As filed with the Securities and Exchange Commission on
September 27, 1995
- -----------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM N-1A
----
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
----
----
Pre-Effective Amendment No. / /
----
----
Post-Effective Amendment No. 6 / X /
and ----
----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY / X /
ACT OF 1940 ----
----
Amendment No. 8 / X /
(Check appropriate box or boxes) ----
---------------
PUTNAM ARIZONA TAX EXEMPT INCOME FUND
( Registration No. 33- 11406; 811- 4531)
(Exact name of registrant as specified in charter)
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
----
----
Pre-Effective Amendment No. / /
----
----
Post-Effective Amendment No. 6 / X /
and ----
----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY / X /
ACT OF 1940 ----
----
Amendment No. 7 / X /
(Check appropriate box or boxes) ----
---------------
PUTNAM FLORIDA TAX EXEMPT INCOME FUND
(Registration No. 33-35677; 811-6129)
(Exact name of registrant as specified in charter)
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
----
----
Pre-Effective Amendment No. / /
----
----
Post-Effective Amendment No. 15 / X /
and ----
----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY / X /
ACT OF 1940 ----
----
Amendment No. 17 / X /
(Check appropriate box or boxes) ----
---------------
PUTNAM MASSACHUSETTS TAX EXEMPT INCOME FUND
Registration No. 33-5416; 811-4518
(Exact name of registrant as specified in charter)
----
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
----
----
Pre-Effective Amendment No. / /
----
----
Post-Effective Amendment No. 15 / X /
and ----
----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY / X /
ACT OF 1940 ----
----
Amendment No. 16 / X /
(Check appropriate box or boxes) ----
---------------
PUTNAM MICHIGAN TAX EXEMPT INCOME FUND
Registration No. 33-8923; 811-4529
PUTNAM MINNESOTA TAX EXEMPT INCOME FUND
Registration No. 33-8916; 811-4527
PUTNAM OHIO TAX EXEMPT INCOME FUND
Registration No. 33-8924; 811-4528
(Exact name of registrant as specified in charter)
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
----
----
Pre-Effective Amendment No. / /
----
----
Post-Effective Amendment No. 6 / X /
and ----
----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY / X /
ACT OF 1940 ----
----
Amendment No. 8 / X /
(Check appropriate box or boxes) ----
---------------
PUTNAM NEW JERSEY TAX EXEMPT INCOME FUND
(Registration No. 33-32550; 811-5977)
(Exact name of registrant as specified in charter)
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
----
----
Pre-Effective Amendment No. / /
----
----
Post-Effective Amendment No. 8 / X /
and ----
----
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY / X /
ACT OF 1940 ----
----
Amendment No. 9 / X /
(Check appropriate box or boxes) ----
---------------
PUTNAM PENNSYLVANIA TAX EXEMPT INCOME FUND
(Registration No. 33-28321; 811-5802)
(Exact name of registrant as specified in charter)
One Post Office Square, Boston, Massachusetts 02109
(Address of principal executive offices)
. . Registrants' Telephone Number, including Area Code (617) 292-1000<PAGE>
It is proposed that this filing will become effective
(check appropriate box)
----
/ / immediately upon filing pursuant to paragraph (b)
- ----
----
/X / on October 1,
1995 pursuant to paragraph (b)
- ----
----
/ / 60 days after filing pursuant to paragraph
(a) (1)
- ----
----
/ / on [date] pursuant to paragraph (a)(1)
- ----
----
/ / 75 days after filing pursuant to paragraph (a)(2)
- ----
----
/ / on (date) pursuant to paragraph (a) (2) of
rule 485.
- ----
If appropriate, check the following box:
----
/ / this post-effective amendment designates a new
- ---- effective date for a previously filed post-effective
amendment.
--------------
JOHN R. VERANI, Vice President
PUTNAM ARIZONA TAX EXEMPT INCOME FUND
PUTNAM FLORIDA TAX EXEMPT INCOME FUND
PUTNAM MASSACHUSETTS TAX EXEMPT INCOME FUND
PUTNAM MICHIGAN TAX EXEMPT INCOME FUND
PUTNAM MINNESOTA TAX EXEMPT INCOME FUND
PUTNAM NEW JERSEY TAX EXEMPT INCOME FUND
PUTNAM OHIO TAX EXEMPT INCOME FUND
PUTNAM PENNSYLVANIA TAX EXEMPT INCOME FUND
One Post Office Square
Boston, Massachusetts 02109
(Name and address of agent for service)
---------------
Copy to:
JOHN W. GERSTMAYR, Esquire
ROPES & GRAY
One International Place
Boston, Massachusetts 02110
----------------------
Each Registrant has registered an indefinite number or
amount of securities under the Securities Act of 1933 pursuant to
Rule 24f-2. Rule 24f-2 notices for Putnam Arizona Tax Exempt
Income Fund, Putnam Florida Tax Exempt Income Fund, Putnam
Massachusetts Tax Exempt Income Fund, Putnam Michigan Tax Exempt
Income Fund, Putnam Minnesota Tax Exempt Income Fund, Putnam New
Jersey Tax Exempt Income Fund, Putnam Ohio Tax Exempt Income Fund
and Putnam Pennslyvania Tax Exempt Income Fund for the fiscal
year ended May 31, 1995 were filed on July 31, 1995.
<PAGE>
<TABLE>
<CAPTION>
Putnam Arizona Tax Exempt Income Fund
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Proposed Proposed
maximum maximum
Amount offering aggregate Amount of
Title of securities being price per offering registration
being registeredregistered unit* price** fee
- -----------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
Shares of Beneficial
Interest 778,568 shs. $9.43 $290,000 $100.00
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
* Based on offering price per share on September 15, 1995.
** Calculated pursuant to Rule 24e-2 under the Investment Company Act of 1940.
The total amount of securities redeemed or repurchased during the Registrant's
previous fiscal year was 2,850,993 shares, 2,103,177 of which have been used
for reductions pursuant to Rule 24e-2(a) or Rule 24f-2(c) under said Act in the
current fiscal year, and 747,816 of which are being used for such reduction
in this Amendment.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Putnam Florida Tax Exempt Income Fund
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Proposed Proposed
maximum maximum
Amount offering aggregate Amount of
Title of securities being price per offering registration
being registeredregistered unit* price** fee
- -----------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
Shares of Beneficial
Interest 1,854,662 shs. $9.55 $290,000 $100.00
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
* Based on offering price per share on September 15, 1995.
** Calculated pursuant to Rule 24e-2 under the Investment Company Act of 1940.
The total amount of securities redeemed or repurchased during the Registrant's
previous fiscal year was 9,260,386 shares, 7,436,090 of which have been used
for reductions pursuant to Rule 24e-2(a) or Rule 24f-2(c) under said Act in the
current fiscal year, and 1,824,296 of which are being used for such reduction
in this Amendment.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Putnam New Jersey Tax Exempt Income Fund
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Proposed Proposed
maximum maximum
Amount offering aggregate Amount of
Title of securities being price per offering registration
being registeredregistered unit* price** fee
- -----------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
Shares of Beneficial
Interest 619,559 shs. $9.36 $290,000 $100.00
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
* Based on offering price per share on September 15, 1995.
** Calculated pursuant to Rule 24e-2 under the Investment Company Act of 1940.
The total amount of securities redeemed or repurchased during the Registrant's
previous fiscal year was 6,383,701 shares, 5,795,124 of which have been used
for reductions pursuant to Rule 24e-2(a) or Rule 24f-2(c) under said Act in the
current fiscal year, and 588,577 of which are being used for such reduction
in this Amendment.
</TABLE>
<PAGE>
PUTNAM ARIZONA TAX EXEMPT INCOME FUND
PUTNAM FLORIDA TAX EXEMPT INCOME FUND
PUTNAM MASSACHUSETTS TAX EXEMPT INCOME FUND
PUTNAM MICHIGAN TAX EXEMPT INCOME FUND
PUTNAM MINNESOTA TAX EXEMPT INCOME FUND
PUTNAM NEW JERSEY TAX EXEMPT INCOME FUND
PUTNAM OHIO TAX EXEMPT INCOME FUND
PUTNAM PENNSYLVANIA TAX EXEMPT INCOME FUND
CROSS REFERENCE SHEET
(as required by Rule 481(a))
Part A
N - 1A Item No. Location
1. Cover Page . . . . . . . . . . . Cover page
2. Synopsis . . . . . . . . . . . . Expenses summary
3. Condensed Financial Information Financial highlights;
How performance is
shown
4. General Description of Registrant Objectives;
How the
funds pursue
their
objectives ;
Organization
and history
5. Management of the Fund . . . . . Expenses summary;
How the
funds are
managed; About Putnam
Investments, Inc.
5A . . . . . . . . . . . . . . . . . Management's
Discussion of Fund
Performance . . . . . . . . (Contained in the
annual report of
the
Registrants)
6. Capital Stock and Other Securities Cover
page ;
Organization
and history;
How a fund
makes
distributions to
shareholders ; tax
information
7. Purchase of Securities Being Offered How to
buy shares;
Distribution
plans; How to sell
shares; How to
exchange shares; How
a fund values its
shares
8. Redemption or Repurchase . . . . How to buy shares;
How to sell
shares; How to
exchange shares;
Organization and
history
9. Pending Legal Proceedings . . . Not applicable
PART B
N - 1A ITEM NO. LOCATION
10. Cover Page . . . . . . . . . . . Cover page
11. Table of Contents . . . . . . . Cover page
12. General Information and History Organization and
history (Part A)
13. Investment Objectives and Policies How the
funds
pursues their
objectives
(Part A);
Investment
restrictions;
Miscellaneous
investment
practices
14. Management of the Registrant . . Management
(Trustees;
Officers);
Additional
officers
15. Control Persons and Principal. . . . . Management
(Trustees;
Holders of Securities Officers);
Charges and
expenses (Share
ownership)
16. Investment Advisory and Other. . . . . Management
(Trustees;
Services Officers; The
management
contract;
Principal
underwriter;
Investor servicing
agent and
custodian);
Charges and
expenses;
Distribution
plans;
Independent
accountants and
financial
statements
17. Brokerage Allocation . . . . . . Management
(Portfolio
transactions);
Charges and
expenses
<PAGE>
18. Capital Stock and Other Securities
Organization and
history (Part A);
How a fund
makes
distributions to
shareholders ; tax
information (Part A);
Suspension of
redemptions
19. Purchase, Redemption , and Pricing How to buy
shares
of Securities Being Offered (Part A); How to sell
shares (Part A); How
to exchange shares
(Part A); How to
buy shares;
Determination of
net asset
value; Suspension
of redemptions
20. Tax Status . . . . . . . . . . . How a fund
makes distributions to
shareholders ; tax
information (Part A);
Taxes
21. Underwriters . . . . . . . . . . Management
(Principal
underwriter);
Charges and
expenses
22. Calculation of Performance Data How performance is
shown (Part A);
Investment
performance;
Standard
performance
measures
23. Financial Statements . . . . . . Independent
accountants and
financial
statements
PART C
Information required to be included in Part C is set forth
under the appropriate Item, so numbered, in Part C of the
Registration Statement. <PAGE>
PROSPECTUS
OCTOBER 1,
1995
PUTNAM ARIZONA TAX EXEMPT INCOME FUND (THE "ARIZONA FUND")
PUTNAM FLORIDA TAX EXEMPT INCOME FUND (THE "FLORIDA FUND")
PUTNAM MASSACHUSETTS TAX EXEMPT INCOME FUND (THE "MASSACHUSETTS
FUND")
PUTNAM MICHIGAN TAX EXEMPT INCOME FUND (THE "MICHIGAN
FUND")
PUTNAM MINNESOTA TAX EXEMPT INCOME FUND (THE "MINNESOTA FUND")
PUTNAM NEW JERSEY TAX EXEMPT INCOME FUND (THE "NEW JERSEY
FUND")
PUTNAM OHIO TAX EXEMPT INCOME FUND (THE "OHIO FUND")
PUTNAM PENNSYLVANIA TAX EXEMPT INCOME FUND (THE "PENNSYLVANIA
FUND")
CLASS A, B AND M SHARES
INVESTMENT STRATEGY: TAX-ADVANTAGED
This prospectus explains concisely what you should know
before investing in the funds . Please read it carefully
and keep it for future reference. You can find more detailed
information about each fund in the October 1, 1995
statement of additional information ("SAI") , as amended from
time to time. For a free copy of the SAI or other
information, call Putnam Investor Services at 1-800-225-1581.
The SAI has been filed with the Securities and Exchange
Commission and is incorporated into this prospectus by
reference.
Each fund invests primarily in a portfolio of tax-
exempt securities (as defined on page 19) , which may include
securities of issuers other than the relevant state and its
political subdivisions.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND INVOLVE RISK, INCLUDING
THE POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED .
BOSTON*LONDON*TOKYO
<PAGE>
ABOUT THE FUNDS
EXPENSES SUMMARY PAGE NUMBER
This section describes the sales charges, management fees, and
annual operating expenses that apply to a fund's various classes
of shares. Use it to help you estimate the impact of transaction
costs on your investment over time.
FINANCIAL HIGHLIGHTS PAGE NUMBER
Study this table to see, among other things, how a fund performed
each year for the past 10 years or since it began investment
operations if it has been in operation for less than 10 years.
OBJECTIVES PAGE NUMBER
Read this section to make sure a fund's objectives are consistent
with your own.
HOW THE FUNDS PURSUE THEIR OBJECTIVES PAGE NUMBER
This section explains in detail how a fund seeks its investment
objectives. RISK FACTORS. All investments entail some risk.
Read this section to make sure you understand certain risks that
may be involved when investing in a fund.
HOW PERFORMANCE IS SHOWN PAGE NUMBER
This section describes and defines the measures used to assess
a fund's performance. All data are based on a fund's past
investment results and do not predict future performance.
HOW THE FUNDS ARE MANAGED PAGE NUMBER
Consult this section for information about a fund's
management, allocation of a fund's expenses, and how purchases
and sales of securities are made for a fund.
ORGANIZATION AND HISTORY PAGE NUMBER
In this section, you will learn when a fund was introduced, how
it is organized, how it may offer shares, and who its Trustees
are.
ABOUT YOUR INVESTMENT
ALTERNATIVE SALES ARRANGEMENTS PAGE NUMBER
Read this section for descriptions of the classes of shares
this prospectus offers and for points you should consider when
making your choice.
HOW TO BUY SHARES PAGE NUMBER
This section describes the ways you may purchase shares and
tells you the minimum amounts required to open various types of
accounts. It explains how sales charges are determined and how
you may become eligible for reduced sales charges on each class
of shares.
DISTRIBUTION PLANS PAGE NUMBER
This section tells you what distribution fees are charged
against each class of shares .
<PAGE>
HOW TO SELL SHARES PAGE NUMBER
In this section you can learn how to sell shares of a fund,
either directly to the fund or through an investment dealer.
HOW TO EXCHANGE SHARES PAGE NUMBER
Find out in this section how you may exchange shares
of a fund for shares of other Putnam funds. The section also
explains how exchanges can be made without sales charges and the
conditions under which sales charges may be required.
HOW A FUND VALUES ITS SHARES PAGE NUMBER
This section explains how a fund determines the value of its
shares.
HOW A FUND MAKES DISTRIBUTIONS TO SHAREHOLDERS ; TAX
INFORMATION PAGE
NUMBER
This section describes the various options you have in choosing
how to receive dividends from a fund. It also discusses the
federal tax status of the payments and counsels shareholders to
seek specific advice about their own situation.
ABOUT PUTNAM INVESTMENTS, INC. PAGE NUMBER
Read this section to learn more about the companies that
provide the marketing, investment management, and shareholder
account services to Putnam funds and their shareholders.
APPENDIX
Securities ratings PAGE NUMBER<PAGE>
ABOUT THE FUND
EXPENSES SUMMARY
Expenses are one of several factors to consider when investing
. The following table summarizes your maximum transaction
costs and expenses incurred in its most recent fiscal
year. The examples show the cumulative expenses
attributable to a hypothetical $1,000 investment over specified
periods.
CLASS A CLASS B CLASS M
SHARES SHARES SHARES
SHAREHOLDER TRANSACTION
EXPENSES
Maximum sales charge
imposed on purchases
(as a percentage of
offering price) 4.75% NONE* 3.25%*
Deferred sales charge 5.0% in the
first
(as a percentage year, declining
of the lower of to 1.0% in the
original purchase sixth year, and
price or redemption eliminated
proceeds) NONE** thereafter NONE
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Total fund
Management 12b-1 Otheroperating
fees fees expenses expenses
- ---------- ----- ---------------- ---
Arizona fund
class A 0.60% 0.20% 0.13% 0.93%
class B 0.60% 0.85% 0.13% 1.58%
class M 0.60% 0.50% 0.13% 1.23%
Florida fund
Class A 0.60% 0.20% 0.11% 0.91%
Class B 0.60% 0.85% 0.10% 1.55%
Class M 0.60% 0.50% 0.11% 1.21%
Massachusetts fund
class A 0.60% 0.20% 0.09% 0.89%
class B 0.60% 0.85% 0.08% 1.53%
class M 0.60% 0.50% 0.09% 1.19%
Michigan fund
class A 0.60% 0.20% 0.15% 0.95%
class B 0.60% 0.85% 0.14% 1.59%
class M 0.60% 0.50% 0.15% 1.25%
Minnesota fund
class A 0.60% 0.20% 0.19% 0.99%
class B 0.60% 0.85% 0.18% 1.63%
class M 0.60% 0.50% 0.19% 1.29%
New Jersey fund
class A 0.60% 0.20% 0.15% 0.95%
class B 0.60% 0.85% 0.14% 1.59%
class M 0.60% 0.50% 0.15% 1.25%
Ohio fund
class A 0.60% 0.20% 0.13% 0.93%
class B 0.60% 0.85% 0.13% 1.58%
class M 0.60% 0.50% 0.13% 1.23%
Pennsylvania fund
class A 0.60% 0.20% 0.04% 0.84%
class B 0.60% 0.85% 0.04% 1.49%
class M 0.60% 0.50% 0.04% 1.14%
The tables are provided to help you understand the expenses of
investing in each fund and your share of the operating
expenses which that fund incurs. Expense
information shown in the table for the Arizona,
Florida, New Jersey and Pennslyvania funds has been
annualized based on the expenses for each fund's most
recent fiscal period. For the Arizona fund, actual management
fees for class A and class B shares were 0.45%,
actual "Other expenses " were 0.10%, and actual total
operating expenses were 0.70% and 1.19% , respectively.
For the Florida fund, actual management fees for class A,
class B and class M shares were 0.55%, 0.55% and 0.10%,
respectively, actual "Other expenses" were 0.10%, 0.09% and none,
respectively, and actual total operating expenses were 0.83%,
1.42% and 0.10%, respectively. For the New Jersey fund actual
management fees for class A and class B shares were 0.55%,
actual "Other expenses" were 0.14% and 0.13%, respectively, and
actual total operating expenses were 0.88% and 1.46%,
respectively. For the Pennslyvania fund, actual management fees
for class A and class B shares were 0.15%, actual "Other
expenses" were 0.01% and actual total operating expenses were
0.21% and 0.38%, respectively. The 12b-1 fees for
class M shares for each fund reflect amounts
currently payable under each distribution plan. For each
fund's class M shares, management fees and "Other expenses"
are based on the corresponding expenses for
class A shares.
EXAMPLES
Your investment of $1,000 would incur the following expenses,
assuming 5% annual return and , except as indicated,
redemption at the end of each period:
1 year 3 years 5 years 10 years
ARIZONA FUND
CLASS A $57 $76 $97 $156
CLASS B $66 $80 $106 $170***
CLASS B (NO REDEMPTION)$16 $50 $86 $170***
CLASS M $45 $70 $98 $177
FLORIDA FUND
CLASS A $56 $75 $95 $154
CLASS B $66 $79 $104 $167***
CLASS B (NO REDEMPTION)$16 $49 $84 $167***
CLASS M $44 $70 $97 $174
MASSACHUSETTS FUND
CLASS A $56 $75 $94 $152
CLASS B $66 $78 $103 $165***
CLASS B (NO REDEMPTION)$16 $48 $83 $165***
CLASS M $44 $69 $96 $172
MICHIGAN FUND
CLASS A $57 $76 $98 $159
CLASS B $66 $80 $107 $172***
CLASS B (NO REDEMPTION)$16 $50 $87 $172***
CLASS M $45 $71 $99 $179
<PAGE>
MINNESOTA FUND
CLASS A $57 $76 $100 $163
CLASS B $67 $81 $109 $176***
CLASS B (NO REDEMPTION)$17 $51 $89 $176***
CLASS M $45 $72 $101 $183
NEW JERSEY FUND
CLASS A $57 $76 $98 $159
CLASS B $66 $80 $107 $172***
CLASS B (NO REDEMPTION)$16 $50 $87 $172***
CLASS M $45 $71 $99 $179
OHIO FUND
CLASS A $57 $76 $97 $156
CLASS B $66 $80 $106 $170***
CLASS B (NO REDEMPTION)$16 $50 $86 $170***
CLASS M $45 $70 $98 $177
PENNSYLVANIA FUND
CLASS A $56 $73 $92 $146
CLASS B $65 $77 $101 $160***
CLASS B (NO REDEMPTION)$15 $47 $81 $160***
CLASS M $44 $68 $93 $167<PAGE>
The examples do not represent past or future expense
levels. Actual expenses may be greater or less than those shown.
Federal regulations require the examples to assume a 5%
annual return, but actual annual return varies .
* The higher 12b-1 fees borne by class B and class
M shares
may cause long-term shareholders to pay more than the
economic
equivalent of the maximum permitted front-end sales charge on
class A shares.
** A deferred sales charge of up to 1.00% is assessed on certain
redemptions of class A shares that were purchased
without an
initial sales charge as part of an investment of $1 million or
more. See "How to buy shares - Class A shares."
*** Reflects conversion of class B shares to class
A shares
(which pay lower ongoing expenses) approximately eight years
after purchase. See "Alternative sales
arrangements."
FINANCIAL HIGHLIGHTS
The following tables present per share financial
information for the funds. No class M shares were
outstanding during these periods for the Arizona and
Pennsylvania funds . This information has been audited and
reported on by each fund's independent accountants. The
" Report of independent accountants" and financial
statements included in each fund's annual report to
shareholders for the 1995 fiscal year are incorporated by
reference into this prospectus. Each fund's annual
report , which contains additional unaudited performance
information, is available without charge upon request. <PAGE>
Financial highlights*
(For a share outstanding throughout the period)
(The tables appear on pages )
<PAGE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the year)
<TABLE>
<CAPTION>
For the period For the period
For the July 15, 1993 For the January 30, 1991
nine months (commencement of nine months (commencement of
endedYear ended operations) to ended operations) to
May 31 Auugst 31 August 31 May 31 Year ended August 31 August
1995<F1> 1994 1993 1995<F1> 1994 1993 1992 1991
CLASS B CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $8.83 $9.47 $9.39 $8.84 $9.47 $9.07 $8.66 $8.50
INVESTMENT OPERATIONS
Net investment income .34 .45 .11 .38 .51 .54<F2> .57<F2> .33<F2>
Net realized and unrealized
gain (loss) on investments .17 (.61) .03 .17 (.61) .47 .42 .16
TOTAL FROM
INVESTMENT OPERATIONS .51 (.16) .14 .55 (.10) 1.01 .99 .49
LESS DISTRIBUTIONS FROM:
Net investment income (.34) (.45) (.06) (.38) (.50) (.55) (.57) (.33)
Net realized gain on investments -- -- -- -- -- (.06) (.01) --
In excess of net realized gain
on investments -- (.03) -- -- (.03) -- -- --
TOTAL DISTRIBUTIONS (.34) (.48) (.06) (.38) (.53) (.61) (.58) (.33)
NET ASSET VALUE, END OF PERIOD $9.00 $8.83 $9.47 $9.01 $8.84 $9.47 $9.07 $8.66
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%) <F3>5.99<F4> (1.80) 1.45<F4> 6.45<F4> (1.07) 11.54 11.85 5.84<F4>
NET ASSETS, END OF PERIOD
(in thousands) $21,538 $16,247 $2,974 $136,598 $142,950 $145,304 $88,566 $46,902
Ratio of expenses to average
net assets (%) 1.19<F4> 1.60 .19<F4> .70<F4> .97 .89 .58<F2> .16<F2><F4>
Ratio of net investment income
to average net assets (%) 3.89<F4> 4.82 .43<F4> 4.42<F4> 5.55 5.82 6.34<F2> 3.91<F2><F4>
Portfolio turnover (%) 51.48<F4> 34.68 5.72 51.48<F4> 34.68 5.72 31.84 12.46<F4>
<FN>
<F1> The fiscal year end has changed from August 31 to May 31.
<F2> Reflects an expense limitation. As a result of the limitation, net investment income of the fund for the year ended
August
31, 1992 and the period ended August 31, 1991, reflect expense reductions of $0.03 and $0.05 per share,
respectively.
<F3> Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
<F4> Not annualized.
</FN>
/TABLE
<PAGE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
FOR THE PERIOD FOR THE
MAY 1, 1995 ELEVEN JANUARY 4, 1993
(COMMENCEMENT MONTHS YEAR (COMMENCEMENT
OF OPERATIONS) TO ENDED ENDEDOF OPERATIONS) TO
MAY 31 MAY 31 JUNE 30 JUNE 30
1995(+) 1995* 1994 1993
Class M Class B
NET ASSET VALUE,
BEGINNING OF PERIOD $8.87 $8.76 $9.53 $9.17
INVESTMENT OPERATIONS
Net investment income .04 .40 .44 .21
Net realized and
unrealized gain (loss)
on investments .25 .36 (.66) .36
TOTAL FROM INVESTMENT
OPERATIONS .29 .76 (.22) .57
LESS DISTRIBUTIONS:
From net investment
income (.04) (.39) (.44) (.21)
In excess of net
investment income -- (.01) -- --
From net realized gain
on investments -- -- (.09) --
In excess of net realized
gain on investments -- -- (.02) --
TOTAL DISTRIBUTIONS (.04) (.40) (.55) (.21)
NET ASSET VALUE,
END OF PERIOD $9.12 $9.12 $8.76 $9.53
TOTAL INVESTMENT RETURN
AT NET ASSET
VALUE (%)(b) 3.28(c) 9.06(c) (2.55) 12.84(c)
NET ASSETS, END OF
PERIOD (in thousands) $1 $44,581 $36,930 $17,881
Ratio of expenses to
average net assets (%) .10(c) 1.42(c) 1.51 .78(c)
Ratio of net investment
income to average
net assets (%) .45(c) 4.62(c) 4.74 2.21(c)
Portfolio turnover (%) 61.46 61.46 64.83 106.69
/TABLE
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE><CAPTION>
<C> <C> <C> <C> <C>
For the
eleven
months
ended
May 31 Year ended June 30 August 24, 1990
(commencement
of operations) to
June 30
1995* 1994 1993 1992 1991
Class A
$8.77 $9.53 $9.08 $8.65 $8.50
.46 .50 .56(a) .60(a) .52(a)
.35 (.65) .53 .45 .15
.81 (.15) 1.09 1.05 .67
(.45) (.50) (.56) (.60) (.52)
(.01) -- -- -- --
-- (.09) (.08) (.02) --
-- (.02) -- -- --
(.46) (.61) (.64) (.62) (.52)
$9.12 $8.77 $9.53 $9.08 $8.65
9.58(c) (1.79) 12.44 12.57 9.46(c)
$271,309$276,245$278,039 $195,963$109,739
.83(c) .91 .77(a) .60(a) .41(a)(c)
5.24(c) 5.38 5.94(a) 6.73(a) 5.94(a)(c)
61.46 64.83 106.69 72.7346.72(c)
<FN>
* The fiscal year end has changed from June 30 to May 31.
+ Per share net investment income has been determined on the basis
of the weighted average number of shares outstanding during the
period.
(a) Reflects an absorption of expenses incurred by the fund
and an expense limitation applicable during the period. As a
result of this absorbtion and the limitations, expenses of the fund for the years
ended June 30, 1992 and the period ended June 30, 1991, reflect a
reduction of $0.02 and $0.04 per share, respectively. For the
year ended June 30, 1993, expenses reflect a reduction of less
than $0.01 per share.
(b) Total investment return assumes dividend reinvestment and does
not reflect the effect of sales charges.
(c) Not annualized.<PAGE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
</TABLE>
<TABLE><CAPTION>
<S> <C> <C> <C>
FOR THE PERIOD FOR THE PERIOD
MAY 12, 1995 JULY 15, 1993
(COMMENCEMENT (COMMENCEMENT
OF OPERATIONS) TO YEAR ENDEDOF OPERATIONS) TO
MAY 31 MAY 31 MAY 31
1995 1995 1994
CLASS M* CLASS B
NET ASSET VALUE,
BEGINNING OF PERIOD $9.10 $9.05 $9.71
INVESTMENT OPERATIONS
Net investment income .02 .49 .41
Net realized and unrealized
gain (loss) on investments .12 .17 (.51)
TOTAL FROM
INVESTMENT OPERATIONS .14 .66 (.10)
LESS DISTRIBUTIONS FROM:
Net investment income (.03) (.49) (.41)
Net realized gain on investments --
- -- (.15)
In excess of net realized gain -- (.02) --
TOTAL DISTRIBUTIONS (.03) (.51) (.56)
NET ASSET VALUE, END OF PERIOD $9.21 $9.20$9.05
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%)(b) 1.53(c) 7.64 (1.15)(c)
NET ASSETS, END OF PERIOD
(in thousands) $22 $47,573 $23,017
Ratio of expenses to
average net assets (%) .06(c) 1.53 1.41(c)
Ratio of net investment income
to average net assets (%) .30(c) 5.46 4.32(c)
Portfolio turnover (%) 47.53 47.53 36.20<PAGE>
FINANCIAL HIGHLIGHTS (continued)
</TABLE>
<TABLE><CAPTION>
<C> <C> <C> <C> <C> <C>
For the period
October 23, 1989
(commencement
of operations) to
Year ended May 31 May 31
1995 1994 1993 1992 1991 1990
Class A
$9.05 $9.55 $9.02 $8.70 $8.50 $8.50
.55 .55 .59 .61(a) .62(a) .35(a)
.18 (.35) .54 .39 .20 --
.73 .20 1.13 1.00 .82 .35
(.55) (.55) (.59) (.61) (.62) (.35)
-- (.15) (.01) (.07) -- --
(.02) -- -- -- -- --
(.57) (.70) (.60) (.68) (.62) (.35)
$9.21 $9.05 $9.55 $9.02 $8.70 $8.50
8.45 1.92 12.80 11.96 10.10 6.84(c)
$251,232 $244,519 $215,611 $149,011 $38,526 $18,249
.89 .96 .97 .88(a) .86(a) .80(a)(c)
6.11 5.69 6.24 6.82(a) 7.27(a) 6.97(a)(c)
47.53 36.20 53.18 94.95(d) 123.29 83.26(d)
<FN>
* Per share net investment income for the period ended May 31, 1995
has been determined on the basis of the weighted average number
of shares outstanding during the period.
(a)Reflects an expense limitation. As a result of this limitation, net
investment income of the fund for the years ended May 31, 1992
and 1991 reflect expense reductions of approximately $0.01 and
$0.02 respectively.
(b) Total investment return assumes dividend reinvestment and does
not reflect the effect of sales charges.
(c) No annualized
(d) Portfolio turnover excludes the impact of assets received by the fund,then known as Putnam Massachusetts Tax Exempt
Income Fund II, from the acquisition of
Putnam Massachusetts Tax Exempt Income Fund.<PAGE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the year)
FOR THE PERIOD FOR THE PERIOD
APRIL 17, 1995
JULY 15, 1993
(COMMENCEMENT OF (COMMENCEMENT OF
OPERATIONS) TO YEAR ENDED OPERATIONS) TO
MAY 31 MAY 31 MAY 31
1995<F1> 1995 1994
CLASS M CLASS B
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $8.80 $8.90$9.43
INVESTMENT OPERATIONS
Net investment income .05 .47 .41
Net realized/unrealized gain (loss)
on investments .21 .10 (.46)
TOTAL FROM INVESTMENT OPERATIONS .26 .57 (.05)
LESS DISTRIBUTIONS FROM:
Net investment income (.06) (.47) (.40)
Net realized gain on investments -- -- --
In excess of net gain on investments --
- -- (.08)
TOTAL DISTRIBUTIONS (.06) (.47) (.48)
NET ASSET VALUE, END OF PERIOD $9.00 $9.00 $8.90
TOTAL INVESTMENT RETURN
AT NET ASSET VALUE (%) <F3> 2.03<F4> 6.72 (.68)<F4>
NET ASSETS, END OF PERIOD (in thousands) $119
$21,071 $10,251
Ratio of expenses to average net assets (%).20<F4>
1.59 1.42<F4>
Ratio of net investment income to
average net assets (%) .84<F4> 5.31 4.25<F4>
Portfolio turnover (%) 82.91 82.91 41.77<F4>
<PAGE>
FINANCIAL HIGHLIGHTS [continued]
(For a share outstanding throughout the year) [continued]
FOR THE PERIOD
OCTOBER 23, 1989
(COMMENCEMENT OF
OPERATIONS) TO
YEAR ENDED MAY 31 MAY 31
1995 1994 1993 1992 1991 1990
CLASS A
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $8.90 $9.30 $8.80 $8.51 $8.43 $8.50
INVESTMENT OPERATIONS
Net investment income .52 .52 .55 .56<F2> .58<F2> .33<F2>
Net realized/unrealized gain (loss)
on investments .11 (.32) .52 .29 .08 (.07)
TOTAL FROM INVESTMENT OPERATIONS .63 .20 1.07 .85 .66 .26
LESS DISTRIBUTIONS FROM:
Net investment income (.52) (.52) (.56) (.56) (.58) (.33)
Net realized gain on investments -- (.03) (.01) -- -- --
In excess of net gain on investments -- (.05) -- -- -- --
TOTAL DISTRIBUTIONS (.52) (.60) (.57) (.56) (.58) (.33)
NET ASSET VALUE, END OF PERIOD $9.01 $8.90 $9.30 $8.80 $8.51 $8.43
TOTAL INVESTMENT RETURN
AT NET ASSET VALUE (%) <F3> 7.45 2.03 12.38 10.25 8.13 3.17<F4>
NET ASSETS, END OF PERIOD (in thousands) $136,010 $128,921 $113,074 $80,310 $19,893 $9,280
Ratio of expenses to average net assets (%) .95 .99 1.04 .95<F2> .87<F2>.45<F2><F4>
Ratio of net investment income to
average net assets (%) 6.03 5.58 6.04 6.28<F2> 6.78<F2> 3.84<F2><F4>
Portfolio turnover (%) 82.91 41.77 15.89 71.68<F4><F5> 16.21 6.46<F4>
<FN>
<F1> Per share net investment income has been determined on the basis of the weighted average number of shares
outstanding
during the period.
<F2> Reflects an expense limitation, and, during the period ended May 31, 1990, an absorption of expenses incurred by
the
Fund. As a result, net investment income of the Fund for the years ended May 31, 1992, 1991 and the period ended
May 31,
1990 reflect expense reductions of approximately $0.01, $0.05, and $0.05, respectively.
<F3> Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
<F4> Not annualized.
<F5> Portfolio turnover excludes the impact of assets received from the fund, then known as Putnam Michigan Tax Exempt
Income Fund II, from the acquisition of Putnam Michigan Tax Exempt Income Fund.
</FN>
/TABLE
<PAGE>
Financial Highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
For the For the
period period
April 3, July 15,
1995 1993
(commencement (commencement
of of
operations) Year operations)
to ended to
May 31 May 31 May 31 Year ended May 31
1995 1995 1994 1995 1994
Class M Class B Class A
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 8.77 $ 8.77 $ 9.18 $ 8.79 $ 9.06
Investment operations
Net investment income .08 .45 .39 .51 .51
Net realized and unrealized
gain (loss) on investments .17 .15 (.41) .15 (.27)
Total from investment
operations .25 .60 (.02) .66 .24
Less Distributions from:
Net investment income (.07) (.45) (.39) (.50) (.51)
Total distributions (.07) (.45) (.39) (.50) (.51)
Net asset value, end of period $ 8.95 $ 8.92 $ 8.77 $ 8.95 $ 8.79
Total investment return at net
asset value (%) (b) 2.89(c) 7.17 (.32)(c) 7.90 2.57
Net assets, end of period
(in thousands) $1 $19,698 $8,873 $98,418 $95,587
Ratio of expenses to average
net assets (%) .21(c) 1.63 1.47(c) .99 1.03
Ratio of net investment income
to average net assets (%) .93(c) 5.15 4.23(c) 5.85 5.60
Portfolio turnover (%) 58.18(c) 58.18 28.19(c) 58.18 28.19
/TABLE
<PAGE>
For the period
October 23, 1989
<TABLE> (commencement
<CAPTION> of operations) to
Year ended May 31 May 31
1993 1992 1991 1990
Class A
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.74 $ 8.56 $ 8.43 $8.50
Investment operations
Net investment income .55 .55(a) .59(a) .34(a)
Net realized and unrealized gain
(loss) on investments .33 .18 .13 (.07)
Total from investment operations .88 .73 .72 .27
Less Distributions from:
Net investment income (.56) (.55) (.59) (.34)
Total distributions (.56) (.55) (.59) (.34)
Net asset value, end of period $ 9.06 $ 8.74 $ 8.56 $8.43
Total investment return at
net asset value (%) (b) 10.33 8.86 8.82 5.25(c)
Net assets, end of period (in thousands) $86,611 $59,914 $16,615 $7,363
Ratio of expenses to average net assets
(%) 1.08 .91(a) .66(a) .27(a)(d)
Ratio of net investment income to
average net assets (%) 6.12 6.34(a) 6.84(a) 4.09(a)(d)
Portfolio turnover (%) 37.69 38.79(d) 14.85 98.54(d)
</TABLE>
(a) Reflects an expense limitation incurred by the fund. As a result of the
limitation, net investment income of the fund for the years ended May 31,
1992, and 1991 reflects expense reductions of approximately $0.02
and $0.07, respectively.
(b) Total investment return assumes dividend reinvestment and does not
reflect the effect of sales charges.
(c) Not annualized.
(d) Portfolio turnover excludes the impact of assets received from the fund
then known as Putnam Minnesota Tax Exempt
Income Fund II,
from the acquisition of Putnam Minnesota Tax Exempt Income Fund.
<PAGE>
Financial Highlights
(For a share outstanding throughout the year)
<TABLE>
<CAPTION>
For the period For the period
May 1, 1995 For the January 4, 1993
(commencement eleven months (commencement
of operations) to ended Year endedof operations) to
May 31, May 31 June 30 June 30
1995 1995* 1994 1993
Class M Class B
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $8.74 $8.75 $9.46 $9.02
Investment operations
Net investment income .04 .41 .45 .21
Net realized and unrealized
gain (loss) on investments .28 .22 (.58) .43
Total from investment
operations .32 .63 (.13) .64
Less distributions:
From net investment income (.08) (.41) (.45) (.20)
Net realized gain on
investments -- (.02) --
In excess of realized gain on
investments -- -- (.11) --
Total distributions (.08) (.41) (.58) (.20)
Net asset value,
end of period $8.98 $8.97 $8.75 $9.46
Total investment return at
net asset value (%) (a)3.21(b) 7.51(b) (1.59) 7.21(b)
Net assets, end of period
(in thousands) $ 1 $58,591 $44,916 $15,113
Ratio of expenses to average
net assets (%) .09(b) 1.46(b) 1.59 .77(b)
Ratio of net investment
income to average net
assets (%) .42(b) 4.72(b) 4.77 2.42(b)
Portfolio turnover (%) 51.86(b) 51.86(b) 51.74 44.58(b)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For the period
For the February 20,
eleven 1990
months (commencement
ended of operations)
May 31 Year ended June 30 to June 30
1995+ 1994 1993 1992 1991 1990
Class A
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 8.75 $ 9.46 $ 8.97 $ 8.64 $ 8.50 $ 8.50
Investment operations
Net investment income .46 .51 .54 .59(c) .62(c) .22(c)
Net realized and unrealized
gain (loss) on investments .23 (.58) .58 .38 .13 .01
Total from investment
operations .69 (.07) 1.12 .97 .75 .23
Less distributions:
From net investment income (.46) (.51) (.55) (.60) (.61) (.23)
Net realized gain on
investments -- (.08) (.08) (.04) -- --
In excess of realized gain
on investments -- (.05) -- -- -- --
Total distributions (.46) (.64) (.63) (.64) (.61) (.23)
Net asset value, end of
period $8.98$ 8.75 $9.46$ 8.97 $ 8.64 $8.50
Total investment return at
net asset value (%) (a) 8.25(b) (.94) 13.02 11.52 9.17 2.71(b)
Net assets, end of period
(in thousands) $242,569 $246,336 $235,243 $159,658 $99,978 $34,588
Ratio of expenses to average
net assets (%) .87(b) .95 .92 .75(c) .66(c) .26(b)(c)
Ratio of net investment
income to average net
assets (%) 5.36(b) 5.43 5.90 6.69(c) 7.09(c)3.06(b)(c)
Portfolio turnover (%) 51.86(b) 51.74 44.58 80.21 101.21 `7.58(b)
</TABLE>
* The fiscal year has been chnaged from June 30 to May 31.
(a) Total Investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) Not annualized.
(c) Reflects an expense limitation. As a result of the limitation, expenses of
the
fund for the years ended June 30, 1992 and 1991 and for the period ended
June 30, 1990 reflect a reduction of $0.01, $0.03 and $0.02,
respectively.
