[H & M Final]
[Translation]
SECURITIES REGISTRATION STATEMENT
(for NAV Sale)
ANNUAL SECURITIES REPORT
(The Fifth Fiscal Year)
From: October 1, 1998
To: September 30, 1999
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
(for NAV Sale)
PUTNAM U.S. GOVERNMENT INCOME TRUST
SECURITIES REGISTRATION STATEMENT
PUTNAM U.S. GOVERNMENT INCOME TRUST
SECURITIES REGISTRATION STATEMENT
To: Director of Kanto Local Finance Bureau
Filing Date: March 17, 2000
Name of the Registrant Trust: PUTNAM U.S. GOVERNMENT INCOME TRUST
Name and Official Title of Representative Charles E. Porter
Of Trustees: Executive Vice President
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U. S. A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
------------------------
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
------------------------
(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
Public Offering or Sale for Registration
Name of the Fund Making Public PUTNAM U.S. GOVERNMENT INCOME
Offering or Sale of Foreign TRUST
Investment Fund Securities:
Type and Aggregate Amount of Up to 115.4 million Class M
Foreign Investment Fund Securities Shares
to be Publicly Offered or Sold: Up to the total amount obtained
by aggregating the amounts
calculated by multiplying the
respective net asset value per
Class M Share in respect
of 115.4 million Class M Shares
(The maximum amount expected to be
sold is 1,402 million U.S. dollars
(\150 billion).
Note 1: U.S.$ amount is translated into Japanese Yen at the rate of
U.S.$l.00=[YEN] 107.00 the mean of the exchange rate quotations by The Bank
of Tokyo-Mitsubishi, Ltd. for buying and selling spot dollars by
telegraphic transfer against yen on January 31, 2000.
Note 2: The maximum amount expected to be sold is an amount calculated by
multiplying the net asset value per Class M Share as of January 31, 2000
(U.S.$12.15) by 115.4 million Class M Shares for convenience.
Places where a copy of this Securities Registration
Statement is available for Public Inspection
Not applicable.
(Total number of pages of this Securities Registration Statement is 19
pages.)
C O N T E N T S
Japanese This
Original English
Translation
PART I. INFORMATION CONCERNING SECURITIES 1 1
PART II. INFORMATION CONCERNING ISSUER 4 7
I. DESCRIPTION OF THE FUND 4 7
II. OUTLINE OF THE FUND 4 7
III. OUTLINE OF THE OTHER RELATED COMPANIES 4 7
IV. FINANCIAL CONDITIONS OF THE FUND 4 7
V. SUMMARY OF INFORMATION CONCERNING
FOREIGN INVESTMENT TRUST SECURITIES 4 7
VI. MISCELLANEOUS 4 5
PART III. SPECIAL INFORMATION 6 9
I. OUTLINE OF THE SYSTEM OF INVESTMENT
TRUSTS IN MASSACHUSETTS 6 9
II. FINANCIAL CONDITIONS OF THE INVESTMENT
MANAGEMENT COMPANY 12 17
III. FORM OF FOREIGN INVESTMENT FUND SECURITIES 12 17
PART I. INFORMATION CONCERNING SECURITIES
1. NAME OF FUND: PUTNAM U.S. GOVERNMENT INCOME TRUST
(hereinafter referred to as the "Fund")
2. NATURE OF FOREIGN Five classes of shares (Class A shares, Class B
INVESTMENT FUND SECU- shares, Class C shares, Class M shares and
RITIES CERTIFICATES: Class Y shares)
Registered shares without par value
In Japan, Class M Shares (hereinafter
referred to as the "Shares") are for public
offering. No rating has been acquired.
3. NUMBER OF SHARES TO Up to 115.4 million Shares
BE OFFERED FOR SALE
(IN JAPAN)
4. TOTAL AMOUNT OF Up to the total amount obtained by aggregating
OFFERING PRICE: the amounts calculated by multiplying
the respective net asset value per Share in
respect of 115.4 million Shares
(The maximum amount expected to be sold is
1,402 million U.S. dollars ([YEN] 150 billion).
Note 1: The maximum amount expected to be sold is the amount
calculated, for convenience, by multiplying the net asset value per
Share as of January 31, 2000 ($12.15) by the number of Shares to be
offered (115.4 million).
Note 2: Dollar amount is translated for convenience at the rate of
$1.00=[YEN] 107.00 (the mean of the exchange rate quotations by The Bank of
Tokyo-Mitsubishi, Ltd. for buying and selling spot dollars by
telegraphic transfer against yen on January 31, 2000). The same applies
hereinafter.
Note 3: In this document, money amounts and percentages have been
rounded. Therefore, there are cases in which the amount of the "total
column" is not equal to the aggregate amount. Also, conversion into yen
is calculated by multiplying the corresponding dollar amount by the
conversion rate specified and rounding up when necessary. As a result,
there are cases in which Japanese yen figures for the same information
differ from each other.
5. ISSUE PRICE: The Net Asset Value per Share next calculated
on a Fund Business Day after the application
for purchase is received by the Fund.
Note: A "Fund Business Day" means a day on which the New York Stock
Exchange is open for business.
6. SALES CHARGE: The public offering price means the amount
calculated by dividing the net asset value by
(1-0.0325) and rounded to three decimal places.
The sales charge in Japan shall be 3% the amount
obtained by deduction of the amount equivalent
to 3% of the public offering price from such
price (hereinafter referred to as the "Sales
Price"). Any amount in excess of the net asset
value and the Sales Price shall be retained by
Putnam Mutual Funds Corp., principal underwriter
of the Fund.
7. MINIMUM AMOUNT OR The minimum amount for purchase of
NUMBER OF SHARES Shares is 100 shares, and shares may be
FOR SUBSCRIPTION: purchased in integral multiples of 100 shares.
8. PERIOD OF From: April 3, 2000 (Monday)
SUBSCRIPTION: To: April 2, 2001 (Monday)
Provided that the subscription is handled
only on a Fund Business Day and a business day
when securities companies are open for business
in Japan.
9. DEPOSIT FOR None.
SUBSCRIPTION:
10. PLACE OF Kokusai Securities Co., Ltd. (hereinafter
SUBSCRIPTION: referred to as " Kokusai" or the "Distributor")
Tokyo Sumitomo Twin Building, East 27-1,
Shinkawa 2-chome Chuo-ku, Tokyo
Note: The subscription is handled at the head office and the branch offices
in Japan of the above-mentioned distributor.
11. DATE AND PLACE Investors shall pay the Issue Price and Sales
OF PAYMENT: Charge to the Distributor or the sales handling
companies within 4 business days in Japan from
the day when Distributor or the sales handling
companies confirms the execution of the order
(the "Trade Day"). The total issue price for
each Application Day will be transferred by the
Distributor to the account of the Fund at Putnam
Fiduciary Trust Company, the transfer agent,
within 3 Fund Business Days (hereinafter
referred to as "Payment Date") from (and
including) the Application Day.
12. OUTLINE OF UNDERWRITING, ETC.:
(A) Kokusai undertakes to make a public offering of the Shares
in accordance with an agreement dated November 25, 1997 with Putnam
Mutual Funds Corp. in connection with the sale of the Shares in Japan.
(B) Kokusai will execute or forward the purchase orders and
repurchase requests relating to the Shares received directly or
indirectly through other sales and repurchase handling companies
(hereinafter referred to as the "Sales Handling Company") to the Fund.
Note: "The Sales Handling Company" mean a securities agent company and/or
registration agent financial institution which shall conclude the agreement
with a Distributor concerning agency business of shares of the Fund, act as
agent for a Distributor for subscription or repurchase of shares of the Fund
from investors and handle the business, etc, concerning receipt of
subscription money from investors or payment of repurchase proceeds to
investors, etc.
(C) The Fund has appointed Kokusai as the Agent Company in Japan.
Note: "The Agent Company" shall mean a company which, under a
contract made with a foreign issuer of investment securities, makes
public the net asset value per Share and submits or forwards the
financial reports or other documents to the Japan Securities Dealers
Association ("JSDA") and the Sales Handling Companies rendering such
other services.
13. MISCELLANEOUS:
(A) Method of Subscription:
Investors who subscribe to Shares shall enter into an agreement with the
Distributor or the Sales Handling Company concerning transactions of foreign
securities. The Distributor or the Sales Handling Company shall provide to
the investors an Agreement Concerning a Foreign Securities Transactions
Account and other agreements ("Account Agreement") and the investors shall
submit to the Distributor or the Sales Handling Company an application for
requesting the opening of a transactions account under the Account Agreement.
The subscription amount shall be paid in yen in principal and the yen exchange
rate shall be the exchange rate which shall be based on the foreign exchange
rate quoted in the Tokyo Foreign Exchange Market on the Trade Day of each
subscription and which shall be determined by such Distributor or the
Sales Handling Company.
The subscription amount shall be paid in dollars to the account of the Fund
with Putnam Fiduciary Trust Company as custodian for the Fund by Kokusai on
the Payment Date.
(B) Performance Information
The following information provides some indication of the Fund's risks. The
chart shows year-to-year changes in the performance of one of the Fund's
classes of shares, class M shares. The table following the chart compares the
Fund's performance to that of a broad measure of market performance. Of
course, the Fund's past performance is not an indication of future performance.
[GRAPHIC OMITTED: vertical bar chart CALENDAR YEAR TOTAL RETURNS FOR CLASS M
SHARES]
CALENDAR YEAR TOTAL RETURNS FOR CLASS M SHARES
1990 9.59%
1991 11.53%
1992 6.42%
1993 5.35%
1994 -2.77%
1995 16.06%
1996 3.62%
1997 8.24%
1998 6.60%
1999 -0.15%
Performance figures in the bar chart do not reflect the impact
of sales charges. If they did, performance would be less than that
shown. During the periods shown in the bar chart, the highest return for
a quarter was 4.96% (quarter ending 6/30/95) and the lowest return for a
quarter was -2.84% (quarter ending 3/31/94).
Performance of Class M shares shown in the bar chart and in the table that
follows for periods prior to their inception on 2/6/95, is derived from the
historical performance of the Fund's Class A shares (not offered in Japan),
adjusted to reflect the higher operations expenses of Class M shares and, in
the table only, the appropriate sales charge.
Average annual total returns (for periods ending 12/31/99)
- -------------------------------------------------------------------------------
Past 1 year Past 5 years Past 10 years
- -------------------------------------------------------------------------------
Class M -3.39% 6.04% 5.97%
- -------------------------------------------------------------------------------
Lehman Brothers
Mortgage-Backed
Securities Index 1.85% 7.98% 7.78%
- -------------------------------------------------------------------------------
Unlike the bar chart, this performance information reflects the impact of sales
charges. Class M share performance reflects the current maximum initial sales
charges. The Fund's performance is compared to the Lehman Brothers
Mortgage-Backed Securities Index, an unmanaged index of 15-and 30-year fixed
rate securities backed by mortgage pools of the Government National Mortgage
Association, Federal Home Loan Mortgage Corporation, and Federal National
Mortgage Association.
(C) Fees and Expenses
This table summarizes the fees and expenses investors may pay if investors
invest in the Fund. Expenses are based on the Fund's last fiscal year.
Shareholder Fees (fees paid directly from investors' investment)
- -------------------------------------------------------------------------------
Maximum sales charge (load) imposed on purchases (as a percentage
of the offering price) 3.25%
- -------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as a percentage of the original
purchase price or redemption proceeds, whichever is lower) None
- -------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
- -------------------------------------------------------------------------------
Distribution Total fund
Management fees (12b-1) fees Other expenses operating expenses
- -------------------------------------------------------------------------------
Class M 0.43% 0.50% 0.17% 1.10%
- -------------------------------------------------------------------------------
(D) Example
The example translates the expenses shown in the preceding table into dollar
amounts. By doing this, investors can more easily compare the cost of investing
in the Fund to the cost of investing in other mutual funds. The example makes
certain assumptions. It assumes that an investor invests $10,000 in the Fund
for the time periods shown and then, redeems all his/her shares at the end of
those periods. It also assumes a 5% return on an investor's investment each
year and that the Fund's operating expenses remain the same. The example is
hypothetical; an investor's actual costs and returns may be higher or lower.
- -------------------------------------------------------------------------------
1 year 3 years 5 years 10 years
- -------------------------------------------------------------------------------
Class M $434 $663 $911 $1,622
- -------------------------------------------------------------------------------
(E) Offerings other than in Japan:
Shares are simultaneously offered in the United States of America.
PART II. INFORMATION CONCERNING ISSUER
I. DESCRIPTION OF THE FUND
The description in this item is same as the description in I.
DESCRIPTION OF THE FUND of the Annual Securities Report (The Fifth
Fiscal Year) attached hereafter.
II. OUTLINE OF THE FUND
The description in this item is same as the description in II.
OUTLINE OF THE FUND of the Annual Securities Report (The Fifth Fiscal
Year) attached hereafter.
III. OUTLINE OF THE OTHER RELATED COMPANIES
The description in this item is same as the description in III.
OUTLINE OF THE OTHER RELATED COMPANIES of the Annual Securities Report
(The Fifth Fiscal Year) attached hereafter.
IV. FINANCIAL CONDITIONS OF THE FUND
The description in this item is same as the description in IV.
FINANCIAL CONDITIONS OF THE FUND of the Annual Securities Report (The
Fifth Fiscal Year) attached hereafter.
V. SUMMARY OF INFORMATION CONCERNING FOREIGN INVESTMENT FUND SECURITIES
The description in this item is same as the description in V.
SUMMARY OF INFORMATION CONCERNING FOREIGN INVESTMENT FUND SECURITIES of
the Annual Securities Report (The Fifth Fiscal Year) attached hereafter.
VI. MISCELLANEOUS
The following documents concerning the Fund were filed with the Director of
Kanto Local Finance Bureau.
(1) December 1, 1998: Amendment to Securities Registration Statement
March 16, 1999: Securities Registration Statement
Annual Securities Report (The Fourth Fiscal Year)
Amendment to Securities Registration Statement
June 30, 1999: Semi-annual Report (The Fifth Term)
Amendment to Securities Registration Statement
(2) The ornamental design is used in cover page of the Japanese Prospectus.
(3) The following must be set forth in the Prospectus.
Outline of the Prospectus will be included at the beginning of the
Prospectus, summarizing the content of Part I., Information on the
securities, "I. Descriptions of the Fund", "III. Outline of Other
Related Companies" and "IV. Financial Condition of the Fund" in Part II,
Information on the Issuer, of the SRS.
(4) Summarized Preliminary Prospectus will be used.
The attached document (Summarized Preliminary Prospectus) will be
used pursuant to the extent permitted by applicable law, as set forth at
Item 1.(1)(b), of Article 12 of the Ordinance Concerning the Disclosure
of the Content, etc. of the Specified Securities. For performance information,
the average of the annual yield calculated in respect of immediately preceding
seven days and/or any one month may be added in percentage up to one decimal
places (rounding down to second decimal places).
PART III. SPECIAL INFORMATION
I. OUTLINE OF THE SYSTEM OF INVESTMENT TRUSTS IN MASSACHUSETTS
Below is an outline of certain general information about open-end U.S.
investment companies. This outline is not intended to provide
comprehensive information about such investment companies or the various
laws, rules or regulations applicable to them, but provides only a brief
summary of certain information that may be of interest to investors. The
discussion below is qualified in its entirety by the complete registration
statement of the fund and the full text of any referenced statutes and
regulations.
I. Massachusetts Business Trusts
A. General Information
Many investment companies are organized as Massachusetts business trusts.
A Massachusetts business trust is organized pursuant to a declaration of
trust, setting out the general rights and obligations of the shareholders,
trustees, and other related parties. Generally, the trustees of the trust
oversee its business, and its officers and agents manage its day-to-day
affairs.
Chapter 182 of the Massachusetts General Laws applies to certain "voluntary
associations", including many Massachusetts business trusts. Chapter 182
provides for, among other things, the filing of the declaration of trust
with the Secretary of State of the Commonwealth of Massachusetts and the
filing by the trust of an annual statement regarding, among other things,
the number of its shares outstanding and the names and addresses of its
trustees.
B. Shareholder Liability
Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of a trust. Typically, a
declaration of trust disclaims shareholder liability for acts or obligations
of the trust and provides for indemnification out of trust property for all
loss and expense of any shareholder held personally liable for the obligations
of a trust. Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which a
particular trust would be unable to meet its obligations.
II. United States Investment Company Laws and Enforcement
A. General
In the United States, pooled investment management arrangements which offer
shares to the public are governed by a variety of federal statutes and
regulations. Most mutual funds are subject to these laws. Among the more
significant of these statutes are:
1. Investment Company Act of 1940
The Investment Company Act of 1940, as amended (the "1940 Act"), in general,
requires investment companies to register as such with the U.S. Securities and
Exchange Commission (the "SEC"), and to comply with a number of substantive
regulations of their operations. The 1940 Act requires an investment company,
among other things, to provide periodic reports to its shareholders.
2. Securities Act of 1933
The Securities Act of 1933, as amended (the "1933 Act"),
regulates many sales of securities. The Act, among other things, imposes
various registration requirements upon sellers of securities and
provides for various liabilities for failures to comply with its
provisions or in respect of other specified matters.
3. Securities Exchange Act of 1934
The Securities Exchange Act of 1934, as amended (the "1934 Act"), regulates a
variety of matters involving, among other things, the secondary trading of
securities, periodic reporting by the issuers of securities, and certain of
the activities of transfer agents and brokers and dealers.
4. The Internal Revenue Code
The Fund intends to qualify as a "regulated investment company" for federal
income tax purposes and to meet an other requirements necessary for it to be
relieved of federal taxes on income and gains it distributes to shareholders.
5. Other laws
The Fund is subject to the provisions of other laws, rules, and regulations
applicable to the Fund or its operations, such as, for example, various state
laws regarding the sale of the Fund's shares.
B. Outline of the Supervisory Authorities
Among the regulatory authorities having jurisdiction over the Fund or certain
of its operations are the SEC and state regulatory agencies or authorities.
1. The SEC has broad authority to oversee the application and enforcement of
the federal securities laws, including the 1940 Act, the 1933 Act, and the
1934 Act, among others, to the Fund. The 1940 Act provides the SEC broad
authority to inspect the records of investment companies, to exempt investment
companies or certain practices from the provisions of the Act, and otherwise
to enforce the provisions of the Act.
2. State authorities typically have broad authority to regulate the activities
of brokers, dealers, or other persons directly or indirectly engaged in
activities relating to the offering and sale of securities to their residents
or within their jurisdictions.
C. Offering Shares to the Public
An investment company ("investment company" or "fund") offering its shares to
the public must meet a number of requirements, including, among other things,
registration as an investment company under the 1940 Act; registration of the
sale of its shares under the 1933 Act; registration of the fund, the sale of
its shares, or both, with state securities regulators; delivery of a current
prospectus to current or prospective investors; and so forth. Many of these
requirements must be met not only at the time of the original offering
of the fund's shares, but compliance must be maintained or updated from
time to time throughout the life of the fund.
D. Ongoing Requirements
Under U.S. law, a fund that continuously offers its shares is subject to
numerous ongoing requirements, including, but not limited to;
1. Updating its prospectus if it becomes materially inaccurate
or misleading;
2. Annual update of its registration statement;
3. Filing semi-annual and annual financial reports with the SEC and
distributing them to shareholders;
4. Annual trustee approval of investment advisory arrangements, distribution
plans, underwriting arrangements, errors and omissions/director and officer
liability insurance, foreign custody arrangements, and auditors;
5. Maintenance of a code of ethics; and
6. Periodic board review of certain fund transactions, dividend payments, and
payments under a fund's distribution plan.
III. Management of a Fund
The board of directors or trustees of a fund are responsible for generally
overseeing the conduct of a fund's business. The officers and agents of a fund
are generally responsible for the day-to-day operations of a fund. The trustees
and officers of a fund may or may not receive a fee for their services.
The investment adviser to a fund is typically responsible for implementing the
fund's investment program. The adviser typically receives a fee for its
services based on a percentage of the net assets of a fund. Certain rules
govern the activities of investment advisers and the fees they may charge. In
the United States, investment advisers to investment companies must be
registered under the Investment Advisers Act of 1940, as amended.
IV. Share Information
A. Valuation
Shares of a fund are generally sold at the net asset value next determined
after an order is received by a fund, plus any applicable sales charges. A fund
normally calculates its net asset value per share by dividing the total value
of its assets, less liabilities, by the number of its shares outstanding.
Shares are typically valued as of the close of regular trading on the New York
Stock Exchange (4:00 p.m., New York time) each day the Exchange is open.
B. Redemption
Shareholders may generally sell shares of an open-end fund to that fund any
day the New York Stock Exchange is open for business at the net asset value
next computed after receipt of the shareholders' order. Under unusual
circumstances, a fund may suspend redemptions, or postpone payment for more
than seven days, if permitted by U.S. securities laws. A fund may charge
redemption fees as described in its prospectus.
C. Transfer agency
The transfer agent for a fund typically processes the transfer of shares,
redemption of shares, and payment and/or reinvestment of distributions.
V. Shareholder Information, Rights and Procedures for the Exercise
of Such Rights
A. Voting Rights
Voting rights vary from fund to fund. In the case of many funds organized
as Massachusetts business trusts, shareholders are entitled to vote on the
election of trustees, approval of investment advisory agreements,
underwriting agreements, and distribution plans (or amendments thereto),
certain mergers or other business combinations, and certain amendments to
the declaration of trust. Shareholder approval is also required to modify or
eliminate a fundamental investment policy.
B. Dividends
Shareholders are typically entitled to receive dividends when and if declared
by a fund's trustees. In declaring dividends, the trustees will normally set a
record date, and all shareholders of record on that date will be entitled to
receive the dividend paid.
C. Dissolution
Shareholders would normally be entitled to receive the net assets of a fund
which were liquidated in accordance with the proportion of the fund's
outstanding shares he owns.
D. Transferability
Shares of a fund are typically transferable without restriction.
E. Right to Inspection
Shareholders of a Massachusetts business trust have the right to inspect the
records of the trust as provided in the declaration of trust or as otherwise
provided by applicable law.
VI. U.S. Tax Matters
The Fund intends to qualify each year as a regulated investment company under
Subchapter M of the United States Internal Revenue Code of 1986, as amended
(the "Code").
