chairman,Council
and the Civic Committee of the Commercial Club of Chicago, of
which he is the founding Chairman. Mr. Perkins is a graduate of
Yale University and Harvard Business School and holds an honorary
doctorate from Loyola University of Chicago.
William F. Pounds
(66)[Insert Picture]
Dr. Pounds, age 68, is the Vice Chairman.Chairman of your fund and of the
other Putnam funds. He has been a Professor of Management at the
Alfred P. Sloan School of Management at the Massachusetts
Institute of Technology.Technology since 1961 and served as Dean of that
School from 1966 to 1980. He previously served as Senior Advisor
to the Rockefeller Family and Associates and was a past Chairman
of Rockefeller & Co., Inc., a registered investment adviser which
manages Rockefeller family assets, and Rockefeller Trust Company.
Dr. Pounds currently also serves as a Director of IDEXX
Laboratories, Inc., M/A-COM, Inc., EG&G, Inc., Perseptive Biosystems, Inc.,
Management Sciences For Health, Inc. and Sun Company, Inc. Also,He is
also a Trustee of the Museum of Fine Arts Boston andin Boston; an Overseer
of WGBH Educational Foundation.
PRINCIPAL OCCUPATION
NOMINEE FOR LAST FIVE YEARS
*GeorgeFoundation, and a Fellow of The American
Academy of Arts and Sciences. He previously served as a Director
of Fisher-Price, Inc. and General Mills, Inc. Dr. Pounds is a
graduate of Carnegie-Mellon University.
George Putnam*
[Insert Picture]
Mr. Putnam, (67)age 70, is the Chairman and President of your fund
and of the other Putnam funds. He is the Chairman and a Director
of Putnam Management and Putnam Mutual Funds. Also,Funds Corp. and a Director
of Marsh & McLennan, their parent company. Mr. Putnam is the son
of the founder of the Putnam funds and Putnam Management and has
been employed in various capacities by Putnam Management since
1951, including Chief Executive Officer from 1961 to 1973. He is
a former Overseer and Treasurer of Harvard University; a past
Chairman of the Harvard Management Company; and a Trustee
Emeritus of Wellesley College and Bradford College.
Mr. Putnam currently also serves as a Director of The Boston
Company, Inc., Boston Safe Deposit and Trust Company, Freeport-McMoRan,Freeport-
McMoRan, Inc., Freeport Copper and Gold, Inc., McMoRan Oil and
Gas, Inc., mining and natural resources companies, General Mills,
Inc., Houghton Mifflin Company, Marsh & McLennan
Companies, Inc.,a major publishing company, and
Rockefeller Group, Inc., a real estate manager. He is also a
Trustee of Massachusetts General Hospital, McLean Hospital,
Vincent Memorial Hospital, WGBH Educational Foundation The
Colonial Williamsburg Foundation
and the
Museum of Fine Arts Boston.
*Georgeand the Museum of Science in Boston; the New
England Aquarium; an Overseer of Northeastern University; and a
Fellow of The American Academy of Arts and Sciences. Mr. Putnam
III (42)is a graduate of Harvard College and Harvard Business School and
holds honorary doctorates from Bates College and Harvard
University.
George Putnam, III*
[Insert Picture]
Mr. Putnam, age 45, is the President of New Generation Research,
Inc. (publisher, a publisher of financial information).advisory and other research
services relating to bankrupt and distressed companies, and New
Generation Advisers, Inc., a registered investment adviser which
provides advice to private funds specializing in investments in
such companies. Prior to founding New Generation in 1985, Mr.
Putnam was an attorney with the Philadelphia law firm Dechert
Price & Rhoads.
Mr. Putnam currently also serves as a Director World
Environment Center andof the
Massachusetts Audubon Society. He is also a Trustee of the Sea
Education Association and St. Mark's School.
Also,School and an Overseer of
the New England Medical Center. *A.J.C.Mr. Putnam is a graduate of
Harvard College, Harvard Business School and Harvard Law School.
Eli Shapiro
[Insert Picture]
Dr. Shapiro, age 80, is the Alfred P. Sloan Professor of
Management, Emeritus at the Alfred P. Sloan School of Management
at the Massachusetts Institute of Technology, having served on
the faculty of the Sloan School for eighteen years. He
previously was also on the faculty of Harvard Business School,
The University of Chicago School of Business and Brooklyn
College. During his academic career, Dr. Shapiro authored
numerous publications concerning finance and related topics. He
previously served as the President and Chief Executive Officer of
the National Bureau of Economic Research and also provided
economic and financial consulting services to various clients.
Dr. Shapiro is a past Director of many companies, including
Nomura Dividend Income Fund, Inc., a privately held registered
investment company managed by Putnam Management, Reece
Corporation, a sewing machine manufacturer, Commonwealth
Mortgage, Dexter Corporation, a manufacturer of plastics and
related products, Avis Corporation, a car rental company,
Connecticut Bank and Trust Company, Connecticut National Gas
Corporation, the Federal Home Loan Bank of Boston, where he
served as Chairman from 1977 to 1989, Travelers' Corporation, an
insurance company, and Norlin Corporation, a musical instrument
manufacturer; and a past Trustee of Mount Holyoke College and the
Putnam funds (from 1984 to 1989).
Dr. Shapiro is a Fellow of The American Academy of Arts and
Sciences and is active in various professional and civic
associations, including the American Economic Association, the
American Finance Association and the Council on Foreign
Relations. Dr. Shapiro is a graduate of Brooklyn College and
Columbia University.
A.J.C. Smith*
[Insert Picture]
Mr. Smith, (60)age 62, is the Chairman and Chief Executive Officer of
Marsh & McLennan Companies, Inc. Also,He has been employed by Marsh &
McLennan and related companies in various capacities since 1961.
Mr. Smith is a Director of the Trident Corp., and he also serves
as a Trustee of the Carnegie Hall Society, the Central Park
Conservancy, The American Institute for Chartered Property
Casualty
Underwriters, and is a Founder of the Central Park
ConservancyMuseum of Scotland Society.
He was educated in Scotland and is a Fellow of the Faculty of
Actuaries in Edinburgh, a Fellow of the Canadian Institute of
Actuaries, a Fellow of the Conference of Actuaries in Public
Practice, an Associate of the Society of Actuaries, a Member of
the American Academy of Actuaries, the International Actuarial
Association and the Carnegie Hall
Society.International Association of Consulting
Actuaries.
W. Nicholas Thorndike**
[Insert Picture]
Mr. Thorndike, age 63, serves as a Director of various
corporations and charitable organizations, including Data General
Corporation, a computer and high technology company, Bradley Real
Estate, Inc., a real estate investment firm, Providence Journal
Co., a newspaper publisher and owner of television stations, and
Courier Corporation, a book binding and printing company. He is
also a Trustee of Eastern Utilities Associates, Massachusetts
General Hospital, where he previously served as chairman and
president, and Northeastern University.
Prior to December 1988, he was the Chairman of the Board and
Managing Partner of Wellington Management Company/Thorndike,
Doran, Paine & Lewis, a registered investment adviser which
manages mutual funds and institutional assets. He also
previously served as a Trustee of the Wellington Group of Funds
(now The Vanguard Group) and was the Chairman and a Director of
Ivest Fund, Inc. Mr. Thorndike is a graduate of Harvard College.
- -------------------------
*Nominees----------------------------
* Nominees who are or may be deemed to be "interested persons"
(as defined in the Investment Company Act of 1940) of the Fund,your
fund, Putnam Management and Putnam Mutual Funds Corp.
("Putnam Mutual Funds"), the principal underwriter for all
the open-end Putnam funds and an affiliate of Putnam
Management. Mr.Messrs. Putnam, Mr. Lasser, and Mr. Smith are deemed
"interested persons" of the Fund, Putnam
Management and Putnam Mutual Funds by virtue of their positions as
officers or shareholders of the Fund or officersyour fund, or directors of
Putnam Management, Putnam Mutual Funds or their parent, Marsh & McLennan
Companies, Inc., or their ownershipthe parent company of stock of Marsh &
McLennan Companies, Inc.Putnam Management and
Putnam Mutual Funds. Mr. George Putnam, III, Mr. Putnam's
son, is also an "interested person" of the Fund,your fund, Putnam
Management and Putnam Mutual Funds. Mr. Perkins may be
deemed to be an "interested person" of your fund because of
his service as a director of a certain publicly held company
that includes registered broker-dealer firms among its
subsidiaries. Neither your fund nor any of the other Putnam
funds currently engages in any transactions with such firms
except that certain of such firms act as dealers in the
retail sale of shares of certain Putnam funds in the
ordinary course of their business. The balance of the
nominees are not "interested persons."
PRINCIPAL OCCUPATION
NOMINEE FOR LAST FIVE YEARS
W. Nicholas** In February 1994 Mr. Thorndike (61) Directoraccepted appointment as a
successor trustee of various corporations
and charitable organizations,
including Providence Journal Co.
and Courier Corporation. Also,
Trustee and President,
Massachusetts General Hospital.
Trustee, Bradley Real Estate Trust,
Eastern Utilities Associates and
Northeastern University. Prior to
December, 1988,certain private trusts in which he has
no beneficial interest. At that time he also became
Chairman of the Board of two privately owned corporations
controlled by such trusts, serving in that capacity until
October 1994. These corporations filed voluntary petitions
for relief under Chapter 11 of the U.S. Bankruptcy Code in
August 1994.
Except as indicated above, the principal occupations and Managing Partnerbusiness
experience of Wellington Management
Company/Thorndike, Doran, Paine &
Lewis (a registered investment
adviser).
Eachthe nominees for the last five years have been with
the employers indicated, although in some cases they have held
different positions with those employers. Except for
Dr. Shapiro and Mr. Jackson, all the nominees were elected by the
shareholders in July 1994. Dr. Shapiro and Mr. Jackson
were elected by the other Trustees in April 1995 and May 1996,
respectively. As indicated above, Dr. Shapiro also
previously served as a Trustee of the Fund receives an annual fee,Putnam funds from 1984 to
1989. The 14 nominees for election as Trustees at the
shareholder meeting of your fund who receive the greatest number
of votes will be elected Trustees of your fund. The Trustees
serve until their successors are elected and an
additional fee for each Trustees' meeting attended. Trustees who
are not "interested persons" of Putnam Management and who serve
on committeesqualified. Each of
the Trustees receive additional fees for
attendance at certain committee meetings. The annual fee paid,
the number of Trustees' meetings held and the aggregate fees paidnominees has agreed to all Trustees are set forth in "Trustees and Officers
Information" below.
The Fund's Trustees have approved Retirement Guidelines for
Trusteesserve as a Trustee if elected. If any
of the Putnam funds. These guidelines provide generally
that a Trustee who retires after reaching age 72 and who has at
least 10 years of continuous service will be eligible to receive
a retirement benefit from each Putnam fundnominees is unavailable for which he or she
served as a Trustee. The amount and form of such benefit is
subject to determination annually by the Trustees and, except as
otherwise determined by the Trustees, will be an annual cash
benefit equal to one-half of the Trustee retainer paid by the
Fundelection at the time of retirement. Several retiredthe
meeting, which is not anticipated, the Trustees ofmay vote for
other nominees at their discretion, or the Fund are currently receiving retirement benefits pursuant to
these Guidelines and it is anticipatedTrustees may
recommend that the currentshareholders fix the number of Trustees
at less than 14 for your fund.
What are the Trustees' responsibilities?
Your fund's Trustees are responsible for the general oversight of
the Fund will receive similar benefits upon their retirement.
The Trustees of the Fund reserve the right to amend or terminate
such Guidelinesyour fund's business and the related payments at any time, and may
modify or waive the foregoing eligibility requirements when
deemed appropriate.
