Securities and Exchange Commission
Washington, D.C. 20549
Form 11-K
Annual Report
Pursuant to Section 15 (d) of the
Securities Exchange Act of 1934
For Fiscal Year Ended December 31, 1999
A. Full title of the plan:
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
B. Name the issuer of the securities held pursuant to the Plan and the
address of its principal executive office:
MARSH & McLENNAN COMPANIES, INC.
1166 Avenue of the Americas
New York, NY 10036
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
The Trustees of the plan currently are Gregory F. Van Gundy, Frank J.
Borelli, and Francis N. Bonsignore. Mr. Van Gundy is General Counsel and
Secretary of Marsh & McLennan Companies, Incorporated (MMC). Mr. Borelli
is Senior Vice President and Chief Financial Officer of MMC. Mr.
Bonsignore is Senior Vice President - Human Resources and Administration of
MMC and has been appointed as Plan Administrator. The business address of
all the Trustees is c/o MMC, 1166 Avenue of the Americas, New York, NY
10036.
The members of the Application Review Committee currently are Irene M.
Esteves, Kathleen M. Collman, and Karen L. Kay. They are officers of
Putnam Investments, Inc. or its subsidiaries. The business address of each
Committee member is c/o Putnam Investments, Inc. One Post Office Square,
Boston, MA 02109.
The financial statements of the Plan are included in this Form 11-K and
consist of the statements of net assets available for plan benefits as of
December 31, 1999 and 1998, and the statements of changes in net assets
available for plan benefits for the years ended December 31, 1999 and 1998
and the report and consent of Deloitte & Touche, independent public
accountants, with respect thereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Trustees of Putnam Investments, Inc. Profit Sharing Retirement Plan have
duly caused this annual report to be signed this 30th day of June, 2000 by
the undersigned thereunto duly authorized.
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
By
--------------------------------
Francis N. Bonsignore
Plan Administrator
INDEPENDENT AUDITORS' CONSENT
-----------------------------
Putnam Investments, Inc. Profit Sharing Retirement Plan:
We hereby consent to the incorporation by reference in Registration
Statement No. 2-65096 of Putnam Investments, Inc. on Form S-8 of our report
dated March 31, 2000 appearing in this Annual Report on Form 11-K of Putnam
Investments, Inc. Profit Sharing Retirement Plan for the years ended
December 31, 1999 and 1998, respectively.
Boston, Massachusetts
June 20, 2000
Putnam Investments, Inc.
Profit Sharing Retirement
Plan
Independent Auditors' Report
Financial Statements
Years Ended December 31, 1999 and 1998
Supplemental Schedule
As of December 31, 1999
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999
AND 1998:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-8
SUPPLEMENTAL SCHEDULE AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1999:
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at
End of Year 9-10
Schedules required under the Employee Retirement Income Security Act of
1974, other than the schedule listed above, are omitted because of the
absence of the conditions under which the schedules are required.
INDEPENDENT AUDITORS' REPORT
To the Trustees of
Putnam Investments, Inc.
Profit Sharing Retirement Plan:
We have audited the accompanying statements of net assets available for
benefits of Putnam Investments, Inc. Profit Sharing Retirement Plan
(the "Plan") as of December 31, 1999 and 1998, and the related statements
of changes in net assets available for benefits for the years then ended.
These financial statements are the responsibility of the Plan's Trustees.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the Plan's net assets available for benefits as of December 31, 1999
and 1998, and the changes in its net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted
in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule
listed in the Table of Contents is presented for the purpose of additional
analysis and is not a required part of the basic financial statements, but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974.
This schedule is the responsibility of the Plan's Trustees. Such schedule
has been subjected to the auditing procedures applied in our audit of the
basic financial statements and, in our opinion, is fairly stated in all
material respects when considered in relation to the basic financial
statements taken as a whole.
March 31, 200
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
1999 1998
ASSETS:
Investments, at fair value $461,824,308 $317,249,931
Contributions receivable 26,499,094 24,167,089
NET ASSETS AVAILABLE FOR BENEFITS $488,323,402 $341,417,020
See notes to financial statements.
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
ADDITIONS:
Investment activity:
Net appreciation in fair value of investments $95,120,570 $21,725,792
Dividend income 28,237,971 16,831,654
Interest income 1,618,362 1,413,928
Total investment activity 124,976,903 39,971,374
Contributions:
Sponsor 24,949,826 22,844,380
Participants 17,427,140 18,311,896
Total additions 167,353,869 81,127,650
DEDUCTIONS -- Benefits paid to participants 20,447,487 16,302,791
NET INCREASE 146,906,382 64,824,859
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 341,417,020 276,592,161
End of year $488,323,402 $341,417,020
See notes to financial statements.