As a regulated investment company qualifying to have its tax liability
determined under Subchapter M, the Fund will not be subject to U.S. federal
income tax on any of its net investment income or net realized capital gains
that are distributed to its shareholders. In addition, as a Massachusetts
business trust, the Fund under present Massachusetts law is not subject to
any excise or income taxes in Massachusetts.
In order to qualify as a "regulated investment company" and to receive the
favorable tax treatment accorded regulated investment companies and their
shareholders, the Fund must, among other things, (a) derive at least 90% of
its gross income from dividends, interest, payments with respect to certain
securities loans, and gains from the sale of stock, securities and foreign
currencies, or other income (including but not limited to gains from options,
futures, or forward contracts) derived with respect to its business of
investing in such stock, securities, or currencies; (b) distribute with
respect to each taxable year at least 90% of the sum of its taxable net
investment income, its net tax-exempt income, and the excess, if any, of its
net short-term capital gains over net long-term capital losses for such
year; (c) diversify its holdings so that, at the close of each quarter
of its taxable year, (i) at least 50% of the value of its total assets
consists of cash, cash items, U.S. Government Securities, securities of
other regulated investment companies and other securities limited
generally with respect to any one issuer to not more than 5% of the
total assets of the Fund and not more than 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25 % of the value of
its assets is invested in the securities (other than those of the U.S.
Government or other regulated investment companies) of any one issuer or
of two or more issuers which the Fund controls and which are engaged in
the same, similar or related trades or businesses.
If the Fund failed to qualify as a regulated investment company
accorded special tax treatment in any taxable year, the Fund would be
subject to tax on its taxable income at corporate rates, and all
distributions from earnings and profits, including any distributions of
net tax-exempt income and net long-term capital gains, would be taxable
to shareholders as ordinary income. In addition, the Fund could be
required to recognize unrealized gains, pay substantial taxes and
interest and make substantial distributions before requalifying as a
regulated investment company that is accorded special tax treatment.
If the Fund fails to distribute in a calendar year substantially
all of its ordinary income for such year and substantially all of its
capital gain net income for the one-year period ending October 31 (or
later if the Fund is permitted to elect and so elects), plus any
retained amount from the prior year, the Fund will be subject to a 4%
excise tax on the undistributed amounts. A dividend paid to shareholders
by the Fund in January of a year generally is deemed to have been paid
by the Fund on December 31 of the preceding year, if the dividend was
declared and payable to shareholders of record on a date in October,
November or December of that preceding year. The Fund intends generally
to make distributions sufficient to avoid imposition of the 4% excise
tax.
Fund distributions generally will be taxable to shareholders as ordinary
income, except that any distributions designated by the Fund as deriving
from net gains on securities held by the Fund for more than one year will
be taxable as such, regardless of how long a shareholder has held shares in
the Fund. Distributions will be taxable as described above whether received
in cash or in shares through the reinvestment of distributions. Shareholders
who are not subject to U.S. federal income tax on their income generally
will not have to pay such tax on amounts distributed to them.
Distributions from capital gains are made after applying any available
capital loss carryovers.
The Fund's investment in securities issued at a discount and certain other
obligations will (and investments in securities purchased at a discount may)
require the Fund to accrue and distribute income not yet received. In order to
generate sufficient cash to make the requisite distributions, the Fund may be
required to sell securities in its portfolio that it otherwise would have
continued to hold.
The Fund generally is required to withhold and remit to the U.S. Treasury 31%
of the taxable dividends and other distributions paid to any individual
shareholder who fails to furnish the Fund with a correct taxpayer
identification number (TIN), who has under-reported dividends or interest
income, or who fails to certify to the fund that he or she is not subject
to such withholding. Shareholders who fail to furnish their correct TIN are
subject to a penalty of $50 for each such failure unless the failure is due
to reasonable cause and not willful neglect. An individual's taxpayer
identification number is his or her social security number.
Non-U.S. investors should consult their tax advisers concerning the
tax consequences of ownership of shares of the Fund, including the
possibility that distributions may be subject to a 30% United States
withholding tax (or a reduced rate of withholding provided by treaty),
the possibility that a non-U.S. investor may be subject to U.S. tax on
capital gain distributions and gains realized upon the sale of fund
shares if the investor is present in the United States for at least 31
days during the calendar year (and certain other conditions apply), or
the possibility that a non-U.S. investor may be subject to U.S. tax on
income from the fund that is "effectively connected" with a U.S. trade
or business carried on by such an investor. Shareholders residing in
Japan should consult "Tax Treatment of Shareholders in Japan", on page
25 of the Annual Securities Report attached hereafter.
New regulations relating to withholding tax on income paid to foreign
persons (the "New Withholding Regulations") will generally be effective
for payments made after December 31, 2000. The New Withholding Regulations
modify and, in general, unify the way in which non-U.S. investors
establish their status as non-U.S. States "beneficial owners" eligible
for withholding exemptions including a reduced treaty rate or an exemption
from backup withholding. For example, the new regulations will require new
forms, which non-U.S. investors will generally have to provide earlier than
they would have had to provide replacements for expiring existing forms.
The New Withholding Regulations clarify withholding agents' reliance
standards. They also require additional certifications for claiming treaty
benefits. For example, a non-U.S. investor may be required to provide a
TIN, and may have to certify that he/she "derives" the income with respect to
which the treaty benefit is claimed within the meaning of applicable
regulations. The New Withholding Regulations also provide somewhat different
procedures for foreign intermediaries and flow-through entities, such as
foreign partnerships, to claim the benefit of applicable exemptions on
behalf of non-U.S. investors for which or for whom they receive payments.
The New Withholding Regulations also amend the foreign broker office
deinition as it applies to partnerships.
The New Withholding Regulations are complex and this summary does not
completely describe them. Non-U.S. investors should consult with their tax
advisors to determine how the New Withholding Regulations will affect their
particular circumstances.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and related regulations currently in effect. For the
complete provisions, reference should be made to the pertinent Code sections
and regulations. The Code and regulations are subject to change by
legislative or administrative actions. Dividends and distributions also may
be subject to state, local or foreign taxes. Shareholders are urged to consult
their tax advisers regarding specific questions as to U.S. federal, state or
local taxes. The foregoing discussion relates solely to U.S. federal income
tax law.
VII. Important Participants in Offering of Mutual Fund Shares
A. Investment Company
Certain pooled investment vehicles qualify as investment companies under the
1940 Act. There are open-end investment companies (those which offer
redeemable securities) and closed-end investment companies (any others).
B. Investment Adviser/Administrator
The investment adviser is typically responsible for the implementation of an
investment company's investment program. It, or another affiliated or
unaffiliated entity, may also perform certain record keeping and administrative
functions.
C. Underwriter
An investment company may appoint one or more principal underwriters for its
shares. The activities of such a principal underwriter are generally governed
by a number of legal regimes, including, for example, the 1940 Act, the 1933
Act, the 1934 Act, and state laws.
D. Transfer Agent
A transfer agent performs certain bookkeeping, data processing, and
administrative services pertaining to the maintenance of shareholder accounts.
A transfer agent may also handle the payment of any dividends declared by the
trustees of a fund.
E. Custodian
A custodian's responsibilities may include, among other things, safeguarding
and controlling a fund's cash and securities, handling the receipt and delivery
of securities, and collecting interest and dividends on a fund's investments.
II. FINANCIAL CONDITION OF THE INVESTMENT MANAGEMENT COMPANY
The description in this item is same as the description in II.
FINANCIAL CONDITION OF THE INVESTMENT MANAGEMENT COMPANY of the Annual
Securities Report (The Fifth Fiscal Year) attached hereafter.
III. FORM OF FOREIGN INVESTMENT FUND SECURITIES
Main items to be set forth on the share certificate of the Fund (if issued) are
as follows:-
(1) Front
a. Name of the Fund
b. Number of shares represented
c. Signatures of the Chairman and Transfer Agent
d. Description stating that the Declaration of Trust applies to shareholders
and assignees therefrom
(2) Back
a. Space for endorsement
b. Description concerning delegation of transfer agency
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
(NAV Sale)
PUTNAM U.S. GOVERNMENT INCOME TRUST
<TABLE>
<CAPTION>
AMENDMENT TO SECURITIES REGISTRATION STATEMENT
To: Director of Kanto Local Finance Bureau Filing Date: March 17, 2000
<S> <C>
Name of the Registrant Fund: PUTNAM U.S. GOVERNMENT INCOME TRUST
Name and Official Title of Representative Charles E. Porter
Of Trustees: Executive Vice President
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U. S. A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
------------------------
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
------------------------
(Seal)
Address or Place of Business Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
Public Offering or Sale for Registration
Name of the Fund Making Public PUTNAM U.S. GOVERNMENT INCOME TRUST
Offering or Sale of Foreign
Investment Fund Securities:
Type and Aggregate Amount of Up to 65.6 million Class M Shares
Foreign Investment Fund Securities Up to the total amount obtained by
to be Publicly Offered or Sold: aggregating the respective net
asset value per Class M Share in
respect of 65.6 million Class M
Shares (The maximum amount expected
to be sold is 860 million U.S. dollars
([YEN] 9.2 billion).
Note 1: U.S.$amount is translated into Japanese Yen at the rate of U.S.$l.00=[YEN]
107.00 the mean of the exchange rate quotations by The Bank of Tokyo-Mitsubishi, Ltd.
for buying and selling spot dollars by telegraphic transfer against yen on January 31,
2000.
Note 2: The maximum amount expected to be sold is an amount calculated by multiplying
the net asset value per Class M Share as of January 31, 1999 (U.S.$13.11) by 65.6
million Class M Shares for convenience.
</TABLE>
Places where a copy of this Amendment to Securities Registration
Statement is available for Public Inspection
Not applicable.
(Total number of pages of this Amendment to Securities Registration
Statement e is 3 including front and back pages.)
I. REASON FOR FILING THIS AMENDMENT TO SECURITIES REGISTRATION STATEMENT:
This statement purports to amend and update the relevant information of the
Securities Registration Statement ("Original SRS") filed on March 16, 1999
due to the fact that the aforementioned Annual Securities Report was filed
today.
The exchange rates used in this statement to translate the amended amounts
of foreign currencies are different from those used before these
amendments, as the latest exchange rates are used in this statement.
II. CONTENTS OF THE AMENDMENTS (the page numbers refer to in the Original
SRS)
Part II. INFORMATION CONCERNING ISSUER (page 5 of the Original SRS)
The following matters in the original Japanese SRS are amended to have the
same contents as those provided in the following items of the
aforementioned Annual Securities Report:
Before amendment After amendment
[Original SRS] [Aforementioned Annual Securities Report]
I. DESCRIPTION OF THE FUND I. DESCRIPTION OF THE FUND (the aforementioned
Japanese Annual Securities Report - The
Fifth Fiscal Year)
II. OUTLINE OF THE FUND II. OUTLINE OF THE FUND (Ditto, from page 32
to page 63)
III. OUTLINE OF THE OTHER III. OUTLINE OF THE OTHER RELATED COMPANIES
RELATED COMPANIES (Ditto,)
IV. FINANCIAL CONDITIONS OF IV. FINANCIAL CONDITIONS OF
THE FUND THE FUND (Ditto)
V. SUMMARY OF INFORMATION VI. SUMMARY OF INFORMATION CONCERNING FOREIGN
CONCERNING FOREIGN INVESTMENT FUND SECURITIES (Ditto)
INVESTMENT FUND SECURITIES
VI. MISCELLANEOUS VII. REFERENCE INFORMATION (Ditto)
Note 1: U.S.$amount is translated into Japanese Yen at the rate of U.S.$1 =
[YEN] 107.00 the mean of the exchange rate quotations at The Bank of
Tokyo-Mitsubishi, Ltd. for buying and selling spot dollars by telegraphic
transfer against yen on January 31, 2000, for convenience.
Note 2: In this document, money amounts and percentages have been rounded.
Therefore, there are cases in which the amount of the "total column" is not
equal to the aggregate amount. Also, translation into yen is made simply by
multiplying the corresponding amount by the conversion rate specified and
rounded up when necessary. As a result, in this document, there are cases
in which Japanese yen figures for the same information differ from each other.
Note 3: In this Report, "fiscal year" refers to a year from October 1 to
September 30 of the following year.
Part III. SPECIAL INFORMATION (Ditto)
II. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY of the
Original SRS is amended to have the same contents as those provided in V.
FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY of the
aforementioned Annual Securities Report:
ANNUAL SECURITIES REPORT
(The Fourth Fiscal Year)
From: October 1, 1998
To: September 30, 1999
PUTNAM U.S. GOVERNMENT INCOME TRUST
ANNUAL SECURITIES REPORT
(The Fifth Fiscal Year)
From: October 1, 1998
To: September 30, 1999
To: Director of Kanto Local Finance Bureau
Filing Date: March 17, 2000
Name of the Registrant Trust: PUTNAM U.S. GOVERNMENT INCOME
TRUST
Name and Official Title of Representative Charles E. Porter
Of Trustees: Executive Vice President
Address of Principal Office: One Post Office Square
Boston, Massachusetts 02109
U. S. A.
Name and Title of Registration Agent: Harume Nakano
Attorney-at-Law
Signature [Harume Nakano]
------------------------
(Seal)
Ken Miura
Attorney-at-Law
Signature [Ken Miura]
------------------------
(Seal)
Address or Place of Business Kasumigaseki Building, 25th
Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Name of Liaison Contact: Harume Nakano
Ken Miura
Attorneys-at-Law
Place of Liaison Contact: Hamada & Matsumoto
Kasumigaseki Building, 25th
Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
Phone Number: 03-3580-3377
Places where a copy of this Annual Securities Report is available for Public
Inspection
Not applicable.
(Total number of pages of this Annual Securities Report is 75 including the
front page)
C O N T E N T S
Japanese This
Original English
Translation
I. DESCRIPTION OF THE FUND 1 1
1. GENERAL INFORMATION 1 1
2. INVESTMENT POLICY 5 7
3. MANAGEMENT STRUCTURE 8 11
4. INFORMATION CONCERNING THE EXERCISE
OF RIGHTS BY SHAREHOLDERS, ETC. 18 24
5. STATUS OF INVESTMENT PORTFOLIO 21 28
II. OUTLINE OF THE FUND 24 31
III. OUTLINE OF THE OTHER RELATED COMPANIES 53 66
IV. FINANCIAL CONDITIONS OF THE FUND 55 68
V. FINANCIAL CONDITIONS OF THE INVESTMENT
MANAGEMENT COMPANY
(Translated from the English source:
omitted in English Translation) 120 74
VI. SUMMARY OF INFORMATION CONCERNING
FOREIGN INVESTMENT FUND SECURITIES 141 74
VII. REFERENCE INFORMATION 141 74
Note 1: The exchange rate of U.S. Dollars ("dollar" or "$") into Japanese Yen
is [YEN] 107.00 for one U.S. Dollar, which is the actual middle point between
the selling and buying currency rate by telegraphic transfer on the January 31,
2000 quoted by The Bank of Tokyo-Mitsubishi, Ltd. The same applies
hereinafter.
Note 2: In this report, money amounts and percentages have been rounded.
Therefore, there are cases in which the amount for the "total" column is not
equal to the aggregate amount. Also, conversion into other currencies is
calculated by multiplying the corresponding amount by the conversion rate
specified and rounding up when necessary. As a result, in this report, there
are cases in which figures for the same information differ from each other.
Note 3: In this report, "fiscal year" refers to a year from October 1 to
September 30 of the following year. However, the first fiscal year refers to
a period from February 6, 1995 (Incorporation of the Fund) to September 30,
1995.
I. DESCRIPTION OF THE FUND
1. GENERAL INFORMATION
(A) Outline of Laws Regulating the Fund in the Jurisdiction Where Established:
(1) Name of the Fund: Putnam U.S. Government Income Trust (the "Fund")
(2) Form of the Fund
Putnam U.S. Government Income Trust is a Massachusetts business trust organized
on November 1, 1983. A copy of the Agreement and Declaration of Trust, which
is governed by Massachusetts law, is on file with the Secretary of State of The
Commonwealth of Massachusetts.
The Fund is an open-end, diversified management investment company with an
unlimited number of authorized shares of beneficial interest which may be
divided without shareholder approval into two or more series of shares having
such preferences and special or relative rights and privileges as the Trustees
determine. The Fund's shares are not currently divided into any series. Only
the Fund's class M shares are currently offered in Japan. The Fund may also
offer in the United States of America other classes of shares with different
sales charges and expenses. Because of these different sales charges and
expenses, the investment performance of the classes will vary.
Each share has one vote, with fractional shares voting proportionally. Shares
of all classes will vote together as a single class except when otherwise
required by law or as determined by the Trustees. Shares are freely
transferable, are entitled to dividends as declared by the Trustees, and, if
the Fund were liquidated, would receive the net assets of the Fund. The Fund
may suspend the sale of shares at any time and may refuse any order to purchase
shares. Although the Fund is not required to hold annual meetings of its
shareholders, shareholders holding at least 10% of the outstanding shares
entitled to vote have the right to call a meeting to elect or remove Trustees,
or to take other actions as provided in the Agreement and Declaration of Trust.
If a shareholder owns fewer shares than the minimum set by the Trustees
(presently 20 shares), the Fund may choose to redeem the shareholders' shares.
Shareholders will receive at least 30 days' written notice before the Fund
redeems shareholders' shares, and shareholders may purchase additional shares
at any time to avoid a redemption. The Fund may also redeem shares if
shareholders own shares above a maximum amount set by the Trustees. There is
presently no maximum, but the Trustees may, at any time, establish one which
could apply to both present and future shareholders.
(3) Governing Laws
The Fund was created under, and is subject to, the laws of The Commonwealth of
Massachusetts. The sale of the Fund's shares is subject to, among other things,
the Securities Act of 1933, as amended, and certain state securities laws. The
Fund also attempts to qualify each year and elects to be taxed as a regulated
investment company under the United States Internal Revenue Code of 1986, as
amended.
The following is a broad outline of certain of the principal statutes
regulating the operations of the Fund in the U.S.:
a. Massachusetts General Laws, Chapter 182 - Voluntary Associations and Certain
Trusts
Chapter 182 provides in part as follows:
A copy of the declaration of trust must be filed with the Secretary of State
of The Commonwealth of Massachusetts and with the Clerk of the City of Boston.
Any amendment of the declaration of trust must be filed with the Secretary and
the Clerk within thirty days after the adoption of such amendment.
A trust must annually file with the Secretary of State on or before June 1 a
report providing the name of the trust, its address, number of shares
outstanding and the names and addresses of its trustees.
Penalties may be assessed against the trust for failure to comply with certain
of the provisions of Chapter 182.
b. Investment Company Act of 1940
The Investment Company Act of 1940, as amended (the "1940 Act"), in general,
requires investment companies to register as such with the U.S. Securities and
Exchange Commission (the "SEC"), and to comply with a number of substantive
regulations of their operations. The 1940 Act requires an investment company,
among other things, to provide periodic reports to its shareholders.
c. Securities Act of 1933
The Securities Act of 1933, as amended (the "1933 Act"), regulates many sales
of securities. The Act, among other things, imposes various registration
requirements upon sellers of securities and provides for various liabilities
for failures to comply with its provisions or in respect of other specified
matters.
d. Securities Exchange Act of 1934
The Securities Exchange Act of 1934, as amended (the "1934 Act"), regulates a
variety of matters involving, among other things, the secondary trading of
securities, periodic reporting by the issuers of securities, and certain of
the activities of transfer agents and brokers and dealers.
e. The Internal Revenue Code
The Fund intends to qualify as a "regulated investment company" for federal
income tax purposes and to meet all other requirements necessary for it to be
relieved of federal taxes on income and gains it distributes to shareholders.
f. Other laws
The Fund is subject to the provisions of other laws, rules, and regulations
applicable to the Fund or its operations, such as, for example, various state
laws regarding the sale of the Fund's shares.
(B) Outline of the Supervisory Authorities
Among the regulatory authorities having jurisdiction over the Fund or certain
of its operations are the SEC and state regulatory agencies or authorities.
a. The SEC has broad authority to oversee the application and enforcement of
the federal securities laws, including the 1940 Act, the 1933 Act, and the
1934 Act, among others, to the Fund. The 1940 Act provides the SEC broad
authority to inspect the records of investment companies, to exempt investment
companies or certain practices from the provisions of the Act, and otherwise
to enforce the provisions of the Act.
b. State authorities typically have broad authority to regulate the offering
and sale of securities to their residents or within their jurisdictions and
the activities of brokers, dealers, or other persons directly or indirectly
engaged in related activities.
(C) Objectives and Basic Nature of the Fund:
GOAL
The Fund seeks as high a level of current income as Investment Management
Company believes is consistent with preservation of capital.
MAIN INVESTMENT STRATEGIES - U.S.GOVERNMENT BONDS
The Fund invests in bonds that
* are obligations of the U.S. government, its agencies and instrumentalities.
* are backed by the full faith and credit of the United States, such as U.S.
Treasury bonds and Ginnie Mae mortgage-backed bonds (a policy that cannot be
changed without approval of the Fund's shareholders), and
* have intermediate to long-term maturities (three years or longer).
The Fund also invests in forward commitments and repurchase agreements relating
to those investments.
MAIN RISKS
The main risks that could adversely affect the value of this Fund's shares and
the total return on investors' investment include;
* The risk that movements in the securities markets will adversely affect the
value of the Fund's investments. This risk includes interest rate risk,
which means that the prices of the Fund's investments are likely to fall if
interest rates rise. Interest rate risk is generally highest for investments
with long maturities.
* The risk that, compared to other debt, mortgage-backed investments may
increase in value less when interest rates decline, and decline in value more
when interest rates rise.
Investors can lose money by investing in the Fund. The Fund may not achieve
its goals, and is not intended as a complete investment program. An investment
in the Fund is not a deposit in a bank and is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
(D) History of the Fund:
November 1, 1983: Organization of the Fund as a Massachusetts
business trust. Adoption of the Agreement and
Declaration of Trust.
January 10, 1992: Adoption of the Amended and Restated Agreement and
Declaration of Trust.
(E) Affiliated Companies of the Fund:
Names and related business of the affiliated companies of the Fund are as
follows:
(1) Putnam Investment Management, Inc. ("Investment Management Company")
renders investment management services to the Fund.