PAGE
<PAGE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
<TABLE><CAPTION>
<S> <C> <C> <C>
FOR THE PERIOD FOR THE PERIOD
APRIL 3, 1995 JULY 15, 1993
(COMMENCEMENT (COMMENCEMENT
OF OPERATIONS)TO YEAR ENDEDOF OPERATIONS) TO
MAY 31 MAY 31 MAY 31
1995 1995 1994
Class M Class B
NET ASSET VALUE,
BEGINNING OF PERIOD $8.76 $8.79 $9.37
INVESTMENT OPERATIONS
Net investment income .08 .46 .40
Net realized and unrealized
gain (loss) on investments .19 .16 (.46)
TOTAL FROM INVESTMENT
OPERATIONS .27 .62 (.06)
LESS DISTRIBUTIONS FROM:
Net investment income (.08) (.46) (.40)
Net realized gain
on investments -- (.01) (.12)
TOTAL DISTRIBUTIONS (.08) (.47) (.52)
NET ASSET VALUE,
END OF PERIOD $8.95 $8.94 $8.79
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%)(b) 3.05(c) 7.39 (1.49)(c)
NET ASSETS, END OF
PERIOD (in thousands) $1 $32,847 $17,959
Ratio of expenses to
average net assets (%) 0.20(c) 1.58 1.42(c)
Ratio of net investment
income to average
net assets (%) 0.89(c) 5.24 4.35(c)
Portfolio turnover (%) 66.29 66.29 44.45
/TABLE
<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE><CAPTION>
<C> <C> <C> <C> <C> <C>
For the period
October 23, 1989
(commencement
of operations) to
Year ended May 31 May 31
1995 1994 1993 1992 1991 1990
Class A
$8.80 $9.26 $8.78 $8.55 $8.40 $8.50
52 .53 .54 .57(a) .59(a) .35(a)
.15 (.35) .48 .23 .14 (.10)
.67 .18 1.02 .80 .73 .25
(.51) (.52) (.54) (.57) (.58) (.35)
(.01) (.12) -- -- -- --
(.52) (.64) (.54) (.57) (.58) (.35)
$8.95 $8.80 $9.26 $8.78 $8.55 $8.40
8.04 1.88 11.94 9.65 9.09 4.94(c)
$193,176 $194,130 $177,879 $140,309 $21,136 $7,684
.93 .99 1.04 .90(a) .87(a) .47(a)(d)
5.97 5.68 5.90 6.41(a) 6.83(a) 4.19(a)(d)
66.29 44.45 21.57 15.20(d) 17.40 23.27(d)
<FN>
(a) Reflects an expense limitation in effect during the period. As a
result, net investment income of the fund for the years ended May
31, 1992 and 1991, reflect expense reductions of approximately
$0.01 and $0.05, per class A share, respectively.
<PAGE>
(b) Total investment return assumes dividend reinvestment and does
not reflect the effect of sales charges.
(c) Not annualized.
(d) Portfolio turnover excludes the impact of assets received from
the fund, then known as Putnam Ohio Tax Exempt Income Fund II, from the acquisition of Putnam Ohio Tax Exempt
Income Fund.
/TABLE
<PAGE>
Financial Highlights
(For a share outstanding throughout the year)
<TABLE>
<CAPTION>
For the period For the period
May 1, 1995 For the January 4, 1993
(commencement eleven months (commencement
of operations) to ended Year endedof operations) to
May 31, May 31 June 30 June 30
1995 1995* 1994 1993
Class M Class B
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $8.74 $8.75 $9.46 $9.02
Investment operations
Net investment income .04 .41 .45 .21
Net realized and unrealized
gain (loss) on investments .28 .22 (.58) .43
Total from investment
operations .32 .63 (.13) .64
Less distributions:
From net investment income (.08) (.41) (.45) (.20)
Net realized gain on
investments -- (.02) --
In excess of realized gain on
investments -- -- (.11) --
Total distributions (.08) (.41) (.58) (.20)
Net asset value,
end of period $8.98 $8.97 $8.75 $9.46
Total investment return at
net asset value (%) (a)3.21(b) 7.51(b) (1.59) 7.21(b)
Net assets, end of period
(in thousands) $ 1 $58,591 $44,916 $15,113
Ratio of expenses to average
net assets (%) .09(b) 1.46(b) 1.59 .77(b)
Ratio of net investment
income to average net
assets (%) .42(b) 4.72(b) 4.77 2.42(b)
Portfolio turnover (%) 51.86(b) 51.86(b) 51.74 44.58(b)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For the period
For the February 20,
eleven 1990
months (commencement
ended of operations)
May 31 Year ended June 30 to June 30
1995+ 1994 1993 1992 1991 1990
Class A
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 8.75 $ 9.46 $ 8.97 $ 8.64 $ 8.50 $ 8.50
Investment operations
Net investment income .46 .51 .54 .59(c) .62(c) .22(c)
Net realized and unrealized
gain (loss) on investments .23 (.58) .58 .38 .13 .01
Total from investment
operations .69 (.07) 1.12 .97 .75 .23
Less distributions:
From net investment income (.46) (.51) (.55) (.60) (.61) (.23)
Net realized gain on
investments -- (.08) (.08) (.04) -- --
In excess of realized gain
on investments -- (.05) -- -- -- --
Total distributions (.46) (.64) (.63) (.64) (.61) (.23)
Net asset value, end of
period $8.98$ 8.75 $9.46$ 8.97 $ 8.64 $8.50
Total investment return at
net asset value (%) (a) 8.25(b) (.94) 13.02 11.52 9.17 2.71(b)
Net assets, end of period
(in thousands) $242,569 $246,336 $235,243 $159,658 $99,978 $34,588
Ratio of expenses to average
net assets (%) .87(b) .95 .92 .75(c) .66(c) .26(b)(c)
Ratio of net investment
income to average net
assets (%) 5.36(b) 5.43 5.90 6.69(c) 7.09(c)3.06(b)(c)
Portfolio turnover (%) 51.86(b) 51.74 44.58 80.21 101.21 `7.58(b)
</TABLE>
* The fiscal year has been chnaged from June 30 to May 31.
(a) Total Investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) Not annualized.
(c) Reflects an expense limitation. As a result of the limitation, expenses of
the
fund for the years ended June 30, 1992 and 1991 and for the period ended
June 30, 1990 reflect a reduction of $0.01, $0.03 and $0.02,
respectively.
<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the year)
<TABLE>
<CAPTION> FOR THE PERIOD FOR THE PERIOD
APRIL 17, 1995
JULY 15, 1993
(COMMENCEMENT OF (COMMENCEMENT OF
OPERATIONS) TO YEAR ENDED OPERATIONS) TO
MAY 31 MAY 31 MAY 31
1995<F1> 1995 1994
CLASS M CLASS B
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $8.80 $8.90$9.43
INVESTMENT OPERATIONS
Net investment income .05 .47 .41
Net realized/unrealized gain (loss)
on investments .21 .10 (.46)
TOTAL FROM INVESTMENT OPERATIONS .26 .57 (.05)
LESS DISTRIBUTIONS FROM:
Net investment income (.06) (.47) (.40)
Net realized gain on investments -- -- --
In excess of net gain on investments --
- -- (.08)
TOTAL DISTRIBUTIONS (.06) (.47) (.48)
NET ASSET VALUE, END OF PERIOD $9.00 $9.00 $8.90
TOTAL INVESTMENT RETURN
AT NET ASSET VALUE (%) <F3> 2.03<F4> 6.72 (.68)<F4>
NET ASSETS, END OF PERIOD (in thousands) $119
$21,071 $10,251
Ratio of expenses to average net assets (%).20<F4>
1.59 1.42<F4>
Ratio of net investment income to
average net assets (%) .84<F4> 5.31 4.25<F4>
Portfolio turnover (%) 82.91 82.91 41.77<F4>
<PAGE>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
FOR THE PERIOD
JULY 15, 1993
THREE MONTHS (COMMENCEMENT OF
ENDED YEAR ENDED OPERATIONS) TO
MAY 31 FEBRUARY 28 FEBRUARY 28
1995* 1995 1994
CLASS B
NET ASSET VALUE, BEGINNING OF
PERIOD $8.97 $9.38 $9.48
INVESTMENT OPERATIONS
NET INVESTMENT INCOME .11 .47 .28
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS .27 (.40) (.08)
TOTAL FROM INVESTMENT OPERATIONS .38 .07 .20
LESS DISTRIBUTIONS:
FROM NET INVESTMENT INCOME (.12) (.47) (.28)
FROM NET REALIZED GAIN ON
INVESTMENTS -- (.01) (.02)
TOTAL DISTRIBUTIONS (.12) (.48) (.30)
NET ASSET VALUE, END OF PERIOD $9.23 $8.97 $9.38
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%)(B) 4.23(C) .93 2.18(C)
NET ASSETS, END OF PERIOD
(IN THOUSANDS) $44,252 $36,670 $12,633
RATIO OF EXPENSES TO AVERAGE NET ASSETS (%) .38(C)
1.57 1.00(C)
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS (%) 1.26(C) 5.23 2.90(C)
PORTFOLIO TURNOVER (%) 4.15(C) 26.09 15.65(C)
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR THE PERIOD
JULY 21, 1989
THREE MONTHS (COMMENCEMENT
ENDED OF OPERATIONS)
MAY 31 YEAR ENDED FEBRUARY 28 TO FEBRUARY 28
1995* 1995 1994 1993 1992 1991 1990
CLASS A
$8.98 $9.39 $9.40 $8.76 $8.42 $8.36 $8.50
.13 .53 .54 .57(A) .61(A) .62(A) .36(A)
.26 (.40) .01 .65 .34 .06 (.14)
.39 .13 .55 1.22 .95 .68 (.22)
(.13) (.53) (.54) (.57) (.61) (.62) (.36)
-- (.01) (.02) (.01) -- -- --
(.13) (.54) (.56) (.58) (.61) (.62) (.36)
$9.24 $8.98 $9.39 $9.40 $8.76 $8.42 $8.36
4.39(C) 1.60 5.93 14.34 11.65 8.53 4.30(C)
$178,785 $171,568 $171,757 $144,374 $93,086 $47,112 $19,203
.21(C) .92 .91 .72(A) .52(A) .41(A) .79(A)(C)
1.44(C) 5.94 5.36 6.31(A) 6.98(A) 7.43(A)6.96(A)(C)
4.15(C) 26.09 15.65 12.26 3.30 9.01 4.41(C)
*THE FISCAL YEAR END HAS CHNAGED FROM FEBRUARY 28 TO MAY 31.
(A)REFLECTS AN EXPENSE LIMITATION. AS A RESULT, NET INVESTMENT
INCOME FOR THE YEARS ENDED FEBRUARY 28, 1993, 1992 AND 1991,
REFLECTS EXPENSE REDUCTIONS OF APPROXIMATELY $0.01, $0.04, AND
$0.06 PER SHARE, RESPECTIVELY.
(B)TOTAL INVESTMENT RETURN ASSUMES DIVIDEND REINVESTMENT AND DOES
NOT REFLECT THE EFFECT OF SALES CHARGES.
(C)NOT ANNUALIZED.
</TABLE>
<PAGE>
OBJECTIVES
EACH FUND SEEKS AS HIGH A LEVEL OF CURRENT INCOME EXEMPT
FROM FEDERAL INCOME TAX AND , EXCEPT FOR THE FLORIDA FUND,
PERSONAL INCOME TAX OF ITS RESPECTIVE STATE AS PUTNAM INVESTMENT
MANAGEMENT, INC., THE FUNDS' INVESTMENT MANAGER ("PUTNAM
MANAGEMENT") , BELIEVES IS CONSISTENT WITH PRESERVATION OF
CAPITAL. None of the funds are intended to be a complete
investment program, and there is no assurance that any
fund will achieve its objective.<PAGE>
HOW THE FUNDS PURSUE THEIR OBJECTIVES
BASIC INVESTMENT STRATEGY
EACH FUND SEEKS ITS OBJECTIVE BY FOLLOWING THE
FUNDAMENTAL INVESTMENT POLICY OF INVESTING AT LEAST 80% OF
ITS NET ASSETS IN TAX-EXEMPT SECURITIES (WHICH ARE
DESCRIBED BELOW), EXCEPT WHEN INVESTING FOR DEFENSIVE PURPOSES
DURING TIMES OF ADVERSE MARKET CONDITIONS.
Under normal market conditions, the Florida fund will invest
at least 65% of its net assets in tax-exempt securities issued by
the State of Florida, its political subdivisions and their
agencies and instrumentalities and in other tax-exempt securities
which are exempt from the Florida intangibles tax. The Florida
fund generally will seek to select investments which will enable
its shares to be exempt from this tax, except when pursuing the
alternative investment strategies described below. Such
investments at times may have lower yields than other tax-exempt
securities available for investment by the Florida fund. This
investment strategy could also result in higher portfolio
turnover and related transaction costs. See "How a fund makes
distributions to shareholders--Florida taxes."
Under current law, to the extent distributions by a fund
are derived from interest on tax-exempt securities defined (as
with respect to such fund), such distributions will be exempt
from federal income tax and, except for the Florida fund,
personal income tax in the relevant state (other than any
applicable federal or state alternative minimum tax or any state
minimum corporate income tax). In the case of the Minnesota
fund, at least 95% of that fund's total exempt-
interest dividends
must also be derived from
interest obligations of the State of Minnesota and its agencies,
instrumentalities and political subdivisions in order for such
distributions to be exempt, and in the case of the New Jersey
fund, it must qualify as a "qualified investment fund" under New
Jersey law. See "How how a fund makes distributions to
shareholders; tax information" below.
<PAGE>
Each fund may also invest from time to time in securities
exempt only from federal income tax and in taxable obligations
described below under "Alternative investment strategies" to the
extent permitted by its investment policies, or hold its assets
in money market instruments or in cash .
Each fund's investments in tax-exempt securities and
taxable obligations will be limited to securities rated at
the time of purchase not lower than the five highest grades
assigned by Moody's Investors Service, Inc. ("Moody's") (Aaa, Aa,
A, Baa or Ba) and Standard & Poor's Corporation ("S&P")
(AAA, AA, A, BBB or BB), for the Arizona, Massachusetts,
Michigan, Minnesota and Ohio funds, by either Moody's and S&P for
the Florida, New Jersey and Pennslyvnia funds, or for all
funds, unrated securities that Putnam Management
determines are of comparable quality.
No funds will purchase a security rated both Ba by Moody's and
BB by S&P at the time of purchase, or, if unrated, determined by
Putnam Management to be of comparable quality if, as a result,
more than 25% of the fund's total assets would be of that
quality. The rating services' descriptions of the five highest
grades of debt securities are included in the appendix to this
prospectus. Securities rated Ba or BB (and comparable
unrated securities) are considered to have speculative
elements, with large uncertainties or major exposures to
adverse conditions. Investors should carefully consider their
ability to assume the risks of owning shares of a mutual fund
which may invest in securities in the lower rating
categories. Putnam Management expects that each fund
will generally invest in tax-exempt securities of longer
maturities (10 years or more), but each fund may invest in
tax-exempt securities having a broad range of maturities.
Under the Pennsylvania fund's investment policies, Putnam
Management will not trade the fund's securities for the purpose
of seeking profits . It is a fundamental policy of the
fund that its portfolio securities may be varied only (i) to
eliminate unsafe investments and investments not consistent with
the preservation of the fund's capital or the tax status of the
fund's investments; (ii) to honor redemption orders and meet
anticipated redemption requirements and negate gains from
discount purchases; (iii) to reinvest the earnings from
securities in like securities; or (iv) to defray normal
administrative expenses. For purposes of this fundamental
policy, the fund may vary its portfolio securities if (i) there
has been an adverse change in a security's credit rating or in
that of its issuer or in Putnam Management's credit analysis of
the security or its issuer; (ii) there has been, in the opinion
of Putnam Management, a deterioration or anticipated
deterioration in general economic or market conditions affecting
issuers of tax-exempt securities, or a change or anticipated
change in interest rates; (iii) adverse changes or anticipated
changes in market conditions or economic or other factors
temporarily affecting the issuers of one or more portfolio
securities make necessary or desirable the sale of such security
or securities in anticipation of the fund's repurchase of the
same or comparable securities at a later date; or (iv) Putnam
Management engages in the alternative investment practices
described below. In addition, for purposes of this
fundamental policy, the fund may purchase or sell
financial futures contracts and related options and options on
securities and securities indices for hedging purposes. As a
result of these limitations, the fund may have less flexibility
than other mutual funds in responding to market or interest rate
changes and to new investment opportunities.
ALTERNATIVE MINIMUM TAX
INTEREST INCOME FROM CERTAIN TYPES OF TAX-EXEMPT SECURITIES MAY
BE SUBJECT TO FEDERAL ALTERNATIVE MINIMUM TAX.
In determining compliance with the 80% test described above, it
is a fundamental policy of each fund to exclude from the
definition of tax-exempt securities any securities the interest
from which may be subject to federal alternative minimum tax for
individuals. Corporate shareholders however, may be subject to
federal alternative minimum tax on a portion of tax-exempt income
the exempt-interest dividends they receive from a fund is
generally included in the alternative minimum taxable income of
corporations.
ALTERNATIVE INVESTMENT STRATEGIES
At times Putnam Management may judge that conditions in the
markets for tax-exempt securities make pursuing a
fund's basic investment strategy inconsistent with the
best interests of its shareholders. At such times Putnam
Management may temporarily use alternative
strategies primarily designed to reduce fluctuations in
the value of a fund's assets.
In implementing these defensive strategies, a
fund may invest without limit in taxable obligations,
including: obligations of the U.S. government, its agencies or
instrumentalities; obligations issued by governmental issuers in
other states, the interest on which would be exempt from federal
income tax; other debt securities rated within the four highest
grades by either Moody's or S &P ; commercial paper rated
in the highest grade by either rating service (Prime-1 or A-1+,
respectively); certificates of deposit and bankers' acceptances;
repurchase agreements ; or any other securities that
Putnam Management considers consistent with such defensive
strategies.
It is impossible to predict when, or for how long, a
fund will use these alternative strategies.
TAX-EXEMPT SECURITIES
THE TERM "TAX-EXEMPT SECURITIES" WHEN USED WITH RESPECT TOA
PARTICULAR FUND, INCLUDES OBLIGATIONS OF A
STATE , AND ITS POLITICAL SUBDIVISIONS AND THEIR AGENCIES,
INSTRUMENTALITIES OR OTHER GOVERNMENTAL UNITS, THE INTEREST
ON WHICH, IN THE OPINION OF BOND COUNSEL, IS EXEMPT FROM
FEDERAL INCOME TAX AND (EXCEPT FOR FLORIDA, WHICH HAS NO
PERSONAL INCOME TAX), PERSONAL OR GROSS INCOME TAX OF THE
RELEVANT STATE .
These securities are issued to obtain funds for various
public purposes, such as the construction of public facilities,
the payment of general operating expenses or the refunding of
outstanding debts.
They may also be issued to finance various private
activities, including the lending of funds to public or private
institutions for the construction of housing, educational or
medical facilities, or to fund short-term cash requirements.
They may also include certain types of industrial development
bonds, private activity bonds or notes issued by public
authorities to finance privately owned or operated facilities
.
Short-term tax-exempt securities may be issued as
interim financing in anticipation of tax collections, revenue
receipts or bond sales to finance various public purposes.
Tax-exempt securities also include obligations
issued by certain other governmental entities, such as U.S.
territories, if these debt obligations generate interest
income that is exempt from federal income tax and
(except for Florida which has no personal income tax) the
personal or gross income tax of the relevant state.
THE TWO PRINCIPAL CLASSIFICATIONS OF TAX-EXEMPT SECURITIES
ARE GENERAL OBLIGATION AND SPECIAL OBLIGATION (OR SPECIAL REVENUE
OBLIGATION) SECURITIES.
GENERAL OBLIGATION securities involve a pledge of the credit
of an issuer possessing taxing power and are payable from the
issuer's general unrestricted revenues. Their payment may depend
on an appropriation by the issuer's legislative body. The
characteristics and methods of enforcement of general obligation
securities vary according to the law applicable to the particular
issuer.
SPECIAL OBLIGATION (or SPECIAL REVENUE OBLIGATION) securities
are payable only from the revenues derived from a particular
facility or class of facilities, or a specific revenue source,
and generally are not payable from the unrestricted revenues of
the issuer. Industrial development bonds and private activity
bonds are in most cases special obligation securities,
whose credit quality is tied to the private user of
the facilities.
A fund may also invest in securities representing
interests in tax-exempt securities , known as "inverse
floating obligations" or "residual interest bonds ." These
obligations pay interest rates that vary inversely
with changes in the interest rates of specified short-term
tax - exempt securities or an index of short-term tax -
exempt securities. The interest rates on inverse floating
obligations or residual interest bonds will typically decline as
short-term market interest rates increase and increase as short-
term market rates decline.
These securities have the effect of providing a degree of
investment leverage . They will generally respond to
changes in market interest rates more rapidly than fixed-
rate long-term securities (typically twice as
fast) . As a result, the market values of inverse floating
obligations and residual interest bonds will generally be more
volatile than the market values of fixed-rate tax - exempt
securities.
RISK FACTORS
THE VALUES OF TAX-EXEMPT SECURITIES FLUCTUATE IN
RESPONSE TO CHANGES IN INTEREST RATES. A decrease in
interest rates will generally result in an increase in the value
of a fund's assets. Conversely, during periods of rising
interest rates, the value of a fund's assets will
generally decline. The magnitude of these fluctuations generally
is greater for securities with longer maturities. However, the
yields on such securities are also generally higher. In
addition, the values of fixed-income securities are
affected by changes in general economic conditions and business
conditions affecting the specific industries of their issuers.
Changes by recognized rating services in their ratings of
a fixed-income security and changes in the ability
of an issuer to make payments of interest and principal may also
affect the value of these investments. Changes in the value of
portfolio securities generally will not affect income derived
from these securities, but will affect a fund's net
asset value.
A fund will not necessarily dispose of a security when
its rating is reduced below its rating at the time of
purchase . However, Putnam Management will monitor the
investment to determine whether continued investment in the
security will assist in meeting a fund's investment
objective.
EACH FUND MAY INVEST IN BOTH HIGHER-RATED AND LOWER-RATED
TAX-EXEMPT SECURITIES. LOWER-RATED SECURITIES ARE SECURITIES
RATED BELOW BAA BY MOODY'S OR BBB BY S&P, AND ARE COMMONLY KNOWN
AS "JUNK BONDS." The values of lower-rated securities
generally fluctuate more than those of higher-rated securities.
In addition, the lower rating reflects a greater possibility that
the financial condition of the issuer, or adverse changes in
general economic conditions, or both, may impair the ability of
the issuer to make payments of income and principal.
The tables below show the percentages of fund net assets
invested during fiscal 1995 in securities assigned to
various rating categories by S&P or if unrated by S&P, assigned
to comparable rating categories by Moody's and in
unrated securities determined by Putnam Management
to be of comparable quality :
<PAGE>
<TABLE>
<CAPTION>
ARIZONA FUND FLORIDA FUND MASSACHUSETTS FUND MICHIGAN FUND
------------------------- -------------------------- ------------------------ ------------------------
UNRATED UNRATED UNRATED UNRATED
RATED SECURITIES RATED SECURITIES RATED SECURITIES RATED SECURITIES
SECURITIES OF COMPARABLE SECURITIES OF COMPARABLE SECURITIES OF COMPARABLE SECURITIES OF COMPARABLE
AS PERCENTAGE QUALITY, AS AS PERCENTAGE QUALITY, AS AS PERCENTAGE QUALITY, AS AS PERCENTAGE QUALITY, AS
OF NET PERCENTAGE OF OF NET PERCENTAGE OF OF FUND PERCENTAGE OF OF NET PERCENTAGE OF
RATINGS ASSETS NET ASSETS ASSETS NET ASSETS ASSETS FUND ASSETS ASSETS NET
ASSETS
- ------------------------------------------------------------------------------------------------------------------------
<C <C <C> <C> <C> <C> <C> <C> <C>
"AAA" 40.83% - 62.93% - 41.37% 0.32% 48.48% -
"AA" 16.14 - 10.05 - 4.76 0.22 9.38 -
"A" 16.83 0.41% 7.54 0.58% 16.02 0.61 7.77 2.93%
"BBB" 13.62 5.34 13.75 0.52 13.84 4.42 19.67 3.59
"BB" 1.86 4.82 - 2.96 1.23 15.94 0.64 6.32
"B" - 0.15 0.05 1.62 - 1.27 1.22 -
------ ------ ------ ------ ------- ------ ------ ------
89.28% 10.72% 94.32% 5.68% 77.22% 22.78% 87.16% 12.84%
- ------------------------------------------------------------------------------------------------------------------------
/TABLE
<PAGE>
<TABLE>
<CAPTION>
MINNESOTA FUND NEW JERSEY FUND OHIO FUND PENNSYLVANIA FUND
------------------------- -------------------------- ------------------------ ------------------------
UNRATED UNRATED UNRATED UNRATED
RATED SECURITIES RATED SECURITIES RATED SECURITIES RATED SECURITIES
SECURITIES OF COMPARABLE SECURITIES OF COMPARABLE SECURITIES OF COMPARABLE SECURITIES OF COMPARABLE
AS PERCENTAGE QUALITY, AS AS PERCENTAGE QUALITY, AS AS PERCENTAGE QUALITY, AS AS PERCENTAGE QUALITY, AS
OF FUND PERCENTAGE OF OF FUND PERCENTAGE OF OF FUND PERCENTAGE OF OF FUND PERCENTAGE OF
RATINGS ASSETS FUND ASSETS ASSETS FUND ASSETS ASSETS FUND ASSETS ASSETS FUND ASSETS
- ------------------------------------------------------------------------------------------------------------------------
<C <C> <C> <C> <C> <C> <C> <C> <C>
"AAA" 34.80% - 43.83% - 57.43% 0.56% 56.46% 0.33%
"AA" 21.75 - 15.61 0.05% 7.78 0.22 7.10 -
"A" 25.18 - 13.61 1.32 7.16 - 11.03 -
"BBB" 10.86 2.50% 7.80 2.32 13.28 6.63 15.17 3.61
"BB" - 4.91 0.38 15.08 1.21 5.42 1.85 3.91
"B" - - % - - 0.31 0.30 0.24
------ ------ ------ ------ ------- ------ ------ ------
92.59% 7.41% 81.23% 18.77% 86.86% 13.14% 91.91% 8.09%
- ------------------------------------------------------------------------------------------------------------------------
/TABLE
<PAGE>
Putnam Management seeks to minimize the risks of investing in
lower-rated securities through careful investment analysis.
However, the amount of information available about the financial
condition of an issuer of tax-exempt securities may not be as
extensive as that which is made available by corporations whose
securities are publicly traded. When a fund invests in tax-
exempt securities in the lower rating categories,
the achievement of the fund's goals is more dependent on
Putnam Management's ability than would be the case if the fund
were investing in tax-exempt securities in the higher rating
categories. Investors should consider carefully their ability to
assume the risks of owning shares of a mutual fund that may
invest in securities in certain of the lower rating
categories .
At times, a substantial portion of each fund's assets may
be invested in securities as to which that fund , by itself
or together with other funds and accounts managed by Putnam
Management and its affiliates, holds all or a major
portion . Under adverse market or economic conditions or
in the event of adverse changes in the financial condition of the
issuer, a fund could find it more difficult to sell
these securities when Putnam Management believes it
advisable to do so or may be able to sell the securities
only at prices lower than if they were more widely held.
Under these circumstances, it may also be more difficult
to determine the fair value of such securities for purposes of
computing a fund's net asset value.
In order to enforce its rights in the event of a default
of these securities, a fund may be required to
participate in various legal proceedings or take
possession of and manage assets securing the issuer's obligations
on the securities . This could increase a
fund's operating expenses and adversely affect a
fund's net asset value. Any income derived from a
fund's ownership or operation of such assets would not be
tax-exempt. The ability of a holder of a tax-exempt security
to enforce the terms of that security in a bankruptcy proceeding
may be more limited than would be the case with respect to
privately-issued securities.
Certain securities held by a fund may permit the issuer at
its option to "call," or redeem, its securities. If an issuer
were to redeem securities held by a fund during a time of
declining interest rates, that fund may not be able to
reinvest the proceeds in securities providing the same investment
return as the securities redeemed.
Each fund may invest in so-called "zero-coupon" bonds
whose values are subject to greater fluctuation in response to
changes in market interest rates than bonds that pay
interest currently. Zero-coupon bonds are issued at a significant
discount from face value and pay interest only at maturity rather
than at intervals during the life of the security.
<PAGE>
Zero-coupon bonds allow an issuer to avoid the need to
generate cash to meet current interest payments. Accordingly,
such bonds may involve greater credit risks than bonds paying
interest currently. A fund is required to accrue and
distribute income from zero-coupon bonds on a current basis, even
though it does not receive that income currently in cash. Thus a
fund may have to sell other investments to obtain cash
needed to make income distributions.
The secondary market for tax-exempt securities is
generally less liquid than that for taxable fixed-income
securities, particularly for securities in the lower rating
categories. Thus it may be more difficult from time to
time to value or buy and sell certain securities
.
FOR ADDITIONAL INFORMATION CONCERNING THE RISKS ASSOCIATED
WITH INVESTING IN SECURITIES IN THE LOWER RATING CATEGORIES, SEE
THE SAI.
SINCE THE FUNDS INVEST PRIMARILY IN TAX-EXEMPT
SECURITIES , THE VALUE OF EACH FUND'S SHARES MAY BE
ESPECIALLY AFFECTED BY FACTORS PERTAINING TO THE ECONOMY OF
THE RELEVANT STATE AND OTHER FACTORS AFFECTING THE
ABILITY OF ISSUERS OF TAX-EXEMPT SECURITIES TO MEET THEIR
OBLIGATIONS.
As a result, the value of each fund's shares may
fluctuate more widely than the value of shares of a portfolio
investing in securities relating to a number of different states.
The ability of state, county or local governments to meet their
obligations will depend primarily on the availability of tax and
other revenues to those governments and on their fiscal
conditions generally.
The amounts of tax and other revenues available to
governmental issuers of tax-exempt securities may be
affected from time to time by economic, political and demographic
conditions within or outside of the particular state. In
addition, constitutional or statutory restrictions may limit a
government's power to raise revenues or increase taxes. The
availability of federal, state and local aid to issuers of
tax-exempt securities may also affect their ability to
meet their obligations.
Payments of principal and interest on special obligation
securities will depend on the economic condition of the facility
or specific revenue source from whose revenues the payments will
be made . The facility's economic status, in turn ,
could be affected by economic, political and demographic
conditions affecting the particular state.
Any reduction in the actual or perceived ability of an issuer
of tax-exempt securities to meet its obligations
would be likely to have an adverse effect on the
market value and marketability of its obligations . A
reduction in the rating of the issuer's outstanding securities
would be included among these factors. Doubts surrounding such
an issuer's ability to meet its obligations could adversely
affect the values of other tax-exempt securities as
well.
DIVERSIFICATION AND CONCENTRATION POLICIES
Under the Investment Company Act of 1940 and the
Internal Revenue Code of 1986, funds may generally invest
up to 25% of its total assets in the securities of any one
issuer , and each of the Arizona, Florida and New Jersey funds,
may generally invest up to 25% of its total assets in the
securities of each of any two issuers. Otherwise, each of
the funds may not invest more than 5% of its assets
in the securities of any one issuer.
Because of these limitations and the relatively small number of
issuers of tax-exempt securities available to each fund, each
fund is more likely to invest a higher percentage of its assets
in the securities of a single issuer than an
investment company that invests in a broad range of
tax-exempt securities. This practice involves an increased
risk of loss to a fund if the issuer were unable to
make interest or principal payments or if the market value of
these securities were to decline.
NO FUND WILL INVEST MORE THAN 25% OF ITS TOTAL ASSETS IN
ANY ONE INDUSTRY. Governmental issuers of tax-exempt
securities are not considered part of any "industry."
However, for this purpose (and for diversification purposes
discussed above) tax-exempt securities backed only by the
assets and revenues of nongovernmental users may be
deemed to be issued by such nongovernmental users. Thus, the 25%
limitation would apply to these obligations.
It is possible that a fund may invest more than
25% of its assets in a broader segment of the market for tax-
exempt securities , such as revenue obligations of hospitals
and other health care facilities, housing revenue obligations, or
airport revenue obligations. This would be the case only if
Putnam Management determined that the yields available from
obligations in a particular segment of the market justified the
additional risks associated with such concentration.
Although these obligations could be supported by the
credit of governmental issuers or by the credit of
nongovernmental issuers engaged in a number of industries,
economic, business, political and other developments generally
affecting the revenues of their issuers may have a
general adverse effect on all tax-exempt securities in a market
segment. (Examples would include proposed legislation or
pending court decisions affecting the financing of such projects
and market factors affecting the demand for their services or
products.)
Each fund reserves the right to invest more than 25% of
its assets in industrial development bonds and private
activity securities .
<PAGE>
INVESTMENTS IN PREMIUM SECURITIES
During a period of declining interest rates, many of each fund's
portfolio investments will likely bear coupon rates that are
higher than current market rates, regardless of whether these
securities were originally purchased at a premium. These
securities would generally carry market values greater than the
principal amounts payable on maturity, which would be reflected
in the net asset value of a fund's shares.
The values of these "premium" securities tend to approach the
principal amount as the securities approach maturity (or call
price in the case of securities approaching their first call
date). As a result, an investor who purchases shares of a fund
during these periods would initially receive higher monthly
distributions (derived from the higher coupon rates payable on
that fund's investments) than might be available from alternative
investments bearing current market interest rates. But the
investor may face an increased risk of capital loss as these
higher coupon securities approach maturity (or first call date).
In evaluating the potential performance of an investment in a
fund, investors may find it useful to compare that fund's current
dividend rate with that fund's "yield," which is computed on a
yield-to-maturity basis in accordance with SEC regulations and
which reflects amortization of market premiums. See "How
performance is shown."
PORTFOLIO TURNOVER
The length of time a fund has held a particular security
is not generally a consideration in investment decisions. A
change in the securities held by a fund is known as
"portfolio turnover." As a result of a fund's investment
policies, under certain market conditions a fund's
portfolio turnover rate may be higher than that of other mutual
funds. Portfolio turnover generally involves some expense to a
fund , including brokerage commissions or dealer
markups and other transaction costs on the sale of
securities and reinvestment in other securities. These
transactions may result in realization of taxable capital gains.
Portfolio turnover rates for the life of each fund are
shown in the section "Financial highlights."
FINANCIAL FUTURES AND OPTIONS
EACH FUND MAY PURCHASE AND SELL FINANCIAL FUTURES CONTRACTS
FOR HEDGING PURPOSES.
Futures contracts on the Municipal Bond Index are
traded on the Chicago Board of Trade. This index is
intended to represent a numerical measure of market performance
for long-term tax-exempt bonds. An "index future" is a contract
to buy or sell units of a particular securities index at an
agreed price on a specified future date. Depending on the change
in value of the index between the time a fund enters into
and terminates an index futures contract, that fund
realizes a gain or loss. A fund may purchase and sell
futures contracts on the index (or any other tax -
exempt bond index approved for trading by the Commodity
Futures Trading Commission) to hedge against general changes in
market values of tax-exempt securities that such fund owns
or expects to purchase. Each fund may also purchase and
sell put and call options on index futures or on the
indexes directly, in addition to or as an alternative to
purchasing and selling index futures.
For hedging purposes, each fund may also purchase
and sell futures contracts and related options on U.S.
Treasury securities, including U.S. Treasury bills, notes and
bonds ("U.S. government securities") and options directly
on U.S. government securities. U.S. government securities
futures and options would be used for purposes similar to
index futures and options.
In addition, to the extent consistant with its investment
restrictions, each fund may purchase put and call options on, or
warrants to purchase tax-exempt securities, either directly or
through custodial arrangements in which the funds and other
investors own an interest in one or more options on tax-exempt
securities.
THE USE OF FUTURES AND OPTIONS INVOLVES CERTAIN SPECIAL
RISKS AND MAY RESULT IN REALIZATION OF TAXABLE INCOME OR CAPITAL
GAINS. FUTURES AND OPTIONS TRANSACTIONS INVOLVE COSTS AND MAY
RESULT IN LOSSES.
Certain risks arise from the possibility of imperfect
correlations between movements in the prices of financial futures
and related options and movements in the prices of the underlying
bond index or U.S. government securities or of the
tax-exempt securities that are the subject of the hedge.
The successful use of futures and options further depends on
Putnam Management's ability to forecast interest rate movements
correctly.
Other risks arise from the potential inability to
close out futures or options positions .
There can be no assurance that a liquid secondary market will
exist for any futures contract or option at a particular time.
Certain provisions of the Internal Revenue Code and certain
regulatory requirements may limit the use of futures and
options transactions.
A MORE DETAILED EXPLANATION OF FINANCIAL FUTURES AND OPTIONS
TRANSACTIONS AND THE RISKS ASSOCIATED WITH THEM IS INCLUDED IN THE
SAI .
OTHER INVESTMENT PRACTICES
EACH FUND MAY ALSO ENGAGE IN THE FOLLOWING
INVESTMENT PRACTICES, EACH OF WHICH MAY RESULT IN
TAXABLE INCOME OR CAPITAL GAINS AND INVOLVES CERTAIN
SPECIAL RISKS. THE SAI CONTAINS MORE DETAILED INFORMATION
ABOUT THESE PRACTICES, INCLUDING LIMITATIONS DESIGNED TO REDUCE
THESE RISKS.
REPURCHASE AGREEMENTS AND FORWARD COMMITMENTS. Each fund
may enter into repurchase agreements on up to 25% of its assets.
These transactions must be fully collateralized at all times.
Each fund may also purchase securities for future
delivery, which may increase its overall investment exposure and
involves a risk of loss if the value of the securities
declines prior to the settlement date. These transactions involve
some risk to a fund if the other party should default on
its obligation and that fund is delayed or prevented from
recovering the collateral or completing the transaction.
DERIVATIVES
Certain of the instruments in which a fund will invest, such as
futures contract, options and inverse floating obligations, are
considered to be "derivatives." Derivatives are financial
instruments whose value depends upon, or is derived from, the
value of an underlying asset, such as a security or an index.
Further information about these instruments and the risks
involved in their use is included elsewhere in this prospectus
and in the SAI.
LIMITING INVESTMENT RISK
Specific investment restrictions help each fund limit
investment risks for its shareholders. These restrictions
prohibit a fund from investing more than:
(a) (For the Massachusetts, Michigan, Minnesota, Ohio
funds with respect to 100% of total assets, for the Pennsylvania
fund with respect to 75% of total assets and for Arizona, Florida
and New Jersey with respect to 50% of total assets) 5% of
total assets in the securities of any one issuer (other than
obligations of the U.S. government or its agencies or
instrumentalities, and for the Massachusetts, Michigan,
Minnesota and Ohio funds, tax-exempt securities); *
(b) 5% of its net assets in securities of any issuer
if the party responsible for payment, together with any
predecessors, has been in operation for less than three
consecutive years (except obligations of the U.S. government,
or its agencies or instrumentalities and
obligations backed by the faith, credit and taxing power
of any person authorized to issue tax-exempt securities) ;
(c) 15% of its net assets in securities restricted as to
resale, excluding securities that have been determined by
the Trustees (or the person designated by them to make
such determinations) to be readily marketable;*
(d) 25% of total assets in any one industry (other
than tax-exempt securities backed by the
governmental issuers and obligations of the U.S. government, its
agencies or instrumentalities);* and
(e) 15% of its net assets in securities that are not readily
marketable, securities restricted as to resale (excluding
securities determined by the Trustees (or the person
designated by them to make such determinations) to be
readily marketable), and repurchase agreements maturing in more
than seven days.
<PAGE>
Restrictions marked with an asterisk (*) above are summaries of
fundamental investment policies. See the SAI for the full
text of these policies and the funds' other fundamental
investment policies. Except for investment policies designated
as fundamental in this prospectus or the SAI , and
the policy that under normal market conditions at least 80% of
each fund's net assets will be invested in tax-exempt
securities (other than securities which may be subject to
federal alternative minimum tax), the investment policies
described in this prospectus and in the SAI are not
fundamental investment policies. The Trustees may change any
non-fundamental investment policies without shareholder approval.
As a matter of policy, the Trustees would not materially change a
fund's investment objective without shareholder approval.
HOW PERFORMANCE IS SHOWN
EACH FUND'S INVESTMENT PERFORMANCE MAY FROM TIME TO TIME
BE INCLUDED IN ADVERTISEMENTS ABOUT THAT FUND . "Yield"
for each class of shares 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 of
the class on the last day of that period.
For purposes of calculating yield , net investment
income is calculated in accordance with SEC regulations and may
differ from net investment income as determined for financial
reporting purposes. SEC 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. See "How the funds pursue their objectives
-- Investments in premium securities."
Yield is based on the price of the shares, including
the maximum initial sales charge in the case of class A
and class M shares, but does not reflect any
contingent deferred sales charge in the case of class B
shares. "Tax-equivalent" yield for each class of shares shows
the effect on performance of the tax-exempt status of
distributions received from each fund . It reflects the
approximate yield that a taxable investment must earn for
shareholders at stated income levels to produce an after-tax
yield equivalent to a class's tax-exempt yield.
<PAGE>
"Total return" for the one-, five- and ten-year periods
(or for the life of a class, if shorter) through the most
recent calendar quarter represents the average annual compounded
rate of return on an investment of $1,000 in a fund
invested at the maximum public offering price (in the case of
class A and class M shares) or reflecting the
deduction of any applicable contingent deferred sales charge (in
the case of class B shares). 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.
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, the composition of a
fund's portfolio, a fund's operating expenses and
which class of shares the investor purchases . Investment
performance also often reflects the risks associated with a
fund's investment objective and policies. These factors
should be considered when comparing a 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. Each fund's performance
may be compared to that of various indexes. See
the SAI .
HOW THE FUNDS ARE MANAGED
THE TRUSTEES OF EACH FUND ARE RESPONSIBLE FOR GENERALLY
OVERSEEING THE CONDUCT OF THAT FUND'S BUSINESS. Subject to
such policies as the Trustees of each fund may determine,
Putnam Management furnishes a continuing investment program for
each fund and makes investment decisions on its behalf.
Subject to the control of the Trustees, Putnam Management also
manages each fund's other affairs and business.
Each fund pays Putnam Management a quarterly fee for these
services based on that fund's average net assets. See "Expenses
summary" and the SAI.
<PAGE>
The following officers of Putnam Management , have had
primary responsibility for the day-to-day management of the
indicated funds' portfolios since the year stated below:
Business experience
Year (at least 5 years)
------- -----------------
Howard K. Manning Employed as an investment
Senior Vice President professional by Putnam
Management
Arizona fund 1995 since 1986.