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following description of Putnam Investments, Inc. Profit Sharing
Retirement Plan (the "Plan") is provided for general information purposes
only. Participants should refer to the plan document for a more complete
description of the Plan's provisions.
General - The Plan, as amended and restated January 1, 1989, is a defined
contribution plan sponsored by Putnam Investments, Inc. ("Putnam") and its
subsidiaries (the "Company"), which is a wholly owned subsidiary of Marsh &
McLennan Companies, Inc. ("MMC") for the benefit of its employees and is
intended to qualify as a profit-sharing plan under Section 401(a) of the
Internal Revenue Code (the "Code") and to constitute a qualified cash or
deferred arrangement under Section 401(k) of the Code. The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
Investment Programs - The Plan allows each participant to elect to have
employer contributions and reallocated forfeitures invested in one or more of
the following authorized investment vehicles:
(1) Any one or a combination of the open-end management investment
companies, excluding tax-exempt income funds, for which a subsidiary of
Putnam acts as an investment adviser.
(2) Prior to January 1997, any one or a combination of contracts with
insurance companies which guarantee principal and interest at a fixed rate.
Subsequent to January 1997, the only guaranteed investment contract ("GIC")
product offered is the PFTC Stable Value Fund.
(3) MMC common stock (MMC is the parent company of Putnam).
(4) Other investment options approved by the Board of Directors of Putnam,
the Trustees of the Plan (the "Trustees") and the Chief Executive Officer of
MMC. There were no investments in this option at December 31, 1999 or 1998.
Employer contributions and forfeitures must generally be allocated with
apportionments to be no less than 1% per investment.
Participants may also elect to have their voluntary contributions invested
in any one or more of the authorized investments noted above in (1), (2), (3)
and (4), with apportionments to be at least 1% to any one investment.
With proper notification, participants may elect to change their investment
in either their participation or voluntary accounts up to once a day. Prior
to April 1, 1997, the limit was twice during a fiscal quarter, not to exceed
six investment changes per year.
1. DESCRIPTION OF THE PLAN (CONTINUED)
Contributions - The Plan covers substantially all of the employees of the
Company who have adopted the Plan. Employer contributions are determined at
the discretion of each company's Board of Directors. Contributions may not
exceed the amount permitted as a deduction under the applicable provisions of
the Code.
Voluntary employee contributions are accepted within certain limits as
defined in the Plan. Participants making contributions are not allowed to
withdraw any appreciation on such contributions before termination of
employment, but may withdraw their contributions, subject to certain
restrictions.
Forfeitures - Forfeitures of invested employer contributions are
reallocated among the remaining eligible participants one year after the
fiscal year in which the forfeitures occur. Reallocation of forfeitures
amounted to $1,476,516 and $920,050 in 1999 and 1998, respectively.
Participant Accounts and Vesting - The Plan provides that the market value
of investments in participant accounts shall be determined each business
day. Unrealized appreciation or depreciation, equal to the difference
between actual cost and the quoted market price of the investments at the
applicable valuation date, is recognized in determining the value of each
fund. The change in unrealized appreciation or depreciation, investment
income received and realized gains or losses on investments sold or
distributed are allocated to participants' accounts based on each
participant's proportionate interest in the investment.
Employer contributions and forfeitures are allocated annually based on a
uniform percentage of eligible earnings per participant. This percentage
was 15% in 1999 and 1998.
An employee is eligible to become a participant under the profit-sharing
portion of the Plan upon the completion of 12 months of continuous service.
An employee is eligible to become a participant in the salary deferral
portion of the Plan upon commencement of employment. A participant must be
employed on the last day of the Plan's fiscal year (December 31) to be
eligible for their portion of the employer's contribution for that year.
The vesting of participants, other than voluntary and rollover contributions,
is as follows:
Vested
Interest
Years of continuous service:
Less than two
None
Two but less than three
25 %
Three but less than four
50 %
Four but less than five
75 %
Five or more
100 %
If a participant has reached age 60, died or become disabled
100 %
Participants are automatically fully vested in their voluntary and rollover
contributions.
Distributions are based on the vested portion of the participant's account
valuation as of the liquidation date coinciding with or following the next
valuation date after the individual ceases to be a participant.
Such distributions are made within a reasonable period after the individual
ceases to be a participant, but not later than 60 days after the close of the
fiscal year. The Plan generally allows terminated participants to maintain
their accounts in the Plan, but such accounts do not share in contributions
and forfeiture reallocations. The value of these accounts will continue to
be determined each business day.