The Agreement and Declaration of Trust of the Fund providesfor assuring that the Fund will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with litigation
in which they may be involved because of their offices with the
Fund, except if ityour fund is determined in the manner specified in the
Agreement and Declaration of Trust that they have not acted in
good faith in the reasonable belief that their actions weremanaged
in the best interests of its shareholders. The Trustees
periodically review your fund's investment performance as well as
the Fund or that such indemnification would
relieve any officer or Trusteequality of any liabilityother services provided to the Fund oryour fund and its
shareholders arising by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of his or her
duties. The Fund, at its expense, provides liability insurance
for the benefit of its Trustees and officers.
AUDIT AND NOMINATING COMMITTEES. The voting members of the
Audit Committee of the Fund include only Trustees who are not
"interested persons" of the Fund or Putnam Management. The Audit
Committee recommends to the Trustees the independent public
accountants to be selected for the Fund. It also reviews the
performance, scope of work and compensation of such accountants,
and reviews with such accountants the quality, accounting
controls, procedures and adequacy of the accounting services
rendered to the Fund by Putnam Management and its affiliates, including
administration, custody, distribution and investor servicing. At
least annually, the Trustees review the fees paid to Putnam
Management and its affiliates for these services and the overall
level of your fund's operating expenses. In carrying out these
responsibilities, the Trustees are assisted by an independent
administrative staff and by your fund's auditors and legal
counsel, which are selected by the Fund's
investor servicing agentTrustees and custodian. The Audit Committee
reports toare independent
of Putnam Management and its affiliates.
Do the Trustees have a stake in your fund?
The Trustees believe it is important that each Trustee have a
significant investment in the results of its inquiries.Putnam funds. The Audit
Committee currently consists of Messrs. Estin (Chairman),
Perkins,Trustees
allocate their investments among the more than 99 Putnam III (without vote), Smith (without vote)funds
based on their own investment needs. The Trustees' aggregate
investments in the Putnam funds total over $48 million.
The table below lists each Trustee's current investments in the
fund and Mrs. Kennan.
The Nominating Committee consists only ofin the Putnam funds as a group.
Share Ownership by Trustees
who are
not "interested persons" of the Fund or Putnam Management. It
recommends to the Trustees
persons to beYear first
elected as Trustees and
as Chairman, Vice Chairman, President and certain other officers
of the Fund. The Nominating Committee will consider individuals
proposed by a shareholder for election as a Trustee.
Shareholders wishing to submit the name of any individual must
submit in writing a brief description of the proposed nominee's
business experience and other information relevant to the
qualifications of the individual to serve as a
Trustee of the
Fund. The Nominating Committee currently consistsPutnam funds
Number of Mrs. Kennan
and Dr. Pounds (Co-chairmen), Mrs. Baxter, and Messrs. Estin,
Hill, Patterson, Perkins and Thorndike.
The number of meetings of the Audit and Nominating
Committees in the Fund's most recent fiscal year is set forth in
"Trustees and Officers Information" below.
TRUSTEES AND OFFICERS INFORMATION
The shareholdings of each Trustee in the Fund for Class A
shares are shown below. No Trustee owned any Class B
shares of the
Fund. Unlessfund owned as of
9/30/96(1)
Number of
shares of all
Putnam funds
owned as of
9/30/96(2)
Jameson A. Baxter
1994
445
35,991
Hans H. Estin
1972
821
27,467
John A. Hill
1985
3,955
127,131
Ronald J. Jackson
1996
646
66,402
Elizabeth T. Kennan
1992
312
29,939
Lawrence J. Lasser
1992
17,221(3)
444,265
Robert E. Patterson
1984
778(4)
59,066
Donald S. Perkins
1982
2,154
164,173
William F. Pounds
1971
6,647
350,849
George Putnam
1957
15,776
1,529,688
George Putnam, III
1984
1,412
289,044
Eli Shapiro
1995
(5
)
916
88,717
A.J.C. Smith
1986
478
46,915
W. Nicholas Thorndike
1992
101
80,855
(1) Except as noted below, each Trustee has
sole investment power and
sole voting power with respect to his or her
shares of the Fund and no Trustee owns 1% or more of the outstanding shares
of the Fund.
OWNERSHIP OF
YEAR FIRST OWNERSHIP OF CLASSSHARES OF ALL
ELECTED AS A SHARES OF THE PUTNAM FUNDS
TRUSTEES TRUSTEE FUND AS OF 3/15/94 AS OF
3/15/94*
- -----------------------------------------------------------------
Jameson Adkins Baxter 1994 150
2,245
Hans H. Estin 1990 814 32,961
John A. Hill 1990 3,921 157,402
Elizabeth T. Kennan 1992 309 (1) 12,458
Lawrence J. Lasser 1992 19,984fund.
(2) 498,674
Robert E. Patterson 1990 952 59,989
Donald S. Perkins 1990 6,985 269,156
William F. Pounds 1990 2,617 366,029
George Putnam 1990 15,641 1,224,649
George Putnam, III 1990 1,521 57,177
A.J.C. Smith 1990 474 30,026
W. Nicholas Thorndike 1992 100 47,729
- -----------------------------------------------------------------
* DoesThese holdings do not include shares of Putnam
Capital Manager Trust,
Putnam Daily Dividend Trust, Putnam Tax Exempt Money Market Fund,
Putnam New York Tax Exempt Money Market Fund, and Putnam
California Tax Exempt Money Market Fund.
(1) In addition, Mrs. Kennan's husband owns 272 shares of
the Fund.
(2)money market funds.
(3) Mr. Lasser has sole investment power and shared voting
power with respect to 5,6671,599 of thesethe shares, which are
held for his individual account in the Putnam
Investments, Inc. Profit Sharing Retirement Plan.Plan, and
has no present economic interest with respect to 8,656
of the shares.
(4) Mr. Patterson has shared investment power and shared voting
power with respect to 546 of these shares of which he has no
present economic interest.
(5) Dr. Shapiro previously served as a Trustee of the
Putnam funds from 1984 to 1989.
As of March 15, 1994,September 30, 1996 , the Trustees and
officers of the Fundfund owned in the aggregate 82,058 Class Aa total of 79,759 shares
of the Fundfund, comprising less than 1% of theits outstanding
Class A shares of the
Fund on that date. With respect to 31,973A total of 21,012 of
these shares which are held forby certain "interested" Trustees and
officers of your fund and Putnam Management in their individual accounts in the Putnam
Investments, Inc. Profit Sharing Retirement Plan certain
Trustees (who are "interested persons" of the Fund and Putnam
Management) and certain officers of the Fund each individuallyaccounts.
Each individual accountholder has sole investment power and
shared voting power. Withpower with respect to his/her account.
What are some of the remainderways in which the Trustees represent
shareholder interests?
The Trustees believe that, as substantial investors in the Putnam
funds, their interests are closely aligned with those of
individual shareholders. Among other ways, the Trustees seek to
represent shareholder interests:
- by carefully reviewing your fund's investment
performance on an individual basis with your fund's
managers;
- by also carefully reviewing the quality of the various
other services provided to the funds and their
shareholders by Putnam Management and its affiliates;
- by discussing with senior management of Putnam
Management steps being taken to address any performance
deficiencies;
- by reviewing the fees paid to Putnam Management to
ensure that such fees remain reasonable and competitive
with those of other mutual funds, while at the same
time providing Putnam Management sufficient resources
to continue to provide high quality services in the
future;
- by monitoring potential conflicts between the funds and
Putnam Management and its affiliates to ensure that the
funds continue to be managed in the best interests of
their shareholders;
- by also monitoring potential conflicts among funds to
ensure that shareholders continue to realize the
benefits of participation in a large and diverse family
of funds.
How often do the Trustees meet?
The Trustees meet each month (except August) over a two-day
period to review the operations of your fund and of the other
Putnam funds. A portion of these shares,meetings is devoted to meetings
of various Committees of the board which focus on particular
matters. These include: the Contract Committee, which reviews
all contractual arrangements with Putnam Management and its
affiliates; the Communication and Service Committee, which
reviews the quality of services provided by your fund's investor
servicing agent, custodian and distributor; the Pricing,
Brokerage and Special Investments Committee, which reviews
matters relating to valuation of securities, best execution,
brokerage costs and allocations and new investment techniques;
the Audit Committee, which reviews accounting policies and the
adequacy of internal controls and supervises the engagement of
the funds' auditors; the Compensation, Administration and Legal
Affairs Committee, which reviews the compensation of the Trustees
and officers
individually have sole investment powertheir administrative staff and sole voting power.
FOR THE FISCAL YEAR ENDED JUNE 30, 1993
MEETINGS OF THE TRUSTEES DURING THE YEAR
Full Boardsupervises the engagement of
Trustees meetings: 11
Audit Committee meetings: 4the funds' independent counsel; and the Nominating Committee,
meetings: 4
TRUSTEES' FEES
Annual retainerwhich is responsible for selecting nominees for election as
Trustees.
Each Trustee generally attends at least two formal committee
meetings during such monthly meeting of the Trustees. During
1995, the average Trustee participated in approximately 40
committee and board meetings. In addition, the Trustees meet in
small groups with Chief Investment Officers and Portfolio
Managers to review recent performance and the current investment
climate for selected funds. These meetings ensure that each
fund's performance is reviewed in detail at least twice a year.
The Contract Committee typically meets on several additional
occasions during the year to carry out its responsibilities.
Other Committees, including an Executive Committee, may also meet
on special occasions as the need arises.
What are the Trustees paid for their services?
Each Trustee receives a fee per Trustee: $1,440
Additional attendance fee per
Trustees' meeting: $24
Aggregatefor his or her
services. Each Trustee also receives fees for serving as Trustee
of other Putnam funds. The Trustees periodically review
their fees to assure that such fees continue to be appropriate in
light of their responsibilities as well as in relation to fees
paid to alltrustees of other mutual fund complexes. The Trustees
for the
year*: $17,741
*Includes both annual fees and fees for attendance at Trustees'
meetings and certain meetingsmeet monthly over a two-day period, except in August. The
Compensation Committee, which consists solely of committees of the Trustees.
These committees include: Compensation, Legal, Administration;
Audit; Closed-End Funds; Distribution; Pricing/Brokerage/Special
Investments; Communication and Service; Contract; Executive;
Board Policy and Nominating; and Proxy.
In addition to George Putnam and Lawrence J. Lasser, the
officers of the Fund are Charles E. Porter, Executive Vice
President, Patricia C. Flaherty, Senior Vice President, Gordon H.
Silver, Peter Carman, Matthew A. Weatherbie, Daniel L. Miller
(the Fund's Portfolio Manager), William N. Shiebler (President of
Putnam Mutual Funds), John R. Verani and Paul M. O'Neil, each of
whom serves as a Vice President, John D. Hughes, Vice President
and Treasurer, and Beverly Marcus, Clerk of the Fund. All of the
officers of the Fund are employees of Putnam Management or its
affiliates. Because of their positionsTrustees not
affiliated with Putnam Management and is responsible for
recommending Trustee compensation, estimates that Committee and
Trustee meeting time together with the appropriate preparation
requires the equivalent of at least three business days per
Trustee meeting. The following table shows the year each Trustee
was first elected a Trustee of the Putnam funds, the estimated
fees to be paid to each Trustee by the fund for fiscal
1996 and the fees paid to each Trustee by all of the Putnam
funds during calendar year 1995:
Compensation Table
Trustees
Aggregate
compensation
from the fund (1)
Pension or
its affiliates or their ownershipretirement
benefits accrued
as part of
stock of Marsh & McLennan
Companies, Inc. (the parent corporation offund expenses (2)
Estimated annual
benefits from all
Putnam Management andfunds upon
retirement(3)
Total
compensation
from all
Putnam
Mutual Funds), Messrs. Putnam,funds
(4)
Jameson A.