Michigan fund 1983
Minnesota fund 1983
Triet Nguyen Employed as an investment
Senior Vice President professional by Putnam
Management
Massachusetts fund 1990 since 1985.
New Jersey fund 1995
Richard P. Wyke Employed as an investment
Senior Vice President professional by Putnam
Management
Florida fund 1990 since 1987.
Ohio fund 1995
Pennsylvania fund 1990
Leslie J. Burke Employed as an investment
Vice President professional by Putnam
New Jersey fund 1995 Management since 1992. Prior
to 1992, Ms. Burke was a
Research Associate and
Municipal Bond Trader at
Fidelity Management and
Research Company.
James M. Prusko Employed as an investment
Assistant Vice President professional by Putnam
Ohio fund 1995 Management since 1992. Prior
to 1992, Mr. Prusko was a
Sales and Trading Associate at
Salomon Brothers.
Each fund pays all expenses not assumed by Putnam
Management, 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). Each fund
also reimburses Putnam Management for the compensation and
related expenses of certain officers of that fund and
their staff who provide administrative services to that
fund . The total reimbursement is determined annually by
the Trustees.
Putnam Management places all orders for purchases and sales of a
fund's securities. In selecting broker-dealers, Putnam
Management may consider research and brokerage services furnished
to it and its affiliates. Subject to seeking the most favorable
price and execution available, Putnam Management may consider
sales of shares of a fund (and, if permitted by law, of
the other Putnam funds) as a factor in the selection of broker-
dealers.
ORGANIZATION AND HISTORY
Each fund is a separate Massachusetts business
trust .
Putnam Arizona Tax Exempt Income Fund was organized on
November 9, 1990. Putnam Florida Tax Exempt Income Fund was
organized on June 27, 1990. Putnam Massachusetts Tax
Exempt Income Fund, which prior to October 1, 1995 was known
as Putnam Massachusetts Tax Exempt Income Fund II was
organized on March 7, 1986. Each of Putnam Michigan Tax
Exempt Income Fund, Putnam Minnesota Tax Exempt Income Fund
and Putnam Ohio Tax Exempt Income Fund, which prior to October 1,
1995 were known as Putnam Michigan Tax Exempt Income Fund II,
Putnam Minnesota Tax Exempt Income Fund II and Putnam Ohio
Tax Exempt Income Fund II , respectively, were
organized on September 2, 1986. Putnam New Jersey Tax-Exempt
Income Fund was organized on November 17, 1989. Putnam
Pennsylvania Tax Exempt Income Fund was organized on April 20,
1989. A copy of each fund's Agreement and Declaration
of Trust, which is governed by Massachusetts law, is on file with
the Secretary of State of The Commonwealth of Massachusetts.
Each of the Massachusetts, Michigan, Minnesota, Ohio and
Pennsylvania funds are open-end, diversified management
investment companies and each of the Arizona, Florida and New
Jersey funds are open-end, non-diversified management investment
companies. Each fund has an unlimited number of authorized
shares of beneficial interest. Shares of each fund
may be divided without shareholder approval into two
or more series of shares representing separate investment
portfolios.
Any such series of shares may be divided
without shareholder approval into two or more classes of
shares having such preferences and special or relative rights and
privileges as the Trustees determine. Each fund's shares
are currently divided into three classes. Only the funds'
class A, B and M shares are offered by this prospectus. Each
fund may also offer 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. For more information, including your eligibility to
purchase any other class of shares, contact your investment
dealer or Putnam Mutual Funds (at 1-800-225-1581).
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. Shares are freely transferable, are
entitled to dividends as declared by the Trustees, and, if a
fund were liquidated, would receive the net assets of that
fund. A fund may suspend the sale of shares at any
time and may refuse any order to purchase shares. Although none
of the funds is 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 each fund's Agreement and Declaration of
Trust.
Although each fund is offering only its own shares in this
prospectus , it is possible that a fund might become
liable for any misstatement in the prospectus about
another fund . The Trustees of each fund have
considered this factor in approving the use of a single
prospectus.
If you own fewer shares than a minimum amount set by the Trustees
(presently 20 shares), a fund may choose to redeem your
shares . You will receive at least 30 days' written
notice before a fund redeems your shares, and you may
purchase additional shares at any time to avoid a redemption. A
fund may also redeem shares if you own shares above a
maximum amount set by the Trustees. There is presently no
maximum, but the Trustees may establish one at any time, which
could apply to both present and future shareholders.
THE FUNDS' TRUSTEES: GEORGE PUTNAM,* CHAIRMAN. President
of the Putnam funds. Chairman and Director of Putnam Management
and Putnam Mutual Funds Corp. ("Putnam Mutual Funds"). Director,
Marsh & McLennan Companies, Inc.; WILLIAM F. POUNDS, VICE
CHAIRMAN. Professor of Management, Alfred P. Sloan School of
Management, Massachusetts Institute of Technology ; JAMESON
ADKINS BAXTER, President, Baxter Associates, Inc.; HANS H. ESTIN,
Vice Chairman, North American Management Corp.; JOHN A. HILL,
Principal and Managing Director, First Reserve Corporation;
ELIZABETH T. KENNAN, President Emeritus and Professor ,
Mount Holyoke College; LAWRENCE J. LASSER,* Vice President of the
Putnam funds. President, Chief Executive Officer and Director of
Putnam Investments, Inc. and Putnam Management. Director, Marsh
& McLennan Companies, Inc.; ROBERT E. PATTERSON, Executive Vice
President, Cabot Partners Limited Partnership; DONALD S.
PERKINS,* Director of various corporations, including
AT&T , Kmart Corporation and Time Warner Inc.; GEORGE
PUTNAM, III,* President, New Generation Research, Inc. ; ELI
SHAPIRO, Alfred P. Sloan Professor of Management, Emeritus,
Alfred P. Sloan School of Management, Massachusetts Institute of
Technology ; A.J.C. SMITH,* Chairman, Chief Executive Officer
and Director, Marsh & McLennan Companies, Inc.; and W. NICHOLAS
THORNDIKE, Director of various corporations and charitable
organizations, including Data General Corporation, Bradley Real
Estate, Inc. and Providence Journal Co. Also, Trustee of
Massachusetts General Hospital and Eastern Utilities Associates.
The funds' Trustees are also Trustees of the other Putnam
funds. Those marked with an asterisk (*) are or may be deemed to
be "interested persons" of the funds , Putnam Management or
Putnam Mutual Funds.
<PAGE>
ABOUT YOUR INVESTMENT
ALTERNATIVE SALES ARRANGEMENTS
This prospectus offers investors three classes of shares
that bear sales charges in different forms and amounts and
that bear different levels of expenses:
CLASS A SHARES. An investor who purchases class A shares
pays a sales charge at the time of purchase. As a result,
class A shares are not subject to any charges when they
are redeemed , except for sales at net asset value in
excess of $1 million that are subject to a contingent
deferred sales charge ("CDSC") . Certain purchases of
class A shares qualify for reduced sales charges. Class A
shares bear a lower 12b-1 fee than class B and
class M shares. See "How to buy shares - - Class A
shares " and "Distribution plans."
CLASS B SHARES. Class B shares are sold without an initial sales
charge, but are subject to a CDSC if redeemed within a
specified period after purchase . Class B shares also bear a
higher 12b-1 fee than class A and class M shares. Class B
shares automatically convert into class A shares,
based on relative net asset value , approximately eight
years after purchase. For more information about the
conversion of class B shares, see the SAI. This discussion will
include information about how shares acquired through
reinvestment of distributions are treated for conversion
purposes. The discussion will also note certain circumstances
under which a conversion may not occur. Class B shares
provide an investor the benefit of putting all of the investor's
dollars to work from the time the investment is made . Until
conversion, class B shares will have a higher expense ratio
and pay lower dividends than class A and class M
shares because of the higher 12b-1 fee. See "How to buy
shares - - Class B shares " and "Distribution
plans."
CLASS M SHARES. An investor who purchases class M shares
pays a sales charge at the time of purchase that is lower
than the sales charge applicable to class A shares.
Certain purchases of class M shares qualify for
reduced sales charges. Class M shares bear a 12b-1 fee
that is lower than class B shares but higher than class A
shares. Class M shares are not subject to any CDSC and do
not convert into any other class of shares. See "How to buy
shares -- Class M shares " and "Distribution plans."
<PAGE>
WHICH ARRANGEMENT IS BEST FOR YOU? The decision as to
which class of shares provides a more suitable investment for an
investor depends on a number of factors, including the amount and
intended length of the investment. Investors making investments
that qualify for reduced sales charges might consider
class A or class M shares. Investors who prefer
not to pay an initial sales charge might consider class B
shares. Orders for class B shares for $250,000 or more
will be treated as orders for class A shares or declined.
For more information about these sales arrangements, consult your
investment dealer or Putnam Investor Services. Shares
may only be exchanged for shares of the same class of another
Putnam fund. See "How to exchange shares."
HOW TO BUY SHARES
You can open a fund account with as little as $500 and
make additional investments at any time with as little as $50.
You can buy fund shares three ways - through most
investment dealers, through Putnam Mutual Funds (at 1-800-225-
1581), or through a systematic investment plan. If you do not
have a dealer, Putnam Mutual Funds can refer you to one.
BUYING SHARES THROUGH PUTNAM MUTUAL FUNDS. Complete an order
form and write a check for the amount you wish to
invest, payable to the fund. Return the completed form
and check to Putnam Mutual Funds, which will act as your
agent in purchasing shares through your designated investment
dealer.
BUYING SHARES THROUGH SYSTEMATIC INVESTING. You can make regular
investments of $25 or more per month through automatic deductions
from your bank checking account. Application forms are available
from your investment dealer or through Putnam Investor Services.
Shares are sold at the public offering price based on the net
asset value next determined after Putnam Investor Services
receives your order. In most cases, in order to receive that
day's public offering price, Putnam Investor Services must
receive your order before the close of regular trading on the New
York Stock Exchange. If you buy shares through your investment
dealer, the dealer must receive your order before the close of
regular trading on the New York Stock Exchange to receive that
day's public offering price.
<PAGE>
CLASS A SHARES
The public offering price of class A shares is the net
asset value plus a sales charge that varies depending on
the size of your purchase . The relevant fund receives the
net asset value. The sales charge is allocated between your
investment dealer and Putnam Mutual Funds as shown in the
following table, except when Putnam Mutual Funds, in its
discretion, allocates the entire amount to your investment
dealer.
SALES CHARGE AMOUNT OF
AS A PERCENTAGE OF : SALES CHARGE
------------------ - REALLOWED TO
NET DEALERS AS
A
AMOUNT OF TRANSACTION AMOUNT OFFERING PERCENTAGE OF
AT OFFERING PRICE ($) INVESTED PRICEOFFERING PRICE
- -----------------------------------------------------------------
Under 25,000
4.99% 4.75% 4.50%
25,000 but under 100,000 4.71
4.50 4.25
100,000 but under 250,000 3.90 3.75 3.50
250,000 but under 500,000 3.09 3.00 2.75
500,000 but under 1,000,0002.04 2.00 1.85
There is no initial sales charge on purchases of
class A shares of $1 million or more. However, a
CDSC of 1.00% or 0.50%, respectively, will be
imposed if you redeem these shares within the first or
second year after purchase, based on the lower of the shares'
cost and current net asset value. Any shares acquired by
reinvestment of distributions will be redeemed without a CDSC.
Shares purchased by certain investors investing $1 million
or more who have made arrangements with Putnam Mutual
Funds and whose dealer of record waived the commission as
described below are not subject to the CDSC. In determining
whether a CDSC is payable, a fund will first redeem shares
not subject to any charge. Putnam Mutual Funds receives the
entire amount of any CDSC you pay. See the SAI for more
information about the CDSC.
Putnam Mutual Funds pays investment dealers of record
commissions on sales of class A shares of $1 million or
more based on an investor's cumulative purchases during the one-
year period beginning with the date of the initial purchase at
net asset value. Each subsequent one-year measuring period for
these purposes will begin with the first net asset value
purchase following the end of the prior period. Such
commissions are paid at the rate of 1.00% of the amount under $3
million, 0.50% of the next $47 million and 0.25% thereafter.
CLASS B SHARES
Class B shares are sold without an initial sales charge, although
a CDSC will be imposed if you redeem shares within a specified
period after purchase , as shown in the table below .
The following types of shares may be redeemed without charge at
any time: (i) shares acquired by reinvestment of distributions
and
(ii) shares otherwise exempt from the CDSC, as described in
"How to buy shares --General" below. For other shares, the
amount of the charge is determined as a percentage of the lesser
of the current market value or the cost of the shares being
redeemed.
YEAR 1 2 3 4 5 6 7+
- -------------------------------------------------------------
CHARGE 5% 4% 3% 3% 2% 1% 0%
In determining whether a CDSC is payable on any redemption, a
fund will first redeem shares not subject to any charge, and then
shares held longest during the CDSC period. For this purpose,
the amount of any increase in a share's value above its initial
purchase price is not regarded as a share exempt from the CDSC.
Thus, when a share that has appreciated in value is redeemed
during the CDSC period, a CDSC is assessed only on its initial
purchase price. For information on how sales charges are
calculated if you exchange your shares, see "How to exchange
shares." Putnam Mutual Funds receives the entire amount of any
CDSC you pay.
CLASS M SHARES
The public offering price of class M shares is the net asset
value plus a sales charge that varies depending on the size of
your purchase. The relevant fund receives the net asset value.
The sales charge is allocated between your investment dealer and
Putnam Mutual Funds as shown in the following table ,
except when Putnam Mutual Funds, at its discretion, allocates the
entire amount to your investment dealer.
SALES CHARGE AMOUNT OF
AS A PERCENTAGE OF: SALES
CHARGE
------------------- REALLOWED
TO
NET DEALERS AS A
AMOUNT OF TRANSACTION AMOUNT OFFERING PERCENTAGE OF
AT OFFERING PRICE ($) INVESTED PRICE OFFERING
PRICE
- -----------------------------------------------------------------
Under 50,000 3.36% 3.25% 3.00%
50,000 but under 100,000 2.30 2.25
2.00
100,000 but under 250,000 1.52 1.50 1.25
250,000 but under 500,000 1.01 1.00 1.00
500,000 and above
NONE NONE NONE
GENERAL
YOU MAY BE ELIGIBLE TO BUY CLASS A SHARES AND CLASS
M SHARES AT REDUCED SALES CHARGES.
Consult your investment dealer or Putnam Mutual Funds for
details about Putnam's combined purchase privilege, cumulative
quantity discount, statement of intention, group sales plan,
employee benefit plans, and other plans. Descriptions are
also included in the order form and in the SAI .
In addition, sales charges will not apply to class M
shares purchased with redemption proceeds received within the
prior 90 days from non-Putnam mutual funds on which the
investor paid a front-end or contingent deferred sales charge.
Each fund may sell class A, class B and
class M shares at net asset value without an initial sales
charge or a CDSC to a fund's current and retired Trustees
(and their families), current and retired employees (and their
families) of Putnam Management and affiliates, registered
representatives and other employees (and their families) of
broker-dealers having sales agreements with Putnam Mutual Funds,
employees (and their families) of financial institutions having
sales agreements with Putnam Mutual Funds (or otherwise having an
arrangement with a broker-dealer or financial institution with
respect to sales of fund shares), financial institution
trust departments investing an aggregate of $1 million or more in
Putnam funds, clients of certain administrators of tax-qualified
plans, employee benefit plans of companies with more than 750
employees, tax-qualified plans when proceeds from repayments of
loans to participants are invested (or reinvested) in Putnam
funds, "wrap accounts" for the benefit of clients of broker-
dealers, financial institutions or financial planners adhering to
certain standards established by Putnam Mutual Funds, and
investors meeting certain requirements who sold shares of certain
Putnam closed-end funds pursuant to a tender offer by the
closed-end fund.
In addition, each fund may sell shares at net asset
value without an initial sales charge or a CDSC in connection
with the acquisition by that fund of assets of an
investment company or personal holding company, and the CDSC will
be waived on redemptions of shares arising out of death or
disability or in connection with certain withdrawals from IRA or
other retirement plans. Up to 12% of the value of class B
shares subject to a systematic withdrawal plan may also be
redeemed each year without a CDSC. Each fund may sell class M
shares at net asset value to members of qualified groups. See
the SAI .
Shareholders of other Putnam funds may be entitled to exchange
their shares for, or reinvest distributions from their funds in,
shares of the funds at net asset value.
If you are considering redeeming or exchanging shares or
transferring shares to another person shortly after purchase, you
should pay for those shares with a certified check to avoid any
delay in redemption, exchange or transfer. Otherwise a
fund may delay payment until the purchase price of those
shares has been collected or, if you redeem by telephone, until
15 calendar days after the purchase date.
To eliminate the need for safekeeping, a fund will not
issue certificates for your shares unless you request them.
Putnam Mutual Funds will from time to time , at its
expense, provide additional promotional incentives or payments to
dealers that sell shares of the Putnam funds. These
incentives or payments may include payments for travel expenses,
including lodging, incurred in connection with trips taken by
invited registered representatives and their guests to locations
within and outside the United States for meetings or seminars of
a business nature. In some instances, these incentives or
payments may be offered only to certain dealers who have sold or
may sell significant amounts of shares. Certain dealers may not
sell all classes of shares.
DISTRIBUTION PLANS
CLASS A DISTRIBUTION PLAN. The class A
plans provide for payments by each fund to Putnam
Mutual Funds at the annual rate of up to 0.35% of average
net assets attributable to class A shares. The Trustees
currently limit payments under each class A plan to
the annual rate of 0.20% of such assets.
Putnam Mutual Funds makes quarterly payments to
qualifying dealers (including, for this purpose,
certain financial institutions) to compensate them for
services provided in connection with sales of class A
shares and the maintenance of shareholder accounts .
The payments are based on the average net asset value
of class A shares attributable to shareholders for
whom the dealers are designated as the dealer of record.
This calculation excludes until one year after purchase
shares purchased at net asset value , known as "NAV
shares," by shareholders investing $1 million or more .
NAV shares are not subject to the one-year exclusion
provision in cases where certain shareholders who
invested $1 million or more have made arrangements
with Putnam Mutual Funds and the dealer of record waived
the sales commission.
Putnam Mutual Funds makes quarterly payments at
the annual rate of 0.15% of such average net asset value
for class A shares outstanding as of March 5, 1993 for
the Arizona fund, July 8, 1993 for the Florida and Pennsylvania
funds, March 9, 1992 for the Michigan, Minnesota and
Ohio funds, May 11, 1992 for the Massachusetts
fund and December 31, 1992 for the New Jersey fund, and
0.20% of such average net asset value for shares
acquired after such dates (including class A shares
acquired through reinvestment of distributions.)
CLASS B AND CLASS M DISTRIBUTION PLANS. The class B and class
M plans provide for payments by each fund to
Putnam Mutual Funds at the annual rate of up to
1.00% of average net assets attributable to class
B shares and class M shares, as the case may be. The
Trustees currently limit payments under the class B
and class M plans to the annual
rates of 0.85% and 50% of such assets ,
respectively.
Although class B shares are sold without an initial sales
charge, Putnam Mutual Funds pays a sales commission equal to
4.00% of the amount invested (including a prepaid service fee of
0.20% of the amount invested) to dealers who sell class B
shares. These commissions are not paid on exchanges from other
Putnam funds or on sales to investors exempt from the
CDSC.
<PAGE>
The amount paid to dealers at the time of the sale of
class M shares is set forth above under "How to buy shares
- -- Class M shares. " In addition, to further
compensate dealers (including qualifying financial
institutions) for services provided in connection with sales of
class B shares and class M shares and the
maintenance of shareholder accounts, Putnam Mutual Funds makes
quarterly payments to qualifying dealers .
The payments are based on the average net asset value of
class B shares and class M shares
attributable to shareholders for whom the dealers are designated
as the dealer of record ,except for the first year's service fees
for class B shares , which are prepaid as described above.
Putnam Mutual Funds makes the payments at an annual rate
of 0.20% of such average net asset value of class B shares
and class M shares, as the case may be.
Putnam Mutual Funds also pays to dealers, as additional
compensation with respect to the sale of class M shares,
0.20% of such average net asset value of class M shares.
For class M shares, the total annual payment to dealers
equals 0.40% of such average net asset value.
GENERAL. Payments under the plans are intended to
compensate Putnam Mutual Funds for services provided and expenses
incurred by it as principal underwriter of fund shares,
including the payments to dealers mentioned above. Putnam Mutual
Funds may suspend or modify such payments to dealers.
The payments are also subject to the continuation of
the relevant distribution plan , the terms of
service agreements between dealers and Putnam Mutual
Funds, and any applicable limits imposed by the National
Association of Securities Dealers, Inc.
HOW TO SELL SHARES
You can sell your shares to your fund any day the New York
Stock Exchange is open, either directly to the fund or
through your investment dealer. A fund will only redeem
shares for which it has received payment.
SELLING SHARES DIRECTLY TO YOUR FUND . Send a signed
letter of instruction or stock power form to Putnam Investor
Services, along with any certificates that represent shares you
want to sell. The price you will receive is the next net asset
value calculated after your fund receives your request in
proper form less any applicable CDSC. In order to receive
that day's net asset value, Putnam Investor Services must receive
your request before the close of regular trading on the New York
Stock Exchange.
If you sell shares of a fund having a net asset value
of $100,000 or more, the signatures of the registered owners or
their legal representatives must be guaranteed by a bank,
broker-dealer or certain other financial institutions. See the
SAI for more information about where to obtain a signature
guarantee. Stock power forms are available from your investment
dealer, Putnam Investor Services and many commercial banks.
If you want your redemption proceeds sent to an address other
than your address as it appears on Putnam's records, a signature
guarantee is required. Putnam Investor Services usually requires
additional documentation for the sale of shares by a corporation,
partnership, agent or fiduciary, or a surviving joint owner.
Contact Putnam Investor Services for details.
A FUND GENERALLY SENDS YOU PAYMENT FOR YOUR SHARES THE
BUSINESS DAY AFTER YOUR REQUEST IS RECEIVED. Under unusual
circumstances, a fund may suspend redemptions, or postpone
payment for more than seven days, as permitted by federal
securities law.
You may use Putnam's Telephone Redemption Privilege to redeem
shares valued up to $100,000 from your account unless you have
notified Putnam Investor Services of an address change within the
preceding 15 days. Unless an investor indicates otherwise on the
account application , Putnam Investor Services will be
authorized to act upon redemption and transfer instructions
received by telephone from a shareholder, or any person claiming
to act as his or her representative, who can provide Putnam
Investor Services with his or her account registration and
address as it appears on Putnam Investor Services' records.
Putnam Investor Services will employ these and other
reasonable procedures to confirm that instructions communicated
by telephone are genuine; if it fails to employ reasonable
procedures, Putnam Investor Services may be liable for any losses
due to unauthorized or fraudulent instructions. For information,
consult Putnam Investor Services.
During periods of unusual market changes and shareholder
activity, you may experience delays in contacting Putnam Investor
Services by telephone . In this event, you may wish to
submit a written redemption request as described above, or
contact your investment dealer, as described below. The
Telephone Redemption Privilege is not available if you were
issued certificates for shares that remain
outstanding. The Telephone Redemption Privilege may be modified
or terminated without notice.
SELLING SHARES THROUGH YOUR INVESTMENT DEALER. Your dealer must
receive your request before the close of regular trading on the
New York Stock Exchange to receive that day's net asset value.
Your dealer will be responsible for furnishing all necessary
documentation to Putnam Investor Services, and may charge you for
its services.
HOW TO EXCHANGE SHARES
You can exchange your shares for shares of the same class of
certain other Putnam funds at net asset value beginning 15 days
after purchase. Not all Putnam funds offer all classes of
shares. If you exchange shares subject to a CDSC, the transaction
will not be subject to the CDSC. However, when you redeem the
shares acquired through the exchange, the redemption may be
subject to the CDSC, depending upon when you originally purchased
the shares . The CDSC will be computed using the schedule
of any fund into or from which you have exchanged your shares
that would result in your paying the highest CDSC applicable to
your class of shares. For purposes of computing the CDSC, the
length of time you have owned your shares will be measured from
the date of original purchase and will not be affected by any
exchange.
To exchange your shares, simply complete an Exchange
Authorization Form and send it to Putnam Investor Services.
The form is available from Putnam Investor
Services. For federal income tax purposes, an exchange is
treated as a sale of shares and generally results in a capital
gain or loss. A Telephone Exchange Privilege is currently
available for amounts up to $500,000. Putnam Investor Services'
procedures for telephonic transactions are described above under
"How to sell shares." The Telephone Exchange Privilege is not
available if you were issued certificates for shares that
remain outstanding. Ask your investment dealer or Putnam
Investor<PAGE>
Services for prospectuses of other Putnam funds. Shares of
certain Putnam funds are not available to residents of all
states.
The exchange privilege is not intended as a vehicle for short-
term trading. Excessive exchange activity may interfere with
portfolio management and have an adverse effect on all
shareholders. In order to limit excessive exchange activity and
in other circumstances where Putnam Management or the Trustees
believe doing so would be in the best interests of a fund,
the fund reserves the right to revise or terminate the
exchange privilege, limit the amount or number of exchanges or
reject any exchange. Shareholders would be notified of any such
action to the extent required by law. Consult Putnam Investor
Services before requesting an exchange. See the SAI to
find out more about the exchange privilege.
HOW A FUND VALUE ITS SHARES
A FUND CALCULATES THE NET ASSET VALUE OF A SHARE OF EACH
CLASS BY DIVIDING THE TOTAL VALUE OF ITS ASSETS, LESS
LIABILITIES, BY THE NUMBER OF SHARES OUTSTANDING. SHARES ARE
VALUED AS OF THE CLOSE OF REGULAR TRADING ON THE NEW YORK STOCK
EXCHANGE EACH DAY THE EXCHANGE IS OPEN.
Tax-exempt securities are valued on the basis of
valuations provided by a pricing service approved by the
Trustees, which uses information with respect to transactions in
bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between
securities in determining value. Each fund believes that
reliable market quotations generally are not readily available
for purposes of valuing its portfolio securities. As a result,
it is likely that most of the valuations provided by a
pricing service will be based upon fair value determined on the
basis of the factors listed above.
Non-tax-exempt securities for which market quotations are
readily available are valued at market value. Short-term
investments that will mature in 60 days or less are valued at
amortized cost, which approximates market value. All other
securities and assets are valued at their fair value following
procedures approved by the Trustees.
<PAGE>
HOW A FUND MAKES DISTRIBUTIONS TO SHAREHOLDERS ; TAX
INFORMATION
EACH FUND DECLARES ALL OF ITS NET INTEREST INCOME AS A
DISTRIBUTION ON EACH DAY IT IS OPEN FOR BUSINESS. Net interest
income consists of interest accrued on portfolio investments of a
fund , less accrued expenses, computed in each case since
the most recent determination of net asset value. Normally, a
fund pays distributions of net interest income monthly. A
fund will distribute at least annually all net realized
capital gains, if any, after applying any available capital loss
carryovers. A capital loss carryover is currently available for
each fund . Distributions paid by a fund with
respect to class A shares will generally be greater than
those paid with respect to class B and class M
shares because expenses attributable to class B and
class M shares will generally be higher.
You begin earning distributions on the business day after
Putnam Mutual Funds receives payment for your shares. It is your
responsibility to see that your dealer forwards payment promptly.
YOU CAN CHOOSE FROM THREE DISTRIBUTION OPTIONS:
-Reinvest all distributions in additional shares of your
fund without a sales charge;
-Receive distributions from net interest income in cash while
reinvesting net capital gains distributions, if any, in
additional shares of your fund without a sales charge;
or
- Receive all distributions in cash.
You can change your distribution option by notifying Putnam
Investor Services in writing. If you do not select an option
when you open your account, all distributions will be reinvested.
All distributions not paid in cash will be reinvested in shares
of the class on which the distributions are paid. You will
receive a statement confirming reinvestment of distributions in
additional fund shares (or in shares of other Putnam funds
for Dividends Plus accounts) promptly following the quarter in
which the reinvestment occurs.
If a check representing a fund distribution is not cashed
within a specified period, Putnam Investor Services will notify
you that you have the option of requesting another check or
reinvesting the distribution in your fund or in another
Putnam fund. If Putnam Investor Services does not receive your
election, the distribution will be reinvested in that
fund . Similarly, if correspondence sent by a fund
or Putnam Investor Services is returned as "undeliverable,"
fund distributions will automatically be reinvested in the
fund or in another Putnam fund.
<PAGE>
FEDERAL TAXES
Each fund intends to qualify as a "regulated investment
company" for federal income tax purposes and to meet all other
requirements necessary for that fund to be
relieved of federal taxes on income and gains it distributes to
shareholders. Each fund will distribute substantially all
of its ordinary income and capital gain net income on a current
basis.
Fund distributions designated by a fund as "exempt-
interest dividends" are not generally subject to federal income
tax. However, if you receive social security or railroad
retirement benefits, you should consult your tax adviser to
determine what effect, if any, an investment in a fund may
have on the taxation of your benefits. In addition, an
investment in a fund may result in liability for federal
alternative minimum tax and state and local taxes, both for
individual and corporate shareholders.
Each fund may at times purchase tax-exempt
securities at a discount from the price at which they were
originally issued, especially during periods of rising
interest rates . For federal income tax purposes, some or all
of the market discount will be included in each fund's
ordinary income and will be taxable to you as such
when it is distributed to you .
Each fund's distributions other than exempt-interest
dividends will be taxable to you as ordinary income, except that
any distributions of net long-term capital gains will be taxable
as such, regardless of how long you have held your
shares. Distributions will be taxable as described above whether
received in cash or in shares through the reinvestment of
distributions.
Early in each year Putnam Investor Services will notify
you of the amount and tax status of distributions paid to you
for the preceding year.
STATE TAXES
GENERAL. Except as described below, to the extent not tax-exempt
under the state income tax regime to which you are
subject , your proportionate share of distributions from a
fund's net investment income and short-term capital gains,
if any, will be taxable as ordinary income, whether you take them
in cash or reinvest them in additional shares of that fund
(except that distributions reinvested in shares of the Michigan
fund are exempt from Michigan intangibles tax).
ARIZONA. It is the published position of the Arizona
Department of Revenue that distributions by a regulated
investment company are exempt from Arizona state income tax to
the extent such dividends are derived from interest on
obligations the interest on which is exempt from Arizona state
income tax. As long as the Arizona fund qualifies as a regulated
investment company, to the extent distributions by the Arizona
fund are derived from interest income with respect to U.S.
Treasury securities or, as described below, tax-exempt securities
as defined above under "How the funds pursue their objectives--
Tax-exempt securities". Such distributions will be exempt from
Arizona state income tax. In addition, it is the published
position of the Arizona Department of Revenue that distributions
by a regulated investment company derived from certain other
governmental obligations as to which federal law specifically
precludes state taxation of interest received by a direct
investor in such obligations are exempt from Arizona state income
tax.
Some tax-exempt securities of Arizona issuers have a direct
income tax exemption under Arizona law, independent of federal
tax treatment. However, in most cases, interest with respect to
tax-exempt securities of Arizona issuers is exempt from Arizona
state income tax only so long as that interest is excluded from
gross income for federal income tax purposes. Therefore, if
interest with respect to tax-exempt securities of Arizona issuers
held by the Arizona fund ceases to be exempt from federal income
tax (or is retroactively determined to be taxable under federal
law), then, unless that obligation has an independent statutory
tax exemption under Arizona law, distributions by the Arizona
fund derived from interest on that obligation will cease to be
exempt from state income taxes (and, if interest on the
obligation is determined to be taxable under federal law
retroactive to any date, those distributions may be considered
not to have been exempt from state income taxes from that date).
For Arizona income tax purposes, dividends by the Arizona fund,
other than dividends exempt from Arizona state income tax, will
be taxable as ordinary income, whether paid in cash or reinvested
in additional shares. Under current Arizona income tax law,
distributions of net capital gains earned by the Arizona fund are
not exempt from taxation and are taxed at ordinary income tax
rates.
FLORIDA. Florida does not currently impose an income tax on
individuals. Thus individual shareholders of the fund will not
be subject to any Florida state income tax on distributions
received from the Florida fund. However, certain distributions
will be taxable to corporate shareholders which are subject to
Florida corporate income tax.
Florida currently imposes an "intangibles tax" at the annual rate
of 0.2% on certain securities and other intangible assets owned
by Florida residents. Certain types of tax-exempt securities of
Florida issuers, U.S. government securities and tax-exempt
securities issued by certain U.S. territories and possessions are
exempt from this intangibles tax. The Florida fund has received
a ruling from Florida authorities that, if on December 31 of any
year the Florida fund's portfolio consists solely of such exempt
assets, the Florida fund's shares will be exempt from the Florida
intangibles tax payable for the following year.
In order to take advantage of the exemption from the intangibles
tax in any year, the Florida fund must sell any non-exempt assets
held in its portfolio and reinvest the proceeds in exempt assets
prior to December 31. Transaction costs involved in
restructuring the portfolio in this fashion would likely reduce
the Florida fund's investment return and might exceed any
increased investment return the Florida fund achieved by
investing in non-exempt assets during the year.
MASSACHUSETTS. Distributions received from the
Massachusetts fund are exempt from Massachusetts personal
income tax to the extent that they are derived from interest on
tax-exempt securities and are designated as such. The
Massachusetts fund has obtained a tax ruling which
recognizes for Massachusetts personal income tax purposes the
tax - exempt character of gains realized by the fund
on the sale of certain tax-exempt securities when those
gains are distributed to shareholders and designated as such.
Distributions from investment income and capital gains, including
exempt-interest dividends, may be subject to Massachusetts
corporate excise tax.
MICHIGAN. Distributions received from the Michigan
fund are exempt from Michigan personal income tax and
Michigan intangibles tax to the extent they are derived from
interest on tax-exempt securities , under the current
position of the Michigan Department of Treasury. Such
distributions, if received in connection with a shareholder's
business activity, may, however, be subject to Michigan single
business tax. See the SAI . For Michigan personal income
tax, intangibles tax and single business tax purposes,
fund distributions attributable to any source other than
interest on tax-exempt securities will be fully taxable.
Fund distributions may be subject to the uniform city income tax
imposed by certain Michigan cities.
MINNESOTA. The 1995 Minnesota Legislature has enacted a
statement of intent that interest on obligations of Minnesota
governmental units and Indian tribes be included in net income of
individuals, estates and trusts for Minnesota income tax purposes
if a court determines that Minnesota's exemption of such interest
unlawfully discriminates against interstate commerce because
interest on obligations of governmental issuers located in other
states is so included. This provision applies to taxable years
that begin during or after the calendar year in which any such
court decision becomes final, irrespective of the date on which
the obligations were issued. Putnam Management is not aware of
any decision in which a court has held that a state's exemption
of interest on its own bonds or those of its political
subdivisions or Indian tribes, but not of interest on the bonds
of other states or thier political subdivisions or Indian tribes,
unlawfully discriminates against interstate commerce or otherwise
contravenes the United States Constitution. However, there can be
no assurance that interest on the Minnesota bonds held by the
Minnesota fund would not become taxable under this Minnesota
statutory provision.
Shareholders of the Minnesota fund who are
individuals, estates or trusts will not be subject to Minnesota
personal income tax on fund distributions to the extent
that such distributions qualify as exempt-interest dividends and
represent interest income attributable to interest on tax-
exempt securities , provided that at least 95% of the
fund's total exempt-interest dividends are derived from
interest on obligations of the State of Minnesota and its
agencies, instrumentalities and political subdivisions.
Exempt-interest dividends attributable to interest on certain
private activity bonds issued after August 7, 1986 will be
included in Minnesota "alternative taxable income" of
individuals, estates and trusts for purposes of computing
Minnesota's alternative minimum tax.
Losses of individuals, estates and trusts that are disallowed or
treated as long-term losses under current federal law by reason
of the shareholder's receipt of exempt-interest dividends or
capital gain dividends, respectively, are treated similarly under
Minnesota law, notwithstanding, in the case of exempt-interest
dividends, that such dividends may not be fully excludable
from Minnesota gross income.
Fund distributions are not excluded in determining the Minnesota
franchise tax on corporations measured by net income or the
Minnesota alternative minimum tax on corporations.
NEW JERSEY. The New Jersey fund intends to qualify as a
"qualified investment fund" under the New Jersey Gross Income Tax
law except when investing for defensive purposes under certain
circumstances. As long as the New Jersey fund is a qualified
investment fund and to the extent its distributions are derived
from interest or net gains on tax-exempt securities, such
distributions will be exempt from New Jersey tax, but will be
reflected in the net income tax base for purposes of computing
the corporate business tax. The exemption from the New Jersey
Gross Income Tax will also extend to interest or net gains on
obligations of the United States, its territories and certain of
its agencies and instrumentalities which pay interest free from
state or local taxation under any laws of New Jersey or under the
Constitution or laws of the United States. Gains resulting from
the redemption or sale of shares of the New Jersey fund will also
be exempt from New Jersey Gross Income Tax.
In order to be a qualified investment fund, the New Jersey fund
must, as of the end of each fiscal quarter, invest at least 80%
of the aggregate principal amount of its investments (excluding
financial options, futures, forward contracts, or other similar
financial instruments related to interest-bearing obligations,
obligations issued at a discount or bond indexes related thereto
to the extent such instruments are authorized under the regulated
investment company rules under the Internal Revenue Code, and
cash and cash items, which cash items shall include receivables)
in the exempt obligations referred to above and have no
investments other than interest bearing or discounted
obligations, cash or cash items (including receivables) and
financial options, futures, forward contracts or certain other
similar instruments related to interest-bearing or discounted
obligations or bond indexes related thereto. If the New Jersey
fund fails to be a qualified investment fund, as a result of
employing alternative investment strategies or otherwise, none of
its distributions for the entire taxable year will qualify for
tax-exempt status under New Jersey law.
For New Jersey Gross Income Tax purposes, distributions by the
fund derived from income or net gains on investments other than
tax-exempt securities and obligations of the United States, its
territories and certain of its agencies and instrumentalities
will be taxable as ordinary income, whether paid in cash or
reinvested in additional shares.
OHIO. Distributions received from the Ohio fund with respect
to shares are exempt from Ohio personal income tax and
school district municipal income taxes in Ohio to the
extent they are properly attributable to interest on
obligations issued by the State of Ohio , political
subdivisions , therefor, or agencies or instrumentalities
therefor , provided that the Ohio fund continues to
qualify as a regulated investment company for federal income tax
purposes and that at all times at least 50% of the value of the
total assets of the fund consist of securities or
similar obligations of other states or their subdivisions. It is
assumed for purposes of this discussion of Ohio taxation that
these requirements are satisfied. All distributions received from
the Ohio fund are excluded from the net income base of the
Ohio corporation franchise tax to the extent that they (a) are
properly attributable to interest on securities, or (b) represent
exempt-interest dividends for federal income tax purposes.
The Ohio fund's shares will be included in a shareholder's
tax base for purposes of computing the Ohio franchise tax
on the net worth basis.
Distributions of capital gain with respect to shares of the
Ohio fund will be exempt from Ohio personal income
tax and school district income taxes and
municipal income taxes in Ohio and will be excluded from
the net income base of the Ohio corporation franchise tax, in
each case to the extent that such distributions are
properly attributable to profit made on the sale, exchange
or other disposition by the Ohio fund of Ohio state
securities.
Distributions with respect to shares properly attributable
to interest on obligations of the United States or of any
authority, commission, or instrumentality of the United States
or obligations of Puerto Rico, the Virgin Islands, or
Guam or their authorities or instrumentalities will be
exempt from Ohio personal income tax and school district
income taxes and municipal income taxes in
Ohio , and are excluded from the net income base of the Ohio
corporation franchise tax .
PENNSYLVANIA. Distributions paid by the Pennslyvania fund will
not be subject to the Pennsylvania personal income tax or to the
Philadelphia School District investment net income tax to the
extent that the distributions are attributable to interest
received by the Pennsylvania fund from its investments in tax-
exempt securities and obligations of the United States, its
territories and certain of its agencies and instrumentalities.
Distributions by the Pennsylvania fund to a Pennsylvania resident
that are attributable to other sources may be subject to the
Pennsylvania personal income tax and (for residents of
Philadelphia) to the Philadelphia School District investment net
income tax whether paid in cash or reinvested in additional
shares. Distributions paid by the Pennsylvania fund which are
excludable as exempt income for federal tax purposes are not
subject to the Pennsylvania corporate net income tax. For a more
detailed description of Pennsylvania corporate income tax see the
SAI.
Individual shareholders of the Pennslyvania fund who are subject
to the personal property taxes levied by certain Pennsylvania
counties, cities and school districts will be exempt from such
tax on their shares of the Pennsylvania fund to the extent that
the Pennsylvania fund's portfolio consists of tax-exempt
securities and obligations of the United States, its territories
and certain of its agencies and instrumentalities. Corporations
are not subject to Pennsylvania personal property taxes.
GENERAL
The foregoing is a summary of certain federal and state income
tax consequences of investing in the funds . You should
consult your tax adviser to determine the precise effect of an
investment in a fund on your particular tax situation
(including possible liability for federal alternative
minimum tax and for state and local taxes).
ABOUT PUTNAM INVESTMENTS, INC.
PUTNAM MANAGEMENT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1937.
Putnam Mutual Funds is the principal underwriter of each
fund and of other Putnam funds. Putnam Fiduciary Trust
Company is each fund's custodian. Putnam Investor
Services, a division of Putnam Fiduciary Trust Company, is each
fund's investor servicing and transfer agent.
Putnam Management, Putnam Mutual Funds and Putnam Fiduciary Trust
Company are subsidiaries of Putnam Investments, Inc., which is
wholly 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.
<PAGE>
APPENDIX
SECURITY RATINGS
The ratings services' descriptions are as follows :
MOODY'S INVESTORS SERVICE, INC.:
BONDS
AAA -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt- edged ." Interest
payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of
such issues.
AA -- Bonds which are rated Aa are judged to be of high quality
by all standards. Together with the Aaa group they comprise what
are generally known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be as
large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat
larger than in the Aaa securities.
A -- Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper - medium -
grade obligations. Factors giving security to principal and
interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the
future.