(2) Putnam Fiduciary Trust Company (the "Custodian" and "Investor Servicing
Agent") acts as Custodian and Investor Servicing Agent.
(3) Putnam Mutual Funds Corp. ("Principal Underwriter") engages in providing
marketing services to the Fund.
(4) Kokusai Securities Co., Ltd. ("Distributor in Japan" and "Agent Company")
engages in forwarding the purchase or repurchase orders for the Shares in Japan
and also acts as the agent company.
Related Companies of the Fund
Fund
Putnam U.S. Government Income Trust Investor
Sevicing
Agreement
Trustees
(Agreement and
Declaration of Fund)
Distribution Custodian
Agreement Agreement
Principal Custodian Investor
Underwriter Sevicing Agent
Putnam Mutual Putnam Fiduciary
Funds Corp. Trust Company
(acts as distributor) (acts as custodian and
investor servicing
agent of the Fund
Japan Dealer
Sales Agreement
Agent Company Management Contract
Agreement
Distributor in Japan Investment Management
Agent Company Company
Kokusai Securities Co., Ltd. Putnam Investment Management, Inc.
(forwarding of sales in Japan (acts as investment management of
and rendering of service as the Fund and investment advisor
agent company) concerning the Fund's assets)
2. INVESTMENT POLICY
(A) What are the Fund's main investment strategies and related risks?
Any investment carries with it some level of risk that generally reflects its
potential for reward. Investment Management Company pursues the Fund's goal
by investing in U.S. government bonds. The Investment Management Company will
consider, among other things, interest rate and prepayment risks, as well as
general market conditions when deciding whether to buy or sell investments.
A description of the risks associated with the Fund's main investment
strategies follows.
Interest rate risk. The values of bonds and other debt usually rise and fall
in response to changes in interest rates. Declining interest rates generally
increase the value of existing debt investments, and rising interest rates
generally decrease the value of existing debt investments. Changes in a debt
instrument's value usually will not affect the amount of interest income paid
to the Fund, but will affect the value of the Fund's shares. Interest rate
risk is generally greater for investments with longer maturities.
Some investments give the issuer the option to call, or redeem, these
investments before their maturity date. If an issuer "calls" its security
during a time of declining interest rates, we might have to reinvest the
proceeds in an investment offering a lower yield, and therefore might not
benefit from any increase in value as a result of declining interest rates.
"Premium investments" offer interest rates higher than prevailing market
rates. However, they involve a greater risk of loss, because their values
tend to decline over time. Investors may find it useful to compare the Fund's
yield, which factors out the effects of premium investments, with its current
dividend rate, which does not factor out that effect.
Mortgage-backed investments. Traditional debt investments typically pay a
fixed rate of interest until maturity, when the entire principal amount is
due. By contrast, payments on mortgage-backed investments typically include
both interest and partial payment of principal. Principal may also be prepaid
voluntarily, or as a result of refinancing or foreclosure. The Fund may have
to invest the proceeds from prepaid investments in other investments with less
attractive terms and yields.
Compared to debt that cannot be repaid, mortgage-backed investments are less
likely to increase in value during periods of declining interest rates and have
a higher risk of decline in value during periods of rising interest rates.
They may increase the volatility of the Fund. Some mortgage-backed investments
receive only the interest portion or the principal portion of payments on the
underlying mortgages. The yields and values of these investments are extremely
sensitive to changes in interest rates and in the rate of principal payments on
the underlying mortgages. The market for these investments may be volatile and
limited, which may make them difficult to buy or sell.
Forward commitments and repurchase agreements. The Fund may enter into
contracts with dealers for future delivery of U.S. government investments,
commonly known as forward commitments. A forward commitment involves a risk of
loss if the value of the investment declines before the delivery date. The
Fund may also enter into repurchase agreements, under which it buys an
investment from a firm that has an obligation to buy the investment back at a
fixed price and time, typically within one week. Repurchase agreements involve
the risk that the other party will default on its obligations, in which case
the Fund may find it difficult to recover the value of these investments.
Frequent trading. The Fund may buy or sell investments relatively often, which
involves higher brokerage commissions and other expenses, and may increase the
amount of U.S. federal income taxes payable by shareholders.
Other investments. In addition to the main investment strategies described
above, the Fund may make other types of investments, such as investments in
derivatives including futures, options, warrants and swap contracts, which may
be subject to other risks.
Alternative strategies. At times the Investment Management Company may judge
that market conditions make pursuing the Fund's usual investment strategies
inconsistent with the best interests of its shareholders. The Investment
Management Company then may temporarily use alternative strategies that are
mainly designed to limit losses. However, the Investment Management Company
may choose not to use these strategies for a variety of reasons, even in very
volatile market conditions. These strategies may cause the Fund to miss out
on investment opportunities, and may prevent the Fund from achieving its goal.
Changes in policies. The Fund's Trustees may change the Fund's goal,
investment strategies and other policies without shareholder approval, except
as otherwise indicated.
(B) Restrictions of Investment:
Except as otherwise specifically designated, the investment restrictions
described in this Securities Registration Statement and the Japanese prospectus
are not fundamental investment restrictions. The Trustees may change any
non-fundamental restrictions without shareholder approval. As fundamental
investment restrictions, which may not be changed without a vote of a majority
of the outstanding voting securities, the Fund may not and will not:
(1) Borrow money in excess of 10% of the value (taken at the lower of cost or
current value) of its total assets (not including the amount borrowed) at the
time the borrowing is made, and then only from banks as a temporary measure to
facilitate the meeting of redemption requests (not for leverage) which might
otherwise require the untimely disposition of portfolio investments or for
extraordinary or emergency purposes. Such borrowings will be repaid before
any additional investments are purchased.
(2) Underwrite securities issued by other persons except to the extent that,
in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under certain federal securities laws.
(3) Purchase or sell real estate, although it may purchase securities which
are secured by or represent interests in real estate.
(4) Purchase or sell commodities or commodity contracts.
(5) 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.
(6) 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 invested in the securities
of such issuer; provided that this limitation does not apply to obligations
issued or guaranteed as to interest or principal by the U.S. government or its
agencies or instrumentalities.
(7) With respect to 75% of its total assets, acquire more than 10% of the
outstanding voting securities of any issuer.
(8) Purchase securities (other than securities of the U.S. government, its
agencies or instrumentalities) if, as a result of such purchase, more than
25% of the Fund's total assets would be invested in any one industry.
(9) Purchase or sell options, or puts, calls, straddles, spreads or
combinations thereof, except that the Fund may write covered call options
with respect to any part or all of its portfolio securities and enter into
closing purchase transactions with respect to such options.
(10) Issue any class of securities which is senior to the Fund's shares of
beneficial interest, except for permitted borrowings.
Fundamental restrictions 6, 7 and 8 are by their terms inapplicable to U.S.
Government Securities and consequently are not expected to have any
significant effect on the operations of the Fund, since it is the Fund's
fundamental policy to invest exclusively in U.S. Government Securities and
repurchase agreements and forward commitments with respect to such securities.
The Investment Company Act of 1940 provides that a "vote of a majority of the
outstanding voting securities" of the Fund means 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 present at a meeting if more than 50% of the outstanding
shares of the Fund are represented at the meeting in person or by proxy.
The following non-fundamental investment policies may be changed without
shareholder approval:
(1) The Fund may not invest in (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, if, as a result, more than 15% of
the Fund's net assets (taken at current value) would be invested in securities
described in (a), (b) and (c) above.
(2) The Fund may not write covered call options with respect to any part or
all of its portfolio securities.
(3) Under normal market conditions, at least 65% of the Fund's investment
income will be derived from interest on U.S. government securities.
In connection with the offering of its shares in Japan, the Fund has undertaken
to the Japanese Securities Dealers Association that the Fund will not:
(1) invest more than 15% of its net assets in securities that are not traded
on an official stock exchange or other regulated market, including, without
limitation, the National Association of Securities Dealers Automated Quotation
System (this restriction shall not be applicable to bonds determined by the
Investment Management Company to be liquid and for which a market price
(including a dealer quotation) is generally obtainable or determinable);
(2) borrow money in excess of 10% of the value of its total assets;
(3) make short sales of securities in excess of the Fund's net asset value; and
(4) together with other mutual funds managed by the Investment Management
Company, acquire more than 50% of the outstanding voting securities of any
issuer.
If the undertaking is violated, the Fund will, promptly after discovery, take
such action as may be necessary to cause the violation to cease, which shall be
the only obligation of the Fund and the only remedy in respect of the
violation. This undertaking will remain in effect as long as shares of the
Fund are qualified for offer or sale in Japan and such undertaking is required
by the Japanese Securities Dealers Association as a condition of such
qualification.
All percentage limitations on investments (other than pursuant to
non-fundamental restriction (1)) will apply at the time of the making of an
investment and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of such investment.
(C) Distribution Policy:
The Fund distributes net investment income monthly and any net realized capital
gains annually. The payment to Japanese investors may be made until the end of
each month by Kokusai.
3. MANAGEMENT STRUCTURE
(A) Outline of Management of Assets, etc.:
A. Valuation of assets:
The Fund determines the net asset value per share of each class of shares once
each day the New York Stock Exchange (the "Exchange") is open. Currently, the
Exchange is closed Saturdays, Sundays and the following U.S. holidays:
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, the Fourth of July, Labor Day, Thanksgiving and Christmas. The
Fund determines net asset value as of the close of regular trading on the
Exchange, currently 4:00 p.m. However, equity options held by the Fund are
priced as of the close of trading at 4:10 p.m., and futures contracts on U.S.
government and other fixed-income securities and index options held by the Fund
are priced as of their close of trading at 4:15 p.m.
Securities for which market quotations are readily available are valued at
prices which, in the opinion of Investment Management Company, most nearly
represent the market values of such securities. Currently, such prices are
determined using the last reported sale price or, if no sales are reported (as
in the case of some securities traded over-the-counter), the last reported bid
price, except that certain securities are valued at the mean between the last
reported bid and asked prices. Short-term investments having remaining
maturities of 60 days or less are valued at amortized cost, which approximates
market value. All other securities and assets are valued at their fair value
procedures approved by the Trustees. Liabilities are deducted from the total
assets and resulting amount is divided by the number of shares of the class
outstanding.
Reliable market quotations are not considered to be readily available for
long-term corporate bonds and notes, certain preferred stocks, tax-exempt
securities, and certain foreign securities. These investments are valued at
fair value on the basis of valuations furnished by pricing services, which
determine valuations for normal, institutional-size trading units of such
securities using methods based on market transactions for comparable securities
and various relationships between securities which are generally recognized by
institutional traders.
If any securities held by the Fund are restricted as to resale, Investment
Management Company determines their fair value using procedures approved by the
Trustees. The fair value of such securities is generally determined as the
amount which the Fund could reasonably expect to realize from an orderly
disposition of such securities over a reasonable period of time. The valuation
procedures applied in any specific instance are likely to vary from case to
case. However, consideration is generally given to the financial position of
the issuer and other fundamental analytical data relating to the investment and
to the nature of the restrictions on disposition of the securities (including
any registration expenses that might be borne by the Fund in connection with
such disposition). In addition, specific factors are also generally
considered, such as the cost of the investment, the market value of any
unrestricted securities of the same class, the size of the holding, the prices
of any recent transactions or offers with respect to such securities and any
available analysts' reports regarding the issuer.
Generally, trading in certain securities (such as foreign securities) is
substantially completed each day at various times prior to the close of the
Exchange. The values of these securities used in determining the net asset
value of the Fund's shares are computed as of such times. Also, because of the
amount of time required to collect and process trading information as to large
numbers of securities issues, the values of certain securities (such as
convertible bonds, U.S. government securities, and tax-exempt securities) are
determined based on market quotations collected earlier in the day at the
latest practicable time prior to the close of the Exchange. Occasionally,
events affecting the value of such securities may occur between such times and
the close of the Exchange which will not be reflected in the computation of the
Fund's net asset value. If events materially affecting the value of such
securities occur during such period, then these securities will be valued at
their fair value using procedures approved by the Trustees.
B. Management Fee, etc.:
(1) Management Fee:
(a) Management and Agent Association Member Fees
Under a Management Contract dated July 8, 1994, the Fund pays a quarterly fee
to Investment Management Company based on the average net assets of the Fund,
as determined at the close of each business day during the quarter, at an
annual rate of 0.57% of the first $500 million of average net assets, 0.475%
of the next $500 million, 0.4275% of the next $500 million and 0.38%
thereafter.
For the fiscal years ending on September 30, 1999, 1998 and 1997 the Fund paid
$14,775,580, $15,162,940 and $15,502,934, respectively as a management fee.
(b) Custodian Fee and Charges of the Investor Servicing Agent
Putnam Fiduciary Trust Company, the Fund's Custodian, is entitled to receive,
out of the assets of the Fund, reasonable compensation for its services and
expenses as Custodian, as agreed from time to time between the Fund and the
Custodian, not including fees paid by the Custodian to any sub-custodian,
payable monthly based on the average daily total net assets of the Fund during
the relevant month. Any reasonable disbursements and out-of-pocket expenses
(including without limitation telephone, telex, cable and postage expenses)
incurred by the Custodian, and any custody charges of banks and financial
institutions to whom the custody of assets of the Fund is entrusted, are borne
by the Fund.
The Fund pays to Putnam Investor Services, a division of Putnam Fiduciary Trust
Company, the Fund's Investor Servicing Agent, such fee, out of the assets of
the Fund, as is mutually agreed upon in writing from time to time, in the
amount, at the time and in the manner of payment mutually agreed.
For the fiscal year ending on September 30, 1999, the Fund paid $5,088,335 as
a custodian fee and investor servicing agent fee.
(c) Fee on Class M Distribution Plan
The Class M distribution plan provides for payments by the Fund to Putnam
Mutual Funds Corp. at the annual rate of up to 1.00% of average net assets
attributable to Class M shares. The Trustees currently limit payments under
the Class M plan to the annual rate of 0.50% of such assets.
Putnam Mutual Funds Corp. makes quarterly payments to Kokusai and other dealers
at an annual rate of 0.40% of the average net asset value of Class M shares
attributable to shareholders for whom Kokusai and other dealers
are designated as the dealer of record.
Payments under the plan are intended to compensate Putnam Mutual Funds Corp.
for services provided and expenses incurred by it as principal underwriter of
the Fund's shares, including the payments to dealers mentioned above. Putnam
Mutual Funds Corp. may suspend or modify such payments to dealers.
For the fiscal year ending September 30, 1999, the Fund paid fees under the
distribution plan of $743,248 for Class M shares.
(d) Other Expenses:
The Fund pays all expenses not assumed by Investment Management Company,
including Trustees' fees, auditing, legal, custodial, investor servicing and
shareholder reporting expenses, and payments under its distribution plans
(which are in turn allocated to the relevant class of shares). The Fund also
reimburses Investment Management Company for the compensation and related
expenses of certain Fund officers and their staff who provide administrative
services. The total reimbursement is determined annually by the Trustees and
was $31,216 for fiscal 1999.
The Trustees are responsible for generally overseeing the conduct of Fund
business. Subject to such policies as the Trustees may determine, the
Investment Management Company furnishes a continuing investment program for
the Fund and makes investment decisions on its behalf. Subject to the control
of the Trustees, the Investment Management Company also manages the Fund's
other affairs and business.
Each Trustee receives a fee for 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 trustees of other mutual fund complexes. The Trustees meet monthly
over a two-day period, except in August. The Board Policy Committee, which
consists solely of Trustees not affiliated with the Investment Management
Company 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 fees paid to each Trustee by the Fund for fiscal 1999 and
the fees paid to each Trustee by all of the Putnam funds during calendar 1999:
<TABLE>
<CAPTION>
COMPENSATION TABLE
Pension on Estimated Total
Aggregate retirement annual benefits compensation
compensation benefits accrued from all from all
from the as part of Putnam funds Putnam
Trustees/Year fund (1) fund expenses upon retirement (2) funds (3)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jameson A. Baxter/
1994 (4) $2,653 $564 $95,000 $191,000
Hans H. Estin/
1972 2,637 1,261 95,000 190,000
John A. Hill/
1985 (4) (5) 3,418 587 115,000 239,750
Ronald J. Jackson/
1996 (4) 2,687 533 95,000 193,500
Paul L. Joskow/
1997 (4) 2,637 154 95,000 191,000
Elizabeth T. Kennan/
1992 2,637 756 95,000 190,000
Lawrence J. Lasser/
1992 2,620 574 95,000 189,000
John H. Mullin, III/
1997 2,722 232 95,000 196,000
Robert E. Patterson/
1984 2,645 409 95,000 190,250
William F. Pounds/
1971 (5) 3,312 1,408 115,000 231,000
George Putnam/
1957 2,637 1,330 95,000 190,000
George Putnam, III/
1984 2,637 276 95,000 190,000
A.J.C. Smith/
1986 2,604 886 95,000 188,000
W. Thomas Stephens/
1997 (4) 2,604 217 95,000 188,000
W. Nicholas Thorndike/
1992 2,637 1,066 95,000 190,000
- ---------------------------------------------------------------------------------------
(1) Includes an annual retainer and an attendance fee for each meeting attended.
(2) Assumes that each Trustee retires at the normal retirement date. Estimated
benefits for each Trustee are based on Trustee fee rates in effect during
calendar 1999.
(3) As of December 31, 1999, there were 114 funds in the Putnam family.
(4) Includes compensation deferred pursuant to a Trustee Compensation Deferral Plan.
The total amounts of deferred compensation payable by the Fund to Mrs. Baxter
and Mr. Hill, Mr. Jackson, Mr. Joskow, Mr. Mullin and Mr. Stephens as of September
30, 1999 were $10,266, $18,342, $11,883, $2,372, $4,819, and $5,681, respectively,
including income earned on such amounts.
(5) Includes additional compensation for service as Vice Chairman of the Putnam Funds.
</TABLE>
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 payments for the 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 who are not
"interested 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 had he or she retired
immediately prior to such termination or amendment.
Investment Management Company places all orders for purchases and sales of the
Fund's portfolio securities. In selecting broker-dealers, Investment
Management Company may consider research and brokerage services furnished to
it and its affiliates. Subject to seeking the most favorable price and
execution available, Investment Management Company may consider sales of Fund
shares (and, if permitted by law, of the other Putnam Funds) as a factor in
the selection of broker-dealers. During fiscal 1997, 1998 and 1999, the Fund
paid $28,500, $0 and $0 in brokerage commissions, respectively. During fiscal
1999 the Fund did not pay any fee to brokers and dealers to recognize research,
statistical and quotation services provided to Investment Management Company
and its affiliates.
For the fiscal year ending on September 30, 1999, the Fund paid $19,220,571 in
total other expenses, including payments under its distribution plans, but
excluding management fees, investor servicing agent expenses and custodian
expenses.
C. Sales, Repurchases and Custody:
(1) Sales of Shares:
a. Sales in the United States
Investors residing in the United States can open a Fund account with as little
as $500 and make additional investments at any time with as little as $50 ($25
through systematic investing). The Fund sells its shares at the offering
price, which is the NAV plus any applicable sales charge. Investors' financial
advisor or Putnam Investor Services generally must receive investor's completed
buy order before the close of regular trading on the exchange for investors'
shares to be bought at that day's offering price. Investors residing in the
U.S. can buy shares.
* Through a financial advisor Investors' advisor will be responsible for
furnishing all necessary documents to Putnam Investor Services, and may charge
investors for his or her services.
* Through systematic investing Investors in the U.S. can make regular
investments of $25 or more per month through automatic deductions from
investors' bank checking or savings account. Application forms are available
through investors' advisor ot Putnam Investor Services at 1-800-225-1581.
Investors may also complete an order form and write a check for the amount
investors wish to invest, payable to the Fund. Return the check and completed
form to Putnam Mutual Funds Corp.
The Fund may periodically close to new purchases of shares or refuse any order
to buy shares if the Fund determines that doing so would be in the best
interests of the Fund and its shareholders.
Class M shares
* Initial sales charge of up to 3.25%
* Lower sales charge for investments of $50,000 or more
* No deferred sales charge
* Lower annual expenses, and higher dividends, than Class B (not offered in
Japan) shares because of lower 12b-1 fee
* Higher annual expenses, and lower dividends, than Class A (not offered in
Japan) shares because of higher 12b-1 fee
* No conversion to Class A shares, so future 12b-1 fee does not decrease
Initial sales charges for Class M shares
- -------------------------------------------------------------------------------
Class M sales charge
as a percentage of:
- -------------------------------------------------------------------------------
Amount of purchase Net amount Offering
at offering price ($) invested price*
- -------------------------------------------------------------------------------
Under 50,000 3.36% 3.25%
50,000 but under 100,000 2.30 2.25
100,000 but under 250,000 1.52 1.50
250,000 but under 500,000 1.01 1.00
500,000 but under 1,000,000 None None
1,000,000 and above None None
- -------------------------------------------------------------------------------
* Offering price includes sales charge.
Distribution (12b-1) plans. The Fund has adopted distribution plans to pay
for the marketing of Fund shares and for services provided to shareholders.
The plans provide for payments at annual rates (based on average net assets) of
up to 1.00% on Class M shares. The Trustees currently limit payments on
Class M Shares to 0.50% of average net assets. Because these fees are paid
out of the Fund's assets on an ongoing basis, they will increase the cost of
investors' investment. The higher fees for Class M may cost investors more
than paying the initial sales charge for Class A shares. Because Class M
shares, unlike Class B shares, do not convert to Class A shares, Class M shares
may cost investors more over time than Class B shares.
An investor may be eligible to buy class M shares at reduced sales charges.
For fiscal 1997,1998 and 1999, Putnam Mutual Funds Corp. received $25,529,
$8,127,400 and $811,406, respectively, in sales charges for Class M shares, of
which it retained $2,522, $635,378 and $64,266, respectively.
b. Sales in Japan
In Japan, Shares of the Fund are offered on any Business Day and any business
day of the Distributor in Japan during the Subscription Period mentioned in "8.
Period of Subscription, Part I Information concerning Securities" of a
securities registration statement pursuant to the terms set forth in "Part I.
Information concerning Securities" of the relevant securities registration
statement. The Distributor or the Sales Handling Company shall provide to the
investors an Agreement Concerning a Foreign Securities Transactions Account and
other agreements (the "Account Agreement") and receive from such investors an
application for requesting the opening of a transactions account under the
Account Agreement. Purchases may be made in the minimum investment amount of
100 shares and in integral multiples of 100 shares.