Baxter/1994(5)
$5,921
$0
$71,676
$150,854
Hans H. Estin/1972
5,873
0
70,043
150,854
John A. Hill/1985(5)
5,782
0
70,043
149,854
Ronald J. Jackson/1996(6)
614
0
N/A
N/A
Elizabeth T. Kennan/1992
5,873
0
69,709
148,854
Lawrence J. Lasser/1992
5,787
0
70,043
150,854
Robert E. Patterson/1984
6,442
0
71,043
152,854
Donald S. Perkins/1982
5,824
0
69,376
150,854
William F. Pounds/1971
6,834
(7)
0
70,543
149,854
George Putnam/1957
5,873
0
70,043
150,854
George Putnam, III, LasserIII/1984
5,873
0
70,043
150,854
Eli Shapiro/1995(8)
6,513
0
47,686
95,372
A.J.C. Smith/1986
5,787
0
68,252
149,854
W. Nicholas Thorndike/1992
6,390
0
71,043
152,854
(1) Reflects estimated amounts to be paid for the current
fiscal year. Includes annual retainer and Smith (nomineesan
attendance fee for each meeting attended.
(2) The Trustees approved a Retirement Plan for Trustees of the
Fund),Putnam fund on October 1, 1996. Prior to that
date, voluntary retirement benefits were paid to certain
retired Trustees, and no such benefits were accrued
as wellpart of fund expenses.
(3) Assumes that each Trustee retires after at least five years
of service.
Estimated benefits for each are based on amounts paid to
such Trustee for the
three most recent calendar years (or, for Trustees who have
not served as
Trustees for the officersthree most recent calendar years, the
average amount paid to
each Trustee for such
years).
(4) As of December 31, 1995, there were 99 funds in the Putnam
family.
(5) Includes compensation deferred pursuant to a Trustee
Compensation Deferral
Plan. The total amount of deferred compensation payable by
the fund to Mr.
Hill, Ms. Baxter and Mr. Jackson as of June 30, 1996, was
$6,628, $4,287 and
$616, respectively. The total amount of deferred
compensation payable by the
Putnam funds to Mr. Hill as of December 31, 1995 was
$51,141. Information on
deferred compensation includes income earned on such
amounts.
(6) Elected as a Trustee in May 1996.
(7) Includes additional compensation for
serivice as
Vice Chairman of the
Fund,Putnam funds.
(8) Elected as a Trustee in April 1995.
Under a Retirement Plan for Trustees of
the Putnam
funds (the "Plan"), each Trustee who retires
with at
least five years of service as a Trustee of the funds is
entitled
to receive an annual retirement benefit equal to
one-half of
the average annual compensation paid to such Trustee
for the
last three years of service prior to retirement. This
retirement
benefit is payable during a Trustee's lifetime,
beginning the
year following retirement, for a number of years equal
to such
Trustee's years of service. A death benefit is also
available
under the Plan which assures that the Trustee and
his or her
beneficiaries will receive benefit frompayments for the
management fees,
distribution fees, underwriting commissions, custodian fees,lesser of an
aggregate period of (i) ten years or (ii) such
Trustee's total
years of
service.
The Plan administrator (a committee comprised of
Trustees that
are not "interest persons" of the fund, as
defined in the
Investment Company Act of 1940) may terminate or amend
the Plan
at any time, but no termination or amendment will
result in a
reduction in the amount of benefits (i) currently being
paid to a
Trustee at the time of such termination or amendment, or
(ii) to
which a current Trustee would have been entitled to
receive had
he or she retired immediately prior to such
termination or
amendment.
For additional information about your fund, including
further
information about its Trustees and investor servicing fees paid or allowed by the Fund.
PUTNAM INVESTMENT MANAGEMENT, INC.officers, please see
"Further
Information About Your Fund," on page
45 .
Putnam
Investments
Putnam Investment Management, Inc. and its
affiliates, Putnam
Mutual Funds, the principal underwriter for shares of
the Fund,your fund
and Putnam Fiduciary Trust Company, the
Fund'syour fund's
investor
servicing agent and custodian, are wholly owned
by Putnam
Investments, Inc., One Post Office Square, Boston,
Massachusetts
02109, a holding company that is in turn wholly owned by
Marsh &
McLennan Companies, Inc., which has executive offices
at 1166
Avenue of the Americas, New York, New York 10036.
Marsh &
McLennan Companies, Inc. and its operating
subsidiaries are
professional services firms with insurance and
reinsurance
brokering, consulting, and investment management
businesses.
A
certified balance sheet of Putnam Management is attached to this
Proxy Statement as Exhibit A.
The directors of Putnam Management are George Putnam,
Lawrence J. Lasser and Gordon H. Silver. Mr. Lasser is the
principal executive officer of Putnam Management. The principal
occupations of Messrs. Putnam, Lasser and Silver are as officers
and directors of Putnam Management and certain of its corporate
affiliates. The address of Putnam Management and the business
address of the directors and officers of Putnam Management is One
Post Office Square, Boston, Massachusetts 02109.
In addition to its services to the Fund, Putnam Management
acts as investment adviser or subadviser of other publicly-owned
investment companies having differing investment objectives.
Putnam Management is also affiliated with The Putnam
Advisory Company, Inc., which together with subsidiaries
furnishes investment advice to domestic and foreign institutional
clients and foreign mutual funds. Another affiliate, Putnam
Fiduciary Trust Company, provides investment advice to
institutional clients under its banking and fiduciary powers.
The advisory fees charged by such firms to their institutional
clients are generally at lower rates than those charged the
Putnam funds. The services performed and responsibilities
assumed by these firms for such clients are, however, not as
extensive as those performed or assumed by Putnam Management for
the Putnam funds.
Certain officers and directors of Putnam Management,
including some who are officers of the Fund, serve as officers or
directors of some of these affiliates. Putnam Management may
also enter into other businesses.
THE MANAGEMENT CONTRACT. Putnam Management serves as
investment manager of the Fund pursuant to a Management Contract
(the "Contract"). The management fee payable under the Contract
is based on the following annual rates: 0.70% of the first $500
million of average net assets, 0.60% of the next $500 million,
0.55% of the next $500 million and 0.50% of any amount over $1.5
billion. Management fees are payable quarterly, based on the
average net assets of the Fund as determined at the close of each
business day. Such fees are in addition to the compensation of
Trustees and certain officers and other expenses borne by the
Fund. The compensation payable to Putnam Management is subject
to reduction or reimbursement to the extent that expenses of the
Fund in any fiscal year exceed the limits on investment company
expenses imposed by any statute or regulatory authority in any
jurisdiction where shares of the Fund are qualified for offer and
sale. The term "expenses" is defined in the statutes and
regulations of such jurisdictions and, generally speaking,
excludes brokerage commissions, taxes, interest and extraordinary
expenses. The only limitation in effect as of the date of this
Proxy Statement is 2.5% of the first $30 million of average net
assets, 2% of the next $70 million and 1.5% of the remaining
average net assets. The fee payable to Putnam Management is also
subject to reduction by the amount of certain possible
commissions, fees, brokerage or similar payments received by
Putnam Mutual Funds, less expenses approved by the Trustees of
the Fund, in respect of purchases and sales of the Fund's
portfolio investments. The fees paid to Putnam Management in the
most recent fiscal year are shown in "Fund Information" below.
Under the Contract, subject to such policies as the Trustees
may determine, Putnam Management, at its expense, furnishes
continuously an investment program for the Fund and makes
investment decisions on behalf of the Fund. Subject to the
control of the Trustees, Putnam Management manages, supervises
and conducts the other affairs and business of the Fund,
furnishes office space and equipment, provides bookkeeping and
clerical services (including determination of the Fund's net
asset value, but excluding shareholder accounting services) and
places all orders for the purchase and sale of the Fund's
portfolio securities. Putnam Management may place Fund portfolio
transactions with broker-dealers that furnish Putnam Management,
without cost to it, certain brokerage and research services of
value to Putnam Management and its affiliates in advising the
Fund and other clients. In so doing, Putnam Management may cause
the Fund to pay greater brokerage commissions than it might
otherwise pay. See "Brokerage and research services" below.
The Fund also pays, or reimburses Putnam Management for, the
compensation and related expenses of certain officers of the Fund
and their assistants. Currently, the Fund is reimbursing Putnam
Management for a portion of the compensation and related expenses
of certain officers of the Fund who provide certain
administrative services to the Fund and the other Putnam funds,
each of which bears an allocated share of the costs. The
aggregate amount of all such payments and reimbursements is
determined annually by the Trustees, and the amount paid in the
most recent fiscal year is set forth in "Fund Information" below.
Putnam Management pays all other salaries of officers of the
Fund. The Fund pays all expenses not assumed by Putnam
Management including, without limitation, auditing, legal,
custodial, investor servicing agent and shareholder reporting
expenses.
The Contract provides that Putnam Management shall not be
subject to any liability to the Fund or to any shareholder of the
Fund for any act or omission in the course of or connected with
rendering services thereunder in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
its obligations and duties.
The Contract may be terminated without penalty upon 30 days'
written notice by Putnam Management, by the Trustees of the Fund,
or by the affirmative vote of the holders of a "majority of the
outstanding voting securities" of the Fund (as defined in the
Investment Company Act of 1940). It may be amended only by an
affirmative vote of the holders of a majority of the outstanding
voting securities of the Fund and by a majority of the Trustees
who are not "interested persons" of the Fund or Putnam
Management.
The Contract will terminate automatically if it is assigned,
or unless its continuance is approved at least annually by either
the Trustees or shareholders of the Fund and in either case by a
majority of the Trustees who are not "interested persons" of
Putnam Management or the Fund.
INVESTMENT DECISIONS. Investment decisions for the Fund and
for the other investment advisory clients of Putnam Management
and its affiliates are made with a view to achieving each
client's respective investment objectives. Investment decisions
are the product of many factors in addition to basic suitability
for the particular client involved. Thus, a particular security
may be bought and sold for clients even though it could have been
bought or sold for other clients at the same time. Likewise, a
particular security may be bought for some clients when other
clients are selling the security. In some cases, one client may
sell a particular security to another client. When two or more
clients simultaneously purchase or sell the same security, each
day's transactions in the security are, insofar as possible,
averaged as to price and allocated between the clients in a
manner which in the opinion of Putnam Management is equitable to
each and in accordance with the total amount of the security
being purchased or sold by each. There may be circumstances when
purchases or sales of portfolio securities for one or more
clients will have an adverse effect on other clients.
BROKERAGE AND RESEARCH SERVICES. Transactions on U.S. stock
exchanges, commodities markets and futures markets and other
agency transactions involve the payment by the Fund of negotiated
brokerage commissions. Such commissions vary among different
brokers. A particular broker may charge different commissions
according to such factors as the difficulty and size of the
transaction. Transactions in foreign investments often involve
the payment of fixed brokerage commissions, which may be higher
than those in the United States. There is generally no stated
commission in the case of securities traded in the
over-the-counter markets, but the price paid by the Fund usually
includes an undisclosed dealer commission or mark-up. In
underwritten offerings, the price paid by the Fund includes a
disclosed, fixed commission or discount retained by the
underwriter or dealer. It is anticipated that most purchases and
sales of securities by funds investing primarily in certain
fixed-income securities will be with the issuer or with
underwriters of or dealers in those securities, acting as
principal. Accordingly, those funds would not ordinarily pay
significant brokerage commissions with respect to securities
transactions.
It has for many years been a common practice in the
investment advisory business for advisers of investment companies
and other institutional investors to receive brokerage and
research services (as defined in the Securities Exchange Act of
1934, as amended (the "1934 Act")), from broker-dealers that
execute portfolio transactions for the clients of such advisers
and from third parties with which such broker-dealers have
arrangements. Consistent with this practice, Putnam Management
receives brokerage and research services and other similar
services from many broker-dealers with which Putnam Management
places the Fund's portfolio transactions and from third parties
with which these broker-dealers have arrangements. These
services include such matters as general economic and market
reviews, industry and company reviews, evaluations of
investments, recommendations as to the purchase and sale of
investments, newspapers, magazines, pricing services, quotation
services, news services and personal computers utilized by Putnam
Management's managers and analysts. Where the services referred
to above are not used exclusively by Putnam Management for
research purposes, Putnam Management, based upon its own
allocations of expected use, bears the portion of the cost of
these services that directly relates to their non-research use.