BAA -- Bonds which are rated Baa are considered as medium grade
obligations ( i.e., they are neither highly protected nor
poorly secured ) . Interest payments and principal security
appear adequate for the present but certain protective elements
may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.
BA -- Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well -
assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
Moody's ratings for state and municipal notes and other short-
term loans are designated Moody's Investment Grade (MIG). This
distinction is in recognition of the differences between short-
term credit risk and long-term risk. Factors affecting the
liquidity of the borrower are uppermost in importance in short-
term borrowing, while various factors of the first importance in
bond risk are of lesser importance in the short run. Loans
bearing the MIG 1 designation are of the best quality, enjoying
strong protection from established cash flows of funds for their
servicing or from established and broad-based access to the
market for refinancing, or both. Loans bearing the MIG 2
designation are of high quality, with margins of protection ample
although not so large as in the preceding group.
STANDARD & POOR'S :
BONDS
AAA -- Debt rated `AAA' has the highest rating assigned by
Standard & Poor's to a debt obligation. Capacity to pay interest
and repay principal is extremely strong.
AA -- Debt rated `AA' has a very strong capacity to pay
interest and repay principal and differs from the highest rated
issues only in small degree.
A -- Debt rated `A' has a strong capacity to pay interest
and repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
BBB -- Debt rated `BBB' is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and repay principal
for debt in this category than for debt in higher rated
categories.
BB -- Debt rated `BB' is regarded, on balance, as
predominantly speculative with respect to the issuer's capacity
to pay interest and repay principal in accordance with the terms
of the obligation. While such debt will likely have some quality
and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
RATINGS OF CORPORATE OBLIGATIONS
The Moody's corporate obligations ratings of Aaa, Aa, A and Baa
and the Standard & Poor's corporate obligations ratings of AAA,
AA, A and BBB do not differ materially from those set forth above
for tax-exempt securities.
COMMERCIAL PAPER
A-1 -- This highest category indicates that the degree of
safety regarding timely payment is strong. Those issues
determined to possess extremely strong safety characteristics are
denoted with a plus sign (+) designation.
A-2 -- Capacity for timely payment on issues with this
designation is satisfactory. However, the relative degree of
safety is not as high as for issues designated`A-1'.<PAGE>
GLOSSARY OF TERMS
BOND An IOU issued by a government or corporation that
usually pays interest.
- -----------------------------------------------------------------
CAPITAL A profit or loss on the sale of securities (stocks
GAIN/LOSS or bonds).
- -----------------------------------------------------------------
CLASS A, B, Types of shares, each class offering investors a
M shares different choice about how to pay sales
charges and distribution fees. A fund's prospectus
explains the availability and attributes of each
type.
- -----------------------------------------------------------------
COMMON A unit of ownership of a corporation.
STOCK
- -----------------------------------------------------------------
DISTRIBUTION A payment from a mutual fund to shareholders. It
may include interest from bonds and dividends from
stocks (dividend distributions). It may also
include profits from the sale of securities from
the fund's portfolio (capital gains
distributions).
- -----------------------------------------------------------------
NET ASSET The basic value of one share of a mutual fund
VALUE (NAV) without regard to sales charges. Some bond funds
aim for a steady NAV, representing stability; most
stock funds work to raise NAV, representing growth
in the value of an investment.
- -----------------------------------------------------------------
PUBLIC The purchase price of one class A share or class M
OFFERING share of a mutual fund, including the applicable
PRICE (POP) up-front sales charge.
- -----------------------------------------------------------------
TOTAL RETURN A measure of performance showing change in the
value of an investment over a given period,
assuming all earnings are invested back into the
fund.
- -----------------------------------------------------------------
YIELD The percentage rate at which a fund's portfolio
earns income from its investments .
<PAGE>
MAKE THE MOST OF YOUR PUTNAM PRIVILEGES
As a Putnam mutual fund shareholder, you have access to a number
of services that can help you build a more effective and flexible
financial program. Here are some of the ways you can use these
privileges to make the most of your Putnam mutual fund
investment.
SYSTEMATIC INVESTMENT PLAN
Invest as much as you wish ($25 or more) on any business
day of the month except for the 29th, 30th, or 31st. The amount
will be automatically transferred from your checking or savings
account.
SYSTEMATIC WITHDRAWAL
Make regular withdrawals of $50 or more monthly, quarterly, or
semiannually from an account valued at $10,000 or more. You may
establish your withdrawal on any business day of the month
except for the 29th, 30th, or 31st.
SYSTEMATIC EXCHANGE
Transfer assets automatically from one Putnam account to another
on a regular, prearranged basis. There is no additional charge
for this service.
FREE EXCHANGE PRIVILEGE
Exchange money between Putnam funds in the same class of shares
without charge. The exchange privilege allows you to adjust your
investments as your objectives change. A signature guarantee is
required for exchanges of more than $500,000.
DIVIDENDS PLUS
Diversify your portfolio by investing dividends and other
distributions from one Putnam fund automatically into another at
net asset value.
STATEMENT OF INTENTION
To reduce a front-end sales charge, you agree to invest a minimum
dollar amount over 13 months. Depending on your fund, the
minimum is $25,000, $50,000, or $100,000. Whenever you make an
investment under this arrangement, you or your investment advisor
should notify Putnam that a Statement of Intention is in effect.
Investors may not maintain, within the same fund, simultaneous
plans for systematic investment or exchange and systematic
withdrawal or exchange. These privileges are subject to change
or termination.
For more information about any of these services and privileges,
call your investment advisor or a Putnam customer service
representative toll - free at 1-800-225-1581.
<PAGE>
PUTNAM FAMILY OF FUNDS
PUTNAM GROWTH FUNDS
Putnam Asia Pacific Growth Fund
Putnam Diversified Equity Trust
Putnam Europe Growth Fund
Putnam Global Growth Fund
Putnam Health Sciences Trust
Putnam International New Opportunities Fund
Putnam Investors Fund
Putnam Natural Resources Fund
Putnam New Opportunities Fund
Putnam OTC Emerging Growth Fund
Putnam Overseas Growth Fund
Putnam Vista Fund
Putnam Voyager Fund
Putnam Voyager Fund II*
PUTNAM GROWTH AND INCOME FUNDS
Putnam Balanced Retirement Fund
Putnam Convertible Income-Growth Trust
Putnam Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
Putnam Growth and Income Fund II
Putnam Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
Putnam Adjustable Rate U.S. Government Fund
Putnam American Government Income Fund
Putnam Diversified Income Trust
Putnam Federal Income Trust
Putnam Global Governmental Income Trust
Putnam High Yield Advantage Fund
Putnam High Yield Trust
Putnam Income Fund
Putnam Intermediate U.S. Government Fund
Putnam Preferred Income Fund
Putnam U.S. Government Income Trust
<PAGE>
PUTNAM TAX-FREE INCOME FUNDS
Putnam Intermediate Tax Exempt Fund
Putnam Municipal Income Fund
Putnam Tax Exempt Income Fund
Putnam Tax-Free High Yield Fund
Putnam Tax-Free Insured Fund
Putnam State tax - free income funds+
Arizona, California, Florida, Massachusetts, Michigan, Minnesota,
New Jersey, New York, Ohio, and Pennsylvania
LIFESTAGE(SM) FUNDS
Putnam Asset Allocation Funds -- three investment portfolios that
spread your money across a variety of stocks, bonds, and money
market investments seeking to help maximize your return and
reduce your risk.
THE THREE PORTFOLIOS:
Balanced Portfolio
Conservative Portfolio
Growth Portfolio
PUTNAM MONEY MARKET FUNDS
Putnam Money Market Fund
Putnam California Tax Exempt Money Market Fund
Putnam New York Tax Exempt Money Market Fund
Putnam Tax Exempt Money Market Fund
*Formerly Putnam Growth Fund
+Not available in all states.
Please call your financial advisor or Putnam to obtain a
prospectus for any Putnam fund. It contains more complete
information, including charges and expenses. Read it carefully
before you invest or send money.
<PAGE>
PUTNAM ARIZONA TAX EXEMPT INCOME FUND
PUTNAM FLORIDA TAX EXEMPT INCOME FUND
PUTNAM MASSACHUSETTS TAX EXEMPT INCOME FUND
PUTNAM MICHIGAN TAX EXEMPT INCOME FUND
PUTNAM MINNESOTA TAX EXEMPT INCOME FUND
PUTNAM NEW JERSEY TAX EXEMPT INCOME FUND
PUTNAM OHIO TAX EXEMPT INCOME FUND
PUTNAM PENNSYLVANIA TAX EXEMPT INCOME FUND
One Post Office Square
Boston, MA 02109
FUND INFORMATION
INVESTMENT MANAGER:
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA
02109
INVESTOR SERVICING AGENT
Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203
CUSTODIAN
Putnam Fiduciary Trust Company
One Post Office Square
Boston, MA 02109
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
Arizona, Michigan , New Jersey and Ohio funds
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
Florida, Massachusetts , Minnesota and
Pennsylvania funds
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
<PAGE>
PUTNAMINVESTMENTS
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581<PAGE>
PUTNA M ARIZONA TAX EXEMPT INCOME FUND
(T HE "ARIZONA FUND")
PUTNA M FLORIDA TAX EXEMPT INCOME FUND
(T HE "FLORIDA FUND")
PUTNA M MASSACHUSETTS TAX EXEMPT INCOME FUND
(THE "MASSACHUSETTS FUND")
PUTNA M MICHIGAN TAX EXEMPT INCOME FUND
(THE "MICHIGAN FUND")
PUTNA M MINNESOTA TAX EXEMPT INCOME FUND
(THE "MINNESOTA FUND")
PUTNA M NEW JERSEY TAX EXEMPT INCOME FUND
(THE "NEW JERSEY FUND")
PUTNA M OHIO TAX EXEMPT INCOME FUND
(THE "OHIO FUND")
PUTNA M PENNSYLVANIA TAX EXEMPT INCOME FUND
(THE "PENNSYLVANIA FUND")
(EACH A "FUND" AND
COLLE CTIVELY, THE "FUNDS")
FORM
N-1A
PART B
STATEMENT OF ADDITIONAL INFORMATION
("SAI")
OCTOBER 1, 1995
This SAI is not a prospectus and is only authorized
for distribution when accompanied or preceded by the
prospectus of the funds dated October 1,
1995 , as revised from time to time. This SAI
contains information which may be useful to investors but which
is not included in the prospectus. If a fund has
more than one form of current prospectus , each reference
to the prospectus in this SAI shall include all of
that fund's prospectuses , unless otherwise noted. The
SAI should be read together with the applicable
prospectus . Investors may obtain a free copy of the
applicable prospectus from Putnam Investor Services,
Mailing address: P.O. Box 41203, Providence, RI 02940-1203.
Part I of this SAI contains specific information about
each fund . Part II includes information about the
funds and the other Putnam funds.
<PAGE>
TABLE OF CONTENTS
PART I PAGE
TAX - EXEMPT SECURITIES. . . . . . . . . . . . . I- 4
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . I-6
CHARGES AND EXPENSES. . . . . . . . . . . . . . . . . . . . I- 12
INVESTMENT PERFORMANCE. . . . . . . . . . . . . . . . . . . . I-23
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . I- 30
EQUIVALENT YIELDS: TAX-EXEMPT VERSUS TAXABLE SECURITIES. . I- 34
ADDITIONAL OFFICERS . . . . . . . . . . . . . . . . . . . . . I-43
INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS. . . . . . I- 44
PART II
MISCELLANEOUS INVESTMENT PRACTICES. . . . . . . . . . . . . . . . . . II-1
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-22
MANAGEMENT OF THE FUND. . . . . . . . . . . . . . . . . . . . . . . II-27
DETERMINATION OF NET ASSET VALUE. . . . . . . . . . . . . . . . . . II-36
HOW TO BUY SHARES . . . . . . . . . . . . . . . . . . . . . . . . . II-38
DISTRIBUTION PLAN . . . . . . . . . . . . . . . . . . . . . . . . . II-49
INVESTOR SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . II-50
SIGNATURE GUARANTEES. . . . . . . . . . . . . . . . . . . . . . . . II-56
SUSPENSION OF REDEMPTIONS . . . . . . . . . . . . . . . . . . . . . II-56
SHAREHOLDER LIABILITY . . . . . . . . . . . . . . . . . . . II- 56
STANDARD PERFORMANCE MEASURES . . . . . . . . . . . . . . . . . . . II-57
COMPARISON OF PORTFOLIO PERFORMANCE . . . . . . . . . . . . . . . . II-58
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-63
<PAGE>
SAI
PART I
TAX - EXEMPT SECURITIES
GENERAL DESCRIPTION. As used in the prospectus and in
this SAI, the term "tax-exempt securities"
includes obligations of a state and its political
subdivisions and their agencies, instrumentalities or
other governmental units, the interest , the interest on
which , in the opinion of bond counsel, is
exempt from federal income tax and (except for
Florida, which has no personal income tax) personal or
gross income tax of the relevant state .
Such obligations are issued to obtain funds for various public
purposes, including the construction of a wide range of public
facilities, such as airports, bridges, highways, housing,
hospitals, mass transportation, schools, streets and water and
sewer works. Other public purposes for which tax-exempt
securities may be issued include the refunding of outstanding
obligations or the payment of general operating
expenses. Short -term tax-exempt securities are
generally issued by state and local governments and public
authorities as interim financing in anticipation of tax
collections, revenue receipts, or bond sales to finance such
public purposes . In addition, certain types of "private
activity" bonds may be issued by public authorities to finance
such projects as privately operated housing facilities and
certain local facilities for water supply, gas, electricity or
sewage or solid waste disposal, student loans, or the
obtaining of funds to lend to public or private institutions
for the construction of facilities such as educational, hospital
and housing facilities. Such obligations are included within the
term tax-exempt securities if the interest paid thereon
is, in the opinion of bond counsel, exempt from federal income
tax and (except for the Florida fund) personal
or gross income tax of the relevant state (such
interest may, however, be subject to federal alternative
minimum tax ) . Other types of private activity bonds,
the proceeds of which are used for the construction, repair or
improvement of, or to obtain equipment for, privately
operated industrial or commercial facilities, may constitute
tax-exempt securities , although the current federal tax laws
place substantial limitations on the size of such issues.
Tax-exempt securities also include short - term
discount notes (tax - exempt commercial paper), which are
promissory notes issued by municipalities to enhance their cash
flows.
STAND-BY COMMITMENTS. When a fund purchases tax-
exempt securities , it has the authority to acquire stand-by
commitments from banks and broker-dealers with respect to those
tax-exempt securities . A stand-by commitment may be
considered a security independent of the tax-exempt
security to which it relates. The amount payable by a bank
or dealer during the time a stand-by commitment is exercisable,
absent unusual circumstances, would be substantially the same as
the market value of the underlying tax-exempt security
to a third party at any time. Each fund expects that
stand-by commitments generally will be available without the
payment of direct or indirect consideration. None of the
funds expect to assign any value to stand-by commitments.
YIELDS. The yields on tax-exempt securities depend on a
variety of factors, including general money market conditions,
effective marginal tax rates, the financial condition of the
issuer, general conditions of the tax-exempt security
market, the size of a particular offering, the maturity of the
obligation and the rating of the issue. The ratings of Moody's
Investors Service, Inc. and Standard & Poor's represent
their opinions as to the quality of the tax-exempt
securities which they undertake to rate. It should be
emphasized, however, that ratings are general and are not
absolute standards of quality. Consequently, tax-exempt
securities with the same maturity and interest rate but with
different ratings may have the same yield. Yield disparities may
occur for reasons not directly related to the investment quality
of particular issues or the general movement of interest rates,
due to such factors as changes in the overall demand or supply of
various types of tax-exempt securities or changes in the
investment objectives of investors. Subsequent to purchase by a
fund , an issue of tax-exempt securities or
other investments may cease to be rated or its rating may be
reduced below the minimum rating required for purchase by a
fund . Neither event will require the elimination of an
investment from a fund's portfolio, but Putnam
Management will consider such an event in its determination of
whether a fund should continue to hold an investment in
its portfolio.
"MORAL OBLIGATION" BONDS. Each fund does not currently
intend to invest in so-called "moral obligation" bonds, where
payment is backed by a moral commitment of an entity other than
the issuer, unless the credit of the issuer itself, without
regard to the "moral obligation , " meets the
investment criteria established for investments by the
fund .
ADDITIONAL RISKS. Securities in which each fund may
invest, including tax-exempt securities , are subject to
the provisions of bankruptcy, insolvency and other laws affecting
the rights and remedies of creditors, such as the federal
Bankruptcy Code (including special provisions related to
municipalities and other public entities) , and to laws, if
any, which may be enacted by <PAGE>
Congress or the appropriate state legislature
extending the time
for payment of principal or interest, or both,
or imposing other constraints upon enforcement of such
obligations. There is also the possibility that as a result of
litigation or other conditions the power , ability
or willingness of issuers to meet their obligations for the
payment of interest and principal on their tax-
exempt securities may be materially affected.
From time to time, proposals have been introduced before
Congress for the purpose of restricting or eliminating the
federal income tax exemption for interest on debt obligations
issued by states and their political subdivisions. Federal tax
laws limit the types and amounts of tax-exempt bonds issuable for
certain purposes, especially industrial development bonds and
private activity bonds. Such limits may affect the
future supply and yields of these types of tax-exempt
securities . Further proposals limiting the issuance of tax-
exempt bonds may well be introduced in the future. If it
appeared that the availability of tax-exempt securities
for investment by a fund and the value of that
fund's portfolio could be materially affected by such changes
in law, the Trustees of that fund would reevaluate its
investment objective and policies and consider changes in the
structure of that fund or its dissolution.
INVESTMENT RESTRICTIONS
AS FUNDAMENTAL INVESTMENT RESTRICTIONS, WHICH MAY NOT BE CHANGED
WITHOUT A VOTE OF A MAJORITY OF THE OUTSTANDING VOTING
SECURITIES, A 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) (All funds except Arizona and New Jersey funds)
Pledge, hypothecate, mortgage or otherwise encumber its assets in
excess of 15% of its total assets (taken at current value) in
connection with borrowings permitted by restriction 1 above.
(3) (Arizona fund only) Pledge, hypothecate, mortgage or
otherwise encumber its assets in excess of 15% of its total
assets (taken at the lower of cost or current value) in
connection with borrowings permitted by restriction 1 above.
(4) (New Jersey fund only) Pledge, hypothecate, mortgage or
otherwise encumber its assets in excess of 15% of its total
assets (taken at current value) and then only to secure
borrowings permitted by restriction 1 above. (The deposit of
underlying securities and other assets in escrow and collateral
arrangements with respect to margin for financial futures
contracts, options on such contracts and on securities indices
are not deemed to be pledges or other encumbrances.)
(5) (Massachusetts, Michigan, Minnesota and Ohio funds
only) Purchase securities on margin, except such short-term
credits as may be necessary for the clearance of purchases and
sales of securities, and except that it may make margin payments
in connection with options on financial futures contracts and on
futures contracts.
(6) (Florida, New Jersey and Pennsylvania funds only)
Purchase securities on margin, except such short-term credits as
may be necessary for the clearance of purchases and sales of
securities, and except that it may make margin payments in
connection with futures contracts and related options.
(7) (Arizona fund only) Purchase securities on margin, except
such short-term credits as may be necessary for the clearance of
purchases and sales of securities, and except that it may make
margin payments in connection with futures contracts and
options.
(8) Make short sales of securities or maintain a short
sale position for the account of the fund unless at all
times when a short position is open it owns an equal amount of
such securities or owns securities which, without payment of any
further consideration, are convertible into or exchangeable for
securities of the same issue as, and equal in amount to, the
securities sold short.
(9) 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.
(10) (Massachusetts, Michigan, Minnesota, Ohio and
Pennsylvania funds only) Purchase or sell real estate,
although it may purchase or sell securities which are secured by
or represent interests in real estate.
(11) (Arizona, Florida, and New Jersey funds only) Purchase
or sell real estate, although it may purchase securities of
issuers which deal in real estate, securities which are secured
by interests in real estate, and securities representing
interests in real estate, and it may acquire and dispose of real
estate or interests in real estate acquired through the exercise
of its rights as a holder of debt obligations secured by real
estate or interests therein.
(12) (Massachusetts, Michigan, Minnesota and Ohio funds
only) Purchase or sell commodities or commodity
contracts, except that a fund may write and purchase
options on financial futures contracts and buy and sell financial
futures contracts.
(13) (Florida, New Jersey and Pennsylvania funds only)
Purchase or sell commodities or commodity contracts, except that
a Fund may write and purchase financial futures contracts and
related options.
(14) (Arizona fund only) Purchase or sell commodities or
commodity contracts, except that the Arizona fund may purchase
and sell financial futures contracts and related options.
(15) (All funds except Arizona fund) Make loans, except
by purchase of debt obligations in which a fund may
invest consistent with its investment policies, or by entering
into repurchase agreements with respect to not more than 25% of
its total assets (taken at current value).
(16) (Arizona fund only) Make loans, except by purchase of
debt obligations in which the Arizona fund may invest consistent
with its investment policies, or by entering into repurchase
agreements with respect to not more than 25% of its total assets
(taken at current value) or through the lending of its portfolio
securities with respect to not more than 25% of its assets.
(17) Invest in securities of any issuer if, to the
knowledge of the fund , officers and Trustees of the
fund and officers and directors of Putnam Management who
beneficially own more than 0.5% of the shares or securities of
that issuer together own more than 5%.
(18) (Massachusetts, Michigan, Minnesota and Ohio funds
only). Invest in securities of any issuer if, immediately
after such investment, more than 5% of the total assets of a
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 and
principal by the U.S. government, its agencies or
instrumentalities or to tax-exempt securities .
(19) (Pennsylvania fund only). With respect to 75% of its
total assets, invest in securities of any issuer if, immediately
after such investment, more than 5% of the total assets of the
Pennsylvania 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 and
principal by the U.S. government or its agencies or
instrumentalities.<PAGE>
(20) (Arizona, Florida and New Jersey funds only). With respect
to 50% of its total assets, invest in 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.
(21) Acquire more than 10% of the voting securities of
any issuer.
(22) (All funds except Arizona fund) Purchase securities
(other than securities of the U.S. government, its agencies or
instrumentalities and tax-exempt securities , except
obligations backed only by the assets and revenues of
nongovernmental issuers) if as a result of such purchase more
than 25% of the fund's total assets would be invested in
any one industry.
(23) (Arizona fund only) Purchase securities (other than
securities of the U.S. government, its agencies or
instrumentalities or tax-exempt securities, except obligations
backed only by the assets and revenues of nongovernmental
issuers) if as a result of such purchase, more than 25% of the
Arizona fund's total assets would be invested in any one
industry.
(24) (New Jersey fund only). Invest in the securities of other
registered open-end investment companies, except as they may be
acquired as part of a merger or consolidation or acquisition of
assets.
(25) (All funds except Arizona fund) Purchase securities
restricted as to resale, if, as a result, such investments would
exceed 15% of the value of a fund's net assets,
excluding restricted securities that have been determined by the
Trustees of the fund (or the person designated by them
to make such determinations) to be readily marketable.
(26) (Arizona fund only) Purchase securities the disposition
of which is restricted under federal securities law, if, as a
result, such investments would exceed 15% of the value of the
Arizona fund's current net assets, excluding restricted
securities that have been determined by the Trustees of the
Arizona fund (or the person designated by them to make such
determinations) to be readily marketable.
(27) (Massachusetts, Michigan, Minnesota, Ohio and Pennslyvania
funds only) Buy or sell oil, gas or other mineral
leases, rights or royalty contracts.
(28) (Florida fund only) Buy or sell oil, gas or other
mineral leases, rights or royalty contracts, although it may
purchase securities which represent interests in, are secured by
interests in, or which are issued by issuers which deal in, such
leases, rights, or contracts, and it may acquire or dispose of
such leases, rights, or contracts acquired through the exercise
of its rights as a holder of debt obligations secured thereby.
(29) (New Jersey fund only) Buy or sell oil, gas or other
mineral leases, rights or royalty contracts, although it may
purchase securities of issuers which deal in, represent interests
in, or are secured by interests in such leases, rights, or
contracts, and it may acquire or dispose of such leases, rights,
or contracts acquired through the exercise of its rights as a
holder of debt obligations secured thereby.
(30) Make investments for the purpose of gaining control
of a company's management.
(31) Issue any class of securities which is senior to
the fund's shares of beneficial interest.
IT IS CONTRARY TO A FUND'S PRESENT POLICY, WHICH MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL, TO:
(1) (For Massachusetts, Michigan, Minnesota and Ohio funds
only) Invest in (a) securities which at the time of such
investment are not readily marketable, (b) securities restricted
as to resale and (c) repurchase agreements maturing in more than
seven days, if, as a result, more than 15% of a fund's
net assets (taken at current value) would be invested in
securities described in (a), (b) and (c) above.
(2) (For Arizona, Florida, New Jersey and Pennsylvania funds
only) Invest in (a) securities which at the time of such
investment are not readily marketable, (b) securities restricted
as to resale (excluding securities determined by the Trustees of
a 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 a fund's net assets (taken at
current value) would be invested in securities described in (a),
(b) and (c) above.
(3) (All funds except Arizona fund). Invest in warrants
(other than warrants acquired by the fund as part of a
unit or attached to securities at the time of purchase).
(4) (All funds except Arizona and Florida funds) Invest
in securities of any issuer if the party responsible for payment,
together with any predecessors, has been in operation for less
than three consecutive years and, as a result of the investment,
the aggregate of such investments would exceed 5% of the value of
the fund's net assets; provided, however, that this
restriction shall not apply to any obligation of the United
States or its agencies or instrumentalities, or to any obligation
for the payment of which is pledged the faith, credit and taxing
power of any person authorized to issue tax-exempt
securities .
(5) (Arizona fund only) Invest in securities of any issuer
if the party responsible for payment, together with any
predecessors, has been in operation for less than three
consecutive years and, as a result of the investment, the
aggregate of such investments would exceed 5% of the value of the
Arizona fund's net assets; provided, however, that this
restriction shall not apply to any obligation of the United
States or its agencies or instrumentalities, or to any general
obligation for the payment of which is pledged the faith, credit
and taxing power of any person authorized to issue tax-exempt
securities.
(6) (Florida fund only) Invest in securities of any issuer if
the party responsible for payment, together with any
predecessors, has been in operation for less than three
consecutive years and, as a result of the investment, the
aggregate of such investments would exceed 5% of the value of the
Florida fund's net assets; provided, however, that this
restriction shall not apply to any obligation of the United
States or its agencies or instrumentalities, or to any obligation
for the payment of which is pledged the full faith, credit and
taxing power of any person authorized to issue tax-exempt
securities.
(7) (All funds except New Jersey fund). Invest in the
securities of other registered open-end investment companies,
except as they may be acquired as part of a merger or
consolidation or acquisition of assets.
Although certain of the funds' fundamental investment
restrictions permit a fund to borrow money to a limited
extent, none of the funds currently
intends to do so and none of the funds did
so last year.
------------------
All percentage limitations on investments 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.
------------------
The Investment Company Act of 1940 provides that a "vote of a
majority of the outstanding voting securities" of a fund
means the affirmative vote of the lesser of (1) more than 50% of
the outstanding shares of that fund , or (2) 67% or more
of the shares present at a meeting if more than 50% of the
outstanding shares of that fund are represented at the
meeting in person or by proxy.
CHARGES AND EXPENSES
MANAGEMENT FEES
Under Management Contracts (dated setforth as below), each
fund pays a quarterly fee to Putnam Management based on the average net
assets of that fund , as determined at the close of each business
day during the quarter, at the following rates (expressed as a
percentage of each fund's average net assets):
FUND NAME CONTRACT DATE RATES
Arizona fund 3/5/92 0.60% of the first $500 million
0.50% of the next $500 million
0.45% of the next $500 million
and
0.40% thereafter
Florida fund 12/5/91 0.60% of the first $500 million
0.50% of the next $500 million
0.45% of the next $500 million and
0.40% thereafter
Massachusetts fund 7/11/91 0.60% of the first $500 million
0.50% of the next $500 million
0.45% of the next $500 million and
0.40% thereafter
Michigan fund 7/11/91 0.60% of the first $500 million
0.50% of the next $500 million
0.45% of the next $500 million and
0.40% thereafter
Minnesota fund 7/11/91 0.60% of the first $500 million
0.50% of the next $500 million
0.45% of the next $500 million and
0.40% thereafter
New Jersey fund 6/6/91 0.60% of the first $500 million
0.50% of the next $500 million
0.45% of the next $500 million and
0.40 thereafter
Ohio fund 7/11/91 0.60% of the first $500 million
0.50% of the next $500 million
0.45% of the next $500 million and
0.40% thereafter
Pennsylvania fund 7/11/91 0.60% of the first $500 million
0.50% of the next $500 million
0.45% of the next $500 million and
0.40% thereafter
<PAGE>
For the past three fiscal years, pursuant to its Management
Contract, each fund incurred the following fees :
REFLECTING A
REDUCTION IN THE
FOLLOWING
AMOUNTS
PURSUANT TO AN
FISCAL MANAGEMENT EXPENSE
YEAR FEE PAID LIMITATION
------ ---------- ----------------
Arizona fund 1995+ $683,508 n/a
1994 $952,641 n/a
1993 $690,438 $5,850
Florida fund 1995++ $1,686,928 n/a
1994 $1,921,362 n/a
1993 $1,440,655 $4,697
Massachusetts fund 1995 $1,638,366 n/a
1994 $1,549,215 n/a
1993 $1,085,405 n/a
Michigan fund 1995 $858,323 n/a
1994 $782,934 n/a
1993 $573,363 n/a
Minnesota fund 1995 $643,810 n/a
1994 $589,840 n/a
1993 $432,104 n/a
New Jersey fund 1995++ $1,588,880 n/a
1994 $1,702,343 n/a
1993 $1,170,593 n/a
Ohio fund 1995 $1,286,605 n/a
1994 $1,206,826 n/a
1993 $957,541 n/a
Pennsylvania fund 1995+++ $323,968 n/a
1995 $1,155,995 n/a
1994 $990,690 n/a
+ for fiscal period 9/1/94 - 5/31/95
++ for fiscal period 7/1/94 - 5/31/95
+++ for fiscal period 3/1/95 - 5/31/95
<PAGE>
BROKERAGE COMMISSIONS
The following table shows brokerage commissions paid during the fiscal
periods indicated.
FISCAL BROKERAGE
YEAR COMMISSIONS
------ ------------
Arizona fund 1995+ $16,040
1994 $0
1993 $15,099
Florida fund 1995++ $29,166
1994 $34,899
1993 $112,624
Massachusetts fund 1995 $27,290
1994 $9,696
1993 $0
Michigan fund 1995 $5,208
1994 $0
1993 $100
Minnesota fund 1995 $9,645
1994 $1,095
1993 $0
New Jersey fund 1995++ $41,937
1994 $9,708
1993 $17,053
Ohio fund 1995 $13,759
1994 $6,063
1993 $0
Pennsylvania fund 1995+++ $2,119
1995 $2,612
1994 $11,715
+ for fiscal period 9/1/94 - 5/31/95
++ for fiscal period 7/1/94 - 5/31/95
+++ for fiscal period 3/1/95 - 5/31/95
<PAGE>
The following table shows transactions placed with brokers and dealers
during the most recent fiscal year to recognize research,
statistical and quotation services Putnam Management considered to be
particularly useful to it and its affiliates.
DOLLAR
VALUE PERCENT OF
OF THESE TOTAL AMOUNT OF
TRANSACTIONS
TRANSACTIONS COMMISSIONS
------------ ------------ -----------
Arizona fund+ $0 0% $0
Florida fund++ $3,538,966 1.44% $20,750
Massachusetts fund $0 0% $0
Michigan fund $12,44,100 2.96% $8,000
Minnesota fund $0 0% $0
New Jersey fund++ $239,063 0.10% $1,063
Ohio fund $3,431,840 2.97% $26,341
Pennsylvania fund+++ $0 0% 0%
+ for fiscal period 9/1/94 - 5/31/95
++ for fiscal period 7/1/94 - 5/31/95
+++ for fiscal period 3/1/95 - 5/31/95
<PAGE>
ADMINISTRATIVE EXPENSE REIMBURSEMENT
Each fund reimbursed Putnam Management in the following amounts
for administrative services during fiscal 1995 ,
including the following amounts for compensation of certain officers of
that fund and contributions to the Putnam Investments, Inc. Profit
Sharing Retirement Plan for their benefit:
PORTION OF TOTAL
REIMBURSEMENT FOR
COMPENSATION
TOTAL AND
REIMBURSEMENT CONTRIBUTIONS
------------- ----------------
Arizona fund+ $6,233 $5,859
Florida fund++ $8,188 $7,697
Massachusetts fund $8,858 $8,326
Michigan fund $11,362 $10,680
Minnesota fund $8,231 $7,737
New Jersey fund++ $5,133 $4,825
Ohio fund $8,635 $8,117
Pennsylvania fund+++ $2,376 $2,233
+ for fiscal period 9/1/95 - 5/31/95
++ for fiscal period 7/1/94 - 5/31/95
+++ for fiscal period 3/1/95 - 5/31/95
TRUSTEE FEES
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 Compensation
Committee, which consists solely of Trustees not affiliated with Putnam
Management and is responsible for recommending Trustee compensation,
estimates that Committee and Trustee meeting time together with the
appropriate preparation requires the equivalent of at least three business
days per Trustee meeting. The following table shows the year each Trustee
was first elected a Trustee of the Putnam funds, the fees paid to each
Trustee by each fund for fiscal 1995 and the fees paid to each Trustee by
all of the Putnam funds during the calendar year 1994:
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
AGGREGATE COMPENSATION* FROM:
ALL PUTNAM
TRUSTEE/YEAR AZ+ FL++ MA MI MN NJ++ OH PA+++ FUNDS**
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Jameson A. Baxter/1994 $583 $813 $865 $772 $754 $808 $826 $198 $135,850
Hans H. Estin/1972 $588 $821 $871 $777 $758 $816 $831 $206 141,850
John A. Hill/1985 $590 $821 $871 $776 $758 $816 $831 $206 143,850
Elizabeth T. Kennan/1992 $581 $812 $871 $770 $758 $816 $831 $206 141,850
Lawrence J. Lasser/1992 $588 $821 $871 $777 $758 $816 $831 $206 141,850
Robert E. Patterson/1984 $594 $831 $880 $783 $765 $826 $837 $206 144,850
Donald S. Perkins/1982 $588 $821 $868 $774 $756 $816 $830 $206 139,850
William F. Pounds/1971 $591 $826 $874 $779 $760 $821 $835 $206 143,850
George Putnam/1957 $588 $821 $871 $777 $758 $816 $831 $206 141,850
George Putnam, III/1984 $588 $821 $871 $777 $758 $816 $831 $206 141,850
Eli Shapiro/1995*** $61 $69 $69 $61 $60 $70 $66 $66 N/A
A.J.C. Smith/1986 $585 $812 $871 $770 $758 $816 $831 $206 137,850
W. Nicholas Thorndike/1992 $594 $831 $862 $783 $752 $807 $823 $206 144,850
* Includes an annual retainer and an attendance fee for each meeting attended.
** Reflects total payments received from all Putnam funds in the most recent calendar year. As of December 31, 1994, there were
86 funds in the Putnam family.
*** Elected as a Trustee in April 1995. For the calendar year ended December 31, 1994, Dr. Shapiro received $38,577 in retirement
benefits from the Putnam funds in respect of his prior service as a Trustee from 1984 to 1989, which benefits terminated at
the end of 1994.
+ For fiscal period 9/1/94 - 5/31/95.
++ For fiscal period 7/1/94 - 5/31/95.
+++ For fiscal period 3/1/95 - 5/31/95.
</TABLE>
The Trustees have approved Retirement Guidelines for Trustees of
the Putnam funds. These Guidelines provide generally that a
Trustee who retires after reaching age 72 and who has at least 10
years of continuous service will be eligible to receive a
retirement benefit from each Putnam fund for which he or she
served as a Trustee. The amount and form of such benefit is
subject to determination annually by the Trustees and, unless
otherwise determined by the Trustees, will be an annual cash
benefit payable for life equal to one-half of the Trustee
retainer fees paid by each fund at the time of retirement.
Several retired Trustees are currently receiving benefits
pursuant to the Guidelines and it is anticipated that the current
Trustees will receive similar benefits upon their retirement. A
Trustee who retired in calendar 1994 and was eligible to receive
benefits under these Guidelines would have received an annual
benefit of $60,425, based upon the aggregate retainer fees paid
by the Putnam funds for such year. The Trustees reserve the
right to amend or terminate such Guidelines and the related
payments at any time, and may modify or waive the foregoing
eligibility requirements when deemed appropriate.
For additional information concerning the Trustees, see
"Management" in Part II of this SAI.
SHARE OWNERSHIP
At August 31, 1995, the officers and Trustees of each fund as
a group owned less than 1% of the outstanding shares of each
class of each fund, and, except as noted below, to the knowledge
of each fund no person owned of record or beneficially 5% or more
of the shares of any class of that fund.
SHAREHOLDER NAME PERCENTAGE
FUND NAME CLASS AND ADDRESS OWNED (%)
- ----------- ----- -------------------- --------
Arizona fund A Merrill Lynch 6.30
4800 Dear Lake Dr. East
Jacksonville, FL 32246
B Merrill Lynch 5.90
4800 Dear Lake Dr. East
Jacksonville, FL 32246
MPutnam Investment, Inc. 51.40
One Post Office Square
Boston, MA 02109
MAlex Brown & Sons, Inc. 48.50
P.O. Box 1346
Baltimore, MD 21203
Florida fund A Merrill Lynch 8.90
4800 Dear Lake Dr. East
Jacksonville, FL 32246
B Merrill Lynch 7.70
4800 Dear Lake Dr. East
Jacksonville, FL 32246
MPutnam Investments, Inc. 100.00
One Post Office Square
Boston, MA 02109
Massachusetts M Janice A. Krusen 43.50
fund 88 Pochet Rd.
Orleans, MA 02643
MCorelink Financial, Inc. 17.50
1855 Gateway Blvd.
Concord, CA 94520
MJoseph R. Gaudet 16.50
165 Linwood St.
Lynn, MA 01905
MAngela M. Monti 16.30
43 Pine vale Rd.
Waltham, MA 02154
Michigan fund M Frank R. Farkas 60.10
1832 ADA
Muskegon, MI 49442
MEdward D. Jones & Co.17.20
P.O. Box 2500
Maryland Heights, MO 63043
MLorain J. Bullis 12.10
2110 N. Williamston Rd.
Williamston, MI 48895
MWaldemar E. Klammer 9.90
801 Weaver Ave.
Kalamazoo, MI 49006
MRaymond P. Dull 5.30
325 N. Division St.
Spring Lake, MI 49456
Minnesota fund M Kermit J. Swenson 99.10
7819 408th St.
Kenyon, MN 55946
<PAGE>
New Jersey fund A Merrill Lynch 9.70
4800 Dear Lake Dr. East
Jacksonville, FL 32246
B Merrill Lynch 9.50
4800 Dear Lake Dr. East
Jacksonville, FL 32246
MChristine Vallet 17.60
40 Fieldcrest Way
Hazlet, NJ 07430
M Carol Bozzo 8.80
189 Broadway
Bayonne, NJ 07002
Ohio fund B Merrill Lynch 11.90
4800 Dear Lake Dr. East
Jacksonville, FL 32246
MRaymond E. Duvall 28.90
1113 Heritage Dr.
Van Wert, OH 45891
MEdward D. Jones & Co. 8.70
P.O. Box 2500
Maryland Heights, MO 63043
Pennsylvania fund A BHC Securities, Inc. 5.10
100 North 20th St.
Philadelphia, PA 19103
B Merrill Lynch 6.80
4800 Dear Lake Dr. East
Jacksonville, FL 32246
MArlene L. Diem 22.20
890 E. Kercher Ave.
Myerstown, PA 17067
MSamuel J. Bucher 6.50
Rt. 2, Box 212
Myerstown, PA 17067
MFrank G. Gravener 5.00
4404 Sylvan Dr.
Reading, PA 19606
<PAGE>
DISTRIBUTION FEES
During fiscal 1995, the funds paid the following 12b-1 fees to
Putnam Mutual Funds:
FUND NAME CLASS A CLASS B CLASS M
- ----------- ------- ------- -------
Arizona fund+ $199,364 $114,668 n/a
Florida fund++ $488,799 $312,328 $0
Massachusetts fund $479,498 $284,736 $5
Michigan fund $256,205 $127,403 $77
Minnesota fund $187,341 $116,155 $0
New Jersey fund++ $431,012 $394,057 $0
Ohio fund $378,971 $212,438 $0
Pennsylvania fund+++ $86,239 $86,431 n/a
+ for fiscal period 9/1/94 - 5/31/95
++ for fiscal period 7/1/94 - 5/31/95
+++ for fiscal period 3/1/95 - 5/31/95
<PAGE>
CLASS A SALES CHARGES AND CONTINGENT DEFERRED SALES CHARGES
Putnam Mutual Funds received sales charges with respect to class
A shares in the following amounts during the periods indicated:
SALES CHARGES
RETAINED BY PUTNAM CONTINGENT
MUTUAL FUNDS DEFERRED
TOTAL AFTER SALES
SALES CHARGESDEALER CONCESSIONS CHARGES
------------------------------- --------
Arizona fund
Fiscal year
1995+ $257,469 $15,552 $200
1994 $894,004 $59,472 $1,639
1993 $1,896,011 $89,369 $0
Florida fund
Fiscal year
1995++ $501,152 $39,037 $19,781
1994 $1,391,801 $80,999 $584
1993 $2,398,367 $133,344 $9,631
Massachusetts fund
Fiscal year
1995 $783,963 $27,221 $680
1994 $1,740,049 $140,316 $10,092
1993 $2,093,315 $155,124 $1,722
Michigan fund
Fiscal year
1995 $419,491 $15,212 $0
1994 $935,249 $65,629 $0
1993 $1,116,865 $58,296 $0
Minnesota fund
Fiscal year
1995 $312,177 $18,588 $7
1994 $670,795 $41,915 $27
1993 $1,030,088 $47,238 $0
<PAGE>
New Jersey fund
Fiscal year
1995++ $777,971 $48,327 $2,864
1994 $2,132,078 $123,856 $0
1993 $3,122,792 $169,842 $0
Ohio fund
Fiscal year
1995 $466,247 $30,918 $0
1994 $1,129,631 $73,168 $0
1993 $1,399,258 $68,352 $0
Pennsylvania fund
Fiscal year
1995+++ $273,245 $18,254 $10,000
1995 $1,113,142 $71,739 $640
1994 $1,283,881 $75,566 $640
+ for fiscal period 9/1/94 - 5/31/95
++ for fiscal period 7/1/94 - 5/31/95
+++ for fiscal period 3/1/95 - 5/31/95
<PAGE>
CLASS B CONTINGENT DEFERRED SALES CHARGES
Putnam Mutual Funds received contingent deferred sales charges
upon redemptions of class B shares in the following amounts
during the periods indicated:
CONTINGENT DEFERRED
SALES CHARGES
-------------------
Arizona fund
Fiscal year
1995+ $48,101
1994 $309,154
1993 $0
Florida fund
Fiscal year
1995++ $153,120
1994 $78,903
1993 $133,344
Massachusetts fund
Fiscal year
1995 $35,000
1994 $34,720
Michigan fund
Fiscal year
1995 $32,819
1994 $3,489
Minnesota fund
Fiscal year
1995 $20,926
1994 $4,372
New Jersey fund
Fiscal year
1995++ $150,939
1994 $62,483
1993 $3,539
<PAGE>
Ohio fund
Fiscal year
1995 $60,907
1994 $9,032
Pennsylvania fund
Fiscal year
1995+++ $18,160
1995 $2,473
1994 $69,280
+ for fiscal period 9/1/94 - 5/31/95
++ for fiscal period 7/1/94 - 5/31/95
+++ for fiscal period 3/1/95 - 5/31/95
<PAGE>
CLASS M SHARES
Putnam Mutual Funds received sales charges with respect to class
M shares in the following amounts during the 1995 fiscal year:
SALES CHARGES
RETAINED BY PUTNAM
MUTUAL FUNDS
TOTAL AFTER
SALES CHARGES DEALER CONCESSIONS
------------- ------------------
Florida fund+ $0 $0
Massachusetts fund $692 $62
Michigan fund $0 $0
Minnesota fund $0 $0
New Jersey fund+ $0 $0
Ohio fund $0 $0
+ for fiscal period 7/1/94 - 5/31/95
No class M shares for the Arizona and Pennslyvania funds were
outstanding during as of May 31, 1995.