The issue price for Shares shall be, in principal, the Net Asset Value per
Share next calculated on the day on which the Fund receives such application.
The Trade Day in Japan is the day when the Distributor confirms the execution
of the order (ordinarily the business day in Japan next following the placement
of orders), and the payment and delivery shall be made on the fourth Business
Day after and including the Trade Day. The sales charge in Japan shall be 3%
of the amount obtained by deduction of the amount equivalent to 3% of the
public offering price from such price (hereinafter referred to as the "Sales
Price"). Any amount, which is over the net asset value, of the Sales Price
shall be retained by Putnam Mutual Fund Corp., principal underwriter of the
Fund. The public offering price means the amount calculated by dividing the
net asset value by (1- 0.0325) and rounded to three decimal places.
The Investors having entrusted the Distributor or the Sales Handling Company
with safekeeping of the certificates for Fund shares will receive a certificate
of safekeeping in exchange for the purchase price. In such case payment shall
be made in yen in principal and the applicable exchange rate shall be the
exchange rate which shall be based on the foreign exchange rate quoted in the
Tokyo Foreign Exchange Market on the Trade Day and which shall be determined
by such Distributor or Sales Handling Company. The payment may be made in
dollars to the extent that the Distributor or the Sales Handling Company can
agree.
In addition, the Distributor or the Sales Handling Company in Japan who are
members of the Japan Securities Dealers' Association cannot continue sales of
the Shares in Japan when the net assets of the Fund are less than [YEN]
100,000,000 or the Shares otherwise cease to comply with the "Standards of
Selection of Foreign Investment Fund Securities" contained in the "Regulations
Concerning the Transactions of Foreign Securities" established by the
Association.
(2) Repurchase of Shares:
a. Repurchase in the United States
Investors residing in the U.S. can sell investors' shares back to the Fund any
day the New York Stock Exchange is open, either through investors' financial
advisor or directly to the Fund. Payment for redemptions may be delayed until
the Fund collects the purchase price of shares, which may take up to 15
calendar days after the purchase date.
* Selling shares through investors' financial advisor. Investors' advisor must
receive investors' request in proper form before the close of regular trading
on the New York Stock Exchange to receive that day's NAV, less any applicable
deferred sales charge. Investors' advisor will be responsible for furnishing
all necessary documents to Putnam Investor Services on a timely basis and may
charge investors for his or her services.
* Selling shares directly to the Fund. Putnam Investor Services must receive
investors' request in proper form before the close of regular trading on the
New York Stock Exchange in order to receive that day's Nav, less any applicable
sales charge.
By Mail. Send a letter of instruction signed by all registered owners or their
legal representatives to Putnam Investor Services. If investors have
certificates for the shares investors want to sell, investors must include them
along with completed stock power forms.
By telephone. Investors may use Putnam's telephone redemption privilege to
redeem shares valued at less than $100,000 unless investors have notified
Putnam Investor Services of an address change within the preceding 15 days,
in which case other requirements may apply. Unless investors indicate
otherwise on the account application, Putnam Investor Services will be
authorized to accept redemption instructions received by telephone.
The telephone redemption privilege is not available if there are certificates
for investors' shares. The telephone redemption privilege may be modified or
terminated without notice.
* Selling shares by check. If investors would like to use a Fund's
check-writing service, mark the proper box on the application or authorization
form and complete the signature card (and, if applicable, the resolution).
The Fund will send investors checks when it receives these properly completed
documents. Investors can then make the checks payable to the order of anyone
in the amount of $500 or more. When the check is presented for payment, the
Fund will redeem a sufficient number of full and fractional shares in
investors' account at that day's NAV to cover the amount of the check and any
applicable deferred sales charge.
The use of checks is subject to the rules of investors' fund's designated bank
for its checking accounts. If investors do not have a sufficient number of
shares in their account to cover the amount of the check and any applicable
deferred sales charge, the check will be returned and no shares will be
redeemed. Because it is not possible to determine their account's value in
advance, investors should not write a check for the entire value of their
account or try to close their account by writing a check. The Fund may change
or end check-writing privileges at any time without notice. The check-writing
service is not available for tax-qualified retirement plans, or if there are
certificates for investors' shares.
* Additional requirements.
In certain situations, for example, if investors sell shares with a value of
$100,000 or more, the signatures of all registered owners or their legal
representatives must be guaranteed by a bank, broker-dealer or certain other
financial institution. In addition, Putnam Investor Services usually requires
additional documents for the sale of shares by a corporation, partnership,
agent or fiduciary, or a surviving joint owner. For more information
concerning Putnam's signature guarantee and documentation requirements, contact
Putnam Investor Services.
* When will the fund pay investors? The Fund generally sends investors payment
for investors' shares the business day after investors' request is received.
Under unusual circumstances, the Fund may suspend redemptions, or postpone
payment for more than seven days as permitted by federal securities laws.
* Redemption by the Fund. If investors own fewer shares than the minimum set
by the Trustees (presently 20 shares), the Fund may redeem investors' shares
without investors' permission and send investors the proceeds. The Fund may
also redeem shares if investors own shares more than a maximum amount set by
the Trustees. There is presently no maximum, but the Trustees could set a
maximum that applies to both present and future shareholders.
b. Repurchase in Japan
Shareholders in Japan may at any time request repurchase of their Shares
without a contingent deferred sales charge. Repurchase requests in Japan may
be made to Investor Servicing Agent through the Distributor or the Sales
Handling Company on a Fund Business Day that is business day of the
Distributor in Japan. The repurchase shall be made is integral multiples of
1 shares.
The price a shareholder in Japan will receive is the next net asset value
calculated after the Fund receives the repurchase request from the Distributor,
provided the request is received before the close of regular trading on the
New York Stock Exchange. The payment of the price shall be made in yen through
the Distributor or the Sales Handling Company pursuant to the Account Agreement
or, if the Distributor or the Sales Handling Company agree, in dollars. The
payment for repurchase proceeds shall be made on the fourth business day of
securities companies in Japan after and including the Trade Day.
(3) Suspension of Repurchase:
The Fund may suspend shareholders' right of redemption, or postpone payment
for more than seven days, if the New York Stock Exchange is closed for other
than customary weekends or holidays, or if permitted by the rules of the U.S.
Securities and Exchange Commission during periods when trading on the Exchange
is restricted or during any emergency which makes it impracticable for the Fund
to dispose of its securities or to determine fairly the value of its net
assets, or during any other period permitted by order of the U.S. Securities
and Exchange Commission for protection of investors.
(4) Custody of Shares:
Share certificates shall be held by Shareholders at their own risk.
The custody of the Share certificates (if issued) representing Shares sold to
Japanese Shareholders shall, unless otherwise instructed by the Shareholder, be
held, in the name of the custodian, by the custodian of Kokusai. Certificates
of custody for the Shares shall be delivered by the Distributor or the Sales
Handling Company to the Japanese Shareholders.
D. Miscellaneous:
(1) Duration and Liquidation:
Unless terminated, the Fund shall continue without limitation of time. The
Fund may be terminated at any time by vote of Shareholders holding at least
66 2/3% of the Shares entitled to vote or by the Trustees of the Fund by
written notice to the Shareholders.
(2) Accounting Year:
The accounts of the Fund will be closed each year on September 30.
(3) Authorized Shares:
There is no prescribed authorized number of Shares, and Shares may be issued
from time to time.
(4) Agreement and Declaration of Trust:
Originals or copies of the Agreement and Declaration of Trust, as amended,
are maintained in the office of the Fund and are made available for public
inspection for the Shareholders. Originals or copies of the Agreement and
Declaration of Trust, as amended, are on file in the United States with the
Secretary of State of The Commonwealth of Massachusetts and with the Clerk of
the City of Boston.
The Agreement and Declaration of Trust may be amended at any time by an
instrument in writing signed by a majority of the then Trustees when authorized
to do so by vote of Shareholders holding a majority of the Shares entitled to
vote, except that an amendment which shall affect the holders of one or more
series or classes of Shares but not the holders of all outstanding series and
classes shall be authorized by vote of the Shareholders holding a majority of
the Shares entitled to vote of each series and class affected and no vote of
Shareholders of a series or class not affected shall be required. Amendments
having the purpose of changing the name of the Fund or of supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote.
In Japan, material changes in the Agreement and Declaration of Trust shall be
published and sent to the Japanese Shareholders.
(5) Issue of Warrants, Subscription Rights, etc.:
The Fund may not grant privileges to purchase shares of the Fund to
shareholders or investors by issuing warrants, subscription rights or options,
or other similar rights.
(6) How Performance Is Shown:
Fund advertisements may, from time to time, include performance information.
"Yield" is calculated by dividing the annualized net investment income per
share during a recent 30-day period by the maximum public offering price per
share on the last day of that period.
For purposes of calculating yield, net investment income is calculated in
accordance with U.S. Securities and Exchange Commission regulations and may
differ from net investment income as determined for tax purposes. U.S.
Securities and Exchange Commission regulations require that net investment
income be calculated on a "yield-to-maturity" basis, which has the effect of
amortizing any premiums or discounts in the current market value of
fixed-income securities. The current dividend rate is based on net investment
income as determined for tax purposes, which may not reflect amortization in
the same manner.
Yield is based on the price of the shares, including the maximum initial sales
charge.
"Total return" for the one-, five- and ten-year periods (or for the life of the
Fund, if shorter) through the most recent calendar quarter represents the
average annual compounded rate of return on an investment of $1,000 in the Fund
invested at the maximum public offering price. Total return may also be
presented for other periods or based on investment at reduced sales charge
levels. Any quotation of investment performance not reflecting the maximum
initial sales charge or contingent deferred sales charge would be reduced if
the sales charge were used. For the one-year, five-year and ten-year periods
ended September 30, 1999, the average annual total return for Class M shares of
the Fund was -2.75%, 6.17%, and 6.35%, respectively. Returns for Class M
shares reflect the deduction of the current maximum initial sales charge of
3.25% for Class M shares. Returns shown for Class M shares for periods prior
to February 6, 1995 are derived from the historical performance of Class A
shares, adjusted to reflect both the deduction of the initial sales charge and
the higher operating expenses applicable to Class M shares. The 30-day yield
for the Class M shares of the Fund for the period ended September 30, 1999 was
5.75%.
All data are based on past investment results and do not predict future
performance. Investment performance, which will vary, is based on many
factors, including market conditions, portfolio composition, Fund operating
expenses and the class of shares the investor purchases. Investment
performance also often reflects the risks associated with the Fund's
investment objective and policies. These factors should be considered when
comparing the Fund's investment results with those of other mutual funds and
other investment vehicles.
Quotations of investment performance for any period when an expense limitation
was in effect will be greater than if the limitation had not been in effect.
Fund performance may be compared to that of various indexes.
(B) Outline of Disclosure System:
(1) Disclosure in U.S.A.:
(i) Disclosure to shareholders
In accordance with the Investment Company Act of 1940, the Fund is required to
send to its shareholders annual and semi-annual reports containing financial
information.
(ii) Disclosure to the SEC
The Fund has filed a registration statement with the SEC on Form N-1A; the Fund
updates that registration statement periodically in accordance with the
Investment Company Act of 1940.
(2) Disclosure in Japan:
a. Disclosure to the Supervisory Authority:
(i) Disclosure Required under the Securities and Exchange Law
When the Fund intends to offer the Shares amounting to more than certain
specific amount in yen in Japan, it shall submit to the Director of Kanto
Local Finance Bureau securities registration statements together with the
copies of the Agreement and Declaration of the Fund and the agreements with
major related companies as attachments thereto. The said documents are made
available for public inspection for investors and any other persons who desire
at Kanto Local Finance Bureau of the Ministry of Finance.
The Distributor or the Sales Handling Company of the Shares shall deliver to
the investors prospectuses the contents of which are substantially identical
to Part I and Part II of the securities registration statements. For the
purpose of disclosure of the financial conditions, etc., the Trustees shall
submit to the Director of Kanto Local Finance Bureau of the Ministry of Finance
securities reports within 6 months of the end of each fiscal year, semi-annual
reports within 3 months of the end of each semi-annual period and extraordinary
reports from time to time when changes occur as to material subjects of the
Fund. These documents are available for public inspection for the investors
and any other persons who desire at the Kanto Local Finance Bureau of the
Ministry of Finance.
(ii) Notifications, etc. under the Law Concerning Securities Investment Trusts
and Securities Investment Companies
If the Investment Management Company conducts the business of offering for
sale of shares of the Fund, it must file in advance certain information
relating to the Fund with the Commissioner of Financial Supervisory Agent under
the Law Concerning Securities Investment Trusts and Securities Investment
Companies (the Law No. 198, 1951) (hereinafter referred to the "Investment
Trusts Law"). In addition, if the Investment Management Company amends the
Agreement and Declaration of Trust of the Fund, it must file in advance such
amendment and the details thereof with the Commissioner of Financial
Supervisory Agent. Further, the Investment Management Company must prepare
the Management Report on the described matters concerning the assets of the
Fund under the Investment Trusts Law immediately after the end of each
calculation period of the Fund and must file such Report with the Commissioner
of Financial Supervisory Agent.
b. Disclosure to Japanese Shareholders:
If the Trustees make any amendment to the Agreement and Declaration of Trust
of the Fund, the substance of which is important, it must give in advance
public notice concerning its intention to make such amendment and the substance
of such amendment at least 30 days prior to such amendment, and must deliver
written documents containing the amendment to the shareholders known in Japan.
Provided, however, that if the said written documents are delivered to all the
shareholders in Japan, the relevant public notice is not required to be given.
The Japanese Shareholders will be notified of the material facts which would
change their position through the Distributor or the Sales Handling Company.
The above described Management Report on the Fund will be sent to the
shareholders known in Japan.
(C) Restrictions on Transactions with Interested Parties:
Portfolio securities of the Fund may not be purchased from or sold or loaned
to any Trustee of the Fund, Putnam Investment Management, Inc., acting as
investment adviser of the Fund, or any affiliate thereof or any of their
directors, officers, or employees, or any major shareholder thereof (meaning
a shareholder who holds to the actual knowledge of Investment Management
Company, on his own account whether in his own or other name (as well as a
nominee's name), 10% or more of the total issued outstanding shares of such a
company) acting as principal or for their own account unless the transaction
is made within the investment restrictions set forth in the Fund's prospectus
and either (i) at a price determined by current publicly available quotations
(including a dealer quotation) or (ii) at competitive prices or interest rates
prevailing from time to time on internationally recognized securities markets
or internationally recognized money markets (including a dealer quotation).
4. INFORMATION CONCERNING THE EXERCISE OF RIGHTS BY SHAREHOLDERS, ETC.
(A) Rights of Shareholders and Procedures for Their Exercise:
Shareholders must register their shares in their own name in order to
exercise directly their rights as Shareholders. Therefore, the Shareholders
in Japan who entrust the custody of their Shares to the Distributor or the
Sales Handling Company cannot exercise directly their Shareholder rights,
because their Shares are registered in the name of the custodian. Shareholders
in Japan may have the Distributor or the Sales Handling Company exercise their
rights on their behalf in accordance with the Account Agreement with the
Distributor or the Sales Handling Company.
Shareholders in Japan who do not entrust the custody of their Shares to the
Distributor or the Sales Handling Company may exercise their rights in
accordance with their own arrangement under their own responsibility.
The major rights enjoyed by Shareholders are as follows:
(i) Voting rights
Each share has one vote, with fractional shares voting proportionally.
Shares of each class will vote together as a single class except when
otherwise required by law or as determined by the Trustees. Although the
Fund is not required to hold annual meetings of its shareholders, shareholders
holding at least 10% of the outstanding shares entitled to vote have the
right to call a meeting to elect or remove Trustees, or to take other actions
as provided in the Agreement and Declaration of Trust.
(ii) Repurchase rights
Shareholders are entitled to request repurchase of Shares at their Net Asset
Value at any time.
(iii) Rights to receive dividends
Shareholders are entitled to receive any distribution from net investment
income monthly and any net realized capital gains at least annually.
Distributions from capital gains are made after applying any available capital
loss carryovers.
Shareholders may choose three distribution options, though investors in Japan
may only choose the last alternative.
* Reinvest all distributions in additional shares without a sales charge;
* Receive distributions from net investment income in cash while reinvesting
capital gains distributions in additional shares without a sales charge; or
* Receive all distributions in cash.
(iv) Right to receive distributions upon dissolution
Shareholders of the Fund are entitled to receive distributions upon
dissolution in proportion to the number of shares then held by them, except
as otherwise required.
(v) Right to inspect accounting books and the like
Shareholders are entitled to inspect the Agreement and Declaration of Trust,
the accounting books at the discretion of the Court and the minutes of any
shareholders' meetings.
(vi) Right to transfer shares
Shares are transferable without restriction except as limited by applicable
law.
(vii) Rights with respect to the U.S. registration statement
If, under the 1933 Act, there is, at the time it became effective, any false
statement concerning a material fact in the U.S. registration statement, or
any omission of any statement of a material fact required to be stated therein
or necessary in order to make the statements made therein not misleading,
shareholders are generally entitled to institute a lawsuit, against the person
who had signed the relevant Registration Statement, the trustees of the issuer
(or any person placed in the same position), any person involved in preparing
such Statement or any underwriter of the relevant shares.
(B) Tax Treatment of Shareholders in Japan:
The tax treatment of Shareholders in Japan shall be as follows:
(1) The distributions to be made by the Fund will be treated as distributions
made by a domestic investment trust.
a. The distributions to be made by the Fund to Japanese individual shareholders
will be subject to separate taxation from other income (i.e. withholding of
income tax at the rate of 15% and withholding of local taxes at the rate of 5%
in Japan). In this case, no report concerning distributions will be filed with
the Japanese tax authorities.
b. The distributions to be made by the Fund to Japanese corporate shareholders
will be subject to withholding of income tax at the rate of 15% and to
withholding of local taxes at the rate of 5% in Japan. In certain cases, the
Distributor or the Sales Handling Company will prepare a report concerning
distributions and file such report with the Japanese tax authorities.
c. Net investment returns such as dividends, etc. and distributions of
short-term net realized capital gain, among distributions on Shares of the
Fund, will be, in principle, subject to withholding of U. S. federal income
tax at the rate of 15% and the amount obtained after such deduction will be
paid in Japan.
Distributions of long-term net realized capital gain will not be subject to
withholding of U. S. federal income tax and the full amount thereof will be
paid in Japan. The amount subject to withholding of U. S. federal income tax
may be deducted from the tax levied on a foreign entity in Japan.
The Japanese withholding tax imposed on distributions as referred to in a.
and b. above will be collected by way of so-called "difference collecting
method." In this method only the difference between the amount equivalent to
20% of the distributions before U.S. withholding tax and the amount of U.S.
withholding tax withheld in the U.S. will be collected in Japan.
(2) The provisions of Japanese tax laws giving the privilege of a certain
deduction from taxable income to corporations, which may apply to dividends
paid by a domestic corporation, shall not apply.
(3) Capital gains and losses arising from purchase and repurchase of the Shares
shall be treated in the same way as those arising from purchase and sale of a
domestic investment trust. The distribution of the net liquidation assets
shall be also treated in the same way as those arising from liquidation of a
domestic investment trust.
(4) The Japanese securities transaction tax will not be imposed so far as the
transactions concerned are conducted outside Japan. Such tax, however, is
applicable to dealers' transactions for their own account and to privately
negotiated transactions conducted in Japan.
(C) Foreign Exchange Control in U.S.A.:
In U.S.A., there are no foreign exchange control restrictions on remittance
of dividends, repurchase money, etc. of the Shares to Japanese Shareholders.
(D) Agent in Japan:
Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo
The foregoing law firm is the true and lawful agent of the Fund to represent
and act for the Fund in Japan for the purpose of;
(1) the receipt of any and all communications, claims, actions, proceedings
and processes as to matters involving problems under the laws and the rules
and regulations of the JSDA and
(2) representation in and out of court in connection with any and all
disputes, controversies or differences regarding the transactions relating to
the public offering, sale and repurchase in Japan of the Shares of the Fund.
The agent for the registration with the Director of Kanto Local Finance Bureau
of the Ministry of Finance of the initial public offering concerned as well as
for the continuous disclosure is each of the following persons:
Harume Nakano
Ken Miura
Attorneys-at-law
Hamada & Matsumoto
Kasumigaseki Building, 25th Floor
2-5, Kasumigaseki, 3-chome
Chiyoda-ku, Tokyo
(E) Jurisdiction:
Limited only to litigation brought by Japanese investors regarding transactions
relating to (D)(2) above, the Fund has agreed that the following court has
jurisdiction over such litigation and the Japanese law is applicable thereto:
Tokyo District Court
1-4, Kasumigaseki 1-chome
Chiyoda-ku, Tokyo
5. STATUS OF INVESTMENT FUND
(A) Diversification of Investment Portfolio
- -------------------------------------------------------------------------------
(As of January 31, 2000)
- -------------------------------------------------------------------------------
Name of Investment
Types of Assets Country Total USD Ratio (%)
- -------------------------------------------------------------------------------
U.S. Government Agency
Mortgages United States 2,587,520,430 90.05
- -------------------------------------------------------------------------------
U.S. Treasury Obligations United States 85,099,864 2.96
- -------------------------------------------------------------------------------
Cash, Deposit and Other Assets
(After deduction of liabilities) 200,719,021 6.99
- -------------------------------------------------------------------------------
Total 2,873,339,315 100.00
- -------------------------------------------------------------------------------
(Net Asset Value) (\307,447 million)
- -------------------------------------------------------------------------------
Note: Investment ratio is calculated by dividing each asset at its market value
by the total Net Asset Value of the Fund. The same applies hereinafter.