Some of these services are of value to Putnam Management and its
affiliates in advising various of their clients (including the
Fund), although not all of these services are necessarily useful
and of value in managing the Fund. The management fee paid by
the Fund is not reduced because Putnam Management and its
affiliates receive these services even though Putnam Management
might otherwise be required to purchase some of these services
for cash.
Putnam Management places all orders for the purchase and
sale of portfolio investments for the Fund and buys and sells
investments for the Fund through a substantial number of brokers
and dealers. In so doing, Putnam Management uses its best
efforts to obtain for the Fund the most favorable price and
execution available, except to the extent it may be permitted to
pay higher brokerage commissions as described below. In seeking
the most favorable price and execution, Putnam Management, having
in mind the Fund's best interests, considers all factors it deems
relevant, including, by way of illustration, price, the size of
the transaction, the nature of the market for the security or
other investment, the amount of the commission, the timing of the
transaction taking into account market prices and trends, the
reputation, experience and financial stability of the
broker-dealer involved and the quality of service rendered by the
broker-dealer in other transactions.
As permitted by Section 28(e) of the 1934 Act, and by the
Contract, Putnam Management may cause the Fund to pay a
broker-dealer that provides "brokerage and research services" (as
defined in the 1934 Act) to Putnam Management an amount of
disclosed commission for effecting securities transactions on
stock exchanges and other transactions for the Fund on an agency
basis in excess of the commission which another broker-dealer
would have charged for effecting that transaction. Putnam
Management's authority to cause the Fund to pay any such greater
commissions is also subject to such policies as the Trustees may
adopt from time to time. Putnam Management does not currently
intend to cause the Fund to make such payments. It is the
position of the staff of the Securities and Exchange Commission
that Section 28(e) does not apply to the payment of such greater
commissions in "principal" transactions. Accordingly, Putnam
Management will use its best efforts to obtain the most favorable
price and execution available with respect to such transactions,
as described above.
The Contract provides that commissions, fees, brokerage or
similar payments received by Putnam Management or an affiliate in
connection with the purchase and sale of portfolio investments of
the Fund, less any direct expenses approved by the Trustees,
shall be recaptured by the Fund through a reduction of the fee
payable by the Fund under the Contract. Putnam Management seeks
to recapture for the Fund soliciting dealer fees on the tender of
the Fund's portfolio securities in tender or exchange offers.
Any such fees which may be recaptured are likely to be minor in
amount.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. and subject to seeking
the most favorable price and execution available and such other
policies as the Trustees may determine, Putnam Management may
consider sales of shares of the Fund (and, if permitted by law,
of the other Putnam funds) as a factor in the selection of
broker-dealers to execute portfolio transactions for the Fund.
PAYMENTS TO AFFILIATES OF PUTNAM MANAGEMENT. Putnam Mutual
Funds is the principal underwriter of shares of the Fund and of
the other continuously offered Putnam funds. Putnam Fiduciary
Trust Company is the Fund's investor servicing agent and
custodian. The amount of sales charges retained by Putnam Mutual
Funds and the investor servicing fees and custodian fees paid to
Putnam Fiduciary Trust Company in the Fund's most recent fiscal
year are set forth in "Fund Information" below.
Under the terms of its Class A Distribution Plan, the Fund
compensates Putnam Mutual Funds at the annual rate of up to 0.35%
of the average net assets of the Fund attributable to Class A
shares, although a limit of 0.25% is currently in effect.
Payments under the Class A Plan compensate Putnam Mutual Funds
for services provided and expenses incurred by it in promoting
the sale of shares of the Fund, reducing redemptions or
maintaining or improving services provided to shareholders by
Putnam Mutual Funds or by dealers. The fee paid to Putnam Mutual
Funds under the Plan in the Fund's most recent fiscal year is set
forth in "Fund Information" below.
Under the terms of its Class B Distribution Plan, the Fund
compensates Putnam Mutual Funds at the annual rate of up to 1.00%
of the average net assets of the Fund attributable to Class B
shares. The purpose of the Class B Plan is to permit the Fund to
compensate Putnam Mutual Funds for services provided and expenses
incurred by it in promoting the sale of Class B shares of the
Fund, including commissions and service fees paid by it to
dealers. The fee paid to Putnam Mutual Funds under the Plan in
the Fund's most recent fiscal year is set forth in "Fund
Information" below.
FUND INFORMATION
ASSETS OF THE FUND; SHARES OUTSTANDING
Net Assets of the Fund as of March 31, 1994 $848,210,018
Class A shares outstanding and authorized
to vote as of April 15, 1994 26,113,873 shares
Class B shares outstanding and authorized
to vote as of April 15, 1994 11,353,611 shares
Persons beneficially owning
more than 5% of the Fund's Class A shares
as of March 31, 1994 NONE
Persons beneficially owning
more than 5% of the Fund's Class B shares
as of March 31, 1994 NONE
FOR THE FISCAL YEAR ENDED JUNE 30, 1993
MANAGEMENT CONTRACT
The Management Contract dated
December 5, 1991 was approved by the
shareholders on that date and was last
approved by the Trustees on January 7, 1994.
Management fee paid to Putnam
Management for the fiscal year $1,547,368
Reimbursement paid by the Fund to Putnam
Management for compensation, related expenses
and employee benefit plan contributions
for the Fund's Executive Vice President
(Charles E. Porter), Senior Vice President
(Patricia C. Flaherty), Clerk (Beverly
Marcus) and those who assist them $25,104
PAYMENTS TO AFFILIATES
Sales charges on sales of Class A
shares retained by Putnam Mutual Funds
after payments to selling broker-dealers $357,774
Deferred sales charges on Class A share
redemptions retained by Putnam Mutual Funds $25
Deferred sales charges on Class B share
redemptions retained by Putnam Mutual Funds $2,008
Payments under Rule 12b-1 Class A Distribution
Plan to Putnam Mutual Funds $559,785
Payments under Rule 12b-1 Class B Distribution
Plan to Putnam Mutual Funds
$22,069
Investor servicing and custodian fees
paid to Putnam Fiduciary Trust Company
(after application of credits, if any) $575,227
BROKERAGE
Total Fund payments to broker-dealers as
commissions on agency transactions $389,826
Total Fund payments to broker-dealers as
commissions on underwritten transactions $2,133,551
The Fund placed agency and underwritten transactions having
an approximate aggregate dollar value of $116,340,222 (18.01% of
the Fund's agency and underwritten transactions, on which
approximately $454,344 of commissions were paid) with brokers and
dealers whose research, statistical and quotation services Putnam
Management considered to be particularly useful to it and its
affiliates. However, many of such transactions were placed with
such brokers and dealers without regard to the furnishing of such
services.
II. RATIFICATION OR REJECTION OF2. SELECTION OF INDEPENDENT
AUDITORS
Coopers & Lybrand L.L.P., One Post Office Square,
Boston,
Massachusetts, independent accountants, has been
selected by the
Trustees as auditorsthe auditor of the Fundyour fund for the current
fiscal year.
Unless otherwise indicated,Among the proxy will be votedcountry's preeminent accounting firms, this
firm also
serves as the auditor for approximately half of the
other funds
in favorthe Putnam family. It was selected primarily on the
basis of
ratifyingits expertise as auditors of investment companies, the
quality of
its audit services, and the competitiveness of the fees
charged
for these
services.
A majority of the votes on the matter is necessary to
ratify the
selection of Coopers & Lybrand as auditors. III. APPROVAL OR DISAPPROVAL OF THE ELIMINATION OFA representative of the
independent
auditors is expected to be present at the meeting
to make
statements and to respond to appropriate
questions.
PROPOSALS 3
AND 4
As described in the following proposals, the
Trustees are
recommending that shareholders approve a number of
changes to
your
fund's fundamental investment restrictions,
including the
elimination of certain of these restrictions. The
purpose of
these changes is to standardize the investment
restrictions of
all of the Putnam funds,
including your
fund where
appropriate,
and in certain cases to increase the fund's
investment
flexibility. By having standard investment restrictions
for all
Putnam funds, Putnam Management will be able to
more easily
monitor each fund's compliance with its investment
policies.
Many of these changes will have little practical
effect on the
way the fund is managed given the fund's current
investment
objective and
policies.
Several
of the proposals request that certain
fundamental
restrictions be
eliminated .
These
fundamental
restrictions were originally adopted to comply
with state
securities law requirements, but are no longer
applicable to the
fund due to recently enacted federal legislation that
effectively
eliminated the ability of states to impose investment
limitations
on registered investment companies like the
fund. In
light of this development, Putnam Management
believes that
these restrictions are unnecessary and
should be
eliminated.
The adoption of any of these proposals is not
contingent on the
adoption of any other
proposal.
3.A. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH
RESPECT TO
INVESTMENTS IN INVESTMENT COMPANIESDIVERSIFICATION
The Fund currently has a fundamental investment restriction
that prohibits the Fund from investing in the securities of other
registered investment companies, except as they may be acquired
as part of a merger or consolidation or acquisition of assets.
From time to time new investment vehicles arise that would
assist the Fund in meeting its investment objective but that may
be registered investment companies (as defined in the Investment
Company Act of 1940) (the "1940 Act") andTrustees are therefore
prohibited by the Fund's investment restrictions. Generally, the
credit support for these securities is a second security
that has been purchased by a trust or other pass-through entity.
This entity, which is registered under the 1940 Act as a unit
investment trust, in turn sells securities. Even though the
securities that are issued by such pass-through entities may
involve the duplication of some fees and expenses, Putnam
Management believes that they may provide attractive investment
opportunities that, except for the restriction stated above,
would be consistent with the Fund's investment objective and
policies. However, the issuers of such securities may be
registered investment companies because they are organized as
unit investment trusts, which invest solely in the underlying
securities . To permit maximum flexibility to take advantage
of future investment opportunities, the Trustees, therefore,
recommendrecommending that the Fund'sfund's
fundamental
investment restriction with respect to the
diversification of its
investments inbe revised to reflect the standard
restriction
expected to be used by other Putnam funds and to grant
the fund
the maximum investment companies be eliminated.
If shareholders approve the elimination of this restriction,
the Trustees intend to adopt a more flexible non-fundamental
investment restriction that would prohibit investmentsflexibility permitted by the
Fund in registered open-end investment companies suchInvestment
Company Act of 1940, as amended (the "1940
Act"). Under
the Fund, but1940 Act, the fund, as a diversified fund, generally
may not, investments in other entities that might otherwise
be registered investment companies, such as the unit investment
trusts mentioned above. Such a non-fundamental investment
restriction could be amended or eliminated by the Trustees
without a shareholder vote.
The Trustees recommend changing the fundamental investment
restriction
with respect to investments in investment companies
to a non-fundamental policy (with the language to be added shown
in (( ))) to provide that the Fund may not:
Invest75% of its total assets, invest more
than 5% of
its total assets in the securities of other registered ((open-
end))any one issuer
(except U.S.
government securities). The remaining 25% of the
fund's total
assets is not subject to this
restriction.
The fund's current restriction is more restrictive,
and states
that the fund
may not:
"Invest in securities of any issuer if,
immediately after
such investment, companies, exceptmore than 5% of the total
assets of the
fund (taken at current value) would be
invested in the
securities of such issuer; provided that this
limitation
does not apply to obligations issued or
guaranteed as theyto
interest and principal by the U.S.
government or its
agencies or
instrumentalities."
The proposed amended fundamental investment
restriction is set
forth
below.
"The fund may
not ...