INVESTOR SERVICING AND CUSTODY FEES AND EXPENSES
During the 1995 fiscal year, each fund incurred
the following fees and out-of-pocket expenses for investor
servicing and custody services provided by Putnam Fiduciary Trust
Company:
Arizona fund+ $52,454
Florida fund++ $127,059
Massachusetts fund $127,771
Michigan fund $103,351
Minnesota fund $77,963
New Jersey fund++ $211,127
Ohio fund $173,281
Pennsylvania fund+++ $0
+ for fiscal period 9/1/94 - 5/31/95
++ for fiscal period 7/1/94 - 5/31/95
+++ for fiscal period 3/1/95 - 5/31/95
<PAGE>
INVESTMENT PERFORMANCE
STANDARD PERFORMANCE MEASURES
(for periods ended May 31, 1995)
Arizona fund
Class A Class B
Inception date: 1/30/91 7/15/93
TOTAL
RETURN NAV* POP** NAV CDSC
- ----------------------------------------------------------------------
1 year +7.62% +2.53% +6.88% +1.88%
Life of
class +7.89 +6.70 +2.94 +0.94
Class A Class B
Inception date: 1/30/91 7/15/93
YIELD POP NAV
30-day 5.02% 4.62%
yield
Tax-equivalent 8.80 8.10
yield***
*net asset value
**public offering price
***Assumes the maximum combined 42.98% federal and state rate. Results
for investors subject to lower tax rates would not be as advantageous.
No class M shares were outstanding at May 31, 1995.
<PAGE>
Florida fund
Class A Class B Class M
Inception date: 8/24/90 1/4/93 5/1/95
TOTAL
RETURN NAV* POP** NAV CDSC NAV POP
- ----------------------------------------------------------------------
1 year +9.23% +4.05% +8.52% +3.52% n/a n/a
Life of
class +8.44 +7.35 +5.18 +3.63 +3.28 -0.10
Class A Class B Class M
Inception date: 8/24/90 1/4/93 5/1/95
YIELD POP NAV POP
30-day 4.92% 4.51% 4.76%
yield
Tax-equivalent 8.15 7.47 7.88
yield***
*net asset value
**public offering price
***Assumes the maximum 39.60% federal rate. Results for investors
subject to lower tax rates would not be as advantageous.
<PAGE>
Massachusetts fund
Class A Class B Class M
Inception date: 10/23/89 7/15/93 5/12/95
TOTAL
RETURN NAV* POP** NAV CDSC NAV POP
- ----------------------------------------------------------------------
1 year +8.45% +3.31% +7.64% +2.64% n/a n/a
5 years +8.97 +7.93 n/a n/a n/a n/a
Life of
class +8.75 +7.82 +3.36 +1.38 +1.53 -1.83
Class A Class B Class M
Inception date: 10/23/89 7/15/93 5/12/95
YIELD POP NAV POP
30-day 5.31% 4.92% 4.67%
yield
Tax-equivalent 9.99 9.26 8.79
yield***
*net asset value
**public offering price
***Assumes the maximum combined 46.85% federal and state rate. Results
for investors subject to lower tax rates would not be as advantageous.
<PAGE>
Michigan fund
Class A Class B Class M
Inception date: 10/23/89 7/15/93 4/3/95
TOTAL
RETURN NAV* POP** NAV CDSC NAV POP
- ----------------------------------------------------------------------
1 year +7.45% +2.38% +6.72% +1.72% n/a n/a
5 years +7.99 +6.94 n/a n/a n/a n/a
Life of
class +7.69 +6.76 +3.14 +1.15 3.06 -0.33
Class A Class B Class M
Inception date: 10/23/89 7/15/93 4/3/95
YIELD POP NAV POP
30-day 5.27% 4.88% 5.06%
yield
Tax-equivalent 9.13 8.45 8.76
yield***
*net asset value
**public offering price
***Assumes the maximum combined 42.26% federal and state rate. Results
for investors subject to lower tax rates would not be as advantageous.
<PAGE>
Minnesota fund
Class A Class B Class M
Inception date: 10/23/89 7/15/93 4/3/95
TOTAL
RETURN NAV* POP** NAV CDSC NAV POP
- ----------------------------------------------------------------------
1 year +7.90% +2.75% +7.17% +2.17% n/a n/a
5 years +7.66 +6.62 n/a n/a n/a n/a
Life of
class +7.40 +6.48 +3.58 +1.55 +2.89 -0.41
Class A Class B Class M
Inception date: 10/23/89 7/15/93 4/3/95
YIELD POP NAV POP
30-day 5.14% 4.75% 5.13%
yield
Tax-equivalent 9.30 8.59 9.28
yield***
*net asset value
**public offering price
***Assumes the maximum combined 44.73% federal and state rate. Results
for investors subject to lower tax rates would not be as advantageous.
<PAGE>
New Jersey fund
Class A Class B Class M
Inception date: 2/20/90 1/4/93 5/1/95
TOTAL
RETURN NAV* POP** NAV CDSC NAV POP
- ----------------------------------------------------------------------
1 year +7.78% +2.67% +6.98% +1.98% n/a n/a
5 years +8.30 +7.26 n/a n/a n/a n/a
Life of
class +8.19 +7.21 +5.37 +3.82 +3.21 -0.10
Class A Class B Class M
Inception date: 2/20/90 1/4/93 5/1/95
YIELD POP NAV POP
30-day 5.15% 4.75% n/a
yield
Tax-equivalent 9.13 8.42 n/a
yield***
*net asset value
**public offering price
***Assumes the maximum combined 43.57% federal and state rate. Results
for investors subject to lower tax rates would not be as advantageous.
<PAGE>
Ohio fund
Class A Class B Class M
Inception date: 10/23/89 7/15/93 4/3/95
TOTAL
RETURN NAV* POP** NAV CDSC NAV POP
- ----------------------------------------------------------------------
1 year +8.04% +2.90% +7.39% +2.39% n/a n/a
5 years +8.06 +7.02 n/a n/a n/a n/a
Life of
class +7.72 +6.80 +3.43 +1.44 +3.05 -0.26
Class A Class B Class M
Inception date: 10/23/89 7/15/93 4/3/95
YIELD POP NAV POP
30-day 4.88% 4.48% 4.47%
yield
Tax-equivalent 8.73 8.02 8.00
yield***
*net asset value
**public offering price
***Assumes the maximum combined 44.13% federal and state rate. Results
for investors subject to lower tax rates would not be as advantageous.
<PAGE>
Pennsylvania fund
Class A Class B
Inception date: 7/21/89 7/15/93
TOTAL
RETURN NAV* POP** NAV CDSC
- ----------------------------------------------------------------------
1 year +8.70% +3.55% +8.01% +3.01%
5 years +8.92 +7.85 n/a n/a
Life of
class +8.32 +7.43 +3.92 +1.90
Class A Class B
Inception date: 7/21/89 7/15/93
YIELD POP NAV
30-day 5.21% 4.81%
yield
Tax-equivalent 8.87 8.19
yield***
*net asset value
**public offering price
***Assumes the maximum combined 41.29% federal and state rate. Results
for investors subject to lower tax rates would not be as advantageous.
No class M shares were outstanding at May 31, 1995.
- ----------------------------------------------------------------------
Data represent past performance and are not indicative of future
results. Total return and yield at POP for class A and class M shares
reflect the deduction of the maximum sales charge of 4.75% and
3.25%, respectively. Total return at CDSC for class B shares
reflects the deduction of the applicable contingent deferred sales
charge (CDSC). The maximum class B CDSC is 5.00%. See "Standard
performance measures" in Part II of this SAI for information on how
performance is calculated. Past performance is no guarantee of future
results.
<PAGE>
TAXES
The prospectus describes generally the tax treatment of
distributions by the funds . This section of the
SAI and the section entitled "Taxes" in Part II of this
SAI include additional information concerning certain
state and federal tax consequences of an investment in a
fund , respectively.
Prospective investors should be aware that an investment in a
state tax-exempt fund may not be suitable for persons who do not
receive income subject to income taxes of such state.
STATE TAXATION. (MICHIGAN AND MINNESOTA FUNDS ONLY) That
percentage of interest on indebtedness incurred or continued to
purchase or carry shares of an investment company paying exempt-
interest dividends, such as the fund , that is equal to the
percentage of the fund's distributions from investment
income and short-term capital gains that is exempt from federal
income tax, will not be deductible by the investor for
Michigan single business tax or Minnesota personal income
tax purposes. For Michigan personal income tax and
Michigan intangibles tax purposes, such interest deduction is
wholly disallowed.
To the extent that distributions are derived from interest on
Michigan tax-exempt securities , such distributions will be
exempt from Michigan personal income tax and the Michigan
intangibles tax under the current position of the Michigan
Department of Treasury. Such distributions, if received in
connection with a shareholder's business activity, may
alternatively be subject to the Michigan single business tax.
For Michigan personal income tax, intangibles tax and single
business tax purposes, exempt-interest dividends attributable to
any investment other than Michigan tax-exempt securities
will be fully taxable as will dividends arising from any source
other than exempt-interest irrespective of the investment to
which any such dividend is attributable.
More specifically, Michigan law provides an exemption from both
the Michigan personal income tax and the Michigan single business
tax with respect to interest paid to the owner of tax-exempt
securities , and a corresponding exemption is provided under
the Michigan intangibles tax with respect to ownership of such
bonds. The Michigan Department of Treasury, in a ruling letter
dated December 19, 1986 and published in April, 1987, revised a
previous administrative position that shareholders of an
investment company other than a "unit investment trust" are to be
treated as the owners of shares in the investment company and not
as the owners of a proportionate share of the company's assets.
This revised position was reaffirmed in a ruling published in
March, 1989. The Michigan fund is not a unit investment
trust, and accordingly shareholders will not , in the view
of the Michigan Department of Treasury, be treated as the owners
of the fund's assets including the fund's tax-exempt
securities .
The Department has not addressed the question of whether the
distinction between ownership of tax-exempt obligations and
mutual fund shares may be accorded significance in connection
with application of the single business tax to investment company
distributions representing interest on obligations which are
exempt from federal income tax and Michigan tax.
NEW JERSEY. Income distributions paid from a "qualified
investment fund" are exempt from the New Jersey Gross Income Tax
to the extent attributable to tax-exempt obligations specified by
New Jersey law. A "qualified investment fund" is any investment
company or trust, or series of such investment company or trust,
registered with the Securities and Exchange Commission which, for
the calendar year in which a distribution is paid, (i) has no
investments other than interest-bearing obligations, obligations
issued at a discount, and cash and cash items (including
receivables) and financial options, futures, forward contracts or
other similar financial instruments related to interest-bearing
obligations, obligations issued at a discount or bond indexes
related thereto, and (ii) has at least 80 percent of the
aggregate principal amount of all its investments (excluding
financial options, futures, forward contracts or other similar
financial instruments related to interest-bearing obligations,
obligations issued at a discount or bond indexes related thereto
to the extent such instruments are authorized under section
851(b) of the Internal Revenue Code, and cash and cash items,
which cash items include receivables), invested in obligations
issued by New Jersey or obligations that are free from state or
local taxation under New Jersey and federal laws, such as
obligations issued by the governments of Puerto Rico, Guam or the
Virgin Islands. Interest income and gains realized by the Fund
and distributed to shareholders are exempt from the New Jersey
Gross Income Tax to the extent attributable to tax-exempt
obligations. Gains resulting from the redemption or sale of
shares of the New Jersey fund would also be exempt from the New
Jersey Gross Income Tax.
The New Jersey Gross Income Tax is not applicable to
corporations. For all corporations subject to the New Jersey
Corporation Business Tax, interest on tax-exempt obligations is
included in the net income tax base for purposes of computing the
corporate business tax. Furthermore, any gain upon the
redemption or sale of shares by a corporate shareholder is also
included in the net income tax base for purposes of computing the
Corporation Business Tax.
The New Jersey fund will notify shareholders by February 15 of
each calendar year as to the amounts of dividends and
distributions made with respect to the preceding calendar year
that are exempt from federal income taxes and New Jersey personal
income tax and the amounts, if any, which are subject to such
taxes. The New Jersey fund will also make appropriate
certification of its status to New Jersey tax authorities by that
date. Shareholders are, however, urged to consult with their own
tax advisors as to the federal, state or local tax consequences
in their specific circumstances.
PENNSYLVANIA CORPORATE NET INCOME TAX. Distributions paid by the
Pennsylvania fund which are excludable as exempt income for
federal tax purposes are not subject to the Pennsylvania
corporate net income tax. An additional deduction from
Pennsylvania taxable income is permitted for the amount of
distributions paid by the Pennsylvania fund attributable to
interest received by the Pennsylvania fund from its investments
in tax-exempt securities and obligations of the United States,
its territories and certain of its agencies and instrumentalities
to the extent included in federal taxable income, but such a
deduction is reduced by any interest on indebtedness incurred to
carry the securities and other expenses incurred in the
production of such interest income, including expenses deducted
on the federal income tax return that would not have been allowed
under the Internal Revenue Code if the interest were exempt from
federal income tax. Distributions by the Pennsylvania fund
attributable to most other sources may be subject to the
Pennsylvania corporate net income tax. It is the current
position of the Pennsylvania Department of Revenue that fund
shares are considered exempt assets (with a pro rata exclusion
based on the value of the Pennsylvania fund attributable to its
investments in tax-exempt securities and obligations of the
United States, its territories and certain of its agencies and
instrumentalities) for purposes of determining a corporation's
capital stock value subject to the Commonwealth's capital stock
or franchise tax.
EQUIVALENT YIELDS: TAX-EXEMPT VERSUS TAXABLE SECURITIES
The tables below show the effect of the tax status of each
fund's tax-exempt securities on the effective yield received
by their holders under the Internal Revenue Code of 1986, as
amended (the "Code") and personal and gross income tax
laws of the relevant state, (except Florida, which has no
personal income tax) in effect for 1995. The tables give the
approximate yield a taxable security must earn at various income
levels to produce after-tax yields equivalent to those of the
relevant tax-exempt securities yielding from 2.0% to 9.0%.<PAGE>
<TABLE>
<CAPTION>
Arizona fund
1995
TAXABLE INCOME* COMBINED
----------------------- ARIZONA AND TAX-EXEMPT YIELD:
FEDERAL MARGINAL
SINGLE JOINT TAX RATE** 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0%
- ------------------------------------------------------------------------------------------- ---------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Equivalent taxable yield
$0-10,000 $0-20,000 17.55% 2.43% 3.64% 4.85% 6.06% 7.28% 8.49% 9.70% 10.92%
10,001-23,350 20,001-39,000 17.98% 2.44 3.66 4.88 6.10 7.31 8.53 9.75 10.97
23,351-25,000 39,001-50,000 30.52% 2.88 4.32 5.76 7.20 8.64 10.07 11.51 12.95
25,001-50,000 50,001-94,250 31.02% 2.90 4.35 5.80 7.25 8.70 10.15 11.60 13.05
50,001-56,550 31.74% 2.93 4.40 5.86 7.33 8.79 10.26 11.72 13.19
94,251-100,000 33.90% 3.03 4.54 6.05 7.56 9.08 10.59 12.10 13.62
56,551-117,950 *** 100,001-143,600 *** 34.59% 3.06 4.59 6.12 7.64 9.1710.7012.2313.76
117,951-150,000 *** 143,601-256,500 *** 39.33% 3.30 4.94 6.59 8.24 9.8911.5413.1914.83
150,001-256,500 *** 39.58% 3.31 4.97 6.62 8.28 9.93 11.5913.2414.90
256,501 300,000 *** 42.74% 3.49 5.24 6.99 8.73 10.48 12.23 13.97 15.72
over 256,500 *** over 300,000 *** 42.98% 3.51 5.26 7.02 8.77 10.52 12.28 14.03 15.78
- ----------------- ---------------------------------------------------------------------------------------------------
- ----
* This amount represents taxable income as defined in the Code. It is assumed that taxable income under Arizona law
is the same as taxable income as defined under the Code. However, Arizona taxable income is likely to differ due
to differences in exemptions, itemized deductions, and other items.
** For federal income tax purposes, these combined rates reflect the applicable marginal rates on taxable income in
effect for 1995. These rates include the effect of deducting state taxes on your Federal return.
*** The amount of taxable income in this bracket may be affected by the phase-out of personal exemptions and the
limitation on itemized deductions under the Code.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Florida fund
TAXABLE INCOME*
1995 TAX-EXEMPT YIELD
FEDERAL
SINGLE JOINT MARGINAL
RATE* * 2% 3% 4% 5% 6% 7% 8% 9%
-----------------------------------------------------------------------------------------------------------------
EQUIVALENT TAXABLE YIELD
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 23,350 $ 0 - 39,000 15.00% 2.35% 3.53% 4.71% 5.88% 7.06% 8.24% 9.41% 10.59%
23,351 - 56,550 39,001 - 94,250 28.00 2.78 4.17 5.56 6.94 8.33 9.72 11.1112.50
56,551 - 117,950 *** 94,251- 143,600 *** 31.00 2.90 4.35 5.80 7.25 8.70 10.14 11.5913.04
117,951- 256,500 *** 143,601-256,500 *** 36.00 3.13 4.69 6.25 7.81 9.38 10.94 12.5014.06
over 256,501***over256,501 *** 39.60 3.31 4.97 6.62 8.28 9.93 11.59 13.2514.90
* This amount represents taxable income as defined in the Code .
** For federal tax purposes, these rates reflect the marginal rates on taxable income in effect
for 1995.
*** The amount of taxable income in this bracket may be affected by the phase-out of personal exemptions and the
limitation on itemized deductions under the Code.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Massachusetts fund
1995
COMBINED
MASSACHUSETTS
TAXABLE INCOME* AND
FEDERAL TAX-EXEMPT YIELD
TAX ----------------------------------------------
SINGLE JOINT RATE* *2% 3% 4% 5% 6% 7% 8% 9%
----------------------------------------------------------------------------------------------------------------
- -
EQUIVALENT TAXABLE YIELD
<C> <C> <C> C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 23,350 $ 0 - 39,000 25.20% 2.67% 4.01% 5.35% 6.68% 8.02% 9.36% 10.70% 12.03%
23,351 - 56,550 39,001 - 94,250 36.64 3.16 4.73 6.31 7.89 9.47 11.05 12.63 14.20
56,551 - 117,950 *** 94,251- 143,600 *** 39.28 3.29 4.94 6.59 8.23 9.88 11.53 13.1814.82
117,951 - 256,500 *** 143,601-256,500 *** 43.68 3.55 5.33 7.10 8.88 10.65 12.43 14.2015.98
256,501 and over ***256,501 and over *** 46.85 3.76 5.64 7.53 9.41 11.29 13.17 15.0516.93
--------------------------------------------------------------------------------------------------------------------
* This amount represents taxable income as defined in the Code. It is assumed that taxable income as defined in the
Code is the same as under the Massachusetts personal income tax law. However, Massachusetts taxable income may
differ due to differences in exemptions, itemized deductions, and other items.
** For federal tax purposes, these combined rates reflect the applicable marginal rates on taxable income in effect
for 1995. For Massachusetts tax purposes, these rates reflect the 12% Massachusetts rate applied to non-
Massachusetts bank interest. (These combined rates include the effect of deducting state taxes on your federal
return.)
*** The amount of taxable income in this bracket may be affected by the phase-out of personal exemptions and the
limitation on itemized deductions, based on adjusted gross income, under the Code.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Michigan fund
1995
COMBINED
MICHIGAN TAX-EXEMPT YIELD
TAXABLE INCOME* AND FEDERAL --------------------------------------------------
TAX
SINGLE JOINT RATE ** 2% 3% 4% 5% 6% 7% 8% 9%
----------------------------------------------------------------------------------------------------------------
EQUIVALENT TAXABLE YIELD
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 23,350 $0 - 39,000 18.74% 2.46% 3.69% 4.92% 6.15% 7.38% 8.61%9.84% 11.08%
23,351 - 56,550 39,001 - 94,250 31.17 2.91 4.36 5.81 7.26 8.72 10.1711.62 13.08
56,551-117,950 *** 94,251-143,600 *** 34.04 3.03 4.55 6.06 7.58 9.1010.61 12.1313.64
117,951-256,500 ***143,601-256,500 *** 38.82 3.27 4.90 6.54 8.17 9.8111.44 13.0814.71
over 256,500 *** over 256,500 *** 42.26 3.46 5.20 6.93 8.66 10.39 12.12 13.85 15.59
----------------------------------------------------------------------------------------------------------------
* This amount represents taxable income as defined in the Code .
It is assumed that taxable income as defined in the Code is the same as under the Michigan personal income tax
law, however, Michigan taxable income may differ due to differences in exemptions, itemized deductions, and other
items.
** For federal tax purposes, these combined rates reflect the applicable marginal rates on taxable income in effect
for 1995. (These combined rates include the effect of deducting state taxes on your Federal return.)
*** The amount of taxable income in this bracket may be affected by the phase-out of personal exemptions and the
limitation on itemized deductions, based on adjusted gross income, under the Code.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Minnesota fund
1995
COMBINED
MINNESOTA
AND FEDERAL TAX-EXEMPT YIELD
TAXABLE INCOME* TAX -------------------------------------------------------
SINGLE JOINT RATE** 2% 3% 4% 5% 6% 7% 8% 9%
---------------------------------------------------------------------------------------------------------------------
EQUIVALENT TAXABLE YIELD
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 15,620 $0 - 22,840 20.10% 2.50%3.75%5 .01% 6.26% 7.51% 8.76%10.01% 11.26%
15,621 - 23,350 22,841- 39,000 21.80 2.56 3.84 5.126 .39 7.67 8.95 10.23 11.51
23,351 - 51,330 39,001- 90,760 33.76 3.02 4.53 6.047 .55 9.06 10.57 12.08 13.59
51,331 - 56,550 90,761- 94,250 34.12 3.04 4.55 6.077 .59 9.11 10.63 12.14 13.66
56,551 - 117,950*** 94,251-143,600 *** 36.87 3 .17 4.75 6.34 7.92 9.50 11.09 12.67 14.26
117,951 - 256,500*** 143,601-256,500 *** 41.44 3 .42 5.12 6.83 8.54 10.25 11.95 13.66 15.37
256,501 and over*** 256,501 and over *** 44.73 3.62 5.43 7.24 9.05 10.8612 .67 14.47 16.28
--------------------------------------------------------------------------------------------------------------------
* This amount represents taxable income as defined in the Code . It is assumed that taxable income
as defined in the
Code is the same as under the Minnesota personal income tax law. However, Minnesota taxable income may
differ due to differences in exemptions, itemized deductions, and other items.
** For federal tax purposes, these combined rates reflect the applicable marginal rates on taxable income in
effect for 1995. (These combined rates include the effect of deducting state taxes on your Federal return.)
*** The amount of taxable income in this bracket may be affected by the phase-out of personal exemptions and the
limitation on itemized deductions, based on adjusted gross income, under the Code.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
New Jersey fund
1995
COMBINED
TAXABLE INCOME* NEW JERSEY TAX EXEMPT YIELD :
----------------------- AND ---------------------------------------------
FEDERAL
SINGLE JOINT TAX RATE** 2% 3% 4% 5% 6% 7% 8% 9%
------------------------------ -------------------------------------------------------------------------------------
- -----
<C> <C> <C> <C> <C><C><C><C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 20,000 0 - 20,000 16.45% 2.39% 3.59% 4 .79% 5.98% 7.18% 8 .38% 9.57% 10.77%
20,001 - 23,350 20,001 - 39,000 16.81 2.40 3.61 4.81 6.01 7.21 8 .41 9.62 10.82
23,351 - 35,000 39,001 - 50,000 29.53 2.84 4.26 5.68 7.10 8.51 9 .9311.3512.77
50,001 - 70,000
30.14 2.86 4.29 5.73 7.16 8.59 10.02 11 .45 12.88
35,001 - 40,000 70,001 - 80,000 31.06 2.90 4.35 5.80 7.25 8.70 10.15 11 .6013.05
40,001 - 56,550 80,001 - 94,250 32.33 2.96 4.43 5.91 7.39 8.87 10 .3411.8213.30
56,551 - 75,000 94,251 - 143,600 35.15 3.08 4.63 6.17 7.71 9.25 10.79 12 .3413.88
75,001 - 117,950 35.543.10 4 .65 6.21 7.76 9.31 10 .86 12.41 13.96
143,601 - 150,000 39.85 3.32 4.99 6.65 8.31 9.97 11.64 13 .30 14.96
17,951 - 256,500 150,001 - 256,500 40.21 3.35 5.02 6.69 8.36 10.04 11.71 13 .3815.05
over 256,500 over 256,500 43.57 3.54 5.32 7.09 8.86 10.63 12.41 14 .18 15.95
----------------------------------------------------------------------------------------------------------------
- -
* This amount represents taxable income as defined in the Code. It is assumed that taxable income as
defined in the
Code is the same as under the New Jersey State Gross Income Tax law. However, New Jersey taxable income may
differ due to differences in exemptions, itemized deductions, and other items.
** For federal tax purposes, these combined rates reflect the applicable marginal rates on taxable income in effect
for 1995. These rates include the effect of deducting state taxes on your Federal return.
*** The amount of taxable income of this bracket may be affected by the phase-out of personal exemptions and the
limitation on itemized deductions under the Code.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Ohio fund
1995
COMBINED
OHIO
AND FEDERAL TAX-EXEMPT YIELD
TAXABLE INCOME* TAX ----------------------------------------------------------
SINGLE JOINT RATE ** 2% 3% 4% 5% 6% 7% 8% 9%
----------------------------------------------------------------------------------------------------------------------
EQUIVALENT TAXABLE YIELD
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 5,000 0 - 5,000 15 .63% 2 .37% 3 .56% 4 .74% 5 .93% 7 .11% 8 .30% 9 .48% 10 .67%
5,001 - 10,000 5,001 - 10,000 16 .26 2 .39 3 .58 4 .78 5 .97 7 .17 8 .36 9 .55 10 .75
10,001 - 15,000 10,001 - 15,000 17 .53 2 .43 3 .64 4 .85 6 .06 7 .28 8 .49 9 .70 10 .91
15,001 - 20,000 15,001 - 20,000 18 .16 2 .44 3 .67 4 .89 6 .11 7 .33 8 .55 9 .77 11 .00
20,001 - 23,350 20,001 - 39,000 18 .79 2 .46 3 .69 4 .93 6 .16 7 .39 8 .62 9 .85 11 .06
23,351 - 40,000 39,001 - 40,000 31 .21 2 .91 4 .36 5 .81 7 .27 8 .72 10 .18 11 .63 13 .08
40,001 - 56,550 40,001 - 80,000 31 .74 2 .93 4 .40 5 .86 7 .33 8 .79 10 .26 11 .72 13 .19
80,001 - 94,250 32 .28 2 .95 4 .43 5 .91 7 .38 8 .86 10 .34 11 .81 13 .29
56,551 - 80,000 34 .59 3 .06 4 .59 6 .12 7 .64 9 .17 10 .70 12 .23 13 .76
80,001 - 100,000 94,251-100,000 35 .10 3 .08 4 .62 6 .16 7 .70 9 .25 10 .79 12 .33 13 .87
100,001 - 117,950*** 100,001-143,600 *** 35 .76 3 .11 4 .67 6 .23 7 .78 9 .34 10 .90 12 .45 14 .01
117,951 - 200,000*** 143,601-200,000 *** 40 .42 3 .36 5 .03 6 .71 8 .39 10 .07 11 .75 13 .43 15 .10
200,001 - 256,500*** 200,001-256,500 *** 40 .80 3 .38 5 .07 6 .76 8 .45 10 .14 11 .82 13 .51 15 .20
over 256,500*** over 256,500*** 44 .13 3 .58 5 .37 7 .16 8 .95 10 .74 12 .53 14 .32 16 .11
----------------------------------------------------------------------------------------------------------------------
* This amount represents taxable income as defined in the the Code . It is assumed that taxable
income as defined in
the Code is the same as under the Ohio personal income tax law, however, Ohio taxable income may differ due to
differences in exemptions, itemized deductions, and other items.
** For federal tax purposes, these combined rates reflect the applicable marginal rates on taxable income
in effect for 1995. These rates include the effect of deducting state taxes on your Federal return.
*** The amount of taxable income in this bracket may be affected by the phase-out of personal exemptions and the
limitation on itemized deductions, based on adjusted gross income, under the Code.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Pennsylvania fund
1995
COMBINED MARGINAL
TAXABLE INCOME* PENNSYLVANIA TAX-EXEMPT YIELD:
------------------------ AND ------------------------------------------------------
FEDERAL TAX
SINGLE JOINT RATE** 2% 3% 4% 5% 6% 7% 8% 9%
-----------------------------------------------------------------------------------------------------------------------
- - EQUIVALENT TAXABLE YIELD IF DOUBLE TAX-EXEMPT:
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$0-$23,350 $0-39,000 17 .38% 2 .42% 3 .63% 4 .84% 6 .05% 7 .26% 8 .47% 9 .68% 10 .89%
$23,351-$56,550 $39,001-$94,250 30 .02 2 .86 4 .29 5 .72 7 .14 8 .57 10 .00 11 .43 12 .86
$56,551-$117,950 *** $94,251-$143,600 *** 32 .93 2 .98 4 .47 5 .96 7 .45 8 .95 10 .44 11 .93 13 .42
$117,951-$256,500*** $143,601-$256,500 *** 37 .79 3 .21 4 .82 6 .43 8 .04 9 .64 11 .25 12 .86 14 .47
over $256,501 *** over $256,501 *** 41 .29 3 .41 5 .11 6 .81 8 .52 10 .22 11 .92 13 .63 15 .33
--------------------------------------------------------------------------------------------------------- -------------
- -
* This amount represents "taxable income" as defined in the Code and the Pennsylvania income tax law. Pennsylvania
taxable income may differ due to differences in exemptions, itemized deductions, and other items.
** For federal income tax purposes these combined rates reflect the marginal rates on taxable income in effect for
1995. For Pennsylvania personal income tax purposes the combined rates reflect tax rates in effect for 1995.
(These combined rates reflect the effect of deducting state taxes on the Federal return.)
*** The amount of taxable income in this bracket may be affected by the phase-out of personal exemptions and the
limitation on itemized deductions under the Code.
/TABLE
<PAGE>
Of course, there is no assurance that a fund will
achieve any specific tax-exempt yield. While it is expected that
each fund will invest principally in obligations which
pay interest exempt from federal income tax and personal income
tax of its respective state, other income received by a
fund may be taxable. The tables do not take into account any
federal alternative minimum taxes or state or local taxes payable
on each fund's distributions except for the personal
income tax of its respective state .
ADDITIONAL OFFICERS
In addition to the persons listed as officers of a fund
in Part II of this SAI , the following persons as noted
below are also officers of one or more funds and Vice
Presidents of certain of the Putnam funds . Officers of
Putnam Management hold the same offices in Putnam Management's
parent company, Putnam Investments, Inc.
GARY N. COBURN, Vice President. Senior Managing Director of
Putnam Management.
JAMES E. ERICKSON, Vice President. Managing Director of Putnam
Management.
BLAKE E. ANDERSON, Vice President . Senior Vice
President of Putnam Management.
TRIET M. NGUYEN, Vice President . Senior Vice
President of Putnam Management.
HOWARD K. MANNING, Vice President . Senior
Vice President of Putnam Management.
RICHARD P. WYKE, Vice President. Senior Vice President
of Putnam Management.
LESLIE J. BURKE, Vice President. Vice President of Putnam
Management. Prior to 1992, Ms. Burke was a Research Associate and
Municipal Bond Trader at Fidelity Management and Research
Company.
JAMES M. PRUSKO, Vice President. Assistant Vice President of
Putnam Management. Prior to 1992, Mr Prusko was a Sales and
Trading Associate at Salomon Brothers.
<PAGE>
INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS
Coopers & Lybrand L.L.P. , One Post Office Square, Boston, MA
02109, are the independent accountants for the Arizona
fund, Michigan fund, New Jersey fund and Ohio fund,
and Price Waterhouse LLP , 160 Federal Street, Boston, MA
02110, are the independent accountants for the Florida
fund, Massachusetts fund, Minnesota fund and
Pennsylvania fund , each providing audit services, tax return
review services and assistance and consultation in connection
with the review of various Securities and Exchange Commission
filings. The Report of Independent Accountants , financial
highlights and financial statements included in each
fund's Annual Report for the fiscal year ended May 31,
1995 , filed electronically on the following dates ,
are incorporated by reference into this SAI:
Date filed
Fund File
No. with SEC
_________________________________________________________
Arizona fund 811-6258 7/28/95
Florida fund 811-6129 7/31/95
Massachusetts fund 811-
4518 7/27/95
Michigan fund 811-4529 8/4/95
Minnesota fund 811-
4527 7/27/95
New Jersey fund 811-5977 7/28/95
Ohio fund 811-4528 8/1/95
Pennsylvania fund 811-5802 7/28/95
The financial highlights included in the prospectus and
incorporated by reference into this SAI and the financial
statements incorporated by reference into the prospectus and
this SAI have been so included and incorporated in reliance
upon the reports of Coopers & Lybrand, L.L.P. (for the
Arizona, Michigan, New Jersey and Ohio funds) and Price
Waterhouse LLP (for the Florida, Massachusetts, Minnesota and
Pennslyvania funds) , independent accountants, given on the
authority of said firms as experts in auditing and
accounting.
<PAGE>
<PAGE>
TABLE OF CONTENTS
MISCELLANEOUS INVESTMENT PRACTICES . . . . . . . . . . . . . . . . . . II-1
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .II-22
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .II-27
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . .II-36
HOW TO BUY SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . .II-38
DISTRIBUTION PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . .II-49
INVESTOR SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . .II-49
SIGNATURE GUARANTEES . . . . . . . . . . . . . . . . . . . . . . . . .II-55
SUSPENSION OF REDEMPTIONS. . . . . . . . . . . . . . . . . . . . . . .II-55
SHAREHOLDER LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . .II-55
STANDARD PERFORMANCE MEASURES. . . . . . . . . . . . . . . . . . . . .II-56
COMPARISON OF PORTFOLIO PERFORMANCE. . . . . . . . . . . . . . . . . .II-57
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .II-62
<PAGE>
THE PUTNAM FUNDS
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
PART II
The following information applies generally to your Fund and to
the other Putnam funds. In certain cases the discussion applies
to some but not all of the funds or their shareholders, and you
should refer to your Prospectus to determine whether the matter
is applicable to you or your Fund. You will also be referred to
Part I for certain information applicable to your particular
Fund. Shareholders who purchase shares at net asset value
through employer-sponsored defined contribution plans should also
consult their employer for information about the extent to which
the matters described below apply to them.
MISCELLANEOUS INVESTMENT PRACTICES
YOUR FUND'S PROSPECTUS STATES WHICH OF THE FOLLOWING INVESTMENT
PRACTICES ARE AVAILABLE TO YOUR FUND. THE FACT THAT YOUR FUND IS
AUTHORIZED TO ENGAGE IN A PARTICULAR PRACTICE DOES NOT
NECESSARILY MEAN THAT IT WILL ACTUALLY DO SO. YOU SHOULD
DISREGARD ANY PRACTICE DESCRIBED BELOW WHICH IS NOT MENTIONED IN
THE PROSPECTUS.
SHORT-TERM TRADING
In seeking the Fund's objective, Putnam Management will buy or
sell portfolio securities whenever Putnam Management believes it
appropriate to do so. In deciding whether to sell a portfolio
security, Putnam Management does not consider how long the Fund
has owned the security. From time to time the Fund will buy
securities intending to seek short-term trading profits. A
change in the securities held by the Fund is known as "portfolio
turnover" and generally involves some expense to the Fund. These
expenses may include brokerage commissions or dealer mark-ups and
other transaction costs on both the sale of securities and the
reinvestment of the proceeds in other securities. If sales of
portfolio securities cause the Fund to realize net short-term
capital gains, such gains will be taxable as ordinary income. As
a result of the Fund's investment policies, under certain market
conditions the Fund's portfolio turnover rate may be higher than
that of other mutual funds. Portfolio turnover rate for a fiscal
year is the ratio of the lesser of purchases or sales of
portfolio securities to the monthly average of the value of
portfolio securities -- excluding securities whose maturities at
acquisition were one year or less. The Fund's portfolio turnover
rate is not a limiting factor when Putnam Management considers a
change in the Fund's portfolio.
<PAGE>
LOWER-RATED SECURITIES
The Fund may invest in lower-rated fixed-income securities
(commonly known as "junk bonds"), to the extent described in the
Prospectus. The lower ratings of certain securities held by the
Fund reflect a greater possibility that adverse changes in the
financial condition of the issuer or in general economic
conditions, or both, or an unanticipated rise in interest rates,
may impair the ability of the issuer to make payments of interest
and principal. The inability (or perceived inability) of issuers
to make timely payment of interest and principal would likely
make the values of securities held by the Fund more volatile and
could limit the Fund's ability to sell its securities at prices
approximating the values the Fund had placed on such securities.
In the absence of a liquid trading market for securities held by
it, the Fund may be unable at times to establish the fair value
of such securities. The rating assigned to a security by Moody's
Investors Service, Inc. or Standard & Poor's Corporation (or by
any other nationally recognized securities rating organization)
does not reflect an assessment of the volatility of the
security's market value or the liquidity of an investment in the
security. See the Prospectus or Part I of this Statement for a
description of security ratings.
Like those of other fixed-income securities, the values of
lower-rated securities fluctuate in response to changes in
interest rates. Thus, a decrease in interest rates will
generally result in an increase in the value of the Fund's
assets. Conversely, during periods of rising interest rates, the
value of the Fund's assets will generally decline. In addition,
the values of such securities are also affected by changes in
general economic conditions and business conditions affecting the
specific industries of their issuers. Changes by recognized
rating services in their ratings of any fixed-income security and
in the ability of an issuer to make payments of interest and
principal may also affect the value of these investments.
Changes in the value of portfolio securities generally will not
affect cash income derived from such securities, but will affect
the Fund's net asset value. The Fund will not necessarily
dispose of a security when its rating is reduced below its rating
at the time of purchase, although Putnam Management will monitor
the investment to determine whether its retention will assist in
meeting the Fund's investment objective.
At times, a substantial portion of the Fund's assets may be
invested in securities as to which the Fund, by itself or
together with other funds and accounts managed by Putnam
Management and its affiliates, holds a major portion or all of
such securities. Although Putnam Management generally considers
such securities to be liquid because of the availability of an
institutional market for such securities, it is possible that,
under adverse market or economic conditions or in the event of
adverse changes in the financial condition of the issuer, the
Fund could find it more difficult to sell such securities when
Putnam Management believes it advisable to do so or may be able
to sell such securities only at prices lower than if such
securities were more widely held. Under such circumstances, it
may also be more difficult to determine the fair value of such
securities for purposes of computing the Fund's net asset value.
In order to enforce its rights in the event of a default under
such securities, the Fund may be required to take possession of
and manage assets securing the issuer's obligations on such
securities, which may increase the Fund's operating expenses and
adversely affect the Fund's net asset value. In the case of
tax-exempt funds, any income derived from the Fund's ownership or
operation of such assets would not be tax-exempt. In addition,
the Fund's intention to qualify as a "regulated investment
company" under the Internal Revenue Code may limit the extent to
which the Fund may exercise its rights by taking possession of
such assets.
Certain securities held by the Fund may permit the issuer at its
option to "call", or redeem, its securities. If an issuer were
to redeem securities held by the Fund during a time of declining
interest rates, the Fund may not be able to reinvest the proceeds
in securities providing the same investment return as the
securities redeemed.