1. DESCRIPTION OF THE PLAN (CONTINUED)
Salary Savings Contributions - It is the intention of the Trustees that the
salary deferral portion of the Plan be qualified under Section 401(k) of the
Code. The terms of the salary savings agreement provide that the
participants' earnings contribution to the Plan will be deducted from their
payroll, and that the employer shall contribute this amount to the Plan on
behalf of the participants. Investments into the various investment vehicles
are at the discretion of the individual participant. The market value of
assets relating to the salary savings program at December 31, 1999 and 1998
was $100,326,324 and $62,770,189, respectively.
Loans - Upon the approval of the Loan Committee, appointed by the plan
administrator, participants of the Plan may borrow from their accounts, to
alleviate financial need as defined by the Plan, an amount which, when added
to all other loans to the participant, would not exceed the lesser of (1) a
maximum borrowing limit of $50,000 or (2) 50% of the vested balance of the
participant's account. All loans shall be secured by the participant's
account and will be repaid through payroll deductions according to a
fixed repayment schedule which includes interest at a rate equal to the
prime rate at the time the loan originated. Loans outstanding at December 31,
1999 and 1998 were $7,817,714 and $6,984,953, respectively.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Method of Accounting - The accompanying financial statements of the Plan
have been prepared on the accrual basis of accounting. Investment
transactions are recorded on the trade-date basis. Dividend income is
recorded on the ex-dividend date. Interest income is recorded as earned.
Investment Valuation - Investments in equity securities and mutual funds
are stated at fair value as determined by quoted market prices based on the
last reported sales prices, or the reported net asset value per share on the
last business day of the plan year. Investments in collective investment
trusts are carried at contract value (cost plus accrued interest), which
approximates fair value. Participant loans are recorded at cost which
approximates market value.
Administrative Expenses - Expenses of the Plan have been paid by the
Company, but such payment is at its discretion.
Benefits - Benefits to participants are recorded when paid.
Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires the Plan's management to
make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the reporting period.
Actual results could differ from those estimates.
Reclassification and Adoption of SOP 99-3 - The Plan has adopted Statement
of Position 99-3, "Accounting for and Reporting of Certain Defined
Contribution Plan Investments and Other Disclosure Matters" ("SOP 99-3"),
issued by the American Institute of Certified Public Accountants. As a
result, a reclassification has been made to eliminate the by-fund reporting
for participant-directed investments in 1998.
3. INVESTMENTS
Investments that represent 5% or more of total plan assets at December 31
are as follows:
1999 1998
Putnam Voyager Fund $51,983,714 $35,623,928
Putnam New Opportunities Fund 57,758,513 34,385,062
The Putnam Fund for Growth and Income 25,295,684 27,851,669
Putnam Money Market Fund 31,273,519 18,538,532
Putnam OTC Emerging Growth Fund 34,252,122 15,028,307
The Plan's funds are invested in the following investment vehicles that
represent 5% or more of total plan assets:
Putnam Voyager Fund - Funds are invested primarily in equity securities of
companies which, in the opinion of the Fund's investment manager, have
potential for capital appreciation significantly greater than that of the
market averages.
Putnam New Opportunities Fund - Funds are invested in equity securities of
companies which, in the opinion of the Fund's investment manager, possess
above-average, long-term growth potential.
The Putnam Fund for Growth and Income - Funds are invested primarily in
equity securities that offer potential for both capital growth and current
income.
Putnam Money Market Fund - Funds are invested in various types of high
quality money market instruments.
Putnam OTC Emerging Growth Fund - Funds are invested primarily in equity
securities that are in the early stages of development and have records
of profitability.
During the years ended December 31, 1999 and 1998, the Plan's investments
(including gains and losses on investments bought and sold, as well as held
during the year) appreciated in value as follows:
1999 1998
Investments at fair value, based on
quoted market prices:
Putnam-sponsored mutual funds $91,794,037 $21,170,241
MMC common stock 3,326,533 555,551
Total $95,120,570 $21,725,792
4. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
In the event of plan termination, participants will become 100% vested in
their accounts.
5. SUBSEQUENT DISTRIBUTIONS
At December 31, 1999 and 1998, terminated employees had requested
distributions of the vested portion of their accounts totaling $623,306 and
$495,396, respectively. The sources of these distributions by investment type
are as follows:
Source
1999 1998
Mutual funds $515,230 $387,455
Guaranteed Investment Products 103,333 107,941
MMC common stock* 4,743 --
Total $623,306 $495,396
*Putnam and MMC are parties-in-interest to the Plan
6. TAX STATUS OF THE PLAN
The Plan obtained its latest determination letter on March 29, 1996 in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Code. The plan
administrator believes that the Plan is currently designed and being operated
in compliance with the applicable requirements of the Code. Accordingly, no
provision for income taxes has been included in the Plan's financial
statements.