With respect to 75% of its total assets,
invest in the
securities of any issuer if, immediately
after such
investment,
more than 5% of the total
assets of the
fund (taken at current value) would be
acquiredinvested in the
securities of such issuer; provided
that this
limitation does not apply to obligations
issued or
guaranteed as partto
interest or
principal by
the U.S.
government or its agencies or
instrumentalities."
If the proposed change is approved, the fund will be
able to
invest up to 25% of its total assets in the
securities of
any one issuer. The amended restriction would
continue to
exclude from its limitations U.S. government
securities.
Following the amendment, the fund would continue
to be a
diversified investment company for purposes of the
1940 Act.
Putnam Management believes that this enhanced
flexibility could
assist the fund in achieving its investment objective.
However,
during times when Putnam Management invests a higher
percentage
of the fund's assets in one or more issuers, the
value of the
fund's shares may fluctuate more widely than the value
of shares
of a merger or consolidation or
acquisitionportfolio investing in a larger number of
assets.
REQUIRED VOTE.issuers.
Required Vote. Approval of this proposal
will require the
affirmative vote of a "majority of the outstanding voting
securities" of the Fund, which for this purpose meansrequires the
affirmative vote
of
the lesser of (1) more than
50% of the
outstanding shares of the Fund,fund, or (2) 67% or more of
the shares
of the Fundfund present at the meeting if more than
50% of the
Fund's
outstanding shares of the fund are present at the
meeting in
person or
by proxy.
If the shareholders do not approve the proposal, the
fundamental investment restriction of the Fund with respect to
investments in investment companies will remain unchanged.
IV. APPROVAL OR DISAPPROVAL OF AN AMENDMENT TO3.B. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH
RESPECT TO INVESTMENTS IN RESTRICTEDTHE VOTING SECURITIES OF
A SINGLE
ISSUER
The Trustees recommendare recommending that the Fund'sfund's
fundamental
investment restriction with respect to restrictedinvestments in
the voting
securities of a single issuer be revised to permitreflect the
Fundstandard
restriction expected to be used by other Putnam
funds and to
grant the fund the maximum flexibility permitted under
the 1940
Act. The 1940 Act prohibits a diversified fund such as
the fund
from investing, with respect to 75% of its total
assets, in the
voting securities of an issuer if as a result it would
own more
than 10% of the outstanding voting securities of that
issuer.
The fund's current investment restriction, which
is more
restrictive than the 1940 Act, states that the fund
may not:
"Acquire more than 10% of the voting
securities of any
issuer."
The proposed amended fundamental investment
restriction is set
forth
below.
"The fund may
not ...
With respect to 75% of its total assets,
acquire more
than 10% of the outstanding voting
securities of any
issuer."
Putnam Management believes that limiting this
restriction to 75%
of the fund's total assets will enhance the fund's
investment
flexibility. Putnam Management has advised the Trustees
that the
current restriction could prevent the fund from
investing in
certain opportunities to the fullest extent
that Putnam
Management believes would best serve the fund's
investment
objective.
The amendment enables the fund to purchase more than
10% of the
voting securities of an issuer with respect to 25% of
the fund's
total
assets.
To
the extent the fund individually or
with other
funds and accounts managed by Putnam Management or its
affiliates
were to own all or a major portion of the
outstanding voting
securities of a particular issuer, under adverse
market or
economic conditions or in the event of adverse
changes in the
financial condition of the issuer the fund could find
it more
difficult to sell these voting securities when Putnam
Management
believes it advisable to do so, or may be able to
sell the
securities only at prices significantly lower than if
they were
more widely held. In addition, certain of the companies
in which
the fund may invest a greater portion of its assets
following the
amendment could have relatively small
equity market
capitalizations (e.g., under $1 billion). Such
companies often
have limited product lines, markets or financial
resources. The
securities of these companies may trade less
frequently and in
limited volume, and only in the over-the-counter market
or on a
regional securities restricted as to resale under the federalexchange. As a result, these
securities laws ("restricted securities"). Putnam Management has
recommended the proposed change to the Trustees because it
believes that the increased flexibility will assist the Fundmay
fluctuate in achieving its investment objective.
The Fund's current investment restrictions prohibit it from
investingvalue more than 5%those of its net assets in restricted
securities. In orderlarger, more
established
companies. Under such circumstances, it may also
be more
difficult to permit maximum flexibility in investingdetermine the Fund's assets, the proposed amendment would raise the current
limit from 5% to 15%fair value of the Fund's net assets that may be
invested in such
securities and would exclude from the
restriction certain restricted securities that are readily
marketable. Putnam Management believes that the proposed
amendment would benefit the Fund by permitting it to respond to
regulatory and market developments regarding restricted
securities.
The Securities and Exchange Commission ("SEC") has long
taken the position that an open-end investment company should
limit its investments in illiquid securities because such
securities may present problems of accurate valuation and because
it is possible that the investment company would have difficulty
satisfying redemptions within seven days. In general, illiquid
securities have included restricted securities and those
securities for which there is no readily available market. While
it had been the SEC's position that an open-end investment
company should not invest more than 10% of its assets in illiquid
securities, the SEC has revised its position to permit an open-
end investment company to invest up to 15% of its net assets in
illiquid securities.
In recognition of the increased size and liquidity of the
institutional markets for unregistered securities and the
importance of institutional investors in the capital formation
process, the SEC has also adopted Rule 144A, which is designed to
facilitate efficient trading of restricted securities among
institutional investors. Rule 144A allows for an even broader
institutional trading market for restricted securities. In
adopting Rule 144A, the SEC specifically stated that restricted
securities traded under Rule 144A may be treated as liquid for
purposes of investment limitations ifcomputing the trustees of an
investment company determine that the securities are, in fact,
liquid. It is expected that the Trustees of the Fund will
delegate to Putnam Management the daily function of determining
and monitoring the liquidity of restricted securities.
As the securities markets evolve and new types of
instruments are developed, Putnam Management believes that the
Fund's present restriction may become overbroad and unnecessarily
restrictive. The fact that a security may be restricted will not
necessarily adversely affect either the liquidity of such
investment or the ability of the Fund to determine the value of
such investment. As institutional markets develop, the Fund
would be constrained by its current investment restriction even
though the institutional restricted securities markets could
provide both readily ascertainable values for restricted
securities and the ability to reduce an investment to cash in
order to satisfy Fund share redemption orders on a timely basis.
In order to be able to take advantage of these regulatory
changes and the increasingly liquid institutional trading markets
for restricted securities, the Trustees recommend that the
proposed amendments to the Fund's fundamental restriction be
adopted by shareholders to increase the current limit from 5% to
15% of the Fund'sfund's net
assets that may be invested in restricted
securities and to provide that certain restricted securities that
are nonetheless liquid may be purchased without regard to the 15%
limit. If the proposed amendment is approved, this investment
practice could have the effect of increasing the level of
illiquidity of the Fund's portfolio securities to the extent that
institutional investors become uninterested, for a time, in
purchasing these restricted securities.
Certain state securities laws may limit the ability of the
Fund to invest in restricted securities, including restricted
securities that are readily marketable.
The Trustees recommend changing the fundamental investment
restriction with respect to restricted securities (with the
language to be deleted shown in // //, and the language to be
added shown in (( ))) to provide that the Fund may not:
Purchase securities //restricted as to
resale//((THE DISPOSITION OF WHICH IS RESTRICTED
UNDER FEDERAL SECURITIES LAWS)) , if, as a
result , such investments would exceed
//5%//((15%)) of the value of the Fund's net assets
((, EXCLUDING RESTRICTED SECURITIES THAT HAVE BEEN
DETERMINED BY THE TRUSTEES OF THE FUND (OR THE PERSON
DESIGNATED BY THEM TO MAKE SUCH DETERMINATIONS) TO
BE READILY MARKETABLE)).
REQUIRED VOTE.asset value.
Required vote. Approval of this proposal
will require
the affirmative vote of a "majority of the outstanding voting
securities" of the Fund, which for this purpose meansrequires the
affirmative vote of the lesser of (1) more than
50% of the
outstanding shares of the Fund,fund, or (2) 67% or more of
the shares
of the Fundfund present at the meeting if more than
50% of the
Fund's
outstanding shares of the fund are present at the
meeting in
person or
by proxy.
If shareholders do not approve3.C. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH
RESPECT TO
MAKING LOANS
The Trustees are recommending that the proposal, thefund's
fundamental
investment restriction with respect to making loans be
revised to
reflect the standard restriction expected to be used
by other
Putnam funds. The current restriction states that the
fund may
not:
"Make loans, except by purchase of debt obligations
in which
the fund may invest consistent with its investment
policies,
or by entering into repurchase agreements with
respect to
not more than 25% of its total assets (taken at
current
value)."
The proposed amended fundamental investment
restriction is set
forth
below.
"The fund may
not ...
Make loans, except by purchase of debt
obligations in
which the fund may invest consistent
with its
investment
policies, by
entering into
repurchase
agreements,
or by lending its portfolio
securities
."
Following the amendment, the fund may, consistent
with its
investment objective and policies and applicable law,
enter into
repurchase agreements and securities loans without limit.
Putnam
Management believes that the increased investment
flexibility
could assist the fund in achieving its investment
objective.
When the fund enters into a repurchase agreement, it
typically
purchases a security for a relatively short period
(usually not
more than one week), which the seller agrees to
repurchase at a
fixed time and price, representing the fund's cost plus
interest.
When the fund enters into a securities loan, it lends
certain of
its portfolio securities to broker-dealers or other
parties and
typically receives an interest payment in
return. These
transactions must be fully collateralized at all
times, but
involve some risk to the fund if the other party should
default
on its obligation. If the other party in these
transactions
should become involved in bankruptcy or insolvency
proceedings,
it is possible that the fund may be treated as an
unsecured
creditor and be required to return the underlying
collateral to
the other party's
estate.
Required vote. Approval of this proposal
requires the
affirmative vote of the Fundlesser of (1) more than
50% of the
outstanding shares of the fund, or (2) 67% or more of
the shares
of the fund present at the meeting if more than
50% of the
outstanding shares of the fund are present at the
meeting in
person or
by proxy.
3.D. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH
RESPECT TO INVESTMENTS IN
COMMODITIES
The Trustees are recommending that the fund's
fundamental
investment restriction with respect to investments in
commodities
be revised to reflect the standard restriction
expected to be
used by other Putnam funds. The current restriction
states that
the fund
may not:
"Purchase or sell commodities or commodity
contracts, except
that the fund may write and purchase financial
futures
contracts and related
options."
The proposed amended fundamental investment
restriction is
set
forth below.
"The fund may not ...
Purchase or sell commodities or commodity
contracts,
except that the fund may purchase and sell
financial
futures contracts and options and may
enter into
foreign exchange contracts and other
financial
transactions not involving physical
commodities."
Under the revised restriction, the fund will continue to
be able
to engage in a variety of transactions involving
the use of
financial futures and options and foreign currencies, as
well as
various other financial transactions to the extent
consistent
with its investment objective and policies. Although
the fund
may already engage in many of these activities, Putnam
Management
believes that the revised language more clearly sets
forth the
fund's policy. The addition of financial
transactions not
involving physical commodities is intended to give
the fund
maximum flexibility to invest in a variety of
financial
instruments that could technically be considered
commodities, but
which do not involve the direct purchase or sale of
physical
commodities, which is the intended focus of the
restriction.
Required vote. Approval of this proposal
requires the
affirmative vote of the lesser of (1) more than
50% of the
outstanding shares of the fund, or (2) 67% or more of
the shares
of the fund present at the meeting if more than
50% of the
outstanding shares of the fund are present at the
meeting in
person or by
proxy.
3.E. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH
RESPECT TO SENIOR
SECURITIES
The Trustees are recommending that the fund's
fundamental
investment restriction with respect to the issuance
of senior
securities be revised to reflect the standard
restriction
expected to be used by other Putnam funds. The
current
restriction states that the fund
may not:
"Issue any class of securities which is senior to
the fund's
shares of beneficial
interest."