If the Fund's Prospectus describes so-called "zero-coupon" bonds
and "payment-in-kind" bonds as possible investments, the Fund may
invest without limit in such bonds unless otherwise specified in
the Prospectus. Zero-coupon bonds are issued at a significant
discount from their principal amount in lieu of paying interest
periodically. Payment-in-kind bonds allow the issuer, at its
option, to make current interest payments on the bonds either in
cash or in additional bonds. Because zero-coupon bonds do not
pay current interest, their value is subject to greater
fluctuation in response to changes in market interest rates than
bonds which pay interest currently. Both zero-coupon and
payment-in-kind bonds allow an issuer to avoid the need to
generate cash to meet current interest payments. Accordingly,
such bonds may involve greater credit risks than bonds paying
interest currently. Even though such bonds do not pay current
interest in cash, the Fund is nonetheless required to accrue
interest income on such investments and to distribute such
amounts at least annually to shareholders. Thus, the Fund could
be required at times to liquidate investments in order to satisfy
its dividend requirements.
The amount of information about the financial condition of an
issuer of tax exempt securities may not be as extensive as that
which is made available by corporations whose securities are
publicly traded. Therefore, to the extent the Fund invests in
tax exempt securities in the lower rating categories, the
achievement of the Fund's goals is more dependent on Putnam
Management's investment analysis than would be the case if the
Fund were investing in securities in the higher rating
categories.
INVESTMENTS IN MISCELLANEOUS FIXED INCOME SECURITIES
Unless otherwise specified in the Prospectus or elsewhere in this
SAI, if the Fund may invest in inverse floating obligations,
premium securities, or interest-only or principal-only classes of
mortgage-backed securities, it may do so without limit. The
Fund, however, currently does not intend to invest more than 15%
of its assets in inverse floating obligations under normal market
conditions.
SECURITIES LOANS
The Fund may make secured loans of its portfolio securities, on
either a short-term or long-term basis, amounting to not more
than 25% of its total assets, thereby realizing additional
income. The risks in lending portfolio securities, as with other
extensions of credit, consist of possible delay in recovery of
the securities or possible loss of rights in the collateral
should the borrower fail financially. As a matter of policy,
securities loans are made to broker-dealers pursuant to
agreements requiring that loans be continuously secured by
collateral consisting of cash or short-term debt obligations at
least equal at all times to the value of the securities on loan,
"marked-to-market" daily. The borrower pays to the Fund an
amount equal to any dividends or interest received on securities
lent. The Fund retains all or a portion of the interest received
on investment of the cash collateral or receives a fee from the
borrower. Although voting rights, or rights to consent, with
respect to the loaned securities pass to the borrower, the Fund
retains the right to call the loans at any time on reasonable
notice, and it will do so to enable the Fund to exercise voting
rights on any matters materially affecting the investment. The
Fund may also call such loans in order to sell the securities.
FORWARD COMMITMENTS
The Fund may enter into contracts to purchase securities for a
fixed price at a future date beyond customary settlement time
("forward commitments") if the Fund holds, and maintains until
the settlement date in a segregated account, cash or high-grade
debt obligations in an amount sufficient to meet the purchase
price, or if the Fund enters into offsetting contracts for the
forward sale of other securities it owns. In the case of to-be-
announced ("TBA") purchase commitments, the unit price and the
estimated principal amount are established when the Fund enters
into a contract, with the actual principal amount being within a
specified range of the estimate. Forward commitments may be
considered securities in themselves, and involve a risk of loss
if the value of the security to be purchased declines prior to
the settlement date, which risk is in addition to the risk of
decline in the value of the Fund's other assets. Where such
purchases are made through dealers, the Fund relies on the dealer
to consummate the sale. The dealer's failure to do so may result
in the loss to the Fund of an advantageous yield or price.
Although the Fund will generally enter into forward commitments
with the intention of acquiring securities for its portfolio or
for delivery pursuant to options contracts it has entered into,
the Fund may dispose of a commitment prior to settlement if
Putnam Management deems it appropriate to do so. The Fund may
realize short-term profits or losses upon the sale of forward
commitments.
The Fund may enter into TBA sale commitments to hedge its
portfolio positions or to sell mortgage-backed securities it owns
under delayed delivery arrangements. Proceeds of TBA sale
commitments are not received until the contractual settlement
date. During the time a TBA sale commitment is outstanding,
equivalent deliverable securities, or an offsetting TBA purchase
commitment deliverable on or before the sale commitment date, are
held as "cover" for the transaction. Unsettled TBA sale
commitments are valued at current market value of the underlying
securities. If the TBA sale commitment is closed through the
acquisition of an offsetting purchase commitment, the Fund
realizes a gain or loss on the commitment without regard to any
unrealized gain or loss on the underlying security. If the Fund
delivers securities under the commitment, the Fund realizes a
gain or loss from the sale of the securities based upon the unit
price established at the date the commitment was entered into.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements up to the limit
specified in the Prospectus. A repurchase agreement is a
contract under which the Fund acquires a security for a
relatively short period (usually not more than one week) subject
to the obligation of the seller to repurchase and the Fund to
resell such security at a fixed time and price (representing the
Fund's cost plus interest). It is the Fund's present intention
to enter into repurchase agreements only with commercial banks
and registered broker-dealers and only with respect to
obligations of the U.S. government or its agencies or
instrumentalities. Repurchase agreements may also be viewed as
loans made by the Fund which are collateralized by the securities
subject to repurchase. Putnam Management will monitor such
transactions to ensure that the value of the underlying
securities will be at least equal at all times to the total
amount of the repurchase obligation, including the interest
factor. If the seller defaults, the Fund could realize a loss on
the sale of the underlying security to the extent that the
proceeds of sale including accrued interest are less than the
resale price provided in the agreement including interest. In
addition, if the seller should be involved in bankruptcy or
insolvency proceedings, the Fund may incur delay and costs in
selling the underlying security or may suffer a loss of principal
and interest if the Fund is treated as an unsecured creditor and
required to return the underlying collateral to the seller's
estate.
Pursuant to an exemptive order issued by the Securities and
Exchange Commission, the Fund may transfer uninvested cash
balances into a joint account, along with cash of other Putnam
funds and certain other accounts. These balances may be invested
in one or more repurchase agreements and/or short-term money
market instruments.
OPTIONS ON SECURITIES
WRITING COVERED OPTIONS. The Fund may write covered call options
and covered put options on optionable securities held in its
portfolio, when in the opinion of Putnam Management such
transactions are consistent with the Fund's investment objectives
and policies. Call options written by the Fund give the
purchaser the right to buy the underlying securities from the
Fund at a stated exercise price; put options give the purchaser
the right to sell the underlying securities to the Fund at a
stated price.
The Fund may write only covered options, which means that, so
long as the Fund is obligated as the writer of a call option, it
will own the underlying securities subject to the option (or
comparable securities satisfying the cover requirements of
securities exchanges). In the case of put options, the Fund will
hold cash and/or high-grade short-term debt obligations equal to
the price to be paid if the option is exercised. In addition,
the Fund will be considered to have covered a put or call option
if and to the extent that it holds an option that offsets some or
all of the risk of the option it has written. The Fund may write
combinations of covered puts and calls on the same underlying
security.
The Fund will receive a premium from writing a put or call
option, which increases the Fund's return on the underlying
security in the event the option expires unexercised or is closed
out at a profit. The amount of the premium reflects, among other
things, the relationship between the exercise price and the
current market value of the underlying security, the volatility
of the underlying security, the amount of time remaining until
expiration, current interest rates, and the effect of supply and
demand in the options market and in the market for the underlying
security. By writing a call option, the Fund limits its
opportunity to profit from any increase in the market value of
the underlying security above the exercise price of the option
but continues to bear the risk of a decline in the value of the
underlying security. By writing a put option, the Fund assumes
the risk that it may be required to purchase the underlying
security for an exercise price higher than its then-current
market value, resulting in a potential capital loss unless the
security subsequently appreciates in value.
The Fund may terminate an option that it has written prior to its
expiration by entering into a closing purchase transaction, in
which it purchases an offsetting option. The Fund realizes a
profit or loss from a closing transaction if the cost of the
transaction (option premium plus transaction costs) is less or
more than the premium received from writing the option. Because
increases in the market price of a call option generally reflect
increases in the market price of the security underlying the
option, any loss resulting from a closing purchase transaction
may be offset in whole or in part by unrealized appreciation of
the underlying security owned by the Fund.
If the Fund writes a call option but does not own the underlying
security, and when it writes a put option, the Fund may be
required to deposit cash or securities with its broker as
"margin", or collateral, for its obligation to buy or sell the
underlying security. As the value of the underlying security
varies, the Fund may have to deposit additional margin with the
broker. Margin requirements are complex and are fixed by
individual brokers, subject to minimum requirements currently
imposed by the Federal Reserve Board and by stock exchanges and
other self-regulatory organizations.
PURCHASING PUT OPTIONS. The Fund may purchase put options to
protect its portfolio holdings in an underlying security against
a decline in market value. Such protection is provided during
the life of the put option since the Fund, as holder of the
option, is able to sell the underlying security at the put
exercise price regardless of any decline in the underlying
security's market price. In order for a put option to be
profitable, the market price of the underlying security must
decline sufficiently below the exercise price to cover the
premium and transaction costs. By using put options in this
manner, the Fund will reduce any profit it might otherwise have
realized from appreciation of the underlying security by the
premium paid for the put option and by transaction costs.
PURCHASING CALL OPTIONS. The Fund may purchase call options to
hedge against an increase in the price of securities that the
Fund wants ultimately to buy. Such hedge protection is provided
during the life of the call option since the Fund, as holder of
the call option, is able to buy the underlying security at the
exercise price regardless of any increase in the underlying
security's market price. In order for a call option to be
profitable, the market price of the underlying security must rise
sufficiently above the exercise price to cover the premium and
transaction costs.
RISK FACTORS IN OPTIONS TRANSACTIONS
The successful use of the Fund's options strategies depends on
the ability of Putnam Management to forecast correctly interest
rate and market movements. For example, if the Fund were to
write a call option based on Putnam Management's expectation that
the price of the underlying security would fall, but the price
were to rise instead, the Fund could be required to sell the
security upon exercise at a price below the current market price.
Similarly, if the Fund were to write a put option based on Putnam
Management's expectation that the price of the underlying
security would rise, but the price were to fall instead, the Fund
could be required to purchase the security upon exercise at a
price higher than the current market price.
When the Fund purchases an option, it runs the risk that it will
lose its entire investment in the option in a relatively short
period of time, unless the Fund exercises the option or enters
into a closing sale transaction before the option's expiration.
If the price of the underlying security does not rise (in the
case of a call) or fall (in the case of a put) to an extent
sufficient to cover the option premium and transaction costs, the
Fund will lose part or all of its investment in the option. This
contrasts with an investment by the Fund in the underlying
security, since the Fund will not realize a loss if the
security's price does not change.
The effective use of options also depends on the Fund's ability
to terminate option positions at times when Putnam Management
deems it desirable to do so. There is no assurance that the Fund
will be able to effect closing transactions at any particular
time or at an acceptable price.
If a secondary market in options were to become unavailable, the
Fund could no longer engage in closing transactions. Lack of
investor interest might adversely affect the liquidity of the
market for particular options or series of options. A market may
discontinue trading of a particular option or options generally.
In addition, a market could become temporarily unavailable if
unusual events -- such as volume in excess of trading or clearing
capability -- were to interrupt its normal operations.
A market may at times find it necessary to impose restrictions on
particular types of options transactions, such as opening
transactions. For example, if an underlying security ceases to
meet qualifications imposed by the market or the Options Clearing
Corporation, new series of options on that security will no
longer be opened to replace expiring series, and opening
transactions in existing series may be prohibited. If an options
market were to become unavailable, the Fund as a holder of an
option would be able to realize profits or limit losses only by
exercising the option, and the Fund, as option writer, would
remain obligated under the option until expiration or exercise.
Disruptions in the markets for the securities underlying options
purchased or sold by the Fund could result in losses on the
options. If trading is interrupted in an underlying security,
the trading of options on that security is normally halted as
well. As a result, the Fund as purchaser or writer of an option
will be unable to close out its positions until options trading
resumes, and it may be faced with considerable losses if trading
in the security reopens at a substantially different price. In
addition, the Options Clearing Corporation or other options
markets may impose exercise restrictions. If a prohibition on
exercise is imposed at the time when trading in the option has
also been halted, the Fund as purchaser or writer of an option
will be locked into its position until one of the two
restrictions has been lifted. If the Options Clearing
Corporation were to determine that the available supply of an
underlying security appears insufficient to permit delivery by
the writers of all outstanding calls in the event of exercise, it
may prohibit indefinitely the exercise of put options. The Fund,
as holder of such a put option, could lose its entire investment
if the prohibition remained in effect until the put option's
expiration.
Special risks are presented by internationally-traded options.
Because of time differences between the United States and various
foreign countries, and because different holidays are observed in
different countries, foreign options markets may be open for
trading during hours or on days when U.S. markets are closed. As
a result, option premiums may not reflect the current prices of
the underlying interest in the United States.
Over-the-counter ("OTC") options purchased by the Fund and assets
held to cover OTC options written by the Fund may, under certain
circumstances, be considered illiquid securities for purposes of
any limitation on the Fund's ability to invest in illiquid
securities.
FUTURES CONTRACTS AND RELATED OPTIONS
Subject to applicable law, and unless otherwise specified in the
Prospectus, the Fund may invest without limit in the types of
futures contracts and related options identified in the
Prospectus. A financial futures contract sale creates an
obligation by the seller to deliver the type of financial
instrument called for in the contract in a specified delivery
month for a stated price. A financial futures contract purchase
creates an obligation by the purchaser to take delivery of the
type of financial instrument called for in the contract in a
specified delivery month at a stated price. The specific
instruments delivered or taken, respectively, at settlement date
are not determined until on or near that date. The determination
is made in accordance with the rules of the exchange on which the
futures contract sale or purchase was made. Futures contracts
are traded in the United States only on commodity exchanges or
boards of trade -- known as "contract markets" -- approved for
such trading by the Commodity Futures Trading Commission (the
"CFTC"), and must be executed through a futures commission
merchant or brokerage firm which is a member of the relevant
contract market.
Although futures contracts (other than index futures) by their
terms call for actual delivery or acceptance of commodities or
securities, in most cases the contracts are closed out before the
settlement date without the making or taking of delivery.
Closing out a futures contract sale is effected by purchasing a
futures contract for the same aggregate amount of the specific
type of financial instrument or commodity with the same delivery
date. If the price of the initial sale of the futures contract
exceeds the price of the offsetting purchase, the seller is paid
the difference and realizes a gain. Conversely, if the price of
the offsetting purchase exceeds the price of the initial sale,
the seller realizes a loss. Similarly, the closing out of a
futures contract purchase is effected by the purchaser's entering
into a futures contract sale. If the offsetting sale price
exceeds the purchase price, the purchaser realizes a gain, and if
the purchase price exceeds the offsetting sale price, he realizes
a loss. In general 40% of the gain or loss arising from the
closing out of a futures contract traded on an exchange approved
by the CFTC is treated as short-term gain or loss, and 60% is
treated as long-term gain or loss.
Unlike when the Fund purchases or sells a security, no price is
paid or received by the Fund upon the purchase or sale of a
futures contract. Upon entering into a contract, the Fund is
required to deposit with its custodian in a segregated account in
the name of the futures broker an amount of cash and/or U.S.
Government Securities. This amount is known as "initial margin."
The nature of initial margin in futures transactions is different
from that of margin in security transactions in that futures
contract margin does not involve the borrowing of funds to
finance the transactions. Rather, initial margin is similar to a
performance bond or good faith deposit which is returned to the
Fund upon termination of the futures contract, assuming all
contractual obligations have been satisfied. Futures contracts
also involve brokerage costs.
Subsequent payments, called "variation margin" or "maintenance
margin", to and from the broker (or the custodian) are made on a
daily basis as the price of the underlying security or commodity
fluctuates, making the long and short positions in the futures
contract more or less valuable, a process known as "marking to
the market." For example, when the Fund has purchased a futures
contract on a security and the price of the underlying security
has risen, that position will have increased in value and the
Fund will receive from the broker a variation margin payment
based on that increase in value. Conversely, when the Fund has
purchased a security futures contract and the price of the
underlying security has declined, the position would be less
valuable and the Fund would be required to make a variation
margin payment to the broker.
The Fund may elect to close some or all of its futures positions
at any time prior to their expiration in order to reduce or
eliminate a hedge position then currently held by the Fund. The
Fund may close its positions by taking opposite positions which
will operate to terminate the Fund's position in the futures
contracts. Final determinations of variation margin are then
made, additional cash is required to be paid by or released to
the Fund, and the Fund realizes a loss or a gain. Such closing
transactions involve additional commission costs.
OPTIONS ON FUTURES CONTRACTS. The Fund may purchase and write
call and put options on futures contracts it may buy or sell and
enter into closing transactions with respect to such options to
terminate existing positions. Options on future contracts give
the purchaser the right in return for the premium paid to assume
a position in a futures contract at the specified option exercise
price at any time during the period of the option. The Fund may
use options on futures contracts in lieu of writing or buying
options directly on the underlying securities or purchasing and
selling the underlying futures contracts. For example, to hedge
against a possible decrease in the value of its portfolio
securities, the Fund may purchase put options or write call
options on futures contracts rather than selling futures
contracts. Similarly, the Fund may purchase call options or
write put options on futures contracts as a substitute for the
purchase of futures contracts to hedge against a possible
increase in the price of securities which the Fund expects to
purchase. Such options generally operate in the same manner as
options purchased or written directly on the underlying
investments.
As with options on securities, the holder or writer of an option
may terminate his position by selling or purchasing an offsetting
option. There is no guarantee that such closing transactions can
be effected.
The Fund will be required to deposit initial margin and
maintenance margin with respect to put and call options on
futures contracts written by it pursuant to brokers' requirements
similar to those described above in connection with the
discussion of futures contracts.
RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS.
Successful use of futures contracts by the Fund is subject to
Putnam Management's ability to predict movements in the direction
of interest rates and other factors affecting securities markets.
For example, if the Fund has hedged against the possibility of
decline in the values of its investments and the values of its
investments increase instead, the Fund will lose part or all of
the benefit of the increase through payments of daily maintenance
margin. The Fund may have to sell investments at a time when it
may be disadvantageous to do so in order to meet margin
requirements.
Compared to the purchase or sale of futures contracts, the
purchase of call or put options on futures contracts involves
less potential risk to the Fund because the maximum amount at
risk is the premium paid for the options (plus transaction
costs). However, there may be circumstances when the purchase of
a call or put option on a futures contract would result in a loss
to the Fund when the purchase or sale of a futures contract would
not, such as when there is no movement in the prices of the
hedged investments. The writing of an option on a futures
contract involves risks similar to those risks relating to the
sale of futures contracts.
There is no assurance that higher than anticipated trading
activity or other unforeseen events might not, at times, render
certain market clearing facilities inadequate, and thereby result
in the institution by exchanges of special procedures which may
interfere with the timely execution of customer orders.
To reduce or eliminate a hedge position held by the Fund, the
Fund may seek to close out a position. The ability to establish
and close out positions will be subject to the development and
maintenance of a liquid secondary market. It is not certain that
this market will develop or continue to exist for a particular
futures contract or option. Reasons for the absence of a liquid
secondary market on an exchange include the following: (i) there
may be insufficient trading interest in certain contracts or
options; (ii) restrictions may be imposed by an exchange on
opening transactions or closing transactions or both; (iii)
trading halts, suspensions or other restrictions may be imposed
with respect to particular classes or series of contracts or
options, or underlying securities; (iv) unusual or unforeseen
circumstances may interrupt normal operations on an exchange; (v)
the facilities of an exchange or a clearing corporation may not
at all times be adequate to handle current trading volume; or
(vi) one or more exchanges could, for economic or other reasons,
decide or be compelled at some future date to discontinue the
trading of contracts or options (or a particular class or series
of contracts or options), in which event the secondary market on
that exchange for such contracts or options (or in the class or
series of contracts or options) would cease to exist, although
outstanding contracts or options on the exchange that had been
issued by a clearing corporation as a result of trades on that
exchange would continue to be exercisable in accordance with
their terms.
U.S. TREASURY SECURITY FUTURES CONTRACTS AND OPTIONS. If the
Fund invests in tax-exempt securities issued by a governmental
entity, the Fund may purchase and sell futures contracts and
related options on U.S. Treasury securities when, in the opinion
of Putnam Management, price movements in Treasury security
futures and related options will correlate closely with price
movements in the tax-exempt securities which are the subject of
the hedge. U.S. Treasury security futures contracts require the
seller to deliver, or the purchaser to take delivery of, the type
of U.S. Treasury security called for in the contract at a
specified date and price. Options on U.S. Treasury security
futures contracts give the purchaser the right in return for the
premium paid to assume a position in a U.S. Treasury security
futures contract at the specified option exercise price at any
time during the period of the option.
Successful use of U.S. Treasury security futures contracts by the
Fund is subject to Putnam Management's ability to predict
movements in the direction of interest rates and other factors
affecting markets for debt securities. For example, if the Fund
has sold U.S. Treasury security futures contracts in order to
hedge against the possibility of an increase in interest rates
which would adversely affect tax-exempt securities held in its
portfolio, and the prices of the Fund's tax-exempt securities
increase instead as a result of a decline in interest rates, the
Fund will lose part or all of the benefit of the increased value
of its securities which it has hedged because it will have
offsetting losses in its futures positions. In addition, in such
situations, if the Fund has insufficient cash, it may have to
sell securities to meet daily maintenance margin requirements at
a time when it may be disadvantageous to do so.
There is also a risk that price movements in U.S. Treasury
security futures contracts and related options will not correlate
closely with price movements in markets for tax-exempt
securities. For example, if the Fund has hedged against a
decline in the values of tax-exempt securities held by it by
selling Treasury security futures and the values of Treasury
securities subsequently increase while the values of its
tax-exempt securities decrease, the Fund would incur losses on
both the Treasury security futures contracts written by it and
the tax-exempt securities held in its portfolio. Putnam
Management will seek to reduce this risk by monitoring movements
in markets for U.S. Treasury security futures and options and for
tax-exempt securities closely. The Fund will only purchase or
sell Treasury security futures or related options when, in the
opinion of Putnam Management, price movements in Treasury
security futures and related options will correlate closely with
price movements in tax-exempt securities in which the Fund
invests.
INDEX FUTURES CONTRACTS. An index futures contract is a contract
to buy or sell units of an index at a specified future date at a
price agreed upon when the contract is made. Entering into a
contract to buy units of an index is commonly referred to as
buying or purchasing a contract or holding a long position in
the index. Entering into a contract to sell units of an index is
commonly referred to as selling a contract or holding a short
position. A unit is the current value of the index. The Fund
may enter into stock index futures contracts, debt index futures
contracts, or other index futures contracts appropriate to its
objective. The Fund may also purchase and sell options on index
futures contracts.
For example, the Standard & Poor's Composite 500 Stock Price
Index ("S&P 500") is composed of 500 selected common stocks, most
of which are listed on the New York Stock Exchange. The S&P 500
assigns relative weightings to the common stocks included in the
Index, and the value fluctuates with changes in the market values
of those common stocks. In the case of the S&P 500, contracts
are to buy or sell 500 units. Thus, if the value of the S&P 500
were $150, one contract would be worth $75,000 (500 units x
$150). The stock index futures contract specifies that no
delivery of the actual stocks making up the index will take
place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the
difference between the contract price and the actual level of the
stock index at the expiration of the contract. For example, if
the Fund enters into a futures contract to buy 500 units of the
S&P 500 at a specified future date at a contract price of $150
and the S&P 500 is at $154 on that future date, the Fund will
gain $2,000 (500 units x gain of $4). If the Fund enters into a
futures contract to sell 500 units of the stock index at a
specified future date at a contract price of $150 and the S&P 500
is at $152 on that future date, the Fund will lose $1,000 (500
units x loss of $2).
There are several risks in connection with the use by the Fund of
index futures as a hedging device. One risk arises because of
the imperfect correlation between movements in the prices of the
index futures and movements in the prices of securities which are
the subject of the hedge. Putnam Management will, however,
attempt to reduce this risk by buying or selling, to the extent
possible, futures on indices the movements of which will, in its
judgment, have a significant correlation with movements in the
prices of the securities sought to be hedged.
Successful use of index futures by the Fund for hedging purposes
is also subject to Putnam Management's ability to predict
movements in the direction of the market. It is possible that,
where the Fund has sold futures to hedge its portfolio against a
decline in the market, the index on which the futures are written
may advance and the value of securities held in the Fund's
portfolio may decline. If this occurred, the Fund would lose
money on the futures and also experience a decline in value in
its portfolio securities. It is also possible that, if the Fund
has hedged against the possibility of a decline in the market
adversely affecting securities held in its portfolio and
securities prices increase instead, the Fund will lose part or
all of the benefit of the increased value of those securities it
has hedged because it will have offsetting losses in its futures
positions. In addition, in such situations, if the Fund has
insufficient cash, it may have to sell securities to meet daily
variation margin requirements at a time when it is
disadvantageous to do so.
In addition to the possibility that there may be an imperfect
correlation, or no correlation at all, between movements in the
index futures and the portion of the portfolio being hedged, the
prices of index futures may not correlate perfectly with
movements in the underlying index due to certain market
distortions. First, all participants in the futures market are
subject to margin deposit and maintenance requirements. Rather
than meeting additional margin deposit requirements, investors
may close futures contracts through offsetting transactions which
could distort the normal relationship between the index and
futures markets. Second, margin requirements in the futures
market are less onerous than margin requirements in the
securities market, and as a result the futures market may attract
more speculators than the securities market does. Increased
participation by speculators in the futures market may also cause
temporary price distortions. Due to the possibility of price
distortions in the futures market and also because of the
imperfect correlation between movements in the index and
movements in the prices of index futures, even a correct forecast
of general market trends by Putnam Management may still not
result in a successful hedging transaction over a short time
period.
OPTIONS ON STOCK INDEX FUTURES. Options on index futures are
similar to options on securities except that options on index
futures give the purchaser the right, in return for the premium
paid, to assume a position in an index futures contract (a long
position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during
the period of the option. Upon exercise of the option, the
delivery of the futures position by the writer of the option to
the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's futures margin account which
represents the amount by which the market price of the index
futures contract, at exercise, exceeds (in the case of a call) or
is less than (in the case of a put) the exercise price of the
option on the index future. If an option is exercised on the
last trading day prior to its expiration date, the settlement
will be made entirely in cash equal to the difference between the
exercise price of the option and the closing level of the index
on which the future is based on the expiration date. Purchasers
of options who fail to exercise their options prior to the
exercise date suffer a loss of the premium paid.
OPTIONS ON INDICES
As an alternative to purchasing call and put options on index
futures, the Fund may purchase and sell call and put options on
the underlying indices themselves. Such options would be used in
a manner identical to the use of options on index futures.
INDEX WARRANTS
The Fund may purchase put warrants and call warrants whose values
vary depending on the change in the value of one or more
specified securities indices ("index warrants"). Index warrants
are generally issued by banks or other financial institutions and
give the holder the right, at any time during the term of the
warrant, to receive upon exercise of the warrant a cash payment
from the issuer based on the value of the underlying index at the
time of exercise. In general, if the value of the underlying
index rises above the exercise price of the index warrant, the
holder of a call warrant will be entitled to receive a cash
payment from the issuer upon exercise based on the difference
between the value of the index and the exercise price of the
warrant; if the value of the underlying index falls, the holder
of a put warrant will be entitled to receive a cash payment from
the issuer upon exercise based on the difference between the
exercise price of the warrant and the value of the index. The
holder of a warrant would not be entitled to any payments from
the issuer at any time when, in the case of a call warrant, the
exercise price is greater than the value of the underlying index,
or, in the case of a put warrant, the exercise price is less than
the value of the underlying index. If the Fund were not to
exercise an index warrant prior to its expiration, then the Fund
would lose the amount of the purchase price paid by it for the
warrant.
The Fund will normally use index warrants in a manner similar to
its use of options on securities indices. The risks of the
Fund's use of index warrants are generally similar to those
relating to its use of index options. Unlike most index options,
however, index warrants are issued in limited amounts and are not
obligations of a regulated clearing agency, but are backed only
by the credit of the bank or other institution which issues the
warrant. Also, index warrants generally have longer terms than
index options. Although the Fund will normally invest only in
exchange-listed warrants, index warrants are not likely to be as
liquid as certain index options backed by a recognized clearing
agency. In addition, the terms of index warrants may limit the
Fund's ability to exercise the warrants at such time, or in such
quantities, as the Fund would otherwise wish to do.
FOREIGN SECURITIES
Under its current policy, which may be changed without
shareholder approval, the Fund may invest up to the limit of its
total assets specified in its Prospectus in securities
principally traded in markets outside the United States.
Eurodollar certificates of deposit are excluded for purposes of
this limitation. Foreign investments can be affected favorably
or unfavorably by changes in currency exchange rates and in
exchange control regulations. There may be less publicly
available information about a foreign company than about a U.S.
company, and foreign companies may not be subject to accounting,
auditing and financial reporting standards and requirements
comparable to those applicable to U.S. companies. Securities of
some foreign companies are less liquid or more volatile than
securities of U.S. companies, and foreign brokerage commissions
and custodian fees are generally higher than in the United
States. Investments in foreign securities can involve other
risks different from those affecting U.S. investments, including
local political or economic developments, expropriation or
nationalization of assets and imposition of withholding taxes on
dividend or interest payments. To hedge against possible
variations in foreign exchange rates, the Fund may purchase and
sell forward foreign currency contracts. These represent
agreements to purchase or sell specified currencies at specified
dates and prices. The Fund will only purchase and sell forward
foreign currency contracts in amounts Putnam Management deems
appropriate to hedge existing or anticipated portfolio positions
and will not use such forward contracts for speculative purposes.
Foreign securities, like other assets of the Fund, will be held
by the Fund's custodian or by a subcustodian.
FOREIGN CURRENCY TRANSACTIONS
Unless otherwise specified in the Prospectus, the Fund may engage
without limit in currency exchange transactions, as well as
foreign currency forward and futures contracts, to protect
against uncertainty in the level of future currency exchange
rates. In addition, the Fund may write covered call and put
options on foreign currencies for the purpose of increasing its
current return.
Generally, the Fund may engage in both "transaction hedging" and
"position hedging". When it engages in transaction hedging, the
Fund enters into foreign currency transactions with respect to
specific receivables or payables, generally arising in connection
with the purchase or sale of portfolio securities. The Fund will
engage in transaction hedging when it desires to "lock in" the
U.S. dollar price of a security it has agreed to purchase or
sell, or the U.S. dollar equivalent of a dividend or interest
payment in a foreign currency. By transaction hedging the Fund
will attempt to protect itself against a possible loss resulting
from an adverse change in the relationship between the U.S.
dollar and the applicable foreign currency during the period
between the date on which the security is purchased or sold, or
on which the dividend or interest payment is earned, and the date
on which such payments are made or received.
The Fund may purchase or sell a foreign currency on a spot (or
cash) basis at the prevailing spot rate in connection with the
settlement of transactions in portfolio securities denominated in
that foreign currency. The Fund may also enter into contracts to
purchase or sell foreign currencies at a future date ("forward
contracts") and purchase and sell foreign currency futures
contracts.
For transaction hedging purposes the Fund may also purchase
exchange-listed and over-the-counter call and put options on
foreign currency futures contracts and on foreign currencies. A
put option on a futures contract gives the Fund the right to
assume a short position in the futures contract until the
expiration of the option. A put option on a currency gives the
Fund the right to sell the currency at an exercise price until
the expiration of the option. A call option on a futures
contract gives the Fund the right to assume a long position in
the futures contract until the expiration of the option. A call
option on a currency gives the Fund the right to purchase the
currency at the exercise price until the expiration of the
option.
When it engages in position hedging, the Fund enters into foreign
currency exchange transactions to protect against a decline in
the values of the foreign currencies in which its portfolio
securities are denominated (or an increase in the value of
currency for securities which the Fund expects to purchase, when
the Fund holds cash or short-term investments). In connection
with position hedging, the Fund may purchase put or call options
on foreign currency and on foreign currency futures contracts and
buy or sell forward contracts and foreign currency futures
contracts. The Fund may also purchase or sell foreign currency
on a spot basis.
The precise matching of the amounts of foreign currency exchange
transactions and the value of the portfolio securities involved
will not generally be possible since the future value of such
securities in foreign currencies will change as a consequence of
market movements in the value of those securities between the
dates the currency exchange transactions are entered into and the
dates they mature.
It is impossible to forecast with precision the market value of
portfolio securities at the expiration or maturity of a forward
or futures contract. Accordingly, it may be necessary for the
Fund to purchase additional foreign currency on the spot market
(and bear the expense of such purchase) if the market value of
the security or securities being hedged is less than the amount
of foreign currency the Fund is obligated to deliver and a
decision is made to sell the security or securities and make
delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency
received upon the sale of the portfolio security or securities if
the market value of such security or securities exceeds the
amount of foreign currency the Fund is obligated to deliver.
Transaction and position hedging do not eliminate fluctuations in
the underlying prices of the securities which the Fund owns or
intends to purchase or sell. They simply establish a rate of
exchange which one can achieve at some future point in time.
Additionally, although these techniques tend to minimize the risk
of loss due to a decline in the value of the hedged currency,
they tend to limit any potential gain which might result from the
increase in value of such currency.
The Fund may seek to increase its current return or to offset
some of the costs of hedging against fluctuations in current
exchange rates by writing covered call options and covered put
options on foreign currencies. The Fund receives a premium from
writing a call or put option, which increases the Fund's current
return if the option expires unexercised or is closed out at a
net profit. The Fund may terminate an option that it has written
prior to its expiration by entering into a closing purchase
transaction in which it purchases an option having the same terms
as the option written.
The Fund's currency hedging transactions may call for the
delivery of one foreign currency in exchange for another foreign
currency and may at times not involve currencies in which its
portfolio securities are then denominated. Putnam Management
will engage in such "cross hedging" activities when it believes
that such transactions provide significant hedging opportunities
for the Fund. Cross hedging transactions by the Fund involve the
risk of imperfect correlation between changes in the values of
the currencies to which such transactions relate and changes in
the value of the currency or other asset or liability which is
the subject of the hedge.
CURRENCY FORWARD AND FUTURES CONTRACTS. A forward foreign
currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number
of days from the date of the contract as agreed by the parties,
at a price set at the time of the contract. In the case of a
cancelable forward contract, the holder has the unilateral right
to cancel the contract at maturity by paying a specified fee.
The contracts are traded in the interbank market conducted
directly between currency traders (usually large commercial
banks) and their customers. A forward contract generally has no
deposit requirement, and no commissions are charged at any stage
for trades. A foreign currency futures contract is a
standardized contract for the future delivery of a specified
amount of a foreign currency at a future date at a price set at
the time of the contract. Foreign currency futures contracts
traded in the United States are designed by and traded on
exchanges regulated by the CFTC, such as the New York Mercantile
Exchange.
Forward foreign currency exchange contracts differ from foreign
currency futures contracts in certain respects. For example, the
maturity date of a forward contract may be any fixed number of
days from the date of the contract agreed upon by the parties,
rather than a predetermined date in a given month. Forward
contracts may be in any amounts agreed upon by the parties rather
than predetermined amounts. Also, forward foreign exchange
contracts are traded directly between currency traders so that no
intermediary is required. A forward contract generally requires
no margin or other deposit.
At the maturity of a forward or futures contract, the Fund either
may accept or make delivery of the currency specified in the
contract, or at or prior to maturity enter into a closing
transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts
are usually effected with the currency trader who is a party to
the original forward contract. Closing transactions with respect
to futures contracts are effected on a commodities exchange; a
clearing corporation associated with the exchange assumes
responsibility for closing out such contracts.
Positions in the foreign currency futures contracts may be closed
out only on an exchange or board of trade which provides a
secondary market in such contracts. Although the Fund intends to
purchase or sell foreign currency futures contracts only on
exchanges or boards of trade where there appears to be an active
secondary market, there is no assurance that a secondary market
on an exchange or board of trade will exist for any particular
contract or at any particular time. In such event, it may not be
possible to close a futures position and, in the event of adverse
price movements, the Fund would continue to be required to make
daily cash payments of variation margin.
FOREIGN CURRENCY OPTIONS. In general, options on foreign
currencies operate similarly to options on securities and are
subject to many similar risks. Foreign currency options are
traded primarily in the over-the-counter market, although options
on foreign currencies have recently been listed on several
exchanges. Options are traded not only on the currencies of
individual nations, but also on the European Currency Unit
("ECU"). The ECU is composed of amounts of a number of
currencies, and is the official medium of exchange of the
European Community's European Monetary System.
The Fund will only purchase or write foreign currency options
when Putnam Management believes that a liquid secondary market
exists for such options. There can be no assurance that a liquid
secondary market will exist for a particular option at any
specific time. Options on foreign currencies are affected by all
of those factors which influence foreign exchange rates and
investments generally.
The value of any currency, including U.S. dollars and foreign
currencies, may be affected by complex political and economic
factors applicable to the issuing country. In addition, the
exchange rates of foreign currencies (and therefore the values
of foreign currency options) may be affected significantly,
fixed, or supported directly or indirectly by U.S. and foreign
government actions. Government intervention may increase risks
involved in purchasing or selling foreign currency options, since
exchange rates may not be free to fluctuate in response to other
market forces.
The value of a foreign currency option reflects the value of an
exchange rate, which in turn reflects relative values of two
currencies, the U.S. dollar and the foreign currency in question.
Because foreign currency transactions occurring in the interbank
market involve substantially larger amounts than those that may
be involved in the exercise of foreign currency options,
investors may be disadvantaged by having to deal in an odd lot
market for the underlying foreign currencies in connection with
options at prices that are less favorable than for round lots.
Foreign governmental restrictions or taxes could result in
adverse changes in the cost of acquiring or disposing of foreign
currencies.
There is no systematic reporting of last sale information for
foreign currencies and there is no regulatory requirement that
quotations available through dealers or other market sources be
firm or revised on a timely basis. Available quotation
information is generally representative of very large round-lot
transactions in the interbank market and thus may not reflect
exchange rates for smaller odd-lot transactions (less than $1
million) where rates may be less favorable. The interbank market
in foreign currencies is a global, around-the-clock market. To
the extent that options markets are closed while the markets for
the underlying currencies remain open, significant price and rate
movements may take place in the underlying markets that cannot be
reflected in the options markets.
SETTLEMENT PROCEDURES. Settlement procedures relating to the
Fund's investments in foreign securities and to the Fund's
foreign currency exchange transactions may be more complex than
settlements with respect to investments in debt or equity
securities of U.S. issuers, and may involve certain risks not
present in the Fund's domestic investments. For example,
settlement of transactions involving foreign securities or
foreign currency may occur within a foreign country, and the Fund
may be required to accept or make delivery of the underlying
securities or currency in conformity with any applicable U.S. or
foreign restrictions or regulations, and may be required to pay
any fees, taxes or charges associated with such delivery. Such
investments may also involve the risk that an entity involved in
the settlement may not meet its obligations.
FOREIGN CURRENCY CONVERSION. Although foreign exchange dealers
do not charge a fee for currency conversion, they do realize a
profit based on the difference (the "spread") between prices at
which they are buying and selling various currencies. Thus, a
dealer may offer to sell a foreign currency to the Fund at one
rate, while offering a lesser rate of exchange should the Fund
desire to resell that currency to the dealer.
RESTRICTED SECURITIES
The SEC Staff currently takes the view that any designation by
the Trustees of the authority to determine that a restricted
security is readily marketable (as described in the investment
restrictions of the Funds) must be pursuant to written procedures
established by the Trustees. It is the present intention of the
Funds' Trustees that, if the Trustees decide to delegate such
determinations to Putnam Management or another person, they would
do so pursuant to written procedures, consistent with the Staff's
position. Should the Staff modify its position in the future,
the Trustees would consider what action would be appropriate in
light of the Staff's position at that time.
TAXES
TAXATION OF THE FUND. The Fund intends to qualify each year as a
regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). In order so to
qualify and to qualify for the special 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) derive less than 30% of its gross income from the sale or
other disposition of certain assets (including stock or
securities and certain options, futures contracts, forward
contracts and foreign currencies) held for less than three
months;
(c) 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 net short-term capital gains
over net long-term capital losses for such year; and
(d) diversify its holdings so that, at the end of each fiscal
quarter, (i) at least 50% of the market value of the Fund's
assets is represented by cash and cash items, U.S. Government
securities, securities of other regulated investment companies,
and other securities limited in respect of any one issuer to a
value not greater than 5% of the value of the Fund's total assets
and to 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 qualifies as a regulated investment company that is
accorded special tax treatment, the Fund will not be subject to
federal income tax on income paid to its shareholders in the form
of dividends (including capital gain dividends).
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 so 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.
EXEMPT-INTEREST DIVIDENDS. The Fund will be qualified to pay
exempt-interest dividends to its shareholders only if, at the
close of each quarter of the Fund's taxable year, at least 50% of
the total value of the Fund's assets consists of obligations the
interest on which is exempt from federal income tax.
Distributions that the Fund properly designates as exempt-
interest dividends are treated by shareholders as interest
excludable from their gross income for federal income tax
purposes but may be taxable for federal alternative minimum tax
purposes and for state and local purposes. If the Fund intends
to be qualified to pay exempt-interest dividends, the Fund may be
limited in its ability to enter into taxable transactions
involving forward commitments, repurchase agreements, financial
futures, and options contracts on financial futures, tax-exempt
bond indices, and other assets.
Part or all of the interest on indebtedness, if any, incurred or
continued by a shareholder to purchase or carry shares of a Fund
paying exempt-interest dividends is not deductible. The portion
of interest that is not deductible is equal to the total interest
paid or accrued on the indebtedness, multiplied by the percentage
of the Fund's total distributions (not including distributions
from net long-term capital gains) paid to the shareholder that
are exempt-interest dividends. Under rules used by the Internal
Revenue Service for determining when borrowed funds are
considered used for the purpose of purchasing or carrying
particular assets, the purchase of shares may be considered to
have been made with borrowed funds even though such funds are not
directly traceable to the purchase of shares.
In general, exempt-interest dividends, if any, attributable to
interest received on certain private activity obligations and
certain industrial development bonds will not be tax-exempt to
any shareholders who are "substantial users" of the facilities
financed by such obligations or bonds or who are "related
persons" of such substantial users.