(B) Results of Past Operations
(1) Record of Changes in Net Assets (Class M Shares)
Record of changes in net assets at the end of the following fiscal years and at
the end of each month within one year prior to the end of January 2000 is as
follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Total Net Asset Value Net Asset Value per Share
USD Yen
(thousands) (millions) USD Yen
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1st Fiscal Year 2,609 279 12.96 1,387
(September 30, 1995)
- --------------------------------------------------------------------------------------
2nd Fiscal Year 6,116 654 12.63 1,351
(September 30, 1996)
- --------------------------------------------------------------------------------------
3rd Fiscal Year 7,850 840 13.00 1,391
(September 30, 1997)
- --------------------------------------------------------------------------------------
4th Fiscal Year 163,076 17,449 13.25 1,418
(September 30, 1998)
- --------------------------------------------------------------------------------------
5th Fiscal Year 133,362 14,270 12.55 1,343
(September 30, 1999)
- --------------------------------------------------------------------------------------
1999 End of February 152,420 16,309 12.91 1,381
March 150,031 16,053 12.92 1,382
April 147,732 15,807 12.91 1,381
May 144,038 15,412 12.77 1,366
June 137,966 14,762 12.62 1,350
July 135,232 14,470 12.49 1,336
August 132,965 14,227 12.43 1,330
September 133,362 14,270 12.55 1,343
October 130,865 14,003 12.53 1,341
November 123,713 13,237 12.47 1,334
December 118,722 12,703 12.32 1,318
2000 End of January 114,638 12,266 12.15 1,300
- --------------------------------------------------------------------------------------
(Note) Operations of Class M Shares were commenced on February 6, 1995.
</TABLE>
(2) Record of Distributions Paid
Amount of Dividend paid per Share
-----------------------------------
Period USD JPY
- -----------------------------------------------------------------------------
1st Fiscal Year (2/6/95 - 9/30/95) $0.60 64.20
- -----------------------------------------------------------------------------
2nd Fiscal Year (10/1/95 - 9/30/96) $0.83 88.81
- -----------------------------------------------------------------------------
3rd Fiscal Year (10/1/96 - 9/30/97) $0.78 83.46
- -----------------------------------------------------------------------------
4the Fiscal Year (10/1/97 - 9/30/98) $0.80 85.60
- -----------------------------------------------------------------------------
5th Fiscal Year (10/1/98 - 9/30/99) $0.76 81.32
- -----------------------------------------------------------------------------
(Note) Record of distribution paid during the period from February 1995
through March 2000 are as follows:
<TABLE>
<CAPTION>
NAV per NAV per
Ex-dividend Dividend Share Ex-dividend Dividend Share
Date (USD) (USD) Date (USD) (USD)
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1995 Feb. 6 0.074 12.29 1998 Jan. 12 0.068 13.12
- -----------------------------------------------------------------------------------
Mar. 6 0.076 12.26 Feb. 10 0.067 13.03
- -----------------------------------------------------------------------------------
Apr. 5 0.074 12.64 Mar. 10 0.067 13.01
- -----------------------------------------------------------------------------------
May 5 0.076 12.69 Apr. 13 0.066 12.99
- -----------------------------------------------------------------------------------
Jun. 5 0.075 12.89 May 11 0.066 12.97
- -----------------------------------------------------------------------------------
Jul. 5 0.074 12.83 Jun. 10 0.066 13.04
- -----------------------------------------------------------------------------------
Aug. 7 0.074 12.71 Jul. 10 0.066 13.03
- -----------------------------------------------------------------------------------
Sep. 5 0.074 12.84 Aug. 10 0.066 13.01
- -----------------------------------------------------------------------------------
Oct. 5 0.073 12.91 Sep. 11 0.066 13.10
- -----------------------------------------------------------------------------------
Nov. 6 0.072 12.97 Oct. 12 0.066 13.08
- -----------------------------------------------------------------------------------
Dec. 6 0.072 13.05 Nov. 10 0.066 13.02
- -----------------------------------------------------------------------------------
1996 Jan. 5 0.072 13.09 Dec. 10 0.066 13.08
- -----------------------------------------------------------------------------------
Feb. 5 0.072 13.11 1999 Jan. 11 0.066 13.01
- -----------------------------------------------------------------------------------
Mar. 8 0.070 12.70 Feb. 10 0.064 13.00
- -----------------------------------------------------------------------------------
Apr. 8 0.070 12.59 Mar. 10 0.063 12.87
- -----------------------------------------------------------------------------------
May 6 0.068 12.46 Apr. 12 0.063 12.93
- -----------------------------------------------------------------------------------
Jun. 7 0.066 12.44 May 10 0.063 12.82
- -----------------------------------------------------------------------------------
Jul. 5 0.065 12.39 Jun. 10 0.063 12.56
- -----------------------------------------------------------------------------------
Aug. 5 0.065 12.65 Jul. 12 0.063 12.61
- -----------------------------------------------------------------------------------
Sep. 6 0.064 12.42 Aug. 10 0.063 12.23
- -----------------------------------------------------------------------------------
Oct. 7 0.064 12.68 Sep. 10 0.063 12.48
- -----------------------------------------------------------------------------------
Nov. 5 0.064 12.80 Oct. 11 0.063 12.45
- -----------------------------------------------------------------------------------
Dec. 6 0.064 12.84 Nov. 10 0.063 12.50
- -----------------------------------------------------------------------------------
1997 Jan. 8 0.064 12.73 Dec. 10 0.063 12.49
- -----------------------------------------------------------------------------------
Feb. 7 0.065 12.82 2000 Jan. 10 0.063 12.20
- -----------------------------------------------------------------------------------
Mar. 7 0.065 12.75 Feb. 10 0.063 12.08
- -----------------------------------------------------------------------------------
Apr. 8 0.064 12.57 Mar. 10 0.064 12.18
- -----------------------------------------------------------------------------------
May 12 0.064 12.73
- -----------------------------------------------------------------------------------
Jun. 10 0.066 12.78
- -----------------------------------------------------------------------------------
Jul. 11 0.066 12.90
- -----------------------------------------------------------------------------------
Aug. 11 0.067 12.85
- -----------------------------------------------------------------------------------
Sep. 10 0.066 12.86
- -----------------------------------------------------------------------------------
Oct. 10 0.066 12.93
- -----------------------------------------------------------------------------------
Nov. 10 0.067 12.96
- -----------------------------------------------------------------------------------
Dec. 10 0.070 13.01
- -----------------------------------------------------------------------------------
(C) Record of Sales and Repurchases
Record of sales and repurchases during the following fiscal years and number of
outstanding Shares of the Fund as of the end of such fiscal years are as follows:
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
Number of Number of Shares Number of
Shares Sold Repurchased Outstanding Shares
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
1st Fiscal Year 217,478 16,150 201,328
(2/6/95-9/30/95) (0) (0) (0)
- -----------------------------------------------------------------------------------
2nd Fiscal Year 509,261 226,315 484,274
(10/1/95-9/30/96) (0) (0) (0)
- -----------------------------------------------------------------------------------
3rd Fiscal Year 702,884 583,426 603,732
(10/1/96-9/30/97) (0) (0) (0)
- -----------------------------------------------------------------------------------
4th Fiscal Year 19,422,018 7,720,736 12,305,014
(10/1/97-9/30/98) (18,344,600) (7,230,200) (11,114,400)
- -----------------------------------------------------------------------------------
5th Fiscal Year 2,833,549 4,509,265 10,629,298
(10/1/98-9/30/99) (1,710,900) (3,635,550) (9,189,750)
- -----------------------------------------------------------------------------------
Note: The number of Shares sold, repurchased and outstanding in the parentheses
represents those sold, repurchased and outstanding in Japan. The Shares have
been sold in Japan since December 4, 1997.
</TABLE>
II. OUTLINE OF THE FUND
1. Fund
(A) Law of Place of Incorporation
The Fund is a Massachusetts business trust organized in Massachusetts, U.S.A.
on November 1, 1983.
Chapter 182 of the Massachusetts General Laws prescribes the fundamental
matters in regard to the operations of certain business trusts constituting
voluntary associations under that chapter.
The Fund is an open-end, diversified management company under the Investment
Company Act of 1940.
(B) Outline of the Supervisory Authority
Refer to I - l (B) Outline of the Supervisory Authority.
(C) Purpose of the Fund
The purpose of the Fund is to provide investors a managed investment primarily
in securities, debt instruments and other instruments and rights of a financial
character.
(D) History of the Fund
November 1, 1983: Organization of the Fund as a Massachusetts
business trust. Adoption of the Agreement and
Declaration of Trust.
January 10, 1992: Adoption of the Amended and Restated Agreement
and Declaration of Trust.
(E) Amount of Capital Stock
Not applicable.
(F) Structure of the management of the Fund
The Trustees are responsible for generally overseeing the conduct of the
Fund's business. The Agreement and Declaration of Trust provides that they
shall have all powers necessary or convenient to carry out that responsibility.
The number of Trustees is fixed by the Trustees and may not be less than three.
A Trustee may be elected either by the Trustees or by the shareholders. At any
meeting called for the purpose, a Trustee may be removed by vote of two-thirds
of the outstanding shares of the Fund. Each Trustee elected by the Trustees or
the shareholders shall serve until he or she retires, resigns, is removed, or
dies or until the next meeting of shareholders called for the purpose of
electing Trustees and until the election and qualification of his or her
successor.
The Trustees of the Fund are authorized by the Agreement and Declaration of
Trust to issue shares of the Fund in one or more series, each series being
preferred over all other series in respect of the assets allocated to that
series. The Trustees may, without shareholder approval, divide the shares of
any series into two or more classes, with such preferences and special or
relative rights and privileges as the Trustees may determine.
Under the Agreement and Declaration of Trust the shareholders shall have power,
as and to the extent provided therein, to vote only (i) for the election of
Trustees, to the extent provided therein (ii) for the removal of Trustees, to
the extent provided therein (iii) with respect to any investment adviser, to
the extent provided therein (iv) with respect to any termination of the Fund,
to the extent provided therein (v) with respect to certain amendments of the
Agreement and Declaration of Trust, (vi) to the same extent as the stockholders
of a Massachusetts business corporation as to whether or not a court action,
proceeding, or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Fund or the shareholders, and (vii) with
respect to such additional matters relating to the Fund as may be required by
the Agreement and Declaration of Trust, the Bylaws of the Fund, or any
registration of the Fund with the U.S. Securities and Exchange Commission (or
any successor agency) or any state, or as the Trustees may consider necessary
or desirable. Certain of the foregoing actions may, in addition, be taken by
the Trustees without vote of the shareholders of the Fund.
On any matter submitted to a vote of shareholders, all shares of the Fund then
entitled to vote are voted in the aggregate as a single class without regard to
series or classes of shares, except (1) when required by the Investment Company
Act of 1940, as amended, or when the Trustees hall have determined that the
matter affects one or more series or classes of shares materially differently,
shares are voted by individual series or class; and (2) when the Trustees have
determined that the matter affects on the interests of one or more series or
classes, then only shareholders of such series or classes are entitled to vote
thereon. There is no cumulative voting.
Meetings of shareholders may be called by the Clerk whenever ordered by the
Trustees, the Chairman of the Trustees, or requested in writing by the holder
or holders of at least one-tenth of the outstanding shares entitled to vote at
the meeting. Written notice of any meeting of shareholders must be given by
mailing the notice at least seven days before the meeting. Thirty percent of
shares entitled to vote on a particular matter is a quorum for the transaction
of business on that matter at a shareholders' meeting, except that, where any
provision of law or of the Agreement and Declaration of Trust permits or
requires that holders of any series or class vote as an individual series or
class, then thirty percent of the aggregate number of shares of that series or
class entitled to vote are necessary to constitute a quorum for the transaction
of business by that series or class. For the purpose of determining the
shareholders of any class or series of shares who are entitled to vote or act
at any meeting, or who are entitled to receive payment of any dividend or other
distribution, the Trustees are authorized to fix record dates, which may not
be more then 90 days before the date of any meeting of shareholders or more
than 60 days before the date of payment of any dividend or other distribution.
The Trustees are authorized by the Agreement and Declaration of Trust to adopt
Bylaws not inconsistent with the Agreement and Declaration of Trust providing
for the conduct of the business of the Fund. The Bylaws contemplate that the
Trustees shall elect a Chairman of the Trustees, the President, the Treasurer,
and the Clerk of the Fund, and that other officers, if any, may be elected or
appointed by the Trustees at any time. The Bylaws may be amended or repealed,
in whole or in part, by a majority of the Trustees then in office at any
meeting of the Trustees, or by one or more writings signed by such a majority.
Regular meetings of the Trustees may be held without call or notice at such
places and at such times as the Trustees may from time to time determine. It
shall be sufficient notice to a Trustee of a special meeting to send notice
by mail at least forty-eight hours or by telegram at least twenty-four hours
before the meeting or to give notice to him or her in person or by telephone
at least twenty-four hours before the meeting.
At any meeting of Trustees, a majority of the Trustees then in office shall
constitute a quorum. Except as otherwise provided in the Agreement and
Declaration of Trust or Bylaws, any action to be taken by the Trustees may be
taken by a majority of the Trustees present at a meeting (a quorum being
present), or by written consents of a majority of the Trustees then in office.
Subject to a favorable majority shareholder vote (as defined in the Agreement
and Declaration of Trust), the Trustees may contract for exclusive or
nonexclusive advisory and/or management services with any corporation, trust,
association, or other organization.
The Agreement and Declaration of Trust contains provisions for the
indemnification of Trustees, officers, and shareholders of the Fund under
the circumstances and on the terms specified therein.
The Fund may be terminated at any time by vote of shareholders holding at
least two-thirds of the shares entitled to vote or by the trustees by written
notice to the shareholders. Any series of shares may be terminated at any
time by vote of shareholders holding at least two-thirds of the shares of
such series entitled to vote or by the Trustees by written notice to the
shareholders of such series.
The foregoing is a general summary of certain provisions of the Agreement and
Declaration of Trust and Bylaws of the Fund, and is qualified in its entirety
by reference to each of those documents.
(G) Information Concerning Major Shareholders
Not applicable.
<TABLE>
<CAPTION>
(H) Information Concerning Directors, Officers and Employees
(1) Trustees and Officers of the Fund (as of January 31, 2000)
- ----------------------------------------------------------------------------------------
Shares
Name Office and Title Resume Owned
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
George Putnam Chairman and present: Chairman and Director, 20,644.096
President Putnam Investment
Management and Putnam
Mutual Funds Corp.
Director, Freeport Copper
and Gold, Inc., Houghton
Mifflin Company and
Marsh & McLennan
Companies, Inc.
- ----------------------------------------------------------------------------------------
John A. Hill Vice Chairman present: Chairman and Managing 544.159
Director, First Reserve
Corp. Director, Synder
Oil Corporation,
TransMontaigne Oil
Company and various private
companies owned by First
Reserve Corp.
- ----------------------------------------------------------------------------------------
William F. Pounds Vice Chairman present: Professor Emeritus of 1,486.858
Management, Alfred P.
Sloan School of Management,
Massachusetts Institute
of Technology, Director,
IDEXX Laboratories, Inc.,
Management Sciences for
Health, Inc. and Sun
Company, Inc.
- ----------------------------------------------------------------------------------------
Jameson Adkins Trustee present: President, Baxter 147.262
Baxter Associates, Inc., Director,
MB Financial, Inc., ASHTA
Chemicals, Inc., Banta
Corporation and Ryerson
Tull, Inc.
- ----------------------------------------------------------------------------------------
Hans H. Estin Trustee present: Vice Chairman, North 203.353
American Management Corp.
- ----------------------------------------------------------------------------------------
Ronald J. Jackson Trustee present: Former Chairman, President 147.527
and Chief Executive Officer,
Fisher-Price, Inc.
- ----------------------------------------------------------------------------------------
Paul. L. Joskow Trustee present: Professor of Economics and 129.474
Management and former Chairman
of Dept. of Economics, the
Massachusetts Institute of
Technology, Director of
New England Electric System,
State Farm Indemnity Company
and Whitehead Institute for
Biomedical Research
- ----------------------------------------------------------------------------------------
Elizabeth T. Kennan Trustee present: President Emeritus and 258.653
Professor, Mount Holyoke
College, Director, Bell
Atlantic, The Kentucky
Home Life Insurance
Companies, Northern
Utilities and Talbots
- ----------------------------------------------------------------------------------------
Lawrence J. Lasser Trustee and present: President, Chief Executive 167.512
Vice President Officer and Director Putnam
Investments, Inc. and Putnam
Investment Management, Inc.
Director, Marsh & McLennan
Companies, Inc. and United
Way of Massachusetts Bay
- ----------------------------------------------------------------------------------------
John H. Mullin, III Trustee present: Chairman and Chief Executive 439.822
Officer, Ridgeway Farm
Director, ACX Technologies,
Inc., Alex. Brown Realty,
Inc., The Liberty Corporation
and Carolina Power & Light
- ----------------------------------------------------------------------------------------
Robert E. Patterson Trustee present: President and Trustee, 1,063.952
Cabot Industrial Trust and
Director of Brandywine
Trust Company
- ----------------------------------------------------------------------------------------
George Putnam, III Trustee present: President, New Generation 2,129.580
Research, Inc. and New
Generation Advisers, Inc.
Director, The Boston Family
Office L.L.C.
- ----------------------------------------------------------------------------------------
A.J.C. Smith Trustee present: Chairman and Chief 763.559
Executive Officer,
Marsh & McLennan
Companies, Inc. Director,
Trident Partnership
- ----------------------------------------------------------------------------------------
W. Thomas Stephens Trustee present: President and Chief 116.551
Executive Officer of
MacMillan Bloedel, Ltd.
Director, Qwest
Communications and
New Century Energies
- ----------------------------------------------------------------------------------------
W. Nicholas Trustee present: Director of various 167.512
Thorndike corporations and
charitable organizations,
including Courier Corp.,
Data General Corp.,
Bradley Real Estate,
Inc. and Providence
Journal Co.
- ----------------------------------------------------------------------------------------
Charles E. Porter Executive Vice present: Managing Director, 0
President Putnam Investments, Inc.
and Putnam Investment
Management, Inc.
- ----------------------------------------------------------------------------------------
Patricia C. Flaherty Senior Vice present: Senior Vice President of 0
President Putnam Investments, Inc.
and Putnam Investment
Management, Inc.
- ----------------------------------------------------------------------------------------
Richard A. Monaghan Vice President present: Managing Director, Putnam 0
Investments, Inc., Chief
of Mutual Fund Business,
Putnam Mutual Funds Corp.
- ----------------------------------------------------------------------------------------
Ian C. Ferguson Vice President present: Senior Managing Director 0
of Putnam Investments,
Inc. and Putnam Investment
Management, Inc.
- ----------------------------------------------------------------------------------------
Gordon H. Silver Vice President present: Director and Senior 0
Managing Director of
Putnam Investments, Inc.
and Putnam Investment
Management, Inc.
- ----------------------------------------------------------------------------------------
John D. Hughes Senior Vice present Senior Vice President 0
President and of Putnam Investment
Treasurer Management, Inc.
- ----------------------------------------------------------------------------------------
Brett C. Browchuk Vice President present Managing Director of 0
Putnam Investment
Management, Inc.
- ----------------------------------------------------------------------------------------
John R. Verani Vice President present: Senior Vice President 0
of Putnam Investments,
Inc. and Putnam Investment
Management, Inc.
- ----------------------------------------------------------------------------------------
Michael Martino Vice President present: Managing Director of 0
Putnam Investments, Inc.
- ----------------------------------------------------------------------------------------
Stephen Oristaglio Vice President present Managing Director of
Putnam Investment
Management, Inc.
- ----------------------------------------------------------------------------------------
Kevin M. Cronin Vice President present: Managing Director of 0
Putnam Investments, Inc.
- ----------------------------------------------------------------------------------------
Edward H. D'Alelio Vice President present: Managing Director, Putnam 0
Investment Management, Inc.
- ----------------------------------------------------------------------------------------
Paul G. Bucuvalas Assistant present: N/A 0
Treasurer
- ----------------------------------------------------------------------------------------
Mary A. Eaton Associate present: N/A 0
Treasurer and
Assistant Clerk
- ----------------------------------------------------------------------------------------
Judith Cohen Associate Clerk present: N/A 0
- ----------------------------------------------------------------------------------------
Katharine Howard Senior Associate present: N/A 0
Treasurer
- ----------------------------------------------------------------------------------------
Wanda M McManus Assistant Clerk present: N/A 0
- ----------------------------------------------------------------------------------------
Joanne M. Neary Assistant Clerk present: N/A 0
- ----------------------------------------------------------------------------------------
</TABLE>
(2) Employees of the Fund
The Fund does not have any employees.
(I) Description of Business and Outline of Operation
The Fund may carry out any administrative and managerial act, including the
purchase, sale, subscription and exchange of any securities and the exercise
of all rights directly or indirectly pertaining to the Fund's assets. The
Fund has retained Putnam Investment Management, Inc., the investment adviser,
to render investment advisory services and Putnam Fiduciary Trust Company, to
hold the assets of the Fund in custody and act as Investor Servicing Agent.
(J) Miscellaneous
(1) Changes of Trustees and Officers
Trustees may be removed or replaced by, among other things, a resolution
adopted by a vote of two-thirds of the outstanding shares at a meeting called
for the purpose. In the event of vacancy, the remaining Trustees may fill
such vacancy by appointing for the remaining term of the predecessor Trustee
such other person as they in their discretion shall see fit. The Trustees
may add to their number as they consider appropriate. The Trustees may
elect and remove officers as they consider appropriate.
(2) Amendment to the Agreement and Declaration of Trust
Generally, approval of shareholders is required to amend the Agreement and
Declaration of Trust, except for certain matters such as change of name,
curing any ambiguity or curing any defective or inconsistent provision.
(3) Litigation and Other Significant Events
Nothing which has or which would have a material adverse effect on the Fund
has occurred which is required to be disclosed and has not been disclosed.
The fiscal year end of the Fund is September 30. The Fund is established for
an indefinite period and may be dissolved at any time by vote of the
shareholders holding at least two-thirds of the shares entitled to vote or
by the Trustees by written notice to shareholders.
2. Putnam Investment Management, Inc. (Investment Management Company)
(A) Law of Place of Incorporation
Putnam is incorporated under the General Corporation Law of The Commonwealth
of Massachusetts, U.S.A. Its investment advisory business is regulated under
the Investment Advisers Act of 1940.
Under the Investment Advisers Act of 1940, an investment adviser means, with
certain exceptions, any person who, for compensation, engages in the business
of advising others, either directly or through publications or writings, as
to the value of securities or as to the advisability of investing in,
purchasing or selling securities, or who, for compensation and as part of a
regular business, issues analyses or reports concerning securities. Investment
advisers under the Act may not conduct their business unless they are
registered with the SEC.