The proposed amended fundamental investment
restriction is set
forth below:
"The fund may
not . . .
Issue any class of securities which is
senior to the
fund's shares of beneficial interest, except for
permitted
borrowings."
Although Putnam Management believes that the fund may
currently
borrow money to the maximum extent permitted by its
existing
policies (up to 10% of its total assets) without
violating its
current restriction, it believes that amending the
restriction
will avoid any possible
ambiguity.
Required vote. Approval of this proposal
requires the
affirmative vote of the lesser of (1) more than
50% of the
outstanding shares of the fund, or (2) 67% or more of
the shares
of the fund present at the meeting if more than
50% of the
outstanding shares of the fund are present at the
meeting in
person or by
proxy.
4.A. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION
WITH RESPECT TO INVESTMENTS IN SECURITIES OF
ISSUERS IN
WHICH MANAGEMENT OF THE FUND OR PUTNAM INVESTMENT
MANAGEMENT
OWNS
SECURITIES
The Trustees are recommending eliminating the fund's
fundamental
investment restriction which prevents the fund from
investing in
the securities of issuers in which management of the
fund or
Putnam Management owns a certain percentage of
securities .
The restriction states that the fund
may not:
"Invest in securities of any issuer if, to the
knowledge of
the fund, officers and Trustees of the fund and
officers and
directors of Putnam Management who beneficially
own more
than 0.5% of the shares or securities of
that issuer
together own more
than 5%."
The fund originally adopted this restriction to
comply with
certain state securities law requirements which are
no longer
applicable to the fund
.
If the restriction were to be eliminated, the fund would
be able
to invest in the securities of any issuer without
regard to
ownership in such issuer by management of the fund
or Putnam
Management, except to the extent prohibited by
the fund's
investment policies or the 1940 Act. Putnam
Management
believes that this enhanced flexibility could assist the
fund in
achieving its investment
objective.
Required vote. Approval of this proposal
requires the
affirmative vote of the lesser of (1) more than
50% of the
outstanding shares of the fund, or (2) 67% or more of
the shares
of the fund present at the
meeting if
more
than
50% of the
outstanding shares of the fund are present at the
meeting in
person or
by proxy.
4.B. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION
WITH RESPECT TO MARGIN
TRANSACTIONS
The Trustees are recommending that the fund's
fundamental
investment restriction with respect to margin
transactions be
eliminated . "Margin transactions" involve the
purchase
of securities with money borrowed from a broker, with
cash or
eligible securities being used as collateral against
the loan.
The restriction states that the fund
may not:
"Purchase securities on margin, except such
short-term
credits as may be necessary for the clearance of
purchases
and sales of securities, and except that it may
make margin
payments in connection with futures contracts and
related
options."
The fund originally adopted this restriction to
comply with
certain state securities law requirements, which are
no longer
applicable to the
fund.
If this proposal is approved, the fund would
have no
formal restriction with respect to engaging
in margin
transactions. However, the fund's
potential use of
margin transactions beyond transactions in financial
futures and
options and for the clearance of purchases and
sales of
securities, including the use of margin in ordinary
securities
transactions, is currently limited by SEC
guidelines which
prohibit margin transactions because they
create senior
securities. The fund's ability to engage in margin
transactions
is also limited by its investment policies, which
generally
permit the fund to borrow money only in limited
circumstances.
Required vote. Approval of this proposal
requires the
affirmative vote of the lesser of (1) more than
50% of the
outstanding shares of the fund, or (2) 67% or more of
the shares
of the fund present at the meeting if more than
50% of the
outstanding shares of the fund are present at the
meeting in
person or
by proxy.
4.C. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION
WITH RESPECT TO
SHORT SALES
The Trustees are recommending that the fund's
fundamental
investment restriction with respect to short sales be
eliminated
. The restriction states that the fund
may not:
"Make short sales of securities or maintain a
short sale
position for the account of the fund unless at
all times
when a short position is open it owns an equal
amount of
such securities or owns securities which, without
payment of
any further consideration, are convertible
into or
exchangeable for securities of the same issue
as, and at
least equal in amount to, the securities sold
short."
The fund originally adopted this restriction to
comply with
certain state securities laws requirements
which are no
longer applicable to the
fund .
If this proposal is approved, the Fund would be
able to
engage in short sales other than those "against the
box" (in
which the fund ownes or has the right to acquire at no
added cost
securities identical to those sold short).
However, Putnam
Nanagement does not currently intend to engage in short
sales on
behalf of the Fund.
In a typical short sale, the fund borrows
securities from a
broker that it anticipates will decline in value in order
to sell
to a third party. The fund becomes obligated
to return
securities of the same issue and quantity at some
future date,
and it realizes a loss to the extent the securities
increase in
value and a profit to the extent the securities decline
in value
(after including any associated costs). Since the
value of a
particular security can increase without limit, the
fund could
potentially realize losses with respect to short sales
which
are not "against the box" that are significantly
greater than
the value of the securities at the time they are
sold short.
Required vote. Approval of this proposal
requires the
affirmative vote of the lesser of (1) more than
50% of the
outstanding shares of the fund, or (2) 67% or more of
the shares
of the fund present at the meeting if more than
50% of the
outstanding shares of the fund are present at the
meeting in
person or
by proxy.
4.D. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION
WITH RESPECT TO
PLEDGING ASSETS
The Trustees are recommending that the fund's
fundamental
investment restriction which limits the fund's ability
to pledge
its assets be eliminated . The restriction
states that
the fund
may not:
"Pledge, hypothecate, mortgage or otherwise
encumber its
assets in excess of 15% of its total assets
(taken at
current value) and then only to secure borrowings
permitted
by restriction 1 above. (The deposit of
underlying
securities and other assets in escrow and
collateral
arrangements with respect to margin for financial
futures
contracts, options on such contracts and on
securities
indices are not deemed to be pledges
or other
encumbrances.)" [Restriction 1 permits the fund
to borrow
money in an amount equal to up to 10% of its
total assets
for certain limited
purposes.]
The fund originally adopted this restriction to
comply with
certain state securities law requirements
which are no
longer applicable to the
fund.
If this proposal is approved, the fund would no
longer have a
policy limiting its pledging activity. Putnam
Management
believes that this enhanced flexibility could assist the
fund in
achieving its investment objective. Further, Putnam
Management
believes that the fund's current limits on pledging may
conflict
with the fund's ability to borrow money to meet
redemption
requests or for extraordinary or emergency
purposes. This
conflict arises because banks may require borrowers
such as the
fund to pledge assets in order to collateralize
the amount
borrowed. These collateral requirements are
typically for
amounts at least equal to, and often larger than, the
principal
amount of the loan. If the fund needed to borrow the
maximum
amount permitted by its policies (currently 10% of
its total
assets), it might be possible that a bank would
require
collateral in excess of 15% of the fund's total
assets. Thus,
the current restriction could have the effect of
reducing the
amount that the fund may borrow in these
situations.
Pledging assets does entail certain risks. To the
extent that
the fund pledges its assets, the fund may have less
flexibility
in liquidating its assets. If a large portion of
the fund's
assets were involved, the fund's ability to meet
redemption
requests or other obligations could be
delayed.
Required vote. Approval of this proposal
requires the
affirmative vote of the lesser of (1) more than
50% of the
outstanding shares of the fund, or (2) 67% or more of
the shares
of the fund present at the meeting if more than
50% of the
outstanding shares of the fund are present at the
meeting in
person or
by proxy.
4.E.
ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION
WITH RESPECT TO INVESTMENTS IN RESTRICTED
SECURITIES
The Trustees are recommending that the fund's
fundamental
investment restriction which limits the fund's
investments in
securities subject to restrictions on resale, which are
known as
"restricted securities," be eliminated. The current
fundamental
investment restriction states that the fund
may not:
"Purchase securities the disposition of which is
restricted
under federal securities laws, if, as a
result, such
investments would exceed 15% of the value of the
fund's net
assets, excluding restricted securities that
have been
determined by the Trustees of the fund (or
the person
designated by them to make such
determinations) to be
readily
marketable."
Putnam Management believes the restriction is
unnecessary in
light of current regulatory requirements, which prohibit
the fund
from investing more than 15% of its net assets in any
combination
of (a) securities which are not readily
marketable, (b)
securities restricted as to resale (excluding
securities
determined by the Trustees of the fund (or the person
designated
by the Trustees of the fund to make such
determinations) to be
readily marketable), and (c) repurchase agreements
maturing in
more than seven
days.
These requirements are currently reflected in
the fund's
nonfundamental policy with respect to illiquid
investments.
Eliminating the fundamental restriction would therefore
provide
the fund with maximum flexibility to respond quickly
to legal,
regulatory and market developments regarding
illiquid
investments. If the restriction were no longer
required, the
Trustees could modify or eliminate the restriction to
increase
the fund's investment flexibility without the
need for
shareholder
approval.
To the extent the fund invests in illiquid investments,
the fund
may encounter difficulty in determining the fair value
of such
securities for purposes of computing net asset
value. In
addition, the fund could encounter difficulty
satisfying
redemption requests within seven days if it could not
readily
dispose of its illiquid
investments.
Required vote. Approval of this proposal
requires the
affirmative vote of the lesser of (1) more than
50% of the
outstanding shares of the fund, or (2) 67% or more of
the shares
of the fund present at the meeting if more than
50% of the
outstanding shares of the fund are present at the
meeting in
person or
by proxy.
4.F.
ELIMINATING
THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION
WITH RESPECT TO INVESTMENTS IN CERTAIN OIL, GAS AND
MINERAL
INTERESTS
The Trustees are recommending that the fund's
fundamental
investment
restriction
with
respect
to investments in
oil, gas
and mineral leases, rights or royalty contracts be
eliminated
. The restriction states that the fund
may not:
"Buy or sell oil, gas, or other mineral leases,
rights, or
royalty contracts, although it may purchase
securities of
issuers which deal in, represent interests
in, or are
secured by interests in such leases, rights, or
contracts,
and it may acquire or dispose of such leases,
rights, or
contracts acquired through the exercise of its
rights as a
holder of debt obligations secured
thereby."
The fund originally adopted this restriction
to comply
with certain state securities law requirements
which are
no longer applicable to the
fund.
If this proposal is approved, the fund would be
able to
invest directly in oil, gas and mineral interests
.
Investments in oil, gas and other mineral
leases, rights
or royalty contracts and in securities which derive
their value
in part from such instruments, entail certain risks.
The prices
of these investments are subject to
substantial
fluctuations, and may be affected by unpredictable
economic and
political circumstances such as social, political or
military
disturbances, the taxation and regulatory policies of
various
governments, the activities and policies of OPEC (an
organization
of major oil producing countries), the existence of
cartels in
such industries, the discovery of new reserves
and the
development of new techniques for producing,
refining and
transporting such materials and related products, the
development
of new technology, energy conservation practices,
and the
development of alternative energy sources and
alternative uses
for such materials and related
products.
Required
vote. Approval of this proposal
requires the
affirmative vote of the lesser of (1) more than
50% of the
outstanding shares of the fund, or (2) 67% or more of
the shares
of the fund present at the meeting if more than
50% of the
outstanding shares of the fund are present at the
meeting in
person or
by proxy.
4.G. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION
WITH RESPECT TO INVESTING TO GAIN CONTROL OF A
COMPANY'S
MANAGEMENT
The Trustees are recommending that the fund's
fundamental
investment restriction which states that the fund may
not "make
investments for the purpose of gaining control of a
company's
management" be eliminated. Eliminating the
restriction would
make it clear that the fund can freely exercise its
rights as a
shareholder of the various companies in which it may
invest,
which activities could at times fall under the
technical
definition of control under the securities laws.
These rights
may include the right to actively oppose or
support the
management of such companies. Putnam Management
believes it
would be in the best interest of the fund to
eliminate the
restriction.