* * * * * *
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT
END OF YEAR
DECEMBER 31, 1999
(a)
(b) Identity of Issue
(c) Number of
(e) Current
MUTUAL FUNDS:
Shares Value
*Putnam Capital Appreciation Fund 282,381 $7,381,443
*Putnam American Gov't Income Trust 238,992.489 1,966,908
*Putnam Growth Opportunities 341,204.779 10,225,904
*Putnam Diversified Equity Trust 159,973.834 2,945,118
*Putnam Small Cap Value Fund 341,250.941 3,310,134
*Putnam Research Fund 220,608.073 4,026,095
*Putnam Global Governmental Income Trust 132,012.066 1,533,980
*Putnam Voyager Fund II 313,186.201 12,042,010
*Putnam International Growth & Income 149,529.170 1,819,770
*Putnam Emerging Markets Trust 340,794.317 4,263,337
*Putnam International Voyager Trust 293,895.329 7,553,110
*Putnam Europe Growth Fund 236,289.572 6,273,488
*Putnam Strategic Income Trust 15,073.301 109,432
*Putnam Asia Pacific Growth Fund 469,768.430 8,925,601
*Putnam Global Growth & Income 13,031.267 177,225
*Putnam Global Natural Resources Fund 102,327.042 1,974,912
*Putnam New Value Fund 316,598.533 3,754,859
*Putnam Int'l New Opportunities Fund 699,001.466 17,356,206
*Putnam Money Market Fund 31,273,518.660 31,273,519
*Putnam Health Sciences Trust 133,927.677 8,196,384
*Putnam Utilities Growth and Income Fund 109,856.681 1,379,800
*Putnam Capital Opportunities Fund 49,938.221 513,864
*Putnam High Yield Trust II 122,632.746 903,803
*The George Putnam Fund of Boston 952,437.033 15,534,248
*The Putnam Fund for Growth and Income 1,347,665.637 25,295,684
*Putnam Global Growth Fund 761,121.712 14,415,645
*Putnam Income Fund 512,025.860 3,266,725
*Putnam New Opportunities Fund 625,024.551 57,758,513
*Putnam Voyager Fund 1,645,054.231 51,983,714
*Putnam Vista Fund 1,200,709.120 21,348,608
*Putnam U.S. Government Income Trust 170,897.790 2,107,170
*Putnam Asset Allocation Fund - Growth 139,241.060 2,128,996
*Putnam Asset Allocation Fund - Balanced 226,113.648 2,932,694
*Putnam Asset Allocation Fund - Conservative 83,748.379 884,383
*Putnam Diversified Income Trust 143,458.924 1,546,487
*Putnam OTC Emerging Growth Fund 915,341.407 34,252,122
*Putnam International Growth Fund 462,472.733 13,777,063
*Putnam Investors Fund 953,380.001 18,352,565
*Putnam Intermediate U.S. Gov't Income Fund 98,048.222 465,729
*Putnam Equity Income Trust 327,856.898 4,567,047
*Putnam High Yield Trust 431,668.559 4,467,770
*Putnam Growth and Income Fund II 384,181.868 4,760,014
*Putnam Balanced Retirement Fund 64,199.073 632,361
*Putnam Convertible Income-Growth Trust 277,639.007 5,522,240
*Putnam High Yield Advantage Trust 323,309.924 2,518,584
Total Mutual Funds 426,425,264
(Continued)
PUTNAM INVESTMENTS, INC.
PROFIT SHARING RETIREMENT PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT
END OF YEAR
DECEMBER 31, 1999
(a)
(b) Identity of Issue
(c) Number of Shares/Par
(e) Current
GUARANTEED INVESTMENT PRODUCTS -
*Putnam Fiduciary Trust Co. Stable
Amount Value
Value Fund, 6.06% 18,581,307.687 18,581,308
*MARSH & McLENNAN COMPANIES, INC.
COMMON STOCK 94,056.378 9,000,022
*PARTICIPANT LOANS (Various maturities from 1999 to 2009 at interest rates
ranging from 7.5% to 12.75%)
$7,817,714 7,817,714
TOTAL ASSETS HELD FOR INVESTMENT PURPOSES $461,824,308
(Concluded)
*Party-in-interest
(Note - The Putnam mutual funds are sponsored by Putnam Investments, Inc.,
a party-in-interest to the Plan.)