(B) Outline of the Supervisory Authority
Investment Management Company is registered as an investment adviser under
the Investment Advisers Act of 1940.
(C) Purpose of the Company
Investment Management Company's sole business is investment management, which
includes the buying, selling, exchanging and trading of securities of all
descriptions on behalf of mutual funds in any part of the world.
(D) History of the Company
Investment Management Company is one of America's oldest and largest money
management firms. Investment Management Company's staff of experienced
portfolio managers and research analysts selects securities and constantly
supervises the fund's portfolio. By pooling an investor's money with that of
other investors, a greater variety of securities can be purchased than would
be the case individually: the resulting diversification helps reduce investment
risk. Investment Management Company has been managing mutual funds since
1937. Today, the firm serves as the Investment Management Company for the
funds in the Putnam Family, with over $284 billion in assets in over 12
million shareholder accounts at January 31, 2000. An affiliate, The Putnam
Advisory Company, Inc., manages domestic and foreign institutional accounts
and mutual funds, including the accounts of many Fortune 500 companies.
Another affiliate, Putnam Fiduciary Trust Company, provides investment
advice to institutional clients under its banking and fiduciary powers as
well as shareholder and custody services to the Putnam Funds.
Putnam Investment Management Inc., Putnam Mutual Funds and Putnam Fiduciary
Trust Company are subsidiaries of Putnam Investments, Inc., which is located
at One Post Office Square, Boston, Massachusetts 02109 and except for a
minority stake owned by employees, is owned by Marsh & McLennan Companies,
Inc., a publicly-owned holding company whose principal businesses are
international insurance and reinsurance brokerage, employee benefit
consulting and investment management.
(E) Amount of Capital Stock $1,000 (as of January 31, 2000)
1. Amount of Capital (issued capital stock at par value):
Common Stock 1,000 shares at $1 par value
2. Number of authorized shares of capital stock:
Common Stock 1,000 shares
3. Number of outstanding shares of capital stock:
Common Stock 1,000 shares
4. Amount of capital (for the purposes of this Item, "Amount of Capital"
means total stockholders' equity for the past five years:
Year Amount of Capital
(Total Stockholders' Equity)
End of 1995 $45,521,351
End of 1996 $45,817,658
End of 1997 $48,617,160
End of 1998 $425,782,007
End of 1999 $879,639,862
(F) Structure of the Management of the Company
Investment Management Company is ultimately managed by its Board of Directors,
which is elected by its shareholders.
Each fund managed by Investment Management Company is managed by one or more
portfolio managers. These managers, in coordination with analysts who
research specific securities and other members of the relevant investment
group (in the case of the Fund, Investment Management Company's Fixed Income
Investments Group), provide a continuous investment program for the Fund and
place all orders for the purchase and sale of portfolio securities.
The investment performance and portfolio of each Fund is overseen by its
Board of Trustees, a majority of whom are not affiliated with Investment
Management Company. The Trustees meet 11 times a year and review the
performance of each fund with its manager at least quarterly.
In selecting portfolio securities for the Fund, Investment Management Company
looks for securities that represent attractive values based on careful
issue-by-issue credit analysis and hundreds of onsite visits and other
contacts with issuers every year. Investment Management Company is one of
the largest managers of high yield and other debt securities in the
United States.
The following officers of Investment Management Company have had primary
responsibility for the day-to-day management of the Fund's portfolio since
the years stated below. Their experience as portfolio managers or investment
analysts' advisors at least the last five years is also shown:
(as of January 31, 2000)
- ------------------------------------------------------------------------------
Manager Since Experience
- ------------------------------------------------------------------------------
Kevin M. Cronin 1998 1997-Present Putnam Investment
Managing Director Management, Inc.
Prior to February 1997 MFS Investment
Management
- ------------------------------------------------------------------------------
Michael Martino 1994 1994-Present: Putnam Investment
Managing Director Management, Inc.
- ------------------------------------------------------------------------------
(G) Information Concerning Major Stockholders
As of January 31, 2000, all the outstanding shares of capital stock of
Investment Management Company were owned by Putnam Investments, Inc. See
subsection D above.
(H) Information Concerning Officers and Employees
The following table lists the names of various officers and directors of
Investment Management Company and their respective positions with Investment
Management Company. For each named individual, the table lists: (i) any other
organizations (excluding other Investment Management Company's funds) with
which the officer and/or director has recently had or has substantial
involvement; and (ii) positions held with such organization:
List of Officers and Directors of Putnam Investment Management, Inc.
List of Officers and Directors of Putnam Investment Management, Inc.
<TABLE>
<CAPTION>
(as at January 31, 2000)
- -----------------------------------------------------------------------------------
Position with
Putnam
Name Investment Other Business Affiliation
Management, Inc.
- -----------------------------------------------------------------------------------
<S> <C> <C>
1 Putnam, George Chairman Director of Putnam Mutual
Funds Corp.
- -----------------------------------------------------------------------------------
2 Lasser, Lawrence J. President and
Director, CEO
- -----------------------------------------------------------------------------------
3 Silver, Gordon H. Director and Senior Director of Putnam
Managing Director Fiduciary Trust Company
and Senior Managing
Director of Putnam Mutual
Funds Corp.
- -----------------------------------------------------------------------------------
4 Collman, Kathleen M. Senior Managing Director Senior Managing Director
of Putnam Mutual Funds
Corp.
- -----------------------------------------------------------------------------------
5 Ferguson, Ian C. Senior Managing Director Senior Managing Director
of Putnam Mutual Funds
Corp.
- -----------------------------------------------------------------------------------
6 Oristaglio, Stephen Senior Managing Director
- -----------------------------------------------------------------------------------
7 Regan, Anthony W. Senior Managing Director
- -----------------------------------------------------------------------------------
8 Spiegel, Steven Senior Managing Director Senior Managing Director
of Putnam Mutual Funds
Corp.
- -----------------------------------------------------------------------------------
9 Anderson, Blake E. Managing Director
- -----------------------------------------------------------------------------------
10 Beck, Robert R. Managing Director
- -----------------------------------------------------------------------------------
11 Boneparth, John F. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
12 Bresnahan, Leslee R. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
13 Browchuk, Brett C. Managing Director
- -----------------------------------------------------------------------------------
14 Cassaro, Joseph A. Managing Director
- -----------------------------------------------------------------------------------
15 Cotner, C. Beth Managing Director
- -----------------------------------------------------------------------------------
16 Cronin, Kevin M. Managing Director Managing Director of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
17 D'Alelio, Edward H. Managing Director
- -----------------------------------------------------------------------------------
18 Daly, Kenneth L. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
19 DeTore, John A. Managing Director Managing Director of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
20 Durgarian, Karnig H. Managing Director Director and Managing
Director of Putnam
Fiduciary Trust Company
- -----------------------------------------------------------------------------------
21 Esteves, Irene M. Managing Director Director of Putnam
and Chief Financial Fiduciary Trust
Officer Company
- -----------------------------------------------------------------------------------
22 Gillis, Roland Managing Director
- -----------------------------------------------------------------------------------
23 Haslett, Thomas R. Managing Director
- -----------------------------------------------------------------------------------
24 Holding, Pamela Managing Director
- -----------------------------------------------------------------------------------
25 Hurley, William J. Managing Director Managing Director and CFO
of Putnam Mutual Funds
Corp.
- -----------------------------------------------------------------------------------
26 Jacobs, Jerome J. Managing Director
- -----------------------------------------------------------------------------------
27 Joseph, Joseph P. Managing Director
- -----------------------------------------------------------------------------------
28 Kamshad, Omid Managing Director
- -----------------------------------------------------------------------------------
29 Kanwal, Amrit Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
30 King, David L. Managing Director
- -----------------------------------------------------------------------------------
31 Kohli, D. William Managing Director
- -----------------------------------------------------------------------------------
32 Kreisel, Anthony I. Managing Director
- -----------------------------------------------------------------------------------
33 Kuenstner, Deborah F. Managing Director
- -----------------------------------------------------------------------------------
34 Landes, William J. Managing Director
- -----------------------------------------------------------------------------------
35 Leibovitch, Richard G. Managing Director
- -----------------------------------------------------------------------------------
36 Leichter, Jennifer E. Managing Director
- -----------------------------------------------------------------------------------
37 Lohr, Mark G. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
38 Maloney, Kevin J. Managing Director
- -----------------------------------------------------------------------------------
39 Martens, Erwin W. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
40 Martino, Michael Managing Director Managing Director of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
41 Maxwell, Scott M. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
42 McMullen, Carol C. Managing Director
- -----------------------------------------------------------------------------------
43 Memani, Krisha K. Managing Director
- -----------------------------------------------------------------------------------
44 Miller, Daniel L. Managing Director
- -----------------------------------------------------------------------------------
45 Miller, Jeffrey M. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
46 Morgan Jr., John J. Managing Director Managing Director of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
47 Morgan, Kelly A. Managing Director
- -----------------------------------------------------------------------------------
48 Morris, Dick Managing Director
- -----------------------------------------------------------------------------------
49 Murphy, Jennifer P. Managing Director
- -----------------------------------------------------------------------------------
50 Nagashima, Tohio Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
51 Peacher, Stephen C. Managing Director
- -----------------------------------------------------------------------------------
52 Peters, Jeffrey F. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
53 Pollard, Mark D. Managing Director
- -----------------------------------------------------------------------------------
54 Porter, Charles E. Managing Director
- -----------------------------------------------------------------------------------
55 Price, Quintin I. Managing Director
- -----------------------------------------------------------------------------------
56 Reilly, Thomas V. Managing Director
- -----------------------------------------------------------------------------------
57 Schultz, Mitchell D. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
58 Scott, Justin M. Managing Director Managing Director of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
59 Shadek Jr., Edward T. Managing Director
- -----------------------------------------------------------------------------------
60 Starr, Loren Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
61 Swift, Robert Managing Director
- -----------------------------------------------------------------------------------
62 Talanian, John C. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
63 Tibbetts, Richard B. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
64 Waldman, David L. Managing Director
- -----------------------------------------------------------------------------------
65 Warren, Paul C. Managing Director
- -----------------------------------------------------------------------------------
66 Wetlaufer, Eric Managing Director
- -----------------------------------------------------------------------------------
67 Woolverton, William H. Managing Director Managing Director of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
68 Allansmith, Lauren L. Senior Vice President
- -----------------------------------------------------------------------------------
69 Arends, Michael K. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
70 Asher, Steven E. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
71 Atkin, Michael J. Senior Vice President
- -----------------------------------------------------------------------------------
72 Augustine, Jeffrey B. Senior Vice President
- -----------------------------------------------------------------------------------
73 Bakshi, Manjit S. Senior Vice President
- -----------------------------------------------------------------------------------
74 Bamford, Dolores Snyder Senior Vice President
- -----------------------------------------------------------------------------------
75 Bent, John J. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
76 Block, Richard L. Senior Vice President
- -----------------------------------------------------------------------------------
77 Bloemker, Rob A. Senior Vice President
- -----------------------------------------------------------------------------------
78 Boselli, John A. Senior Vice President
- -----------------------------------------------------------------------------------
79 Bousa, Edward P. Senior Vice President
- -----------------------------------------------------------------------------------
80 Bradford Jr., Linwoood E. Senior Vice Presidet Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
81 Burke, Andrea Senior Vice President
- -----------------------------------------------------------------------------------
82 Burns, Cheryl A. Senior Vice President
- -----------------------------------------------------------------------------------
83 Byrne, Joshua L. Senior Vice President
- -----------------------------------------------------------------------------------
84 Callahan, Ellen S. Senior Vice President
- -----------------------------------------------------------------------------------
85 Carlson, David G. Senior Vice President
- -----------------------------------------------------------------------------------
86 Chase, Mary Claire Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
87 Chrostowski, Louis F. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
88 Crane, George H. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
89 Curran, Peter J. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
90 Dalferro, John R. Senior Vice President
- -----------------------------------------------------------------------------------
91 Derbyshire, Ralph C. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
92 Dexter, Stephen P. Senior Vice President
- -----------------------------------------------------------------------------------
93 Divney, Kevin M. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
94 Eigerman, Nathan W. Senior Vice President
- -----------------------------------------------------------------------------------
95 Elavia, Tony H. Senior Vice President
- -----------------------------------------------------------------------------------
96 England, Richard B. Senior Vice President
- -----------------------------------------------------------------------------------
97 Epke, Laura L. Senior Vice President
- -----------------------------------------------------------------------------------
98 Farrell, Deborah S. Senior Vice President
- -----------------------------------------------------------------------------------
99 Flaherty, Patricia C. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
100 Fleisher, Peter M. Senior Vice President
- -----------------------------------------------------------------------------------
101 Fontana, Forrest N. Senior Vice President
- -----------------------------------------------------------------------------------
102 Francis, Jonathan H. Senior Vice President
- -----------------------------------------------------------------------------------
103 Frost, Karen T. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
104 Frucci, Richard M. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
105 Gorman, Stephen A. Senior Vice President
- -----------------------------------------------------------------------------------
106 Graham, Andrew Senior Vice President
- -----------------------------------------------------------------------------------
107 Grant, Peter J. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
108 Graviere, Patrice Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
109 Grim, Daniel J. Senior Vice President
- -----------------------------------------------------------------------------------
110 Haagensen, Paul E. Senior Vice President
- -----------------------------------------------------------------------------------
111 Hadas, Edward Senior Vice President
- -----------------------------------------------------------------------------------
112 Hadden, Peter J. Senior Vice President
- -----------------------------------------------------------------------------------
113 Halperin, Matthew C. Senior Vice President
- -----------------------------------------------------------------------------------
114 Hamlin, David E. Senior Vice President
- -----------------------------------------------------------------------------------
115 Harring, Linda Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
116 Hart, Nigel P. Senior Vice President
- -----------------------------------------------------------------------------------
117 Healey, Deborah R. Senior Vice President
- -----------------------------------------------------------------------------------
118 Horwitz, Jonathan S. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
119 Hotchkiss, Michael F. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
120 Kaufman, Jeffrey Senior Vice President
- -----------------------------------------------------------------------------------
121 Kay, Karen R. Senior Vice President Clerk, Director and Senior
Vice President of Putnam
Fiduciary Trust Company
- -----------------------------------------------------------------------------------
122 Kirson, Steven L. Senior Vice President
- -----------------------------------------------------------------------------------
123 Knight, Jeffrey L. Senior Vice President
- -----------------------------------------------------------------------------------
124 Koontz, Jill A. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
125 Korn, Karen R. Senior Vice President
- -----------------------------------------------------------------------------------
126 Kurey, Thomas J. Senior Vice President
- -----------------------------------------------------------------------------------
127 Lannum III, Coleman N. Senior Vice President
- -----------------------------------------------------------------------------------
128 Lindsey, Jeffrey R. Senior Vice President
- -----------------------------------------------------------------------------------
129 Lode, Geirulv Senior Vice President
- -----------------------------------------------------------------------------------
130 Lomba, Rufino R. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
131 MacElwee, Jones, Senior Vice President
Elizabeth M.
- -----------------------------------------------------------------------------------
132 Madore, Robert A. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
133 Malloy, Julie M. Senior Vice President
- -----------------------------------------------------------------------------------
134 Manuel Jr., Richard D. Senior Vice President
- -----------------------------------------------------------------------------------
135 Marrkand, Paul E. Senior Vice President
- -----------------------------------------------------------------------------------
136 Marshall, William L. Senior Vice President
- -----------------------------------------------------------------------------------
137 Matteis, Andrew S. Senior Vice President
- -----------------------------------------------------------------------------------
138 McDonald, Richard E. Senior Vice President
- -----------------------------------------------------------------------------------
139 Meehan, Thalia Senior Vice President
- -----------------------------------------------------------------------------------
140 Mehta, Sandeep Senior Vice President
- -----------------------------------------------------------------------------------
141 Miller, William H. Senior Vice President
- -----------------------------------------------------------------------------------
142 Mockard, Jeanne L. Senior Vice President
- -----------------------------------------------------------------------------------
143 Mufson, Michael J. Senior Vice President
- -----------------------------------------------------------------------------------
144 Mullen, Donald E. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
145 Mullin, Hugh H. Senior Vice President
- -----------------------------------------------------------------------------------
146 Murphy, Kevin F. Senior Vice President
- -----------------------------------------------------------------------------------
147 Netols, Jeffrey W. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
148 Oler, Stephen S. Senior Vice President
- -----------------------------------------------------------------------------------
149 Paine, Robert M. Senior Vice President
- -----------------------------------------------------------------------------------
150 Parker, Margery C. Senior Vice President
- -----------------------------------------------------------------------------------
151 Parr, Cynthia O. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
152 Perry, William Senior Vice President
- -----------------------------------------------------------------------------------
153 Peters, Carmel Senior Vice President
- -----------------------------------------------------------------------------------
154 Petralia, Randolph S. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
155 Plapinger, Keith Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
156 Pohl, Charles G. Senior Vice President
- -----------------------------------------------------------------------------------
157 Prusko, James M. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
158 Puddle, David G. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
159 Quistberg, Paul T. Senior Vice President
- -----------------------------------------------------------------------------------
160 Rogers, Kevin J. Senior Vice President
- -----------------------------------------------------------------------------------
161 Ruys de Perez, Charles A. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
162 Sai, Yumiko Senior Vice President
- -----------------------------------------------------------------------------------
163 Santos, David J. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
164 Santosus, Anthony C. Senior Vice President
- -----------------------------------------------------------------------------------
165 Schwister, Jay E. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
166 Scordato, Christine A. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
167 Selden, Denise D. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
168 Sievert, Jean I. Senior Vice President
- -----------------------------------------------------------------------------------
169 Simon, Sheldon N. Senior Vice President
- -----------------------------------------------------------------------------------
170 Simozar, Saied Senior Vice President
- -----------------------------------------------------------------------------------
171 Smith Jr., Leo J. Senior Vice President
- -----------------------------------------------------------------------------------
172 Smith, Margaret D. Senior Vice President
- -----------------------------------------------------------------------------------
173 Spatz, Erin J. Senior Vice President
- -----------------------------------------------------------------------------------
174 Spiers, John Graham Senior Vice President
- -----------------------------------------------------------------------------------
175 Stack, Michael P. Senior Vice President
- -----------------------------------------------------------------------------------
176 Stairs, George W. Senior Vice President
- -----------------------------------------------------------------------------------
177 Strumpf, Casey Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
178 Sugimoto, Toshifumi Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
179 Sullivan, Roger R. Senior Vice President
- -----------------------------------------------------------------------------------
180 Sullivan, William J. Senior Vice President
- -----------------------------------------------------------------------------------
181 Suzuki, Toshimi Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
182 Svensson, Lisa H. Senior Vice President
- -----------------------------------------------------------------------------------
183 Swanberg, Charles H. Senior Vice President
- -----------------------------------------------------------------------------------
184 Thomsen, Rosemary H. Senior Vice President Senior Vice President of
Putnam Fiduciary Trust
Company
- -----------------------------------------------------------------------------------
185 Troped Blacker, Bonnie L. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
186 Verani, John R. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
187 Walsh, Francis P. Senior Vice President
- -----------------------------------------------------------------------------------
188 Weinstein, Michael R. Senior Vice President
- -----------------------------------------------------------------------------------
189 Weiss, Manuel Senior Vice President
- -----------------------------------------------------------------------------------
190 Whalen, Edward F. Senior Vice President Senior Vice President of
Putnam Mutual Funds Corp.
- -----------------------------------------------------------------------------------
191 Wyke, Richard P. Senior Vice President
- -----------------------------------------------------------------------------------
192 Yogg, Michael R. Senior Vice President
- -----------------------------------------------------------------------------------
</TABLE>
(I) Summary of Business Lines and Business Operation
Investment Management Company is engaged in the business of providing
investment management and investment advisory services to mutual funds.