Putnam Management believes that eliminating this
restriction will
remain unchanged.
V. MISCELLANEOUS
QUORUM AND METHODS OF TABULATION.allow the fund maximum flexibility to protect the
value of its
investments through influencing management of companies
in which
it invests. Putnam Management believes that the fund
should be
allowed to freely communicate its views as a
shareholder on
matters of policy to management, the board of
directors, and
other shareholders when a policy may affect the
value of the
fund's investment. Activities in which the fund may
engage might
include the fund, either individually or with others,
seeking
changes in a company's goals, management, or board of
directors,
seeking the sale of some or all of a company's assets,
or voting
to participate in or oppose a takeover effort with
respect to a
company. Although Putnam Management believes that
the fund
currently may engage in such activities without
necessarily
violating this restriction, it believes that
eliminating the
restriction will eliminate any potential obstacle to the
fund in
protecting its interests as a
shareholder.
This area of corporate activity is highly prone to
litigation,
and whether or not the restriction is eliminated, the
fund could
be drawn into lawsuits related to these activities.
The fund
will direct its efforts toward those instances
where Putnam
Management believes the potential for benefit to
the fund
outweighs potential
litigation risks.
Required vote. Approval of this proposal
requires the
affirmative vote of the lesser of (1) more than
50% of the
outstanding shares of the fund, or (2) 67% or more of
the shares
of the fund present at the meeting if more than
50% of the
outstanding shares of the fund are present at the
meeting in
person or
by proxy.
Further Information About Voting and the Shareholder
Meeting
Quorum and Methods of Tabulation. Thirty percent of
the shares
entitled to vote -- present in person or represented by
proxy --
constitutes a quorum for the transaction of business with
respect
to such proposals at the Meeting. However, as noted
above, the affirmative vote of at least a majority of shares
outstanding at the close of business on the record date is
necessary to approve certain of the proposals. Votes cast by
proxy or in personany proposal at the meeting will be counted by persons
appointed by(unless otherwise
noted in the
Trust as tellers for the Meeting.
The twelve nominees for election as Trustees at the Meeting
who receive the greatest number of votes properly cast for the
election of Trustees shall be elected Trustees. A majority of
the votes properly cast on the matter is necessary to ratify the
selection of independent auditors.
The tellers will count the total number of votes cast "for"
approval of the proposals for purposes of determining whether
sufficient affirmative votes have been cast. The tellers will
count sharesproxy statement). Shares represented by proxies that
reflect
abstentions and "broker non-votes" (i.e., shares held by
brokers
or nominees as to which (i) instructions have not been
received
from the beneficial owners or the persons entitled to
vote and
(ii) the broker or nominee does not have the
discretionary voting
power on a particular matter) will be counted as shares
that are
present and entitled to vote on the matter for
purposes of
determining the presence of a quorum. Votes cast by
proxy or in
person at the meeting will be counted by persons
appointed by
your fund as tellers for the
meeting.
The tellers will count the total number of votes
cast "for"
approval of the proposals for purposes of determining
whether
sufficient affirmative votes have been cast. With
respect to the
election of Trustees and selection of auditors,
neither
abstentions nor broker non-votes have any effect on the
outcome
of the proposal. With respect to any other
proposals,
abstentions and broker non-votes have the effect of a
negative
vote on the
proposal.
OTHER BUSINESS.Other business. The Trustees know of no other
business to be
brought before the meeting. However, if any other
matters
properly come before the meeting, it is their
intention that
proxies that do not contain specific restrictions to the
contrary
will be voted on such matters in accordance with the
judgment of
the persons named as proxies in the enclosed form
of proxy.
SIMULTANEOUS MEETINGS.Simultaneous meetings. The meeting of shareholders of
the
Fundyour fund
is called to be held at the same time as the
meetings of
shareholders of certain of the other Putnam
funds. It is
anticipated that all meetings will be held
simultaneously. If
any Fund shareholder at the meeting objects to the
holding of a
simultaneous meeting and moves for an adjournment of the
meeting
to a time promptly after the simultaneous meetings, the
persons
named as proxies will vote in favor of such
adjournment.
SOLICITATION OF PROXIES.Solicitation of proxies. In addition to the solicitation ofsoliciting
proxies by
mail, Trustees of the Fundyour fund and employees of Putnam
Management,
Putnam Fiduciary Trust Company and Putnam Mutual
Funds may
solicit proxies in person or by telephone. The FundYour fund
may also
arrange to have votes recorded by telephone. The
telephone
voting procedure is designed to authenticate
shareholders'
identities, to allow shareholders to authorize the
voting of
their shares in accordance with their instructions and to
confirm
that their instructions have been properly recorded.
Your fund
has been advised by counsel that these procedures are
consistent
with the requirements of applicable law. If this
procedurethese
procedures
were subject to a successful legal challenge, such
votes would
not be counted at the meeting. Your fund is unaware of
any such
challenge at this time. Shareholders would be
called at the
phone number Putnam Investments has in its records
for their
accounts, and would be asked for their Social Security
number or
other identifying information. The shareholders would
then be
given an opportunity to authorize proxies to vote their
shares at
the meeting in accordance with their instructions.
To ensure
that the shareholders' instructions have been recorded
correctly,
they will also receive a confirmation of their
instructions in
the mail. A special toll-free number will be available
in case
the information contained in the confirmation is
incorrect.
Your fund's Trustees have adopted a general policy of
maintaining
confidentiality in the voting of proxies. Consistent
with this
policy, your fund may solicit proxies from shareholders
who have
not voted their shares or who have abstained from
voting.
Persons holding shares as nominees will upon
request be
reimbursed for their reasonable expenses in
sending soliciting
material toinstructions from their principals. The FundYour fund has
retained at
its expense Tritech
Services, Four Corporate Place, Corporate Park 287, Piscataway,
NJ 08854,D.F. King & Co., Inc., 77 Water Street, New
York, New
York 10005, to aid in the solicitation of
instructions for
registered and nominee accounts, for a fee not
to exceed
$4,500$20,000 plus reasonable out-of-pocket expenses.
DATE FOR RECEIPT OF SHAREHOLDERS' PROPOSALS FOR SUBSEQUENT
MEETINGS OF SHAREHOLDERS. The Fund'sexpenses for
mailing
and phone
costs.
Revocation of proxies. Proxies, including proxies
given by
telephone, may be revoked at any time before they are
voted by a
written revocation received by the Clerk of your
fund, by
properly executing a later-dated proxy or by
attending the
meeting and voting in
person.
Date for receipt of shareholders' proposals for
subsequent
meetings of shareholders. Your fund's Agreement and
Declaration
of Trust does not provide for annual meetings of
shareholders,
and the Fundyour fund does not currently intend to hold such a
meeting in
1995.1997. Shareholder proposals for inclusion in the proxy
statement
for any subsequent meeting must be received by the Fundyour fund
within a
reasonable period of time prior to any such
meeting.
ADJOURNMENT.Adjournment. If sufficient votes in favor of
any of the
proposals set forth in the Notice of the Meeting are not
received
by the time scheduled for the meeting, the persons
named as
proxies may propose one or more adjournments of the meeting for a
period or
periods of not more than 60 days in the aggregate
to permit
further solicitation of proxies with respect to any
of such
proposals. Any adjournment will require the affirmative
vote of
a majority of the votes cast on the question in
person or by
proxy at the session of the meeting to be adjourned. The
persons
named as proxies will vote in favor of such
adjournment those
proxies which they are entitled to vote in favor
of such
proposals. They will vote against any such adjournment those
proxies
required to be voted against any of such proposals. The
FundYour fund
pays the
costs of any additional solicitation and of any
adjourned
session.
EXHIBIT A
PUTNAM INVESTMENT MANAGEMENT, INC.
BALANCE SHEET
DECEMBER 31, 1993
ASSETS:
Cash $ 300 Any proposals for which sufficient favorable
votes have
been received by the time of the meeting may be acted
upon and
considered final regardless of whether the meeting is
adjourned
to permit additional solicitation with respect to
any other
proposal.
Financial information. Your fund will furnish, without
charge,
to you upon request a copy of the fund's annual report
for its
most recent fiscal year, and a copy of its semiannual
report for
any subsequent semiannual period. Such requests may be
directed
to Putnam Investor Services, P.O. Box 41203,
Providence, RI
02940-1203 or
1-800-225-1581.
Further Information About
Your Fund
Limitation of Trustee liability. The Agreement and
Declaration
of Trust of your fund provides that the fund will
indemnify its
Trustees and officers against liabilities and expenses
incurred
in connection with litigation in which they may be
involved
because of their offices with the fund, except
if it is
determined in the manner specified in the
Agreement and
Declaration of Trust that they have not acted in good
faith in
the reasonable belief that their actions were in
the best
interests of the fund or that such indemnification would
relieve
any officer or Trustee of any liability to the
fund or its
shareholders arising by reason of willful misfeasance,
bad faith,
gross negligence or reckless disregard of his or her
duties.
Your fund, at its expense, provides liability insurance
for the
benefit of its Trustees and
officers.
Audit and Nominating Committees. The voting members of
the Audit
Committee of your fund include only Trustees who
are not
"interested persons" of the fund by reason of any
affiliation
with Putnam Investments (note 2) 50,000
Investment management fees receivable 60,817,927
Accounts receivable from affiliates (note 6) 1,819,578
Prepaid expensesand its affiliates. The Audit
Committee
currently consists of Messrs. Estin (Chairman), Perkins
(without
vote), Putnam, III (without vote), Shapiro, Smith
(without vote),
and Ms. Kennan. The Nominating Committee consists
only of
Trustees who are not "interested persons" of your fund
or Putnam
Management. The Nominating Committee currently
consists of Dr.
Pounds and Ms. Kennan (Co-chairpersons), Ms. Baxter, and
Messrs.
Estin, Hill, Jackson, Patterson, Shapiro, and
Thorndike.
Officers and other assets 2,759,786
Propertyinformation. In addition to George
Putnam and
equipmentLawrence J. Lasser, the officers of your fund are as
follows:
Year
first
elected
to
Name (age) Office office
- net (notes 2-----------------------------------
- ------------------------------
Charles E. Porter (58) Executive Vice President
1990
Patricia C. Flaherty (49) Senior Vice President
1993
John D. Hughes (61) Senior Vice President &
3) 5,105,571
------------
TOTAL ASSETS $70,553,162
============
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Accounts payable and accrued
expenses (note 5) $ 20,704,486
Accounts payable to affiliate 916
------------
TOTAL LIABILITIES 20,705,402
------------
STOCKHOLDER'S EQUITY:
Common stockTreasurer
1990
Gordon H. Silver (49) Vice President
1990
Peter Carman (55) Vice President
1994
Daniel L. Miller*(39) Vice President
1992
Brett C. Browchuk (33) Vice President
1994
John J. Morgan, Jr. (56) Vice President
1995
William N. Shiebler**(54) Vice President
1991
John R. Verani (57) Vice President
1990
Paul M. O'Neil (43) Vice President
1992
Beverly Marcus (52) Clerk
1990
- $1 par value; authorized
and outstanding, 1,000 shares 1,000
Paid-in surplus 4,696,665
Retained earnings 45,150,095
------------
TOTAL STOCKHOLDER'S EQUITY 49,847,760
------------
TOTAL LIABILITIES AND STOCKHOLDER'S
EQUITY $70,553,162
============
See notes to balance sheet.
PUTNAM INVESTMENT MANAGEMENT, INC.
NOTES TO BALANCE SHEET
1. CORPORATE AFFILIATION
Putnam Investment Management, Inc. (the Company) is a
wholly-owned subsidiary----------------------------------
- -------------------------------
* The fund's portfolio manager
** President of Putnam
Investments, Inc., (the
Parent), which isMutual Fund s
All of the officers of your fund a wholly-owned subsidiaryre
employees of Putnam
Management or its affiliates. Bec ause of their
positions with
Putnam Management or its affiliate s or their ownership
of stock
of Marsh & McLennan Companies, Inc. (MMC).