A Fund which is qualified to pay exempt-interest dividends will
inform investors within 60 days of the Fund's fiscal year-end of
the percentage of its income distributions designated as
tax-exempt. The percentage is applied uniformly to all
distributions made during the year. The percentage of income
designated as tax-exempt for any particular distribution may be
substantially different from the percentage of the Fund's income
that was tax-exempt during the period covered by the
distribution.
HEDGING TRANSACTIONS. If the Fund engages in transactions,
including hedging transactions in options, futures contracts, and
straddles, or other similar transactions, it will be subject to
special tax rules (including mark-to-market, straddle, wash sale,
and short sale rules), the effect of which may be to accelerate
income to the Fund, defer losses to the Fund, cause adjustments
in the holding periods of the Fund's securities, or convert
short-term capital losses into long-term capital losses. These
rules could therefore affect the amount, timing and character of
distributions to shareholders. The Fund will endeavor to make
any available elections pertaining to such transactions in a
manner believed to be in the best interests of the Fund.
Under the 30% of gross income test described above (see "Taxation
of the Fund"), the Fund will be restricted in selling assets held
or considered under Code rules to have been held for less than
three months, and in engaging in certain hedging transactions
(including hedging transactions in options and futures) that in
some circumstances could cause certain Fund assets to be treated
as held for less than three months.
Certain of the Fund's hedging activities (including its
transactions, if any, in foreign currencies or foreign
currency-denominated instruments) are likely to produce a
difference between its book income and its taxable income. If
the Fund's book income exceeds its taxable income, the
distribution (if any) of such excess will be treated as a
dividend to the extent of the Fund's remaining earnings and
profits (including earnings and profits arising from tax-exempt
income), and thereafter as a return of capital or as gain from
the sale or exchange of a capital asset, as the case may be. If
the Fund's book income is less than its taxable income, the Fund
could be required to make distributions exceeding book income to
qualify as a regulated investment company that is accorded
special tax treatment.
RETURN OF CAPITAL DISTRIBUTIONS. If the Fund makes a
distribution to you in excess of its current and accumulated
"earnings and profits" in any taxable year, the excess
distribution will be treated as a return of capital to the extent
of your tax basis in your shares, and thereafter as capital gain.
A return of capital is not taxable, but it reduces your tax basis
in your shares, thus reducing any loss or increasing any gain on
a subsequent taxable disposition by you of your shares.
SECURITIES ISSUED OR PURCHASED AT A DISCOUNT. 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.
CAPITAL LOSS CARRYOVER. The amounts and expiration dates of any
capital loss carryovers available to the Fund are shown in Note 1
(Federal income taxes) to the financial statements included in
Part I of this Statement or incorporated by reference into this
Statement.
FOREIGN CURRENCY-DENOMINATED SECURITIES AND RELATED HEDGING
TRANSACTIONS. The Fund's transactions in foreign currencies,
foreign currency-denominated debt securities and certain foreign
currency options, futures contracts, and forward contracts (and
similar instruments) may give rise to ordinary income or loss to
the extent such income or loss results from fluctuations in the
value of the foreign currency concerned.
If more than 50% of the Fund's assets at year end consists of the
debt and equity securities of foreign corporations, the Fund may
elect to permit shareholders to claim a credit or deduction on
their income tax returns for their pro rata portion of qualified
taxes paid by the Fund to foreign countries. In such a case,
shareholders will include in gross income from foreign sources
their pro rata shares of such taxes. A shareholder's ability to
claim a foreign tax credit or deduction in respect of foreign
taxes paid by the Fund may be subject to certain limitations
imposed by the Code, as a result of which a shareholder may not
get a full credit or deduction for the amount of such taxes.
Shareholders who do not itemize on their federal income tax
returns may claim a credit (but no deduction) for such foreign
taxes.
Investment by the Fund in certain "passive foreign investment
companies" could subject the Fund to a U.S. federal income tax or
other charge on the proceeds from the sale of its investment in
such a company; however, this tax can be avoided by making an
election to mark such investments to market annually or to treat
the passive foreign investment company as a "qualified electing
fund."
SALE OR REDEMPTION OF SHARES. The sale, exchange or redemption
of Fund shares may give rise to a gain or loss. In general, any
gain or loss realized upon a taxable disposition of shares will
be treated as long-term capital gain or loss if the shares have
been held for more than 12 months, and otherwise as short-term
capital gain or loss. However, if a shareholder sells shares at
a loss within six months of purchase, any loss will be disallowed
for Federal income tax purposes to the extent of any exempt-
interest dividends received on such shares. In addition, any
loss (not already disallowed as provided in the preceding
sentence) realized upon a taxable disposition of shares held for
six months or less will be treated as long-term, rather than
short-term, to the extent of any long-term capital gain
distributions received by the shareholder with respect to the
shares. All or a portion of any loss realized upon a taxable
disposition of Fund shares will be disallowed if other Fund
shares are purchased within 30 days before or after the
disposition. In such a case, the basis of the newly purchased
shares will be adjusted to reflect the disallowed loss.
SHARES PURCHASED THROUGH TAX-QUALIFIED PLANS. Special tax rules
apply to investments though defined contribution plans and other
tax-qualified plans. Shareholders should consult their tax
adviser to determine the suitability of shares of a fund as an
investment through such plans and the precise effect of an
investment on their particular tax situation.
BACKUP WITHHOLDING. 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 underreported 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 currect
TIN are subject to a penalty of $50 for each such failure unless
the failure is due to reasonable cause and not wilful neglect.
An individual's taxpayer identification number is his or her
social security number.
MANAGEMENT
TRUSTEES
*+GEORGE PUTNAM, Chairman and President. Chairman and Director
of Putnam Management and Putnam Mutual Funds. Director, The
Boston Company, Inc., Boston Safe Deposit and Trust Company,
Freeport-McMoRan, Inc., General Mills, Inc., Houghton Mifflin
Company, Marsh & McLennan Companies, Inc. and Rockefeller Group,
Inc.
+WILLIAM F. POUNDS, Vice Chairman. Professor of Management,
Alfred P. Sloan School of Management, Massachusetts Institute of
Technology. Director of EG&G, Inc., Fisher Price, Inc., IDEXX,
M/A-COM, Inc., and Sun Company, Inc.
JAMESON A. BAXTER, Trustee. President, Baxter Associates, Inc.
(consultants to management). Director of Avondale Federal Savings
Bank, ASHTA Chemicals, Inc. and Banta Corporation. Chairman of
the Board of Trustees, Mount Holyoke College.
+HANS H. ESTIN, Trustee. Vice Chairman, North American
Management Corp. (a registered investment adviser). Director of
The Boston Company, Inc. and Boston Safe Deposit and Trust
Company.
ELIZABETH T. KENNAN, Trustee. President Emeritus and Professor,
Mount Holyoke College. Director, the Kentucky Home Life
Insurance Companies, NYNEX Corporation, Northeast Utilities and
Talbots and Trustee of the University of Notre Dame.
*LAWRENCE J. LASSER, Trustee and Vice President. President,
Chief Executive Officer and Director of Putnam Investments, Inc.
and Putnam Investment Management, Inc. Director of Marsh &
McLennan Companies, Inc. Vice President of the Putnam funds.
JOHN A. HILL, Trustee. Chairman and Managing Director, First
Reserve Corporation (a registered investment adviser). Director,
Lantana Corporation, Maverick Tube Corporation, Snyder Oil
Corporation and various First Reserve Funds.
+ROBERT E. PATTERSON, Trustee. Executive Vice President, Cabot
Partners Limited Partnership (a registered investment adviser).
*DONALD S. PERKINS, Trustee. Director of various corporations,
including American Telephone & Telegraph Company, AON Corp.,
Cummins Engine Company, Inc., Illinois Power Company, Inland
Steel Industries, Inc., Kmart Corporation, LaSalle Street Fund,
Inc., Springs Industries, Inc., TBG, Inc. and Time Warner Inc.
*#GEORGE PUTNAM, III, Trustee. President, New Generation
Research, Inc. (publisher of bankruptcy information). Director,
World Environment Center.
ELI SHAPIRO, Trustee. Alfred P. Sloan Professor of Management,
Emeritus, Alfred P. Sloan School of Management, Massachusetts
Institute of Technology. Director of Nomura Dividend Fund, Inc.
(a privately held registered investment company managed by Putnam
Management) and former Trustee of the Putnam funds (1984-1990).
*A.J.C. SMITH, Trustee. Chairman, Chief Executive Officer and
Director, Marsh & McLennan Companies, Inc.
W. NICHOLAS THORNDIKE, Trustee. Director of various corporations
and charitable organizations, including Courier Corporation and
Providence Journal Co. Also, Trustee and President of
Massachusetts General Hospital and Trustee of Bradley Real Estate
Trust and Eastern Utilities Associates.
<PAGE>
OFFICERS
CHARLES E. PORTER, Executive Vice President. Managing Director
of Putnam Investments, Inc. and Putnam Investment Management,
Inc. Executive Vice President of the Putnam funds.
PATRICIA C. FLAHERTY, Senior Vice President. Senior Vice
President of Putnam Investments, Inc. and Putnam Investment
Management, Inc.
WILLIAM N. SHIEBLER, Vice President. Director and Senior
Managing Director of Putnam Investments, Inc. President, Chief
Operating Officer and Director of Putnam Mutual Funds. Vice
President of the Putnam funds.
GORDON H. SILVER, Vice President. Senior Managing Director of
Putnam Investments, Inc. and Putnam Investment Management, Inc.
Director, Putnam Investments, Inc. and Putnam Investment
Management, Inc. Vice President of the Putnam funds.
JOHN R. VERANI, Vice President. Senior Vice President of Putnam
Investments, Inc. and Putnam Investment Management, Inc. Vice
President of the Putnam funds.
PAUL M. O'NEIL, Vice President. Vice President of Putnam
Investments, Inc. and Putnam Investment Management, Inc. Vice
President of the Putnam funds.
JOHN D. HUGHES, Vice President and Treasurer. Vice President and
Treasurer of the Putnam funds.
KATHERINE HOWARD, Assistant Vice President. Assistant Vice
President of the Putnam funds.
BEVERLY MARCUS, Clerk and Assistant Treasurer. Clerk and
Assistant Treasurer of the Putnam funds.
*Trustees who are or may be deemed to be "interested persons" (as
defined in the Investment Company Act of 1940) of the Fund,
Putnam Management or Putnam Mutual Funds.
+Members of the Executive Committee of the Trustees. The
Executive Committee meets between regular meetings of the
Trustees as may be required to review investment matters and
other affairs of the Fund and may exercise all of the powers of
the Trustees.
#George Putnam, III is the son of George Putnam.
-----------------
Certain other officers of Putnam Management are officers of your
Fund. SEE "ADDITIONAL OFFICERS OF THE FUND" IN PART I OF THIS
STATEMENT. The mailing address of each of the officers and
Trustees is One Post Office Square, Boston, Massachusetts 02109.
Except as stated below, the principal occupations of the officers
and Trustees for the last five years have been with the employers
as shown above, although in some cases they have held different
positions with such employers. Prior to January, 1992, Ms.
Baxter was Vice President and Principal, Regency Group, Inc. and
Consultant, The First Boston Corporation. Prior to May, 1991,
Dr. Pounds was Senior Advisor to the Rockefeller Family and
Associates, Chairman of Rockefeller Trust Company and Director of
Rockefeller Group, Inc. During the past five years Dr. Shapiro
has provided economic and financial consulting services to
various clients. Prior to November, 1990, Mr. Shiebler was
President and Chief Operating Officer of the Intercapital
Division of Dean Witter Reynolds, Inc., Vice President of the
Dean Witter Funds and Director of Dean Witter Trust Company.
Each Trustee of the Fund receives an annual fee and an additional
fee for each Trustees' meeting attended. Trustees who are not
interested persons of Putnam Management and who serve on
committees of the Trustees receive additional fees for attendance
at certain committee meetings and for special services rendered
in that connection. All of the Trustees are Trustees of all the
Putnam funds and each receives fees for his or her services. FOR
DETAILS OF TRUSTEES' FEES PAID BY THE FUND, SEE "FUND CHARGES AND
EXPENSES" IN PART I OF THIS STATEMENT.
The Agreement and Declaration of Trust of the Fund provides that
the Fund will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with litigation
in which they may be involved because of their offices with the
Fund, except if it is determined in the manner specified in the
Agreement and Declaration of Trust that they have not acted in
good faith in the reasonable belief that their actions were in
the best interests of the Fund or that such indemnification would
relieve any officer or Trustee of any liability to the Fund or
its shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties. The
Fund, at its expense, provides liability insurance for the
benefit of its Trustees and officers.
Putnam Management, Putnam Mutual Funds and Putnam Fiduciary Trust
Company are subsidiaries of Putnam Investments, Inc., a holding
company which is in turn wholly owned by Marsh & McLennan
Companies, Inc., a publicly owned holding company whose principal
operating subsidiaries are international insurance and
reinsurance brokers, investment managers and management
consultants.
Trustees and officers of the Fund who are also officers of Putnam
Management or its affiliates or who are stockholders of Marsh &
McLennan Companies, Inc. will benefit from the advisory fees,
sales commissions, distribution fees (if any), custodian fees and
transfer agency fees paid or allowed by the Fund.
PUTNAM MANAGEMENT
Putnam Management is one of America's oldest and largest money
management firms. Putnam Management'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. Putnam Management has been managing mutual funds
since 1937. Today, the firm serves as the investment manager for
the funds in the Putnam Family, with over $67 billion in assets
in over 4.1 million shareholder accounts at December 31, 1994.
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. At
December 31, 1994, Putnam Management and its affiliates managed
over $95 billion in assets, including over $15 billion in tax
exempt securities and over $36 billion in retirement plan assets.
THE MANAGEMENT CONTRACT
Under a Management Contract between the Fund and Putnam
Management, subject to such policies as the Trustees may
determine, Putnam Management, at its expense, furnishes
continuously an investment program for the Fund and makes
investment decisions on behalf of the Fund. Subject to the
control of the Trustees, Putnam Management also manages,
supervises and conducts the other affairs and business of the
Fund, furnishes office space and equipment, provides bookkeeping
and clerical services (including determination of the Fund's net
asset value, but excluding shareholder accounting services) and
places all orders for the purchase and sale of the Fund's
portfolio securities. Putnam Management may place Fund portfolio
transactions with broker-dealers which furnish Putnam Management,
without cost to it, certain research, statistical and quotation
services of value to Putnam Management and its affiliates in
advising the Fund and other clients. In so doing, Putnam
Management may cause the Fund to pay greater brokerage
commissions than it might otherwise pay.
FOR DETAILS OF PUTNAM MANAGEMENT'S COMPENSATION UNDER THE
MANAGEMENT CONTRACT, SEE "FUND CHARGES AND EXPENSES" IN PART I OF
THIS STATEMENT. Putnam Management's compensation under the
Management Contract may be reduced in any year if the Fund's
expenses exceed the limits on investment company expenses imposed
by any statute or regulatory authority of any jurisdiction in
which shares of the Fund are qualified for offer or sale. The
term "expenses" is defined in the statutes or regulations of such
jurisdictions, and generally, excludes brokerage commissions,
taxes, interest, extraordinary expenses and, if the Fund has a
Distribution Plan, payments made under such Plan. The only such
limitation as of the date of this Statement (applicable to any
Fund registered for sale in California) was 2.5% of the first $30
million of average net assets, 2% of the next $70 million and
1.5% of any excess over $100 million.
Under the Management Contract, Putnam Management may reduce its
compensation to the extent that the Fund's expenses exceed such
lower expense limitation as Putnam Management may, by notice to
the Fund, declare to be effective. The expenses subject to this
limitation are exclusive of brokerage commissions, interest,
taxes, deferred organizational and extraordinary expenses and,
if the Fund has a Distribution Plan, payments required under such
Plan. THE TERMS OF ANY EXPENSE LIMITATION FROM TIME TO TIME IN
EFFECT ARE DESCRIBED IN EITHER THE PROSPECTUS OR PART I OF THIS
STATEMENT.
In addition to the fee paid to Putnam Management, the Fund
reimburses Putnam Management for the compensation and related
expenses of certain officers of the Fund and their assistants who
provide certain administrative services for the Fund and the
other funds in the Putnam Family, each of which bears an
allocated share of the foregoing costs. The aggregate amount of
all such payments and reimbursements is determined annually by
the Trustees. THE AMOUNT OF THIS REIMBURSEMENT FOR THE FUND'S
MOST RECENT FISCAL YEAR IS INCLUDED IN "FUND CHARGES AND
EXPENSES" IN PART I OF THIS STATEMENT. Putnam Management pays
all other salaries of officers of the Fund. The Fund pays all
expenses not assumed by Putnam Management including, without
limitation, auditing, legal, custodial, investor servicing and
shareholder reporting expenses. The Fund pays the cost of
typesetting for its Prospectuses and the cost of printing and
mailing any Prospectuses sent to its shareholders. Putnam Mutual
Funds pays the cost of printing and distributing all other
Prospectuses.
The Management Contract provides that Putnam Management shall not
be subject to any liability to the Fund or to any shareholder of
the Fund for any act or omission in the course of or connected
with rendering services to the Fund in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
its duties on the part of Putnam Management.
The Management Contract may be terminated without penalty by vote
of the Trustees or the shareholders of the Fund, or by Putnam
Management, on 30 days' written notice. It may be amended only
by a vote of the shareholders of the Fund. The Management
Contract also terminates without payment of any penalty in the
event of its assignment. The Management Contract provides that
it will continue in effect only so long as such continuance is
approved at least annually by vote of either the Trustees or the
shareholders, and, in either case, by a majority of the Trustees
who are not "interested persons" of Putnam Management or the
Fund. In each of the foregoing cases, the vote of the
shareholders is the affirmative vote of a "majority of the
outstanding voting securities" as defined in the Investment
Company Act of 1940.
PORTFOLIO TRANSACTIONS
INVESTMENT DECISIONS. Investment decisions for the Fund and for
the other investment advisory clients of Putnam Management and
its affiliates are made with a view to achieving their respective
investment objectives. Investment decisions are the product of
many factors in addition to basic suitability for the particular
client involved. Thus, a particular security may be bought or
sold for certain clients even though it could have been bought or
sold for other clients at the same time. Likewise, a particular
security may be bought for one or more clients when one or more
other clients are selling the security. In some instances, one
client may sell a particular security to another client. It also
sometimes happens that two or more clients simultaneously
purchase or sell the same security, in which event each day's
transactions in such security are, insofar as possible, averaged
as to price and allocated between such clients in a manner which
in Putnam Management's opinion is equitable to each and in
accordance with the amount being purchased or sold by each.
There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on
other clients.
BROKERAGE AND RESEARCH SERVICES. Transactions on U.S. stock
exchanges, commodities markets and futures markets and other
agency transactions involve the payment by the Fund of negotiated
brokerage commissions. Such commissions vary among different
brokers. A particular broker may charge different commissions
according to such factors as the difficulty and size of the
transaction. Transactions in foreign investments often involve
the payment of fixed brokerage commissions, which may be higher
than those in the United States. There is generally no stated
commission in the case of securities traded in the
over-the-counter markets, but the price paid by the Fund usually
includes an undisclosed dealer commission or mark-up. In
underwritten offerings, the price paid by the Fund includes a
disclosed, fixed commission or discount retained by the
underwriter or dealer. It is anticipated that most purchases and
sales of securities by funds investing primarily in tax-exempt
securities and certain other fixed-income securities will be with
the issuer or with underwriters of or dealers in those
securities, acting as principal. Accordingly, those funds would
not ordinarily pay significant brokerage commissions with respect
to securities transactions. SEE "FUND CHARGES AND EXPENSES" IN
PART I OF THIS STATEMENT FOR INFORMATION CONCERNING COMMISSIONS
PAID BY THE FUND.
It has for many years been a common practice in the investment
advisory business for advisers of investment companies and other
institutional investors to receive brokerage and research
services (as defined in the Securities Exchange Act of 1934, as
amended (the "1934 Act")) from broker-dealers that execute
portfolio transactions for the clients of such advisers and from
third parties with which such broker-dealers have arrangements.
Consistent with this practice, Putnam Management receives
brokerage and research services and other similar services from
many broker-dealers with which Putnam Management places the
Fund's portfolio transactions and from third parties with which
these broker-dealers have arrangements. These services include
such matters as general economic and market reviews, industry and
company reviews, evaluations of investments, recommendations as
to the purchase and sale of investments, newspapers, magazines,
pricing services, quotation services, news services and personal
computers utilized by Putnam Management's managers and analysts.
Where the services referred to above are not used exclusively by
Putnam Management for research purposes, Putnam Management, based
upon its own allocations of expected use, bears that portion of
the cost of these services which directly relates to their
non-research use. Some of these services are of value to Putnam
Management and its affiliates in advising various of their
clients (including the Fund), although not all of these services
are necessarily useful and of value in managing the Fund. The
management fee paid by the Fund is not reduced because Putnam
Management and its affiliates receive these services even though
Putnam Management might otherwise be required to purchase some of
these services for cash.
Putnam Management places all orders for the purchase and sale of
portfolio investments for the Fund and buys and sells investments
for the Fund through a substantial number of brokers and dealers.
In so doing, Putnam Management uses its best efforts to obtain
for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher brokerage
commissions as described below. In seeking the most favorable
price and execution, Putnam Management, having in mind the Fund's
best interests, considers all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security or other
investment, the amount of the commission, the timing of the
transaction taking into account market prices and trends, the
reputation, experience and financial stability of the
broker-dealer involved and the quality of service rendered by the
broker-dealer in other transactions.
As permitted by Section 28(e) of the 1934 Act, and by the
Management Contract, Putnam Management may cause the Fund to pay
a broker-dealer which provides "brokerage and research services"
(as defined in the 1934 Act) to Putnam Management an amount of
disclosed commission for effecting securities transactions on
stock exchanges and other transactions for the Fund on an agency
basis in excess of the commission which another broker-dealer
would have charged for effecting that transaction. Putnam
Management's authority to cause the Fund to pay any such greater
commissions is also subject to such policies as the Trustees may
adopt from time to time. Putnam Management does not currently
intend to cause the Fund to make such payments. It is the
position of the staff of the Securities and Exchange Commission
that Section 28(e) does not apply to the payment of such greater
commissions in "principal" transactions. Accordingly Putnam
Management will use its best effort to obtain the most favorable
price and execution available with respect to such transactions,
as described above.
The Management Contract provides that commissions, fees,
brokerage or similar payments received by Putnam Management or an
affiliate in connection with the purchase and sale of portfolio
investments of the Fund, less any direct expenses approved by the
Trustees, shall be recaptured by the Fund through a reduction of
the fee payable by the Fund under the Management Contract.
Putnam Management seeks to recapture for the Fund soliciting
dealer fees on the tender of the Fund's portfolio securities in
tender or exchange offers. Any such fees which may be recaptured
are likely to be minor in amount.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. and subject to seeking
the most favorable price and execution available and such other
policies as the Trustees may determine, Putnam Management may
consider sales of shares of the Fund (and, if permitted by law,
of the other Putnam funds) as a factor in the selection of
broker-dealers to execute portfolio transactions for the Fund.
PRINCIPAL UNDERWRITER
Putnam Mutual Funds is the principal underwriter of shares of the
Fund and the other continuously offered Putnam funds. Putnam
Mutual Funds is not obligated to sell any specific amount of
shares of the Fund and will purchase shares for resale only
against orders for shares. SEE "FUND CHARGES AND EXPENSES" IN
PART I OF THIS STATEMENT FOR INFORMATION ON SALES CHARGES AND
OTHER PAYMENTS RECEIVED BY PUTNAM MUTUAL FUNDS.
INVESTOR SERVICING AGENT AND CUSTODIAN
Putnam Investor Services, a division of Putnam Fiduciary Trust
Company ("PFTC"), is the Fund's investor servicing agent
(transfer, plan and dividend disbursing agent), for which it
receives fees which are paid monthly by the Fund as an expense of
all its shareholders. The fee paid to Putnam Investor Services
is determined by the Trustees taking into account the number of
shareholder accounts and transactions. Putnam Investor Services
has won the DALBAR Quality Tested Service Seal every year since
the award's 1990 inception. Over 10,000 tests of 38 separate
shareholders service components demonstrated that Putnam Investor
Services exceeded the industry standard in all categories.
PFTC is the custodian of the Fund's assets. In carrying out its
duties under its custodian contract, PFTC may employ one or more
subcustodians whose responsibilities will include safeguarding
and controlling the Fund's cash and securities, handling the
receipt and delivery of securities and collecting interest and
dividends on the Fund's investments. PFTC and any subcustodians
employed by it have a lien on the securities of the Fund (to the
extent permitted by the Fund's investment restrictions) to secure
charges and any advances made by such subcustodians at the end of
any day for the purpose of paying for securities purchased by the
Fund. The Fund expects that such advances will exist only in
unusual circumstances. Neither PFTC nor any subcustodian
determines the investment policies of the Fund or decides which
securities the Fund will buy or sell. PFTC pays the fees and
other charges of any subcustodians employed by it. The Fund may
from time to time pay custodial expenses in full or in part
through the placement by Putnam Management of the Fund's
portfolio transactions with the subcustodians or with a third-
party broker having an agreement with the subcustodians. The
Fund pays PFTC an annual fee based on the Fund's assets,
securities transactions and securities holdings and reimburses
PFTC for certain out-of-pocket expenses incurred by it or any
subcustodian employed by it in performing custodial services.
SEE "FUND CHARGES AND EXPENSES" IN PART I OF THIS STATEMENT FOR
INFORMATION ON FEES AND REIMBURSEMENTS FOR INVESTOR SERVICING AND
CUSTODY RECEIVED BY PFTC. THE FEES MAY BE REDUCED BY CREDITS
ALLOWED BY PFTC.
DETERMINATION OF NET ASSET VALUE
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 holidays: New Year's 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 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 the Trustees or Putnam
Management, 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 U.S. Government securities are
stated at the mean between the last reported bid and asked
prices. Short-term investments having remaining maturities of 60
days or less are stated at amortized cost, which approximates
market value. All other securities and assets are valued at
their fair value following procedures approved by the Trustees.
Liabilities are deducted from the total, and the 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 stated at fair value on the
basis of valuations furnished by pricing services approved by the
Trustees, 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,
Putnam Management determines their fair value following
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 following procedures approved by
the Trustees.
Money market funds generally value their portfolio securities at
amortized cost according to Rule 2a-7 under the Investment
Company Act of 1940.
HOW TO BUY SHARES
General
The Prospectus contains a general description of how investors
may buy shares of the Fund and states whether the Fund offers
more than one class of shares. This Statement contains
additional information which may be of interest to investors.
Class A shares and Class M shares are sold with a sales charge
payable at the time of purchase (except for Class A shares and
Class M shares of money market funds). As used in this Statement
and unless the context requires otherwise, the term "Class A
shares" includes shares of Funds that offer only one class of
shares. The Prospectus contains a table of applicable sales
charges. For information about how to purchase Class A shares of
a Putnam fund at net asset value through an employer's defined
contribution plan, please consult your employer. Certain
purchases of Class A shares and Class M shares may be exempt from
a sales charge or, in the case of Class A shares, may be subject
to a contingent deferred sales charge ("CDSC"). See "General--
Sales without sales charges or contingent deferred sales
charges", "Additional Information About Class A and Class M
Shares", and "Contingent Deferred Sales Charges--Class A shares".
Class B shares and Class C shares are sold subject to a CDSC
payable upon redemption within a specified period after purchase.
The Prospectus contains a table of applicable CDSCs.
Class Y shares, which are available only to employer-sponsored
defined contribution plans initially investing at least $250
million in a combination of Putnam funds and other investments
managed by Putnam Management or its affiliates, are not subject
to sales charges or a CDSC.
Certain purchase programs described below are not available to
defined contribution plans. Consult your employer for
information on how to purchase shares through your plan.
The Fund is currently making a continuous offering of its shares.
The Fund receives the entire net asset value of shares sold. The
Fund will accept unconditional orders for shares to be executed
at the public offering price based on the net asset value per
share next determined after the order is placed. In the case of
Class A shares and Class M shares, the public offering price is
the net asset value plus the applicable sales charge, if any. No
sales charge is included in the public offering price of other
classes of shares. In the case of orders for purchase of shares
placed through dealers, the public offering price will be based
on the net asset value determined on the day the order is placed,
but only if the dealer receives the order before the close of
regular trading on the Exchange. If the dealer receives the
order after the close of the Exchange, the price will be based on
the net asset value next determined. If funds for the purchase
of shares are sent directly to Putnam Investor Services, they
will be invested at the public offering price based on the net
asset value next determined after receipt. Payment for shares of
the Fund must be in U.S. dollars; if made by check, the check
must be drawn on a U.S. bank.
Initial and subsequent purchases must satisfy the minimums stated
in the Prospectus, except that (i) individual investments under
certain employee benefit plans or Tax Qualified Retirement Plans
may be lower, (ii) persons who are already shareholders may make
additional purchases of $50 or more by sending funds directly to
Putnam Investor Services (see "Your Investing Account" below),
and (iii) for investors participating in systematic investment
plans and military allotment plans, the initial and subsequent
purchases must be $25 or more. Information about these plans is
available from investment dealers or from Putnam Mutual Funds.
As a convenience to investors, shares may be purchased through a
systematic investment plan. Preauthorized monthly bank drafts
for a fixed amount (at least $25) are used to purchase Fund
shares at the applicable public offering price next determined
after Putnam Mutual Funds receives the proceeds from the draft
(normally the 20th of each month, or the next business day
thereafter). Further information and application forms are
available from investment dealers or from Putnam Mutual Funds.
Except for Putnam funds that declare a distribution daily,
distributions to be reinvested are reinvested without a sales
charge in shares of the same class as of the ex-dividend date
using the net asset value determined on that date, and are
credited to a shareholder's account on the payment date.
Dividends for Putnam money market funds are credited to a
shareholder's account on the payment date. Distributions for
Putnam Tax-Free Income Trust and Putnam Preferred Income Fund are
reinvested without a sales charge as of the last day of the
period for which distributions are paid using the net asset value
determined on that date, and are credited to a shareholder's
account on the payment date. Distributions for all other Putnam
funds that declare a distribution daily are reinvested without a
sales charge as of the next day following the period for which
distributions are paid using the net asset value determined on
that date, and are credited to a shareholder's account on the
payment date.
PAYMENT IN SECURITIES. In addition to cash, the Fund may accept
securities as payment for Fund shares at the applicable net asset
value. Generally, the Fund will only consider accepting
securities to increase its holdings in a portfolio security, or
if Putnam Management determines that the offered securities are a
suitable investment for the Fund and in a sufficient amount for
efficient management.
While no minimum has been established, it is expected that the
Fund would not accept securities with a value of less than
$100,000 per issue as payment for shares. The Fund may reject in
whole or in part any or all offers to pay for purchases of Fund
shares with securities, may require partial payment in cash for
such purchases to provide funds for applicable sales charges, and
may discontinue accepting securities as payment for Fund shares
at any time without notice. The Fund will value accepted
securities in the manner described in the section "Determination
of Net Asset Value" for valuing shares of the Fund. The Fund
will only accept securities which are delivered in proper form.
The Fund will not accept options or restricted securities as
payment for shares. The acceptance of securities by certain
Funds in exchange for Fund shares are subject to additional
requirements. In the case of Putnam American Government Income
Fund, Putnam Asia Pacific Growth Fund, Putnam Asset Allocation
Funds: Balanced Portfolio, Putnam Asset Allocation Funds:
Conservative Portfolio, Putnam Asset Allocation Funds: Growth
Portfolio, Putnam Capital Appreciation Fund, Putnam Preferred
Income Fund, Putnam Diversified Equity Trust, Putnam Equity
Income Fund, Putnam Europe Growth Fund, The Putnam Fund for
Growth & Income, Putnam Global Governmental Income Trust, Putnam
Growth and Income Fund II, Putnam High Yield Advantage Fund,
Putnam Investment Funds, Putnam Intermediate Tax Exempt Fund,
Putnam Investment-Grade Bond Fund, Putnam Municipal Income Fund,
Putnam Natural Resources Fund, Putnam OTC Emerging Growth Fund,
Putnam Overseas Growth Fund, Putnam Tax Exempt Income Fund and
Putnam Tax-Free Income Trust, transactions involving the issuance
of Fund shares for securities or assets other than cash will be
limited to a bona-fide re-organization or statutory merger and to
other acquisitions of portfolio securities that meet all the
following conditions: (a) such securities meet the investment
objectives and policies of the Fund; (b) such securities are
acquired for investment and not for resale; (c) such securities
are liquid securities which are not restricted as to transfer
either by law or liquidity of market; and (d) such securities
have a value which is readily ascertainable, as evidenced by a
listing on the American Stock Exchange, the New York Stock
Exchange or NASDAQ. In addition, Putnam Global Governmental
Income Trust may accept only investment grade bonds with prices
regularly stated in publications generally accepted by investors,
such as the London Financial Times and the Association of
International Bond Dealers manual, or securities listed on the
New York or American Stock Exchanges or with NASDAQ, and Putnam
Diversified Income Trust may accept only bonds with prices
regularly stated in publications generally accepted by investors.
For federal income tax purposes, a purchase of Fund shares with
securities will be treated as a sale or exchange of such
securities on which the investor will realize a taxable gain or
loss. The processing of a purchase of Fund shares with
securities involves certain delays while the Fund considers the
suitability of such securities and while other requirements are
satisfied. For information regarding procedures for payment in
securities, contact Putnam Mutual Funds. Investors should not
send securities to the Fund except when authorized to do so and
in accordance with specific instructions received from Putnam
Mutual Funds.
SALES WITHOUT SALES CHARGES OR CONTINGENT DEFERRED SALES CHARGES.
The Fund may sell shares without a sales charge or CDSC to:
(i) current and retired Trustees of the Fund; officers of
the Fund; directors and current and retired U.S. full-time
employees of Putnam Management, Putnam Mutual Funds, their
parent corporations and certain corporate affiliates;
family members of and employee benefit plans for the
foregoing; and partnerships, trusts or other entities in
which any of the foregoing has a substantial interest;
(ii) employee benefit plans, for the repurchase of shares
in connection with repayment of plan loans made to plan
participants (if the sum loaned was obtained by redeeming
shares of a Putnam fund sold with a sales charge) (not
offered by tax-exempt funds);
(iii) clients of administrators of tax-qualified employee
benefit plans which have entered into agreements with
Putnam Mutual Funds (not offered by tax-exempt funds);
(iv) registered representatives and other employees of
broker-dealers having sales agreements with Putnam Mutual
Funds; employees of financial institutions having sales
agreements with Putnam Mutual Funds or otherwise having an
arrangement with any such broker-dealer or financial
institution with respect to sales of Fund shares; and
their spouses and children under age 21 (Putnam Mutual
Funds is regarded as the dealer of record for all such
accounts);
(v) investors meeting certain requirements who sold shares
of certain Putnam closed-end funds pursuant to a tender
offer by such closed-end fund;
(vi) a trust department of any financial institution
purchasing shares of the Fund in its capacity as trustee
of any trust, if the value of the shares of the Fund and
other Putnam funds purchased or held by all such trusts
exceeds $1 million in the aggregate; and
(vii) "wrap accounts" maintained for clients of broker-
dealers, financial institutions or financial planners who
have entered into agreements with Putnam Mutual Funds with
respect to such accounts.
In addition, the Fund may issue its shares at net asset value in
connection with the acquisition of substantially all of the
securities owned by other investment companies or personal
holding companies.
PAYMENTS TO DEALERS. Putnam Mutual Funds may, at its expense,
pay concessions in addition to the payments disclosed in the
Prospectus to dealers which satisfy certain criteria established
from time to time by Putnam Mutual Funds relating to increasing
net sales of shares of the Putnam funds over prior periods, and
certain other factors.
ADDITIONAL INFORMATION ABOUT CLASS A AND CLASS M SHARES
The underwriter's commission is the sales charge shown in the
Prospectus less any applicable dealer discount. Putnam Mutual
Funds will give dealers ten days' notice of any changes in the
dealer discount. Putnam Mutual Funds retains the entire sales
charge on any retail sales made by it.
Putnam Mutual Funds offers several plans by which an investor may
obtain reduced sales charges on purchases of Class A shares and
Class M shares. The variations in sales charges reflect the
varying efforts required to sell shares to separate categories of
purchasers. These plans may be altered or discontinued at any
time.
COMBINED PURCHASE PRIVILEGE. The following persons may qualify
for the sales charge reductions or eliminations shown in the
Prospectus by combining into a single transaction the purchase of
Class A shares or Class M shares with other purchases of any
class of shares:
(i) an individual, or a "company" as defined in Section
2(a)(8) of the Investment Company Act of 1940 (which
includes corporations which are corporate affiliates of
each other);
(ii) an individual, his or her spouse and their children
under twenty-one, purchasing for his, her or their own
account;
(iii) a trustee or other fiduciary purchasing for a single
trust estate or single fiduciary account (including a
pension, profit-sharing, or other employee benefit trust
created pursuant to a plan qualified under Section 401 of
the Internal Revenue Code);
(iv) tax-exempt organizations qualifying under Section
501(c)(3) of the Internal Revenue Code (not including
403(b) plans); and
(v) employee benefit plans of a single employer or of
affiliated employers, other than 403(b) plans.
A combined purchase currently may also include shares of any
class of other continuously offered Putnam funds (other than
money market funds) purchased at the same time through a single
investment dealer, if the dealer places the order for such shares
directly with Putnam Mutual Funds.
CUMULATIVE QUANTITY DISCOUNT (RIGHT OF ACCUMULATION). A
purchaser of Class A shares or Class M shares may qualify for a
cumulative quantity discount by combining a current purchase (or
combined purchases as described above) with certain other shares
of any class of Putnam funds already owned. The applicable sales
charge is based on the total of:
(i) the investor's current purchase; and
(ii) the maximum public offering price (at the close of
business on the previous day) of:
(a) all shares held by the investor in all of the
Putnam funds (except money market funds); and
(b) any shares of money market funds acquired by
exchange from other Putnam funds; and
(iii) the maximum public offering price of all shares
described in paragraph (ii) owned by another shareholder
eligible to participate with the investor in a "combined
purchase" (see above).
To qualify for the combined purchase privilege or to obtain the
cumulative quantity discount on a purchase through an investment
dealer, when each purchase is made the investor or dealer must
provide Putnam Mutual Funds with sufficient information to verify
that the purchase qualifies for the privilege or discount. The
shareholder must furnish this information to Putnam Investor
Services when making direct cash investments.
STATEMENT OF INTENTION. Investors may also obtain the reduced
sales charges for Class A shares or Class M shares shown in the
Prospectus for investments of a particular amount by means of a
written Statement of Intention, which expresses the investor's
intention to invest that amount (including certain "credits," as
described below) within a period of 13 months in shares of any
class of the Fund or any other continuously offered Putnam fund
(excluding money market funds). Each purchase of Class A shares
or Class M shares under a Statement of Intention will be made at
the public offering price applicable at the time of such purchase
to a single transaction of the total dollar amount indicated in
the Statement. A Statement of Intention may include purchases of
shares made not more than 90 days prior to the date that an
investor signs a Statement; however, the 13-month period during
which the Statement is in effect will begin on the date of the
earliest purchase to be included.
An investor may receive a credit toward the amount indicated in
the Statement equal to the maximum public offering price as of
the close of business on the previous day of all shares he or she
owns on the date of the Statement which are eligible for purchase
under a Statement (plus any shares of money market funds acquired
by exchange of such eligible shares). Investors do not receive
credit for shares purchased by the reinvestment of distributions.
Investors qualifying for the "combined purchase privilege" (see
above) may purchase shares under a single Statement of Intention.
The Statement of Intention is not a binding obligation upon the
investor to purchase the full amount indicated. The minimum
initial investment under a Statement of Intention is 5% of such
amount, and must be invested immediately. Class A shares or
Class M shares purchased with the first 5% of such amount will be
held in escrow to secure payment of the higher sales charge
applicable to the shares actually purchased if the full amount
indicated is not purchased. When the full amount indicated has
been purchased, the escrow will be released. If an investor
desires to redeem escrowed shares before the full amount has been
purchased, the shares will be released from escrow only if the
investor pays the sales charge that, without regard to the
Statement of Intention, would apply to the total investment made
to date.
To the extent that an investor purchases more than the dollar
amount indicated on the Statement of Intention and qualifies for
a further reduced sales charge, the sales charge will be adjusted
for the entire amount purchased at the end of the 13-month
period, upon recovery from the investor's dealer of its portion
of the sales charge adjustment. Once received from the dealer,
which may take a period of time or may never occur, the sales
charge adjustment will be used to purchase additional shares at
the then current offering price applicable to the actual amount
of the aggregate purchases. These additional shares will not be
considered as part of the total investment for the purpose of
determining the applicable sales charge pursuant to the Statement
of Intention. No sales charge adjustment will be made unless and
until the investor's dealer returns any excess commissions
previously received.
To the extent that an investor purchases less than the dollar
amount indicated on the Statement of Intention within the 13-
month period, the sales charge will be adjusted upward for the
entire amount purchased at the end of the 13-month period. This
adjustment will be made by redeeming shares from the account to
cover the additional sales charge, the proceeds of which will be
paid to the investor's dealer and Putnam Mutual Funds in
accordance with the Prospectus. If the account exceeds an amount
that would otherwise qualify for a reduced sales charge, that
reduced sales charge will be applied.
Statements of Intention are not available for certain employee
benefit plans.
Statement of Intention forms may be obtained from Putnam Mutual
Funds or from investment dealers. Interested investors should
read the Statement of Intention carefully.
REDUCED SALES CHARGE FOR GROUP PURCHASES OF CLASS A SHARES.
Members of qualified groups may purchase Class A shares of the
Fund at a group sales charge rate of 4.5% of the public offering
price (4.71% of the net amount invested). The dealer discount on
such sales is 3.75% of the offering price.