As of the end of January 2000, Investment Management Company managed,
advised, and/or administered the following 114 funds and fund portfolios
(having an aggregate net asset value of approximately $284 billion):
<TABLE>
<CAPTION>
"(As of January 31, 2000)"
- -------------------------------------------------------------------------------------------------------------
Net Asset
Month/Date/ Total Net Value per
Year Principal Asset Value share
Name Established Characteristics ($ million) ($)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 The George Putnam Fund of Boston; A 11/5/37 Open/Equity 3,425.61 15.91
2 The George Putnam Fund of Boston; B 4/24/92 Open/Equity 1,399.21 15.76
3 The George Putnam Fund of Boston; M 12/1/94 Open/Equity 255.96 15.77
4 The George Putnam Fund of Boston; Y 1/1/94 Open/Equity 735.21 15.95
5 Putnam Arizona Tax Exempt Income Fund; A 1/30/91 Open/Bond 91.97 8.49
6 Putnam Arizona Tax Exempt Income Fund; B 7/15/93 Open/Bond 29.60 8.48
7 Putnam Arizona Tax Exempt Income Fund; M 7/3/95 Open/Bond 0.85 8.50
8 Putnam American Government Income Fund; A 3/1/85 Open/Bond 1,449.27 8.15
9 Putnam American Government Income Fund; B 5/20/94 Open/Bond 134.79 8.11
10 Putnam American Government Income Fund; M 2/14/95 Open/Bond 6.91 8.17
11 Putnam Balanced Fund 10/2/95 Open/Balanced 5.03 13.03
12 Putnam Growth Opportunities; A 10/2/95 Open/Equity 2,386.87 28.37
13 Putnam Growth Opportunities; B 8/1/97 Open/Equity 2,741.63 27.87
14 Putnam Growth Opportunities; C 2/1/99 Open/Equity 183.59 28.22
15 Putnam Growth Opportunities; M 8/1/97 Open/Equity 142.58 28.03
16 Putnam Asia Pacific Growth Fund; A 2/20/91 Open/Equity 333.13 17.06
17 Putnam Asia Pacific Growth Fund; B 6/1/93 Open/Equity 296.79 16.72
18 Putnam Asia Pacific Growth Fund; M 2/1/95 Open/Equity 20.36 16.90
19 Putnam Asset Allocation: Balanced
Portfolio; A 2/7/94 Open/Balanced 1,019.75 12.51
20 Putnam Asset Allocation: Balanced
Portfolio; B 2/11/94 Open/Balanced 579.30 12.43
21 Putnam Asset Allocation: Balanced
Portfolio; C 9/1/94 Open/Balanced 133.65 12.36
22 Putnam Asset Allocation: Balanced
Portfolio; M 2/6/95 Open/Balanced 71.34 12.48
23 Putnam Asset Allocation: Balanced
Portfolio; Y 7/14/94 Open/Balanced 494.14 12.52
24 Putnam Asset Allocation : Conservative
Portfolio; A 2/7/94 Open/Balanced 396.39 10.38
25 Putnam Asset Allocation : Conservative
Portfolio; B 2/18/94 Open/Balanced 188.34 10.33
26 Putnam Asset Allocation : Conservative
Portfolio; C 9/1/94 Open/Balanced 47.56 10.31
27 Putnam Asset Allocation : Conservative
Portfolio; M 2/7/95 Open/Balanced 26.88 10.34
28 Putnam Asset Allocation : Conservative
Portfolio; Y 7/14/94 Open/Balanced 113.96 10.40
29 Putnam Asset Allocation: Growth
Portfolio; A 2/8/94 Open/Balanced 781.96 14.61
30 Putnam Asset Allocation: Growth
Portfolio; B 2/16/94 Open/Balanced 524.95 14.41
31 Putnam Asset Allocation: Growth
Portfolio; C 9/1/94 Open/Balanced 126.63 14.28
32 Putnam Asset Allocation: Growth
Portfolio; M 2/1/95 Open/Balanced 67.69 14.43
33 Putnam Asset Allocation: Growth
Portfolio; Y 7/14/94 Open/Balanced 464.06 14.69
34 Putnam Balanced Retirement Fund; A 4/19/85 Open/Balanced 582.67 9.64
35 Putnam Balanced Retirement Fund; B 2/1/94 Open/Balanced 172.55 9.54
36 Putnam Balanced Retirement Fund; M 3/17/95 Open/Balanced 13.96 9.58
37 Putnam Balanced Retirement Fund; Y 1/4/99 Open/Balanced 3.07 9.64
38 Putnam California Tax Exempt Income
Fund; A 4/29/83 Open/Bond 2,531.76 7.95
39 Putnam California Tax Exempt Income
Fund; B 1/4/93 Open/Bond 556.40 7.94
40 Putnam California Tax Exempt Income
Fund; M 2/14/95 Open/Bond 13.65 7.94
41 Putnam California Tax Exempt Money
Market Fund 10/26/87 Open/Bond 27.90 1.00
42 Putnam Capital Appreciation Fund; A 8/5/93 Open/Equity 1,107.15 24.77
43 Putnam Capital Appreciation Fund; B 11/2/94 Open/Equity 1,178.16 24.45
44 Putnam Capital Appreciation Fund; M 1/22/96 Open/Equity 77.26 24.51
45 Putnam Capital Opportunities Fund; A 8/5/93 Open/Equity 79.70 9.66
46 Putnam Capital Opportunities Fund; B 11/2/94 Open/Equity 85.46 9.57
47 Putnam Capital Opportunities Fund; M 1/22/96 Open/Equity 6.13 9.59
48 Putnam Convertible Income-Growth
Trust; A 6/29/72 Open/Balanced 1,013.96 19.55
49 Putnam Convertible Income-Growth
Trust; B 7/15/93 Open/Balanced 278.48 19.29
50 Putnam Convertible Income-Growth
Trust; M 3/13/95 Open/Balanced 16.61 19.42
51 Putnam Convertible Income-Growth
Trust; Y 12/30/98 Open/Balanced 64.07 19.56
52 Putnam Global Equity Trust; A 7/1/94 Open/Equity 548.06 17.48
53 Putnam Global Equity Trust; B 7/2/94 Open/Equity 631.90 17.14
54 Putnam Global Equity Trust; C 2/1/99 Open/Equity 19.65 17.39
55 Putnam Global Equity Trust; M 7/3/95 Open/Equity 52.60 17.26
56 Putnam Diversified Income Trust; A 10/3/88 Open/Bond 1,375.38 10.60
57 Putnam Diversified Income Trust; B 3/1/93 Open/Bond 1,570.89 10.55
58 Putnam Diversified Income Trust; C 2/1/99 Open/Bond 8.06 10.57
59 Putnam Diversified Income Trust; M 12/1/94 Open/Bond 1,055.37 10.55
60 Putnam Diversified Income Trust ; Y 7/11/96 Open/Bond 13.89 10.61
61 Putnam Strategic Income Fund; A 2/19/95 Open/Bond 78.05 7.15
62 Putnam Strategic Income Fund; B 2/19/96 Open/Bond 121.82 7.15
63 Putnam Strategic Income Fund; C 2/1/99 Open/Bond 5.43 7.17
64 Putnam Strategic Income Fund; M 2/19/96 Open/Bond 8.19 7.14
65 Putnam Emerging Markets Fund; A 10/2/95 Open/Equity 90.53 12.37
66 Putnam Emerging Markets Fund; B 10/2/95 Open/Equity 62.48 12.26
67 Putnam Emerging Markets Fund; M 10/2/95 Open/Equity 5.35 12.30
68 Putnam Equity Income Fund; A 6/15/77 Open/Balanced 1,061.00 13.48
69 Putnam Equity Income Fund; B 9/13/93 Open/Balanced 547.72 13.38
70 Putnam Equity Income Fund; C 2/1/99 Open/Balanced 12.45 13.44
71 Putnam Equity Income Fund; M 12/2/94 Open/Balanced 54.87 13.39
72 Putnam Europe Growth Fund; A 9/7/90 Open/Equity 959.94 25.19
73 Putnam Europe Growth Fund; B 2/1/94 Open/Equity 866.59 24.58
Putnam Europe Growth Fund; C 7/26/99 Open/Equity
74 Putnam Europe Growth Fund; M 12/1/94 Open/Equity 79.17 25.04
75 Putnam Florida Tax Exempt Income
Fund; A 8/24/90 Open/Bond 202.29 8.57
76 Putnam Florida Tax Exempt Income
Fund; B 1/4/93 Open/Bond 73.66 8.57
77 Putnam Florida Tax Exempt Income
Fund; M 5/1/95 Open/Bond 0.64 8.57
78 Putnam Global Growth and Income
Fund; A 1/3/95 Open/Equity 40.60 13.00
79 Putnam Global Growth and Income
Fund; B 1/3/95 Open/Equity 31.73 12.87
80 Putnam Global Growth and Income
Fund; M 1/3/95 Open/Equity 2.98 12.92
81 Putnam Global Governmental Income
Trust; A 6/1/87 Open/Bond 113.92 11.32
82 Putnam Global Governmental Income
Trust; B 2/1/94 Open/Bond 26.90 11.29
83 Putnam Global Governmental Income
Trust; C 7/26/99 Open/Bond 0.06 11.31
84 Putnam Global Governmental Income
Trust; M 3/17/95 Open/Bond 179.71 11.27
85 Putnam Global Growth Fund; A 9/1/67 Open/Equity 5,675.61 17.12
86 Putnam Global Growth Fund; B 4/27/92 Open/Equity 2,404.81 16.28
87 Putnam Global Growth Fund; C 2/1/99 Open/Equity 36.94 16.98
88 Putnam Global Growth Fund; M 3/1/95 Open/Equity 98.15 16.89
89 Putnam Global Growth Fund; Y 6/15/94 Open/Equity 278.21 17.45
90 Putnam Growth and Income Fund II; A 1/5/95 Open/Balanced 1,122.10 11.91
91 Putnam Growth and Income Fund II; B 1/5/95 Open/Balanced 1,226.83 11.80
92 Putnam Growth and Income Fund II; C 2/1/99 Open/Balanced 32.40 11.88
93 Putnam Growth and Income Fund II; M 1/5/95 Open/Balanced 143.97 11.84
94 The Putnam Fund for Growth and
Income; A 11/6/57 Open/Balanced 19,958.16 18.13
95 The Putnam Fund for Growth and
Income; B 4/27/92 Open/Balanced 12,267.48 17.87
96 The Putnam Fund for Growth and
Income; M 5/1/95 Open/Balanced 418.76 18.00
97 The Putnam Fund for Growth and
Income; Y 6/15/94 Open/Balanced 1,474.55 18.16
98 Putnam High Yield Advantage Fund; A 3/25/86 Open/Bond 900.45 7.74
99 Putnam High Yield Advantage Fund; B 5/16/94 Open/Bond 744.99 7.71
100 Putnam High Yield Advantage Fund; M 12/1/94 Open/Bond 785.65 7.73
101 Putnam High Yield Advantage Fund; Y 12/30/98 Open/Bond 8.94 7.75
102 Putnam High Yield Trust; A 2/14/78 Open/Bond 2,356.57 10.27
103 Putnam High Yield Trust; B 3/1/93 Open/Bond 518.29 10.23
104 Putnam High Yield Trust; M 7/3/95 Open/Bond 13.04 10.27
105 Putnam High Yield Trust; Y 12/30/98 Open/Bond 18.19 10.27
106 Putnam High Yield Fund II; A 12/31/97 Open/Bond 569.79 7.31
107 Putnam High Yield Fund II; B 12/31/97 Open/Bond 817.92 7.32
108 Putnam High Yield Fund II; M 12/31/97 Open/Bond 37.69 7.32
109 Putnam Health Sciences Trust; A 5/28/82 Open/Equity 3,041.19 65.51
110 Putnam Health Sciences Trust; B 3/1/93 Open/Equity 2,197.69 62.51
111 Putnam Health Sciences Trust; M 7/3/95 Open/Equity 92.50 64.22
112 Putnam Income Fund; A 11/1/54 Open/Bond 1,040.17 6.32
113 Putnam Income Fund; B 3/1/93 Open/Bond 431.33 6.29
114 Putnam Income Fund; C 7/26/99 Open/Bond 247.65 6.31
115 Putnam Income Fund; M 12/14/94 Open/Bond 1,511.58 6.28
116 Putnam Income Fund; Y 2/12/94 Open/Bond 243.74 6.34
117 Putnam Intermediate U.S. Government
Income Fund; A 2/16/93 Open/Bond 230.87 4.73
118 Putnam Intermediate U.S. Government
Income Fund; B 2/16/93 Open/Bond 120.67 4.74
119 Putnam Intermediate U.S. Government
Income Fund; M 4/3/95 Open/Bond 10.52 4.74
120 Putnam Intermediate U.S. Government
Income Fund; Y 10/1/97 Open/Bond 110.52 4.72
121 Putnam International Fund 12/28/95 Open/Equity 6.05 12.74
122 Putnam International Growth and
Income Fund; A 8/1/96 Open/Equity 508.93 11.56
123 Putnam International Growth and
Income Fund; B 8/1/96 Open/Equity 459.67 11.44
124 Putnam International Growth and
Income Fund; C 2/1/99 Open/Equity 17.28 11.52
125 Putnam International Growth and
Income Fund; M 8/1/96 Open/Equity 38.35 11.52
126 Putnam International New Opportunities
Fund; A 1/3/95 Open/Equity 1,525.99 23.73
127 Putnam International New Opportunities
Fund; B 7/21/95 Open/Equity 1,648.98 23.00
128 Putnam International New Opportunities
Fund; C 2/1/99 Open/Equity 30.65 23.57
129 Putnam International New Opportunities
Fund; M 7/21/95 Open/Equity 130.60 23.29
130 Putnam International Voyager Fund; A 12/28/95 Open/Equity 650.63 26.48
131 Putnam International Voyager Fund; B 10/30/96 Open/Equity 480.29 26.14
132 Putnam International Voyager Fund; M 10/30/96 Open/Equity 48.25 26.29
133 Putnam Investors Fund; A 12/1/25 Open/Equity 7,619.20 17.97
134 Putnam Investors Fund; B 3/1/93 Open/Equity 4,087.44 17.09
135 Putnam Investors Fund; M 12/2/94 Open/Equity 255.02 17.57
136 Putnam Investors Fund; Y 1/7/97 Open/Equity 1,148.52 18.07
137 Putnam Mid-Cap Value Fund 11/1/99 Open/Balanced 3.04 8.38
138 Putnam Massachusetts Tax Exempt
Income Fund; A 10/23/89 Open/Bond 260.70 8.69
139 Putnam Massachusetts Tax Exempt
Income Fund; B 7/15/93 Open/Bond 112.24 8.68
140 Putnam Massachusetts Tax Exempt
Income Fund; M 5/12/95 Open/Bond 4.95 8.68
141 Putnam Michigan Tax Exempt Income
Fund; A 10/23/89 Open/Bond 121.68 8.33
142 Putnam Michigan Tax Exempt Income
Fund; B 7/15/93 Open/Bond 40.06 8.32
143 Putnam Michigan Tax Exempt Income
Fund; M 4/17/95 Open/Bond 1.91 8.33
144 Putnam Minnesota Tax Exempt Income
Fund; A 10/23/89 Open/Bond 87.93 8.29
145 Putnam Minnesota Tax Exempt Income
Fund; B 7/15/93 Open/Bond 46.43 8.27
146 Putnam Minnesota Tax Exempt Income
Fund; M 4/3/95 Open/Bond 2.18 8.29
147 Putnam Money Market Fund; A 10/1/76 Open/Bond 3,760.34 1.00
148 Putnam Money Market Fund; B 4/27/92 Open/Bond 890.35 1.00
149 Putnam Money Market Fund; C 2/1/99 Open/Bond 14.83 1.00
150 Putnam Money Market Fund; M 12/8/94 Open/Bond 126.43 1.00
151 Putnam Municipal Income Fund; A 5/22/89 Open/Bond 710.07 8.39
152 Putnam Municipal Income Fund; B 1/4/93 Open/Bond 426.57 8.38
153 Putnam Municipal Income Fund; C 2/1/99 Open/Bond 8.55 8.38
154 Putnam Municipal Income Fund; M 12/1/94 Open/Bond 13.33 8.38
155 Putnam New Jersey Tax Exempt
Income Fund; A 2/20/90 Open/Bond 181.27 8.44
156 Putnam New Jersey Tax Exempt
Income Fund; B 1/4/93 Open/Bond 87.78 8.43
157 Putnam New Jersey Tax Exempt
Income Fund; M 5/1/95 Open/Bond 0.89 8.44
158 Putnam New York Tax Exempt
Income Fund; A 9/2/83 Open/Bond 1,305.37 8.12
159 Putnam New York Tax Exempt
Income Fund; B 1/4/93 Open/Bond 180.38 8.11
160 Putnam New York Tax Exempt
Income Fund; M 4/10/95 Open/Bond 1.73 8.13
161 Putnam New York Tax Exempt
Money Market Fund 10/26/87 Open/Bond 38.95 1.00
162 Putnam New York Tax Exempt
Opportunities Fund; A 11/7/90 Open/Bond 133.36 8.25
163 Putnam New York Tax Exempt
Opportunities Fund; B 2/1/94 Open/Bond 60.33 8.25
164 Putnam New York Tax Exempt
Opportunities Fund; M 2/10/95 Open/Bond 2.19 8.24
165 Putnam Global Natural Resources
Fund; A 7/24/80 Open/Equity 176.87 18.62
166 Putnam Global Natural Resources
Fund; B 2/1/94 Open/Equity 129.01 18.35
167 Putnam Global Natural Resources
Fund; M 7/3/95 Open/Equity 6.06 18.53
168 Putnam New Century Growth Fund; A 1/21/00 Open/Equity 105.75 25.35
169 Putnam New Century Growth Fund; B 1/21/00 Open/Equity 55.99 25.35
170 Putnam New Century Growth Fund; C 1/21/00 Open/Equity 10.17 25.35
171 Putnam New Century Growth Fund; M 1/21/00 Open/Equity 3.67 25.35
172 Putnam New Opportunities Fund; A 8/31/90 Open/Equity 18,256.93 89.00
173 Putnam New Opportunities Fund; B 3/1/93 Open/Equity 11,905.15 84.11
174 Putnam New Opportunities Fund; M 12/1/94 Open/Equity 710.99 86.44
175 Putnam New Opportunities Fund; Y 7/19/94 Open/Equity 1,718.21 90.45
176 Putnam New Value Fund; A 1/3/96 Open/Equity 318.24 11.39
177 Putnam New Value Fund; B 2/26/96 Open/Equity 315.70 11.30
178 Putnam New Value Fund; M 2/26/96 Open/Equity 29.36 11.35
179 Putnam Ohio Tax Exempt Income
Fund; A 10/23/89 Open/Bond 158.82 8.26
180 Putnam Ohio Tax Exempt Income
Fund; B 7/15/93 Open/Bond 50.21 8.25
181 Putnam Ohio Tax Exempt Income
Fund; M 4/3/95 Open/Bond 1.70 8.26
182 Putnam OTC & Emerging Growth
Fund; A 11/1/82 Open/Equity 6,283.78 37.74
183 Putnam OTC & Emerging Growth
Fund; B 7/15/93 Open/Equity 2,846.68 35.54
184 Putnam OTC & Emerging Growth Fund; M 12/2/94 Open/Equity 688.10 36.58
185 Putnam OTC & Emerging Growth Fund; Y 7/12/96 Open/Equity 534.03 38.16
186 Putnam International Growth Fund; A 2/28/91 Open/Equity 5,163.92 28.27
187 Putnam International Growth Fund; B 6/1/94 Open/Equity 2,966.39 27.70
188 Putnam International Growth Fund; M 12/1/94 Open/Equity 322.98 28.04
189 Putnam International Growth Fund; Y 7/12/96 Open/Equity 713.65 28.38
190 Putnam Pennsylvania Tax Exempt
Income Fund; A 7/21/89 Open/Bond 148.37 8.31
191 Putnam Pennsylvania Tax Exempt
Income Fund; B 7/15/93 Open/Bond 80.82 8.30
192 Putnam Pennsylvania Tax Exempt
Income Fund; M 7/3/95 Open/Bond 2.54 8.32
193 Putnam Preferred Income Fund; A 1/4/84 Open/Bond 98.17 8.21
194 Putnam Preferred Income Fund; M 4/20/95 Open/Bond 10.13 8.19
195 Putnam S & P 500 Fund 1/4/94 Open/Equity 2,721.69 33.18
196 Putnam Research Fund; A 10/2/95 Open/Equity 682.63 17.51
197 Putnam Research Fund; B 6/15/98 Open/Equity 730.81 17.28
198 Putnam Research Fund; C 2/1/99 Open/Equity 64.62 17.39
199 Putnam Research Fund; M 6/15/98 Open/Equity 55.00 17.36
200 Putnam Small Cap Value Fund; A 4/12/99 Open/Equity 74.11 9.46
201 Putnam Small Cap Value Fund; B 5/3/99 Open/Equity 49.70 9.42
202 Putnam Tax Smart Equity Fund: A 7/1/99 Open/Equity 94.84 10.06
203 Putnam Tax Smart Equity Fund; B 10/1/99 Open/Equity 101.75 10.04
204 Putnam Tax Smart Equity Fund; C 10/1/99 Open/Equity 26.32 10.04
205 Putnam Tax - Free Income Trust
Tax - Free High Yield Fund; A 9/20/93 Open/Bond 1,127.70 13.23
206 Putnam Tax - Free Income Trust
Tax - Free High Yield Fund B 9/9/85 Open/Bond 521.39 13.25
207 Putnam Tax - Free Income Trust
Tax - Free High Yield Fund C 2/1/99 Open/Bond 3.12 13.23
208 Putnam Tax - Free Income Trust
Tax - Free High Yield Fund M 12/29/94 Open/Bond 19.46 13.24
209 Putnam Tax - Free Income Trust
Tax - Free Insured Fund; A 9/30/93 Open/Bond 235.97 13.93
210 Putnam Tax - Free Income Trust
Tax - Free Insured Fund; B 9/9/85 Open/Bond 272.53 13.94
211 Putnam Tax - Free Income Trust
Tax - Free Insured Fund; M 6/1/95 Open/Bond 1.82 13.96
212 Putnam Tax Exempt Income Fund; A 12/31/76 Open/Bond 1,594.92 8.27
213 Putnam Tax Exempt Income Fund; B 1/4/93 Open/Bond 200.75 8.26
214 Putnam Tax Exempt Income Fund; M 2/16/95 Open/Bond 9.27 8.29
215 Putnam Tax Exempt Money Market Fund 10/26/87 Open/Bond 100.58 1.00
216 Putnam U.S. Government Income Trust; A 2/8/84 Open/Bond 1,865.04 12.17
217 Putnam U.S. Government Income Trust; B 4/27/92 Open/Bond 862.48 12.11
218 Putnam U.S. Government Income Trust; C 7/26/99 Open/Bond 4.42 12.16
219 Putnam U.S. Government Income Trust; M 2/6/95 Open/Bond 114.64 12.15
220 Putnam U.S. Government Income Trust; Y 4/11/94 Open/Bond 26.76 12.17
221 Putnam Utilities Growth and Income
Fund; A 11/19/90 Open/Balanced 1,000.33 12.86
222 Putnam Utilities Growth and Income
Fund; B 4/27/92 Open/Balanced 452.38 12.78
223 Putnam Utilities Growth and Income
Fund; M 3/1/95 Open/Balanced 12.93 12.83
224 Putnam Vista Fund; A 6/3/68 Open/Equity 5,265.79 17.09
225 Putnam Vista Fund; B 3/1/93 Open/Equity 2,384.66 15.93
226 Putnam Vista Fund; M 12/1/94 Open/Equity 203.85 16.51
227 Putnam Vista Fund; Y 3/28/95 Open/Equity 821.15 17.41
228 Putnam Voyager Fund II; A 4/14/93 Open/Equity 1,698.52 37.10
229 Putnam Voyager Fund II; B 10/2/95 Open/Equity 1,531.06 35.80
230 Putnam Voyager Fund II; C 2/1/99 Open/Equity 85.73 36.85
231 Putnam Voyager Fund II; M 10/2/95 Open/Equity 167.42 36.27
232 Putnam Voyager Fund; A 4/1/96 Open/Equity 24,067.30 30.02
233 Putnam Voyager Fund; B 4/27/92 Open/Equity 11,481.22 27.60
234 Putnam Voyager Fund; M 12/1/94 Open/Equity 555.07 29.08
235 Putnam Voyager Fund; Y 4/1/94 Open/Equity 3,902.45 30.65
236 Putnam VT Asia Pacific Growth
Fund; IA 5/1/95 Open/Equity 220.98 15.48
237 Putnam VT Asia Pacific Growth
Fund; IB 4/30/98 Open/Equity 7.57 15.44
238 Putnam VT Diversified Income
Fund; IA 9/15/93 Open/Bond 609.66 9.82
239 Putnam VT Diversified Income
Fund; IB 4/6/98 Open/Bond 26.05 9.80
240 Putnam VT Global Asset Allocation
Fund; IA 2/1/88 Open/Balanced 954.63 18.88
241 Putnam VT Global Asset Allocation
Fund; IB 4/30/98 Open/Balanced 7.13 18.88
242 Putnam VT George Putnam Fund; IA 4/30/98 Open/Equity 273.21 9.75
243 Putnam VT George Putnam Fund; IB 4/30/98 Open/Equity 41.72 9.75
244 Putnam VT Global Growth Fund; IA 5/1/90 Open/Equity 2,843.12 28.06
245 Putnam VT Global Growth Fund; IB 4/30/98 Open/Equity 31.68 27.99
246 Putnam VT Growth and Income Fund; IA 2/1/88 Open/Balanced 9,106.10 25.93
247 Putnam VT Growth and Income Fund; IB 4/6/98 Open/Balanced 180.93 25.87
248 Putnam VT Income Fund; IA 2/1/88 Open/Bond 906.24 12.48
249 Putnam VT Income Fund; IB 4/30/98 Open/Bond 19.61 12.47
250 Putnam VT High Yield Fund; IA 2/1/88 Open/Bond 947.01 11.11
251 Putnam VT High Yield Fund; IB 4/30/98 Open/Bond 19.83 11.10
252 Putnam VT Health and Sciences
Fund; IA 4/30/98 Open/Equity 243.92 11.22
253 Putnam VT Health and Sciences
Fund; IB 4/30/98 Open/Equity 24.32 11.21
254 Putnam VT International Growth
and Income; IA 1/1/97 Open/Balanced 371.48 14.50
255 Putnam VT International Growth
and Income; IB 4/6/98 Open/Balanced 11.92 14.47
256 Putnam VT International Growth
Fund; IA 1/1/97 Open/Equity 616.46 20.62
257 Putnam VT International Growth
Fund; IB 4/30/98 Open/Equity 44.31 20.59
258 Putnam VT International New
Opportunities Fund; IA 1/1/97 Open/Equity 335.94 22.27
259 Putnam VT International New
Opportunities Fund; IB 4/30/98 Open/Equity 43.82 22.23
260 Putnam VT Investors Fund; IA 4/30/98 Open/Equity 861.80 14.24
261 Putnam VT Investors Fund; IB 4/30/98 Open/Equity 111.94 14.21
262 Putnam VT Money Market Fund; IA 2/1/88 Open/Bond 738.30 1.00
263 Putnam VT Money Market Fund; IB 4/30/98 Open/Bond 46.47 1.00
264 Putnam VT New Opportunities Fund; IA 5/2/94 Open/Equity 6,374.58 42.61