The Company's primary business is to provide investment
advisory services to Putnam-sponsored mutual funds. In
connection with providing these services,Inc ., the Company
receives a management fee which is based upon the average
net asset value of the respective fund to which the services
are provided.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
Investments consist of time deposits held by an affiliate.
Investments are recorded at the lower of cost or market.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Office and
data processing equipment are depreciated using the straight-line
method over their estimated useful lives of four to ten years.
Leasehold improvements are amortized using the straight-line
method over ten years or the period covered by the lease,
whichever is less. Additions, renewals and betterments of
property and equipment are capitalized. Expenditures for
maintenance and repairs are charged to income when incurred.
3. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
Office and data processing equipment $ 3,610,612
Less accumulated depreciation (2,244,442)
------------
1,366,170
------------
Leasehold improvements 6,051,063
Less accumulated amortization (2,311,662)
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3,739,401
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Property and equipment - net $ 5,105,571
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4. INCOME TAXES
In accordance with the provisions of STATEMENT OF
FINANCIAL ACCOUNTING STANDARDS NO. 109 - ACCOUNTING FOR
INCOME TAXES, the Company records a current liability or
asset for the estimated taxes payable or refundable on tax
returns for the current year and a deferred tax liability or
asset for the estimated future tax effects attributable to
temporary differences.
The Company, through MMC, files its federal tax return
as a member of a consolidated group. The Parent allocates
its current and deferred tax provision or benefit to the
Company in a manner which is representative of how the
Company would compute its provision as a separate entity.
Under an agreement with the Parent, the Company pays
the Parent each month for the amount of its net current and
deferred tax provision. If the Company has a net tax
benefit, the Parent pays the Company that amount. The
Parent then assumes responsibility for the payment of all
taxes in accordance with federal, state and local laws. As
a result of this agreement, the Company has no current or
deferred tax liability or asset reflected in its balance
sheet at December 31, 1993.
5. EMPLOYEE BENEFIT PLANS
PROFIT SHARING PLAN
The Company, the Parent and affiliates sponsor a
profit-sharing plan (the Plan) covering substantially all
employees, providing for annual contributions as determined
by the Board of Directors. Contributions payable to the
Plan at December 31, 1993 were $557,000.
RETIREE HEALTH CARE PLAN
MMC provides a health care plan which covers all
eligible retirees of the Company and its affiliates. The
Parent subsidizes a portion of the cost of the plan. The
Parent allocates its cost of the plan to the Company and its
affiliates in a manner which management believes reflects
the actual cost of the plan on an accrual basis.
6. RELATED PARTY TRANSACTIONS
The Company shares office facilities and personnel with
other wholly-owned subsidiaries of the Parent. Accordingly,
the related costs of such arrangements have been allocated
among the various subsidiaries in a manner which management
believes is representative of the actual costs incurred.
Accounts receivable from affiliates primarily
represents advances made to the Parent in connection with the
Parent's cash management policy.
In 1993 the Company paid a dividend of $100,000,000 to
the Parent.
INDEPENDENT AUDITORS' REPORT
Putnam Investment Management, Inc.
We have audited the accompanying balance sheetparent
corporation of
Putnam Investment Management Inc. (a wholly-owned subsidiaryand Putnam Mutua l Funds, Messrs.
Putnam, George
Putnam, III, Lasser and Smith (nom inees for Trustees
of Putnam
Investments, Inc.) as of December 31, 1993. This financial
statement is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the balance sheet is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the balance sheet. An audit also
includes assessing the accounting principles used and significant
estimates made by management,your
fund), as well as evaluating the overall
balance sheet presentation. We believe thatofficers of your fund, will
benefit from
the management fees, distribution fees, underwriting
commissions,
custodian fees, and investor servi cing fees paid or
allowed by
the fund.
Assets and shares outstanding of y our auditfund as
of November
1, 1996
Net assets
11,329,526,874
Class A shares outstanding
and authorized to vote
137,720,596 shares
Class B shares outstanding
and authorized to vote
127,668,030 shares
Class M shares outstanding
and authorized to vote
6,597,728 shares
Class Y shares outstanding
3,643,887 shares
and authorized to vote
5% beneficial ownership of your fund as of September 30,
1996
Persons beneficially owning more than 5%
of the balance sheet provides a reasonable basis for our opinion.
In our opinion, such balance sheet presents fairly, in all
material respects,fund's class A shares None
Persons beneficially owning more than 5%
of the financial positionfund's class B shares
(1) Merrill Lynch Pierce Fenner
13,373,264 shares or 11.00%
& Smith, Inc.
Mutual Fund Operations
3rd Floor
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
Persons beneficially owning more than 5%
of the fund's class M shares
(1) Merrill Lynch Pierce Fenner 408,065 shares or
6.80%
& Smith, Inc.
3rd Floor
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
Persons beneficially owning more than 5%
of the fund's class Y shares
(1) Putnam Investment
Management, Inc. at December 31, 1993 in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE
February 10, 1994Fiduciary Trust Company 3,231,057 shares or 92.80%
One Post Office Square
Boston, MA 02109
PUTNAMINVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581
(Putnam Logo)PUTNAM INVESTMENTS
This is your PROXY CARD.
Please vote this proxy, sign it below, and return it promptly in
the envelope provided. Your vote is important.
HAS YOUR VOTE IS IMPORTANT.ADDRESS CHANGED?
Please use this form to notify us of any change in address or
telephone number or to provide us with your comments. Detach
this form from the proxy ballot and return it with your signed
proxy in the enclosed envelope.
Street
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City
State Zip
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Telephone
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DO YOU HAVE ANY COMMENTS?
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DEAR SHAREHOLDER:
Your vote is important. Please help us to eliminate the expense
of follow-up mailings by executingsigning and returning this Proxyproxy as soon
as possible. A postage-paid business reply envelope is enclosed for your
convenience.
PLEASE VOTE, SIGN AND RETURN PROXY BALLOT PROMPTLY IN ENCLOSED
ENVELOPE.THANK YOU!
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Please fold at perforation before detachingdetaching.
PUTNAM NEW OPPORTUNITIES FUND PROXY BALLOT
PROXY FOR THE MEETING OF SHAREHOLDERS, JULY 7, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF THE FUND.Proxy for a meeting of shareholders to be held on February 2,
1997 for Putnam New Opportunities Fund.
This proxy is solicited on behalf of the Trustees of the fund.
The undersigned shareholder hereby appoints George Putnam, Hans
H. Estin, and William F. Pounds,Robert E. Patterson, and each of them separately,
proxies,Proxies, with power of substitution, and hereby authorizes them
to represent and to vote, as designated below, at the Meetingmeeting of
Shareholdersshareholders of Putnam New Opportunities Income Fund on
July 7, 1994,February 6, 1997, at 1:2:00 p.m., Boston time, and at any
adjournments thereof, all of the shares of the Fund whichfund that the
undersigned shareholder would be entitled to vote if personally
present.
NOTE:If you complete and sign the proxy, we'll vote it exactly as you
tell us. If you simply sign the proxy, it will be voted FOR
electing Trustees as set forth in Proposal 1 and FOR each of the
other Proposals listed below. In their discretion, the Proxies
will also be authorized to vote upon such other matters that may
properly come before the meeting.
Note: If you have questions on any of the proposals, please call
1-800-225-1581.
PLEASE BE SURE TO SIGN AND DATE THIS PROXY.
Please sign your name exactly as nameit appears on this card. AllIf you
are a joint ownersowner, each owner should sign. When signing as
executor, administrator, attorney, trustee, or guardian, or as
custodian for a minor, please give your full title as such. If
you are signing for a corporation, please sign inthe full corporate
name and indicate the signer's office. If you are a partner,
sign in the partnership name.
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Shareholder sign here Date
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Co-owner sign here Date
(Detachable attachment to proxy card)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
CHANGE OF ADDRESS NOTIFICATION. Please use this form to inform us of any change in address or telephone
number or to provide us with your comments. Detach this form from the Proxy Ballot and return it with
your executed Proxy in the enclosed envelope.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
....................................................... .......................................................
....................................................... .......................................................
Telephone ............................................. ......................................................
Please fold at perforation before detachingTHE TRUSTEES RECOMMEND A VOTE FOR ELECTING ALL OF THE NOMINEES
FOR TRUSTEES AND FOR THE OTHER PROPOSALS LISTED BELOW.
Please mark your choices / X / in blue or black ink.
1. Proposal to elect Trustees
The nominees for Trustees are: J.A. Baxter, H.H. Estin, J.A.
Hill, R.J. Jackson, E.T. Kennan, L.J. Lasser, R.E.
Patterson, D.S. Perkins, W.F. Pounds, G. Putnam, G. Putnam,
III, E. Shapiro, A.J.C. Smith and W.N. Thorndike.
/ / FOR electing all the nominees
(except as indicated to the contrary below)
/ / WITHHOLD authority to vote for all nominees
To withhold authority to vote for one or more of the nominees,
write those nominees' names below:
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PROPOSAL TO:
2. Ratify the selection FOR AGAINST ABSTAIN
of Coopers & Lybrand
L.L.P as the / / / / / /
independent auditors
of your fund.
3. Amend the fund's
fundamental investment
restriction with respect
to:
A. Diversification. / / / / / /
B. Investments in the voting / / / / / /
securities of a single
issuer.
C. Making loans. / / / / / /
D. Investments in / / / / / /
commodities.
E. Senior securities. / / / / / /
4. Eliminate the fund's
fundamental investment
restriction with respect
to:
A. Investments in securities / / / / / /
of issuers in which
management of the fund
or Putnam Investment
Management owns securities.
B. Margin transactions. / / / / / /
C. Short sales. / / / / / /
D. Pledging assets. / / / / / /
E. Investments in / / / / / /
restricted securities.
F. Investments in certain / / / / / /
oil, gas and mineral
interests.
G. Investing to gain / / / / / /
control of a company's
management.
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THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTING TRUSTEES AS SET FORTH IN PROPOSAL 1 AND FOR
PROPOSALS 2, 3 AND 4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE MEETING.
THE TRUSTEES RECOMMEND A VOTE FOR ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE PROPOSALS LISTED BELOW.
1. ELECTION OF TRUSTEES: NOMINEES: PROPOSAL TO: FOR AGAINST ABSTAIN
---- FOR electing all the J. A. Baxter 2. RATIFY THE SELECTION ----
/ / nominees H. H. Estin OF COOPERS & LYBRAND / /
---- (EXCEPT AS MARKED TO J. A. Hill AS AUDITORS. ----
THE CONTRARY BELOW). E. T. Kennan
L. J. Lasser 3. Approve the elimination of the ---- ---- ----
R. E. Patterson FUND'S FUNDAMENTAL INVESTMENT / / / / /
/
D. S. Perkins RESTRICTION WITH RESPECT TO ---- ---- ----
W. F. Pounds INVESTMENTS IN INVESTMENT COMPANIES.
---- WITHHOLD authority G. Putnam 4. APPROVE AN AMENDMENT TO THE
/ / to vote for all G. Putnam, III FUND'S FUNDAMENTAL INVESTMENT
/ /
---- nominees. A.J.C. Smith RESTRICTION WITH RESPECT TO
W. N. Thorndike INVESTMENTS IN RESTRICTED
SECURITIES.
TO WITHHOLD AUTHORITY TO
VOTE FOR AN INDIVIDUAL
NOMINEE, WRITE THAT
NOMINEE'S NAME BELOW.
--------------------------
--------------------------
Please be sure to sign and date this Proxy. (Account #) (Shares #)
............................./ .......................... Date .......... (Name & Address)
Shareholder sign here Co-owner sign here
/TABLE
lipsett/106290.111/proxys/newopp4.wpf