265 Putnam VT New Opportunities Fund; IB 4/30/98 Open/Equity 73.97 42.50
266 Putnam VT New Value Fund; IA 1/2/97 Open/Equity 235.50 11.39
267 Putnam VT New Value Fund; IB 4/30/98 Open/Equity 10.21 11.37
268 Putnam VT OTC & Emerging Growth
Fund; IA 4/30/98 Open/Equity 254.60 23.19
269 Putnam VT OTC & Emerging Growth
Fund; IB 4/30/98 Open/Equity 30.64 23.16
270 Putnam VT Research; IA 10/1/98 Open/Equity 139.39 14.09
271 Putnam VT Research; IB 10/1/98 Open/Equity 29.07 14.07
272 Putnam VT Small Cap Value Fund; IA 4/30/99 Open/Equity 14.39 10.07
273 Putnam VT Small Cap Value Fund; IB 4/30/99 Open/Equity 7.34 10.05
274 Putnam VT Utilities Growth and
Income Fund; IA 5/1/92 Open/Balanced 950.96 17.37
275 Putnam VT Utilities Growth and
Income Fund; IB 4/30/98 Open/Balanced 13.17 17.34
276 Putnam VT Vista Fund; IA 1/2/97 Open/Equity 546.66 20.19
277 Putnam VT Vista Fund; IB 4/30/98 Open/Equity 46.83 20.16
278 Putnam VT Voyager Fund; IA 2/1/88 Open/Equity 8,902.18 64.33
279 Putnam VT Voyager Fund; IB 4/30/98 Open/Equity 175.69 64.19
280 Putnam California Investment
Grade Municipal Trust 11/27/92 Closed/Bond 64.38 13.97
281 Putnam Convertible Opportunity
and Income Trust 6/29/95 Closed/Bond 86.65 23.34
282 Putnam Dividend Income Fund 9/28/89 Closed/Bond 116.92 10.80
283 Putnam High Income Convertible
and Bond Fund 7/9/87 Closed/Bond 111.93 8.18
284 Putnam High Yield Municipal Trust 5/25/89 Closed/Bond 181.93 8.21
285 Putnam Investment Grade Municipal
Trust I 10/26/89 Closed/Bond 216.80 10.30
286 Putnam Investment Grade Municipal
Trust II 11/27/92 Closed/Bond 163.81 12.26
287 Putnam Investment Grade Municipal
Trust III 11/29/93 Closed/Bond 47.53 11.86
288 Putnam Managed High Yield Trust 6/25/93 Closed/Bond 87.24 11.62
289 Putnam Managed Municipal Income Trust 2/24/89 Closed/Bond 391.68 8.39
290 Putnam Master Income Trust 4/29/88 Closed/Bond 406.70 7.66
291 Putnam Master Intermediate Income Trust 4/29/88 Closed/Bond 744.69 7.44
292 Putnam Municipal Opportunities Trust 5/28/93 Closed/Bond 198.27 12.27
293 Putnam New York Investment Grade
Municipal Trust 11/27/92 Closed/Bond 36.08 12.67
294 Putnam Premier Income Trust 1995/2/29 Closed/Bond 1,036.66 7.35
295 Putnam Tax-Fee Health Care Fund 6/29/92 Closed/Bond 182.93 13.25
296 Putnam Asia Pacific Fund II 3/23/98 Open/Equity 4.10 14.04
297 Putnam Equity Fund 98 12/30/97 Open/Equity 21.02 24.82
298 Putnam Worldwide Equity Fund 5/6/98 Open/Equity 20.43 34.34
299 Putnam Growth Fund 5/1/98 Open/Equity 3.74 13.75
300 Putnam Latin America Fund 3/23/98 Open/Equity 2.55 8.35
301 Putnam US Core Fund 5/1/98 Open/Equity 4.62 11.60
302 Putnam Value Fund 5/1/98 Open/Balanced 2.13 8.12
</TABLE>
(J) Miscellaneous
1. Election and Removal of Directors
Directors of Investment Management Company are elected to office or removed
from office by vote of either stockholders or directors, in accordance with
Articles of Organization and By-Laws of Investment Management Company.
2. Election and Removal of Officers
Officers are elected by the Board of Directors. The Board of Directors may
remove any officer without cause.
3. Supervision by SEC of Changes in Directors and Certain Officers
Investment Management Company files certain reports with the SEC in accordance
with Sections 203 and 204 of the Investment Advisers Act of 1940, which
reports list and provide certain information relating to directors and
officers of Investment Management Company.
Under Section 9 (b) of the Investment Company Act of 1940 SEC may prohibit
the directors and officers from remaining in office, if SEC will judge that
such directors and officers have willfully violated any provision of the
federal securities law.
4. Amendment to the Articles of Organization, Transfer of Business and
Other Important Matters.
a. Articles of Organization of Investment Management Company may be
amended, under the General Corporation Law of The Commonwealth of
Massachusetts, by appropriate shareholders' vote.
b. Under the General Corporation Law of The Commonwealth of Massachusetts,
transfer of business requires a vote of 2/3 of the stockholders entitled to
vote thereon.
c. Investment Management Company has no direct subsidiaries.
5. Litigation, etc.
There are no known facts, such as legal proceedings, which are expected to
materially affect the Fund and/or Investment Management Company within the
six-month period preceding the filing of this Registration Statement.
III. OUTLINE OF THE OTHER RELATED COMPANIES
(A) Putnam Fiduciary Trust Company (the Transfer Agent, Shareholder Service
Agent and Custodian)
(1) Amount of Capital
U.S.$42,918,520 ([YEN] 46 billion) as of January 31, 2000
(2) Description of Business
Putnam Fiduciary Trust Company is a Massachusetts trust company and is a
wholly-owned subsidiary of Putnam Investments, Inc., parent of Putnam.
Putnam Fiduciary Trust Company has been providing paying agent and
shareholder service agent services to mutual funds, including the Fund,
since its inception and custody services since 1990.
(3) Outline of Business Relationship with the Fund
Putnam Fiduciary Trust Company provides transfer agent services,
shareholder services and custody services to the Fund.
(B) Putnam Mutual Funds Corp. (the Principal Underwriter)
(1) Amount of Capital
U.S.$124,721,023 ([YEN] 13.3 billion) as of January 31, 2000
(2) Description of Business
Putnam Mutual Funds Corp. is the Principal Underwriter of the shares of
Putnam Funds including the Fund.
(3) Outline of Business Relationship with the Fund
Putnam Mutual Funds Corp. engages in providing marketing services to the
Fund.
(C) Kokusai Securities Co., Ltd. (Distributor in Japan and Agent Company)
(1) Amount of Capital
[YEN] 64.2 billion as of the end of January 2000
(2) Description of Business
Kokusai Securities Co., Ltd. is a diversified securities company in Japan.
Also, it engages in handling the sales and redemption of the Fund Shares as
the Designated Securities Company for the investment trust funds of Kokusai
Securities Investment Trust Management Co., Ltd., and as the Underwriting
Company and the Agent Company for Fresh Korea Fund, Keystone Bond Fund II
'95, Keystone Bond Fund III '95, Keystone Global Trust-Keystone Bond Fund
IV '95, International Bond Index Fund, Fidelity Special Growth Fund, ACM
International Health Care Fund, European and Asian Fund, Putnam High Yield
Advantage Fund, ACM American Growth Fund, ACM Global Growth Trend
Portfolio, Evergreen Small Company Growth Fund, Asia Network Growth Fund,
Evergreen Global Opportunities Fund, Super Phoenix Fund, Super Phoenix Fund
II, Solomon Euro Bond Fund A/B and Putnam U.S. Government Income Trust, and
as the Underwriting Company for AGF Growth Equity Fund Limited, G.T.
Investment Fund, Sci Tech, Morgan Stanley Money Market Family.
(3) The Company acts as a Distributor in Japan and Agent Company for the
Fund in connection with the offering of shares in Japan.
(D) Capital Relationships
100% of the shares of Putnam Investment Management, Inc. are held by Putnam
Investments, Inc.
(E) Interlocking Directors and Auditors
Names and functions of officers of the Fund who also are officers of the
related companies are as follows:
<TABLE>
<CAPTION>
(as of January 31, 2000)
- -------------------------------------------------------------------------------------
Investment Transfer Agent and
Name of Officer Management Shareholder Service
or Trustee Fund Company Agent
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
George Putnam Chairman, Trustee Chairman and None
and President Director
- -------------------------------------------------------------------------------------
Charles E. Porter Executive Vice Managing Director None
President
- -------------------------------------------------------------------------------------
Patricia C. Flaherty Senior Vice President Senior Vice President None
- -------------------------------------------------------------------------------------
John D. Hughes Senior Vice President Senior Vice President None
and Treasurer
- -------------------------------------------------------------------------------------
Lawrence J. Lasser Trustee and President and CEO None
Vice President
- -------------------------------------------------------------------------------------
Gordon H. Silver Vice President Senior Vice President Director
- -------------------------------------------------------------------------------------
Ian C. Ferguson Vice President Senior Managing None
Director
- -------------------------------------------------------------------------------------
Richard A. Monaghan Vice President Senior Managing None
Director
- -------------------------------------------------------------------------------------
Michael Martino Vice President Managing Director None
- -------------------------------------------------------------------------------------
John R. Verani Vice President Senior Vice President Senior Vice
President
- -------------------------------------------------------------------------------------
Edward H. D'Alelio Vice President Managing Director None
- -------------------------------------------------------------------------------------
Kevin M. Cronin Vice President Managing Director None
- -------------------------------------------------------------------------------------
Brett C. Browchuk Vice President Managing Director None
- -------------------------------------------------------------------------------------
Stephen M. Oristaglio Vice President Managing Director None
- -------------------------------------------------------------------------------------
Richard G. Liebovitch Vice President Managing Director None
- -------------------------------------------------------------------------------------
Paul C. Bucuvalas Assistant Treasurer None None
- -------------------------------------------------------------------------------------
Katharine Howard Senior Associate None None
Treasurer
- -------------------------------------------------------------------------------------
Mary A. Eaton Associate Treasurer None None
& Associate Clerk
- -------------------------------------------------------------------------------------
Judith Cohen Associate Clerk None None
& Assistant Treasurer
- -------------------------------------------------------------------------------------
Wanda McManus Assistant Clerk None None
- -------------------------------------------------------------------------------------
Joanne M. Neary Assistant Clerk None None
- -------------------------------------------------------------------------------------
</TABLE>
IV. FINANCIAL CONDITION OF THE FUND
1. FINANCIAL STATEMENTS
[Omitted, in Japanese version, financial statements of the Fund and
Japanese translations thereof are incorporated here]
Financial highlights
The financial highlights table is intended to help investors understand the
Fund's recent financial performance. Certain information reflects financial
results for a single fund share. The total returns represent the rate that an
investor would have earned or lost on an investment in the Fund, assuming
reinvestment of all dividends and distributions. This information has been
derived from the Fund's Financial Statements, which have been audited by
PricewaterhouseCoopers LLP. Its report and the Fund's financial statements
are included in the Fund's annual report to shareholders, which is available
upon request.
<TABLE>
<CAPTION>
Financial highlights (For a share outstanding throughout the period)
Class M
Year ended September 30
------------------------------------------------------------
1999 1998 1997 1996 1995 +
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $13.25 $13.00 $12.63 $12.96 $12.29
- ------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income .72(b) .80(b) .80 .82(b) .61
Net Gain or Losses
(both realized and
unrealized) on
Investments (.66) .25 .35 (.32) .66
- ------------------------------------------------------------------------------------
Total From Investment
Operations .06 1.05 1.15 .50 1.27
- ------------------------------------------------------------------------------------
Less Distributions From:
Net Investment Income (.72) (.77) (.78) (.78) (.55)
In Excess of Net
Investment Income -- (.03) -- -- --
From Return of Capital (.04) -- -- (.05) (.05)
- ------------------------------------------------------------------------------------
Total Distributions (.76) (.80) (.78) (.83) (.60)
- ------------------------------------------------------------------------------------
Net Asset Value (NAV) $12.55 $13.25 $13.00 $12.63 $12.96
- ------------------------------------------------------------------------------------
Ratios/Supplemental Data
Total Return at NAV (%)(a) 0.56 8.38 9.39 3.99 10.54*
Net Assets,
End of Period $133,362 $163,076 $7,850 $6,116 $2,609
- ------------------------------------------------------------------------------------
Ratio of Expenses
to Average Net Assets (%) 1.10 1.12 1.14 1.14 .79*
Ratio of Net Investment
Income to Average
Net Assets (%) 5.68 5.91 6.32 6.37 4.14*
Portfolio Turnover
Rate (%) 123.04 294.74 125.80 138.97 195.45
- ------------------------------------------------------------------------------------
+ From the period from the commencement of operations on February 6, 1995 through
September 30, 1995
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect the effect of
sales charges.
(b) The ratio of expenses to average net assets includes amounts paid through
expense offset arrangements.
(c) Per share net investment income has been determined on the basis of the weighted
average number of shares outstanding during the period.
</TABLE>
The following financial documents are omitted here.
Report of independent accountants for the fiscal year ended September 30, 1999
Report of independent accountants for the year ended September 30, 1998
Statement of assets and liabilities September 30, 1999
Statement of operations Year ended September 30, 1999
Statement of changes in net assets
Financial highlights (For a share outstanding throughout the period)
Notes to financial statements September 30, 1999
Portfolio of investments owned September 30, 1999
Statement of assets and liabilities September 30, 1998
Statement of operations Year ended September 30, 1998
Statement of changes in net assets
Financial highlights (For a share outstanding throughout the period)
Notes to financial statements September 30, 1998
2. CONDITION OF THE FUND
(a) Statement of Net Assets
<TABLE>
<CAPTION>
(As of the end of January 2000)
- -------------------------------------------------------------------------------------
USD JPY (in thousands)
- -------------------------------------------------------------------------------------
<S> <C> <C>
a. Total Assets 3,049,197,602 326,264,143
- -------------------------------------------------------------------------------------
b. Total Liabilities 175,858,287 18,816,837
- -------------------------------------------------------------------------------------
c. Total Net Assets (a-b) 2,873,339,315 307,447,307
- -------------------------------------------------------------------------------------
d. Total Number of Shares Class A. 153,225,875 Shares
Outstanding Class B. 71,191,302 Shares
Class C. 364,221 Shares
Class M. 9,434,989 Shares
Class Y. 2,199,350 Shares
- -------------------------------------------------------------------------------------
e. Net Asset Value Class A. 12.17 \1,302
per Share (c/d) Class B. 12.11 \1,296
Class C. 12.16 \1,301
Class M. 12.15 \1,300
Class Y. 12.17 \1,302
- -------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
(b) <Names of Major Portfolio Holdings other than Equity Shares (Top 30 Holdings)>
(As of the end of January 2000)
USD USD
Kind of Maturity Interest Par Value Acquisition Current Investment
Name of Securities Issue Date Rate (%) (1,000) Cost Value Ratio (%)
<S> <C> <C> <C> <C> <C> <C> <C>
1 GNMA U.S. Government 2007-2029 7 967,209 976,889,766 925,585,993 32.21
2 GNMA U.S. Government 2024-2029 6 1/2 777,789 775,341,565 719,350,275 25.04
3 GNMA U.S. Government 2001-2027 7 1/2 346,206 333,838,965 339,102,530 11.80
4 GNMA U.S. Government 2001-2028 8 309,077 315,074,459 309,463,233 10.77
5 GNMA U.S. Government 2028-2029 6 146,496 139,545,916 130,838,780 4.55
6 GNMA U.S. Government 2001-2024 8 1/2 83,481 87,612,158 85,643,291 2.98
7 U.S. Treasury
Notes U.S. Government 2009 6 75,000 71,725,056 71,484,000 2.49
8 GNMA U.S. Government 2004-2025 9 20,957 21,307,349 21,792,264 0.76
9 GNMA TBA U.S. Government 2030 6 16,100 14,489,547 14,379,393 0.50
10 GNMA U.S. Government 2010-2021 10 1/2 12,251 13,878,058 13,247,697 0.46
11 GNMA U.S. Government 2009-2029 9 1/2 12,144 13,108,593 12,825,073 0.45
12 U.S. Treasury
Bond U.S. Government 2029 6 1/8 8,520 7,872,608 8,109,912 0.28
13 GNMA - Project
Loan U.S. Government 2027 8 1/2 5,623 5,623,347 5,732,272 0.20
14 U.S. Treasury
Bond U.S. Government 2029 5 1/4 6,610 5,725,473 5,505,932 0.19
15 GNMA U.S. Government 2010-2018 11 1/2 1,407 1,587,734 1,554,184 0.05
16 GNMA U.S. Government 2000-2019 11 1,409 1,556,782 1,538,788 0.05
17 GNMA U.S. Government 2009-2021 10 1,038 1,080,898 1,115,268 0.04
18 GNMA U.S. Government 2011-2015 13 1/2 688 776,720 785,297 0.03
19 GNMA U.S. Government 2013-2016 11 1/4 634 686,049 695,040 0.02
20 GNMA U.S. Government 2013-2015 13 540 586,050 611,542 0.02
21 GNMA U.S. Government 2016-2019 9 1/4 579 570,728 607,126 0.02
22 GNMA U.S. Government 2013-2015 12 1/4 383 412,493 429,959 0.01
23 GNMA U.S. Government 2010-2015 12 1/2 304 319,629 340,695 0.01
24 GNMA U.S. Government 2014-2016 12 303 339,754 336,977 0.01
25 GNMA U.S. Government 2013-2014 12 3/4 259 275,575 293,828 0.01
26 GNMA U.S. Government 2016-2020 10 1/4 217 232,880 234,088 0.01
27 GNMA U.S. Government 2011-2013 15 143 155,434 168,382 0.01
28 GNMA U.S. Government 2014-2015 14 113 119,664 130,095 0.00
29 GNMA U.S. Government 2016 10 3/4 115 121,554 125,723 0.00
30 GNMA U.S. Government 2014-2016 12 3/4 111 119,014 125,688 0.00
</TABLE>
V. FINANCIAL CONDITIONS OF THE INVESTMENT MANAGEMENT COMPANY
Deloitte & Touche LLP is responsible for this part.
Japanese translation of fiscal 1998 and 1997 are attached to the Japanese
version of the Annual Securities Report.
VI. SUMMARY OF INFORMATION CONCERNING FOREIGN INVESTMENT TRUST SECURITIES
1. Transfer of the Shares
The transfer agent for the registered share certificates is Putnam Fiduciary
Trust Company, P.O. Box 41203, Providence, RI 02940-1203, U. S. A.
The Japanese investors who entrust the custody of their shares to the
Distributor or the Sales Handling Company shall have their shares transferred
under the responsibility of such company, and the other investors shall make
their own arrangements.
No fee is chargeable for the transfer of shares.
2. The Closing Period of the Shareholders' Book
No provision is made.
3. There are no annual shareholders' meetings. Special shareholders'
meeting may be held from time to time as required by the Agreement and
Declaration of Trust and the Investment Company Act of 1940.
4. No special privilege is granted to Shareholders.
The acquisition of Shares by any person may be restricted.
VII. REFERENCE INFORMATION
The following documents concerning the Fund were filed with the Director of
Kanto Local Finance Bureau of Japan.
December 1, 1998: Amendment to Securities Registration Statement
March 16, 1999: Securities Registration Statement
Annual Securities Report (The Fourth Fiscal Year)
Amendment to Securities Registration Statement
June 30, 1999: Semi-annual Report (The Fifth Term)
Amendment to Securities Registration Statement