To receive the group rate, group members must purchase Class A
shares through a single investment dealer designated by the
group. The designated dealer must transmit each member's initial
purchase to Putnam Mutual Funds, together with payment and
completed application forms. After the initial purchase, a
member may send funds for the purchase of Class A shares directly
to Putnam Investor Services. Purchases of Class A shares are
made at the public offering price based on the net asset value
next determined after Putnam Mutual Funds or Putnam Investor
Services receives payment for the shares. The minimum investment
requirements described above apply to purchases by any group
member. Only Class A shares are included in calculating the
purchased amount.
Qualified groups include the employees of a corporation or a sole
proprietorship, members and employees of a partnership or
association, or other organized groups of persons (the members of
which may include other qualified groups) provided that: (i) the
group has at least 25 members of which at least 10 members
participate in the initial purchase; (ii) the group has been in
existence for at least six months; (iii) the group has some
purpose in addition to the purchase of investment company shares
at a reduced sales charge; (iv) the group's sole organizational
nexus or connection is not that the members are credit card
holders of a company, policy holders of an insurance company,
customers of a bank or broker-dealer, clients of an investment
adviser or security holders of a company; (v) the group agrees to
provide its designated investment dealer access to the group's
membership by means of written communication or direct
presentation to the membership at a meeting on not less
frequently than an annual basis; (vi) the group or its investment
dealer will provide annual certification in form satisfactory to
Putnam Investor Services that the group then has at least 25
members and that at least ten members participated in group
purchases during the immediately preceding 12 calendar months;
and (vii) the group or its investment dealer will provide
periodic certification in form satisfactory to Putnam Investor
Services as to the eligibility of the purchasing members of the
group.
Members of a qualified group include: (i) any group which meets
the requirements stated above and which is a constituent member
of a qualified group; (ii) any individual purchasing for his or
her own account who is carried on the records of the group or on
the records of any constituent member of the group as being a
good standing employee, partner, member or person of like status
of the group or constituent member; or (iii) any fiduciary
purchasing shares for the account of a member of a qualified
group or a member's beneficiary. For example, a qualified group
could consist of a trade association which would have as its
members individuals, sole proprietors, partnerships and
corporations. The members of the group would then consist of the
individuals, the sole proprietors and their employees, the
members of the partnerships and their employees, and the
corporations and their employees, as well as the trustees of
employee benefit trusts acquiring Class A shares for the benefit
of any of the foregoing.
A member of a qualified group may, depending upon the value of
Class A shares of the Fund owned or proposed to be purchased by
the member, be entitled to purchase Class A shares of the Fund at
non-group sales charge rates shown in the Prospectus which may be
lower than the group sales charge rate, if the member qualifies
as a person entitled to reduced non-group sales charges. Such a
group member will be entitled to purchase at the lower rate if,
at the time of purchase, the member or his or her investment
dealer furnishes sufficient information for Putnam Mutual Funds
or Putnam Investor Services to verify that the purchase qualifies
for the lower rate.
Interested groups should contact their investment dealer or
Putnam Mutual Funds. The Fund reserves the right to revise the
terms of or to suspend or discontinue group sales at any time.
EMPLOYEE BENEFIT PLANS; INDIVIDUAL ACCOUNT PLANS. The term
"employee benefit plan" means any plan or arrangement, whether or
not tax-qualified, which provides for the purchase of Class A
shares. The term "affiliated employer" means employers who are
affiliated with each other within the meaning of Section
2(a)(3)(C) of the Investment Company Act of 1940. The term
"individual account plan" means any employee benefit plan whereby
(i) Class A shares are purchased through payroll deductions or
otherwise by a fiduciary or other person for the account of
participants who are employees (or their spouses) of an employer,
or of affiliated employers, and (ii) a separate Investing Account
is maintained in the name of such fiduciary or other person for
the account of each participant in the plan.
The table of sales charges in the Prospectus applies to sales to
employee benefit plans, except that the Fund may sell Class A
shares at net asset value to employee benefit plans, including
individual account plans, of employers or of affiliated employers
which have at least 750 employees to whom such plan is made
available, in connection with a payroll deduction system of plan
funding (or other system acceptable to Putnam Investor Services)
by which contributions or account information for plan
participation are transmitted to Putnam Investor Services by
methods acceptable to Putnam Investor Services. The Fund may
also sell Class A shares at net asset value to employee benefit
plans of employers or of affiliated employers which have at least
750 employees, if such plans are qualified under Section 401 of
the Internal Revenue Code.
Additional information about employee benefit plans and
individual account plans is available from investment dealers or
from Putnam Mutual Funds.
<PAGE>
CONTINGENT DEFERRED SALES CHARGES
CLASS A SHARES. Class A shares purchased at net asset value by
shareholders investing $1 million or more, including purchases
pursuant to any Combined Purchase Privilege, Right of
Accumulation or Statement of Intention, are subject to a CDSC of
1.00% or 0.50%, respectively, if redeemed within the first or
second year after purchase. The Class A CDSC is imposed on the
lower of the cost and the current net asset value of the shares
redeemed. The CDSC does not apply to shares sold without a sales
charge through participant-directed qualified retirement plans
and shares purchased by certain investors investing $1 million or
more that have made arrangements with Putnam Mutual Funds and
whose dealer of record waived the commission described in the
next paragraph.
Except as stated below, Putnam Mutual Funds pays investment
dealers of record commissions on sales of Class A shares of $1
million or more based on an investor's cumulative purchases of
such shares, including purchases pursuant to any Combined
Purchase Privilege, Right of Accumulation or Statement of
Intention, during the one-year period beginning with the date of
the initial purchase at net asset value and each subsequent one-
year period beginning with the first net asset value purchase
following the end of the prior period. Such commissions are paid
at the rate of 1.00% of the amount under $3 million, 0.50% of the
next $47 million and 0.25% thereafter. On sales at net asset
value to a participant-directed qualified retirement plan
initially investing less than $20 million in Putnam funds and
other investments managed by Putnam Management or its affiliates
(including a plan sponsored by an employer with more than 750
employees), Putnam Mutual Funds pays commissions on cumulative
purchases during the life of the account at the rate of 1.00% of
the amount under $3 million and 0.50% thereafter. On sales at
net asset value to all other participant-directed qualified
retirement plans, Putnam Mutual Funds pays commissions on the
initial investment and on subsequent net quarterly sales (gross
sales minus gross redemptions during the quarter) at the rate of
0.15%. Money market fund shares are excluded from all commission
calculations, except for determining the amount initially
invested by a participant-directed qualified retirement plan.
Commissions on sales at net asset value to such plans are subject
to Putnam Mutual Funds' right to reclaim such commissions if the
shares are redeemed within two years.
Different CDSC and commission rates may apply to shares purchased
before April 1, 1994.
CLASS B AND CLASS C SHARES. Investors who set up an Automatic
Cash Withdrawal Plan (ACWP) for a Class B and Class C share
account (see "Plans Available To Shareholders -- Automatic Cash
Withdrawal Plan") may withdraw through the ACWP up to 12% of the
net asset value of the account (calculated as set forth below)
each year without incurring any CDSC. Shares not subject to a
CDSC (such as shares representing reinvestment of distributions)
will be redeemed first and will count toward the 12% limitation.
If there are insufficient shares not subject to a CDSC, shares
subject to the lowest CDSC liability will be redeemed next until
the 12% limit is reached. The 12% figure is calculated on a pro
rata basis at the time of the first payment made pursuant to a
ACWP and recalculated thereafter on a pro rata basis at the time
of each ACWP payment. Therefore, shareholders who have chosen a
ACWP based on a percentage of the net asset value of their
account of up to 12% will be able to receive ACWP payments
without incurring a CDSC. However, shareholders who have chosen
a specific dollar amount (for example, $100 per month from a fund
that pays income distributions monthly) for their periodic ACWP
payment should be aware that the amount of that payment not
subject to a CDSC may vary over time depending on the net asset
value of their account. For example, if the net asset value of
the account is $10,000 at the time of payment, the shareholder
will receive $100 free of the CDSC (12% of $10,000 divided by 12
monthly payments). However, if at the time of the next payment
the net asset value of the account has fallen to $9,400, the
shareholder will receive $94 free of any CDSC (12% of $9,400
divided by 12 monthly payments) and $6 subject to the lowest
applicable CDSC. This ACWP privilege may be revised or
terminated at any time.
ALL SHARES. No CDSC is imposed on shares of any class subject to
a CDSC ("CDSC Shares") to the extent that the CDSC Shares
redeemed (i) are no longer subject to the holding period
therefor, (ii) resulted from reinvestment of distributions on
CDSC Shares, or (iii) were exchanged for shares of another Putnam
fund, provided that the shares acquired in such exchange or
subsequent exchanges (including shares of a Putnam money market
fund) will continue to remain subject to the CDSC, if applicable,
until the applicable holding period expires. In determining
whether the CDSC applies to each redemption of CDSC Shares, CDSC
Shares not subject to a CDSC are redeemed first.
The Fund will waive any CDSC on redemptions, in the case of
individual or Uniform Transfers to Minors Act accounts, in case
of death or disability or for the purpose of paying benefits
pursuant to tax-qualified retirement plans. Such payments
currently include, without limitation, (1) distributions from an
IRA due to death or disability, (2) a return of excess
contributions to an IRA or 401(k) plan, and (3) distributions
from retirement plans qualified under section 401(a) or section
403(b)(7) (a "403(b) plan") of the Internal Revenue Code of 1986,
as amended (the "Code"), due to death, disability, retirement or
separation from service. The Fund will also waive any CDSC in
the case of the death of one joint tenant. These waivers may be
changed at any time. Additional waivers may apply to IRA
accounts opened prior to February 1, 1994.
<PAGE>
DISTRIBUTION PLAN
If the Fund or a class of shares of the Fund has adopted a
Distribution Plan, the Prospectus describes the principal
features of the Plan. This Statement contains additional
information which may be of interest to investors.
Continuance of a Plan is subject to annual approval by a vote of
the Trustees, including a majority of the Trustees who are not
interested persons of the Fund and who have no direct or indirect
interest in the Plan or related arrangements (the "Qualified
Trustees"), cast in person at a meeting called for that purpose.
All material amendments to a Plan must be likewise approved by
the Trustees and the Qualified Trustees. No Plan may be amended
in order to increase materially the costs which the Fund may bear
for distribution pursuant to such Plan without also being
approved by a majority of the outstanding voting securities of
the Fund or the relevant class of the Fund, as the case may be.
A Plan terminates automatically in the event of its assignment
and may be terminated without penalty, at any time, by a vote of
a majority of the Qualified Trustees or by a vote of a majority
of the outstanding voting securities of the Fund or the relevant
class of the Fund, as the case may be.
If Plan payments are made to reimburse Putnam Mutual Funds for
payments to dealers based on the average net asset value of Fund
shares attributable to shareholders for whom the dealers are
designated as the dealer of record, "average net asset value"
attributable to a shareholder account means the product of (i)
the Fund's average daily share balance of the account and (ii)
the Fund's average daily net asset value per share (or the
average daily net asset value per share of the class, if
applicable). For administrative reasons, Putnam Mutual Funds may
enter into agreements with certain dealers providing for the
calculation of "average net asset value" on the basis of assets
of the accounts of the dealer's customers on an established day
in each quarter.
Financial institutions receiving payments from Putnam Mutual
Funds as described above may be required to comply with various
state and federal regulatory requirements, including among others
those regulating the activities of securities brokers or dealers.
INVESTOR SERVICES
SHAREHOLDER INFORMATION
Each time shareholders buy or sell shares, they will receive a
statement confirming the transaction and listing their current
share balance. (Under certain investment plans, a statement may
only be sent quarterly.) Shareholders will receive a statement
confirming reinvestment of distributions in additional Fund
shares (or in shares of other Putnam funds for Dividends Plus
accounts) promptly following the quarter in which the
reinvestment occurs. To help shareholders take full advantage of
their Putnam investment, they will receive a Welcome Kit and a
periodic publication covering many topics of interest to
investors. The Fund also sends annual and semiannual reports
that keep shareholders informed about its portfolio and
performance, and year-end tax information to simplify their
recordkeeping. Easy-to-read, free booklets on special subjects
such as the Exchange Privilege and IRAs are available from Putnam
Investor Services. Shareholders may call Putnam Investor
Services toll-free weekdays at 1-800-225-1581 between 8:30 a.m.
and 7:00 p.m. Boston time for more information, including account
balances.
YOUR INVESTING ACCOUNT
The following information provides more detail concerning the
operation of a Putnam Investing Account. For further information
or assistance, investors should consult Putnam Investor Services.
Shareholders who purchase shares through a defined contribution
plan should note that not all of the services or features
described below may be available to them, and they should contact
their employer for details.
A shareholder may reinvest a recent cash distribution without a
front-end sales charge or without the reinvested shares being
subject to a CDSC, as the case may be, by delivering to Putnam
Investor Services the uncashed distribution check, endorsed to
the order of the Fund. Putnam Investor Services must receive the
properly endorsed check within 30 days after the date of the
check. Upon written notice to shareholders, the Fund may permit
shareholders who receive cash distributions to reinvest amounts
representing returns of capital without a sales charge or without
being subject to the CDSC.
The Investing Account also provides a way to accumulate shares of
the Fund. In most cases, after an initial investment of $500, a
shareholder may send checks to Putnam Investor Services for $50
or more, made payable to the Fund, to purchase additional shares
at the applicable public offering price next determined after
Putnam Investor Services receives the check. For Putnam
Preferred Income Fund, the minimum initial investment is $25,000
and the minimum subsequent investment is $5,000. Checks must be
drawn on a U.S. bank and must be payable in U.S. dollars.
Putnam Investor Services acts as the shareholder's agent whenever
it receives instructions to carry out a transaction on the
shareholder's account. Upon receipt of instructions that shares
are to be purchased for a shareholder's account, shares will be
purchased through the investment dealer designated by the
shareholder. Shareholders may change investment dealers at any
time by written notice to Putnam Investor Services, provided the
new dealer has a sales agreement with Putnam Mutual Funds.
Shares credited to an account are transferable upon written
instructions in good order to Putnam Investor Services and may be
sold to the Fund as described under "How to buy shares, sell
shares and exchange shares" in the Prospectus. Money market
funds and certain other funds will not issue share certificates.
A shareholder may send any certificates which have been
previously issued to Putnam Investor Services for safekeeping at
no charge to the shareholder.
Putnam Mutual Funds, at its expense, may provide certain
additional reports and administrative material to qualifying
institutional investors with fiduciary responsibilities to assist
these investors in discharging their responsibilities.
Institutions seeking further information about this service
should contact Putnam Mutual Funds, which may modify or terminate
this service at any time.
Putnam Investor Services may make special services available to
shareholders with investments exceeding $1,000,000. Contact
Putnam Investor Services for details.
The Fund pays Putnam Investor Services' fees for maintaining
Investing Accounts.
REINSTATEMENT PRIVILEGE
An investor who has redeemed shares to the Fund may reinvest
(within 1 year) the proceeds of such sale in shares of the same
class of the Fund, or may be able to reinvest (within 1 year) the
proceeds in shares of the same class of one of the other
continuously offered Putnam funds (through the Exchange Privilege
described in the Prospectus), including, in the case of shares
subject to a CDSC, the amount of CDSC charged on the redemption.
Any such reinvestment would be at the net asset value of the
shares of the fund(s) the investor selects, next determined after
Putnam Mutual Funds receives a Reinstatement Authorization. The
time that the previous investment was held will be included in
determining any applicable CDSC due upon redemptions and, in the
case of Class B shares, the eight-year period for conversion to
Class A shares. Shareholders will receive from Putnam Mutual
Funds the amount of any CDSC paid at the time of redemption as
part of the reinstated investment, which may be treated as
capital gains to the shareholder for tax purposes. Exercise of
the Reinstatement Privilege does not alter the federal income tax
treatment of any capital gains realized on a sale of Fund shares,
but to the extent that any shares are sold at a loss and the
proceeds are reinvested in shares of the Fund, some or all of the
loss may be disallowed as a deduction. Consult your tax adviser.
Investors who desire to exercise this Privilege should contact
their investment dealer or Putnam Investor Services.
EXCHANGE PRIVILEGE
Except as otherwise set forth in this section, by calling Putnam
Investor Services, investors may exchange shares valued up to
$500,000 between accounts with identical registrations, provided
that no certificates are outstanding for such shares and no
address change has been made within the preceding 15 days.
During periods of unusual market changes and shareholder
activity, shareholders may experience delays in contacting Putnam
Investor Services by telephone to exercise the Telephone Exchange
Privilege.
Putnam Investor Services also makes exchanges promptly after
receiving a properly completed Exchange Authorization Form and,
if issued, share certificates. If the shareholder is a
corporation, partnership, agent, or surviving joint owner, Putnam
Investor Services will require additional documentation of a
customary nature. Because an exchange of shares involves the
redemption of Fund shares and reinvestment of the proceeds in
shares of another Putnam fund, completion of an exchange may be
delayed under unusual circumstances if the Fund were to suspend
redemptions or postpone payment for the Fund shares being
exchanged, in accordance with federal securities laws. Exchange
Authorization Forms and prospectuses of the other Putnam funds
are available from Putnam Mutual Funds or investment dealers
having sales contracts with Putnam Mutual Funds. The prospectus
of each fund describes its investment objective(s) and policies,
and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
Shares of certain Putnam funds are not available to residents of
all states. The Fund reserves the right to change or suspend the
Exchange Privilege at any time. Shareholders would be notified
of any change or suspension. Additional information is available
from Putnam Investor Services.
Shares of the Fund must be held at least 15 days by the
shareholder requesting an exchange. There is no holding period
if the shareholder acquired the shares to be exchanged through
reinvestment of distributions, transfer from another shareholder,
prior exchange or certain employer-sponsored defined contribution
plans. In all cases, the shares to be exchanged must be
registered on the records of the Fund in the name of the
shareholder requesting the exchange.
Shareholders of other Putnam funds may also exchange their shares
at net asset value for shares of the Fund, as set forth in the
current prospectus of each fund.
For federal income tax purposes, an exchange is a sale on which
the investor generally will realize a capital gain or loss
depending on whether the net asset value at the time of the
exchange is more or less than the investor's basis. The Exchange
Privilege may be revised or terminated at any time. Shareholders
would be notified of any such change or suspension.
DIVIDENDS PLUS
Shareholders may invest the Fund's distributions of net
investment income or distributions combining net investment
income and short-term capital gains in shares of the same class
of another continuously offered Putnam fund (the "receiving
fund") using the net asset value per share of the receiving fund
determined on the date the Fund's distribution is payable. No
sales charge or CDSC will apply to the purchased shares unless
the Fund is a money market fund. The prospectus of each fund
describes its investment objective(s) and policies, and
shareholders should obtain a prospectus and consider these
objective(s) and policies carefully before investing their
distributions in the receiving fund. Shares of certain Putnam
funds are not available to residents of all states.
The minimum account size requirement for the receiving fund will
not apply if the current value of your account in this Fund is
more than $5,000.
Shareholders of other Putnam funds (except for money market
funds, whose shareholders must pay a sales charge or become
subject to a CDSC) may also use their distributions to purchase
shares of the Fund at net asset value.
For federal tax purposes, distributions from the Fund which are
reinvested in another fund are treated as paid by the Fund to the
shareholder and invested by the shareholder in the receiving fund
and thus, to the extent comprised of taxable income and deemed
paid to a taxable shareholder, are taxable.
The Dividends PLUS program may be revised or terminated at any
time.
PLANS AVAILABLE TO SHAREHOLDERS
The Plans described below are fully voluntary and may be
terminated at any time without the imposition by the Fund or
Putnam Investor Services of any penalty. All Plans provide for
automatic reinvestment of all distributions in additional shares
of the Fund at net asset value. The Fund, Putnam Mutual Funds or
Putnam Investor Services may modify or cease offering these Plans
at any time.
AUTOMATIC CASH WITHDRAWAL PLAN. An investor who owns or buys
shares of the Fund valued at $10,000 or more at the current
public offering price may open a Withdrawal Plan and have a
designated sum of money ($50 or more) paid monthly, quarterly,
semi-annually or annually to the investor or another person.
(Payments from the Fund can be combined with payments from other
Putnam funds into a single check through a Designated Payment
Plan.) Shares are deposited in a Plan account, and all
distributions are reinvested in additional shares of the Fund at
net asset value (except where the Plan is utilized in connection
with a charitable remainder trust). Shares in a Plan account are
then redeemed at net asset value to make each withdrawal payment.
Payment will be made to any person the investor designates;
however, if shares are registered in the name of a trustee or
other fiduciary, payment will be made only to the fiduciary,
except in the case of a profit-sharing or pension plan where
payment will be made to a designee. As withdrawal payments may
include a return of principal, they cannot be considered a
guaranteed annuity or actual yield of income to the investor.
The redemption of shares in connection with a Withdrawal Plan
generally will result in a gain or loss for tax purposes. Some
or all of the losses realized upon redemption may be disallowed
pursuant to the so-called wash sale rules if shares of the same
fund from which shares were redeemed are purchased (including
through the reinvestment of fund distributions) within a period
beginning 30 days before, and ending 30 days after, such
redemption. In such a case, the basis of the replacement shares
will be increased to reflect the disallowed loss. Continued
withdrawals in excess of income will reduce and possibly exhaust
invested principal, especially in the event of a market decline.
The maintenance of a Withdrawal Plan concurrently with purchases
of additional shares of the Fund would be disadvantageous to the
investor because of the sales charge payable on such purchases.
For this reason, the minimum investment accepted while a
Withdrawal Plan is in effect is $1,000, and an investor may not
maintain a Plan for the accumulation of shares of the Fund (other
than through reinvestment of distributions) and a Withdrawal Plan
at the same time. The cost of administering these Plans for the
benefit of those shareholders participating in them is borne by
the Fund as an expense of all shareholders. The Fund, Putnam
Mutual Funds or Putnam Investor Services may terminate or change
the terms of the Withdrawal Plan at any time. A Withdrawal Plan
will be terminated if communications mailed to the shareholder
are returned as undeliverable.
Investors should consider carefully with their own financial
advisers whether the Plan and the specified amounts to be
withdrawn are appropriate in their circumstances. The Fund and
Putnam Investor Services make no recommendations or
representations in this regard.
TAX QUALIFIED RETIREMENT PLANS; 403(B) AND SEP PLANS. (NOT
OFFERED BY FUNDS INVESTING PRIMARILY IN TAX-EXEMPT SECURITIES.)
Investors may purchase shares of the Fund through the following
Tax Qualified Retirement Plans, available to qualified
individuals or organizations:
Standard and variable profit-sharing (including 401(k))
and money purchase pension plans; and
Individual Retirement Account Plans (IRAs).
Each of these Plans has been qualified as a prototype plan by the
Internal Revenue Service. Putnam Investor Services will furnish
services under each plan at a specified annual cost. Putnam
Fiduciary Trust Company serves as trustee under each of these
Plans.
Forms and further information on these Plans are available from
investment dealers or from Putnam Mutual Funds. In addition,
specialized professional plan administration services are
available on an optional basis; contact Putnam Defined
Contribution Plan Services at 1-800-225-2465, extension 8600.
A 403(b) Retirement Plan is available for employees of public
school systems and organizations which meet the requirements of
Section 501(c)(3) of the Internal Revenue Code. Forms and
further information on the 403(b) Plan are also available from
investment dealers or from Putnam Mutual Funds. Shares of the
Fund may also be used in simplified employee pension (SEP) plans.
For further information on the Putnam prototype SEP plan, contact
an investment dealer or Putnam Mutual Funds.
Consultation with a competent financial and tax adviser regarding
these Plans and consideration of the suitability of Fund shares
as an investment under the Employee Retirement Income Security
Act of 1974, or otherwise, is recommended.
SIGNATURE GUARANTEES
Redemption requests for shares having a net asset value of
$100,000 or more must be signed by the registered owners or their
legal representatives and must be guaranteed by a bank,
broker/dealer, municipal securities dealer or broker, government
securities dealer or broker, credit union, national securities
exchange, registered securities association, clearing agency,
savings association or trust company, provided such institution
is acceptable under and conforms with Putnam Fiduciary Trust
Company's signature guarantee procedures. A copy of such
procedures is available upon request. If you want your
redemption proceeds sent to an address other than your address as
it appears on Putnam's records, you must provide a signature
guarantee. Putnam Investor Services usually requires additional
documentation for the sale of shares by a corporation,
partnership, agent or fiduciary, or a surviving joint owner.
Contact Putnam Investor Services for details.
SUSPENSION OF REDEMPTIONS
The Fund may not suspend shareholders' right of redemption, or
postpone payment for more than seven days, unless the New York
Stock Exchange is closed for other than customary weekends or
holidays, or if permitted by the rules of the 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 Commission for protection of
investors.
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of
the Fund. However, the Agreement and Declaration of Trust
disclaims shareholder liability for acts or obligations of the
Fund and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by
the Fund or the Trustees. The Agreement and Declaration of Trust
provides for indemnification out of Fund property for all loss
and expense of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund would be unable to
meet its obligations. The likelihood of such circumstances is
remote.
STANDARD PERFORMANCE MEASURES
Yield and total return data for the Fund may from time to time be
presented in Part I of this Statement and in advertisements. In
the case of funds with more than one class of shares, all
performance information is calculated separately for each class.
The data is calculated as follows.
Total return for one-, five- and ten-year periods (or for such
shorter periods as the Fund has been in operation or shares of
the relevant class have been outstanding) is determined by
calculating the actual dollar amount of investment return on a
$1,000 investment in the Fund made at the beginning of the
period, at the maximum public offering price for Class A shares
and Class M shares and net asset value for other classes of
shares, and then calculating the annual compounded rate of return
which would produce that amount. Total return for a period of
one year is equal to the actual return of the Fund during that
period. Total return calculations assume deduction of the Fund's
maximum sales charge or CDSC, if applicable, and reinvestment of
all Fund distributions at net asset value on their respective
reinvestment dates.
The Fund's yield is presented for a specified thirty-day period
(the "base period"). Yield is based on the amount determined by
(i) calculating the aggregate amount of dividends and interest
earned by the Fund during the base period less expenses accrued
for that period, and (ii) dividing that amount by the product of
(A) the average daily number of shares of the Fund outstanding
during the base period and entitled to receive dividends and (B)
the per share maximum public offering price for Class A shares or
Class M shares, as appropriate and net asset value for other
classes of shares on the last day of the base period. The result
is annualized on a compounding basis to determine the yield. For
this calculation, interest earned on debt obligations held by the
Fund is generally calculated using the yield to maturity (or
first expected call date) of such obligations based on their
market values (or, in the case of receivables-backed securities
such as GNMA's, based on cost). Dividends on equity securities
are accrued daily at their stated dividend rates.
If the Fund is a money market fund, yield is computed by
determining the percentage net change, excluding capital changes,
in the value of an investment in one share over the seven-day
period for which yield is presented (the "base period"), and
multiplying the net change by 365/7 (or approximately 52 weeks).
Effective yield represents a compounding of the yield by adding 1
to the number representing the percentage change in value of the
investment during the base period, raising that sum to a power
equal to 365/7, and subtracting 1 from the result.
If the Fund is a tax-exempt fund, the tax-equivalent yield during
the base period may be presented for shareholders in one or more
stated tax brackets. Tax-equivalent yield is calculated by
adjusting the tax-exempt yield by a factor designed to show the
approximate yield that a taxable investment would have to earn to
produce an after-tax yield equal, for that shareholder, to the
tax-exempt yield. The tax-equivalent yield will differ for
shareholders in other tax brackets.
At times, Putnam Management may reduce its compensation or assume
expenses of the Fund in order to reduce the Fund's expenses. The
per share amount of any such fee reduction or assumption of
expenses during the Fund's past ten fiscal years (or for the life
of the Fund, if shorter) is reflected in the table in the section
entitled "Financial history" in the Prospectus. Any such fee
reduction or assumption of expenses would increase the Fund's
yield and total return during the period of the fee reduction or
assumption of expenses.
All data are based on past performance and do not predict future
results.
COMPARISON OF PORTFOLIO PERFORMANCE
Independent statistical agencies measure the Fund's investment
performance and publish comparative information showing how the
Fund, and other investment companies, performed in specified time
periods. Three agencies whose reports are commonly used for such
comparisons are set forth below. From time to time, the Fund may
distribute these comparisons to its shareholders or to potential
investors. THE AGENCIES LISTED BELOW MEASURE PERFORMANCE BASED
ON THEIR OWN CRITERIA RATHER THAN ON THE STANDARDIZED
PERFORMANCE MEASURES DESCRIBED IN THE PRECEDING SECTION.
LIPPER ANALYTICAL SERVICES, INC. distributes mutual fund
rankings monthly. The rankings are based on total return
performance calculated by Lipper, reflecting generally
changes in net asset value adjusted for reinvestment of
capital gains and income dividends. They do not reflect
deduction of any sales charges. Lipper rankings cover a
variety of performance periods, for example year-to-date,
1-year, 5-year, and 10-year performance. Lipper
classifies mutual funds by investment objective and asset
category.
MORNINGSTAR, INC. distributes mutual fund ratings twice a
month. The ratings are divided into five groups:
highest, above average, neutral, below average and lowest.
They represent a fund's historical risk/reward ratio
relative to other funds with similar objectives. The
performance factor is a weighted-average assessment of the
Fund's 3-year, 5-year, and 10-year total return
performance (if available) reflecting deduction of
expenses and sales charges. Performance is adjusted using
quantitative techniques to reflect the risk profile of the
fund. The ratings are derived from a purely quantitative
system that does not utilize the subjective criteria
customarily employed by rating agencies such as Standard &
Poor's Corporation and Moody's Investor Service, Inc.
CDA/WIESENBERGER'S MANAGEMENT RESULTS publishes mutual
fund rankings and is distributed monthly. The rankings
are based entirely on total return calculated by
Weisenberger for periods such as year-to-date, 1-year,
3-year, 5-year and 10-year. Mutual funds are ranked in
general categories (e.g., international bond,
international equity, municipal bond, and maximum capital
gain). Weisenberger rankings do not reflect deduction of
sales charges or fees.
Independent publications may also evaluate the Fund's
performance. Certain of those publications are listed below, at
the request of Putnam Mutual Funds, which bears full
responsibility for their use and the descriptions appearing
below. From time to time the Fund may distribute evaluations by
or excerpts from these publications to its shareholders or to
potential investors. The following illustrates the types of
information provided by these publications.
BUSINESS WEEK publishes mutual fund rankings in its
Investment Figures of the Week column. The rankings are
based on 4-week and 52-week total return reflecting
changes in net asset value and the reinvestment of all
distributions. They do not reflect deduction of any sales
charges. Funds are not categorized; they compete in a
large universe of over 2000 funds. The source for
rankings is data generated by Morningstar, Inc.
INVESTOR'S BUSINESS DAILY publishes mutual fund rankings
on a daily basis. The rankings are depicted as the top 25
funds in a given category. The categories are based
loosely on the type of fund, e.g., growth funds, balanced
funds, U.S. government funds, GNMA funds, growth and
income funds, corporate bond funds, etc. Performance
periods for sector equity funds can vary from 4 weeks to
39 weeks; performance periods for other fund groups vary
from 1 year to 3 years. Total return performance reflects
changes in net asset value and reinvestment of dividends
and capital gains. The rankings are based strictly on
total return. They do not reflect deduction of any sales
charges. Performance grades are conferred from A+ to E.
An A+ rating means that the fund has performed within the
top 5% of a general universe of over 2000 funds; an A
rating denotes the top 10%; an A- is given to the top 15%,
etc.
BARRON'S periodically publishes mutual fund rankings. The
rankings are based on total return performance provided by
Lipper Analytical Services. The Lipper total return data
reflects changes in net asset value and reinvestment of
distributions, but does not reflect deduction of any sales
charges. The performance periods vary from short-term
intervals (current quarter or year-to-date, for example)
to long-term periods (five-year or ten-year performance,
for example). Barron's classifies the funds using the
Lipper mutual fund categories, such as Capital
Appreciation Funds, Growth Funds, U.S. Government Funds,
Equity Income Funds, Global Funds, etc. Occasionally,
Barron's modifies the Lipper information by ranking the
funds in asset classes. "Large funds" may be those with
assets in excess of $25 million; "small funds" may be
those with less than $25 million in assets.
THE WALL STREET JOURNAL publishes its Mutual Fund
Scorecard on a daily basis. Each Scorecard is a ranking
of the top-15 funds in a given Lipper Analytical Services
category. Lipper provides the rankings based on its total
return data reflecting changes in net asset value and
reinvestment of distributions and not reflecting any sales
charges. The Scorecard portrays 4-week, year-to-date,
one-year and 5-year performance; however, the ranking is
based on the one-year results. The rankings for any given
category appear approximately once per month.
FORTUNE magazine periodically publishes mutual fund
rankings that have been compiled for the magazine by
Morningstar, Inc. Funds are placed in stock or bond fund
categories (for example, aggressive growth stock funds,
growth stock funds, small company stock funds, junk bond
funds, Treasury bond funds, etc.), with the top-10 stock
funds and the top-5 bond funds appearing in the rankings.
The rankings are based on 3-year annualized total return
reflecting changes in net asset value and reinvestment of
distributions and not reflecting sales charges.
Performance is adjusted using quantitative techniques to
reflect the risk profile of the fund.
MONEY magazine periodically publishes mutual fund rankings
on a database of funds tracked for performance by Lipper
Analytical Services. The funds are placed in 23 stock or
bond fund categories and analyzed for five-year risk
adjusted return. Total return reflects changes in net
asset value and reinvestment of all dividends and capital
gains distributions and does not reflect deduction of any
sales charges. Grades are conferred (from A to E): the
top 20% in each category receive an A, the next 20% a B,
etc. To be ranked, a fund must be at least one year old,
accept a minimum investment of $25,000 or less and have
had assets of at least $25 million as of a given date.
FINANCIAL WORLD publishes its monthly Independent
Appraisals of Mutual Funds, a survey of approximately 1000
mutual funds. Funds are categorized as to type, e.g.,
balanced funds, corporate bond funds, global bond funds,
growth and income funds, U.S. government bond funds, etc.
To compete, funds must be over one year old, have over $1
million in assets, require a maximum of $10,000 initial
investment, and should be available in at least 10 states
in the United States. The funds receive a composite past
performance rating, which weighs the intermediate- and
long-term past performance of each fund versus its
category, as well as taking into account its risk, reward
to risk, and fees. An A+ rated fund is one of the best,
while a D-rated fund is one of the worst. The source for
Financial World rating is Schabacker investment management
in Rockville, MD.
FORBES magazine periodically publishes mutual fund ratings
based on performance over at least two bull and bear
market cycles. The funds are categorized by type,
including stock and balanced funds, taxable bond funds,
municipal bond funds, etc. Data sources include Lipper
Analytical Services and CDA Investment Technologies. The
ratings are based strictly on performance at net asset
value over the given cycles. Funds performing in the top
5% receive an A+ rating; the top 15% receive an A rating;
and so on until the bottom 5% receive an F rating. Each
fund exhibits two ratings, one for performance in "up"
markets and another for performance in "down" markets.
KIPLINGER'S PERSONAL FINANCE MAGAZINE (formerly Changing
Times), periodically publishes rankings of mutual funds
based on one-, three- and five-year total return
performance reflecting changes in net asset value and
reinvestment of dividends and capital gains and not
reflecting deduction of any sales charges. Funds are
ranked by tenths: a rank of 1 means that a fund was among
the highest 10% in total return for the period; a rank of
10 denotes the bottom 10%. Funds compete in categories of
similar funds--aggressive growth funds, growth and income
funds, sector funds, corporate bond funds, global
governmental bond funds, mortgage-backed securities funds,
etc. Kiplinger's also provides a risk-adjusted grade in
both rising and falling markets. Funds are graded against
others with the same objective. The average weekly total
return over two years is calculated. Performance is
adjusted using quantitative techniques to reflect the risk
profile of the fund.
U.S. NEWS AND WORLD REPORT periodically publishes mutual
fund rankings based on an overall performance index (OPI)
devised by Kanon Bloch Carre & Co., a Boston research
firm. Over 2000 funds are tracked and divided into 10
equity, taxable bond and tax-free bond categories. Funds
compete within the 10 groups and three broad categories.
The OPI is a number from 0-100 that measures the relative
performance of funds at least three years old over the
last 1, 3, 5 and 10 years and the last six bear markets.
Total return reflects changes in net asset value and the
reinvestment of any dividends and capital gains
distributions and does not reflect deduction of any sales
charges. Results for the longer periods receive the most
weight.
THE 100 BEST MUTUAL FUNDS YOU CAN BUY (1992), authored by
Gordon K. Williamson. The author's list of funds is
divided into 12 equity and bond fund categories, and the
100 funds are determined by applying four criteria.
First, equity funds whose current management teams have
been in place for less than five years are eliminated.
(The standard for bond funds is three years.) Second, the
author excludes any fund that ranks in the bottom 20
percent of its category's risk level. Risk is determined
by analyzing how many months over the past three years the
fund has underperformed a bank CD or a U.S. Treasury bill.
Third, a fund must have demonstrated strong results for
current three-year and five-year performance. Fourth, the
fund must either possess, in Mr. Williamson's judgment,
"excellent" risk-adjusted return or "superior" return with
low levels of risk. Each of the 100 funds is ranked in
five categories: total return, risk/volatility,
management, current income and expenses. The rankings
follow a five-point system: zero designates "poor"; one
point means "fair"; two points denote "good"; three points
qualify as a "very good"; four points rank as "superior";
and five points mean "excellent."
In addition, Putnam Mutual Funds may distribute to shareholders
or prospective investors illustrations of the benefits of
reinvesting tax-exempt or tax-deferred distributions over
specified time periods, which may include comparisons to fully
taxable distributions. These illustrations use hypothetical
rates of tax-advantaged and taxable returns and are not intended
to indicate the past or future performance of any fund.
<PAGE>
DEFINITIONS
"Putnam Management" -- Putnam Investment Management,
Inc., the Fund's investment
manager.
"Putnam Mutual Funds" -- Putnam Mutual Funds Corp., the
Fund's principal underwriter.
"Putnam Fiduciary Trust -- Putnam Fiduciary Trust Company,
Company" the Fund's custodian.
"Putnam Investor Services" -- Putnam Investor Services, a
division of Putnam Fiduciary
Trust Company, the Fund's
investor servicing agent.
<PAGE>
PUTNAM ARIZONA TAX EXEMPT INCOME FUND ("ARIZONA")
PUTNAM FLORIDA TAX EXEMPT INCOME FUND ("FLORIDA")
PUTNAM MASSACHUSETTS TAX EXEMPT INCOME FUND
("MASSACHSUETTS")
PUTNAM MICHIGAN TAX EXEMPT INCOME FUND ("MICHIGAN")
PUTNAM MINNESOTA TAX EXEMPT INCOME FUND ("MINNESOTA")
PUTNAM NEW JERSEY TAX EXEMPT INCOME FUND ("NEW JERSEY")
PUTNAM OHIO TAX EXEMPT INCOME FUND ("OHIO")
PUTNAM PENNSYLVANIA TAX EXEMPT INCOME FUND ("PENNSYLVANIA")
(collectively, the "funds")
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Index to Financial Statements and Supporting
Schedule:
(1) Financial Statements for the funds:
Statement of assets and liabilities -- May
31, 1995 (a).
Statement of operations -- year ended May
31, 1995 (a).
Statement of changes in net assets -- years
ended May 31, 1995 and May 31,
1994 for Massachusetts, Michigan, Minnesota
and Ohio (a).
Statement of changes in net assets --
period ended May 31, 1995 and year ended June
30, 1994 for Florida and New Jersey (a).
Statement of changes in net assets --
period ended May 31, 1995 and year ended
August 31, 1994 for Arizona (a).
Statement of changes in net assets --
period ended May 31, 1995 and year ended
February 28, 1995 for Pennsylvania (a).
Financial highlights (a)(b).
Notes to financial statements (a).
(2) Supporting Schedules for the Funds:
Schedule I -- Portfolio of investments owned
-- May 31, 1995 (a) .
Schedules through IX omitted
because the required matter is not present.
(a) Incorporated by reference into Parts A
and B.
(b) Included in Part A.
-----------------------
<PAGE>
(b) Exhibits:
1. Agreement and Declaration of Trust for
Arizona --Incorporated by reference to
the Registrant's Initial
Registration Statement.
Agreement and Declaration of Trust,
dated June 27, 1990 for Florida --
Incorporated by reference to the
Registrant's Initial Registration
Statement.
Agreement and Declaration of Trust, as
amended September 15, 1995 for
Massachusetts -- Exhibit 1.
Agreements and Declarations of
Trust, as amended September 15, 1995 for
Michigan, Minnesota and Ohio -- Exhibit 2.
Agreement and Declaration of Trust for New
Jersey --Incorporated by reference to
the Registrant's Initial Registration
Statement.
Agreement and Declaration of Trust dated
April 1, 1989 for Pennsylvania --
Incorporated by reference to the Registrant's
Initial Registration Statement.
By-Laws as amended through February 1, 1994
for Arizona -- Incorporated by reference
to Post-Effective Amendment No. 5 to
the Registrant's Registration Statement.
By-Laws as amended through February 1, 1994
for Florida -- Incorporated by reference to
Post-Effective Amendment No. 5 to the
Registrant's Registration Statement.
By-Laws as amended through February 1, 1994
for New Jersey -- Incorporated by reference
to Post-Effective Amendment No. 5 to the
Registrant's Registration Statement.
By-Laws as amended through February 1, 1994
for Pennsylvania -- Incorporated by reference
to Post-Effective Amendment No. 6 to the
Registrant's Registration Statement.
2. By-Laws as amended through February 1, 1994
for Massachusetts ,
Michigan , Minnesota and Ohio
-- Incorporated by reference to Post-
Effective Amendment No. 14 to the
Registrants' Registration Statement.
3. Not applicable.
4a. Class A Specimen share certificate
for Arizona -- Incorporated by
reference to Post-Effective Amendment No.
4 to the Registrant's Registration
Statement.
Class A Specimen share certificate
for Florida -- Incorporated by
reference to Post-Effective Amendment No.
3 to the Registrant's Registration
Statement.<PAGE>
Class A Specimen share certificate
for New Jersey --
Incorporated by reference to Post-Effective
Amendment No. 3 to the
Registrant's Registration Statement.
Class A Specimen share certificate
for Pennsylvania -- Incorporated by
reference to Post-Effective Amendment No.
6 to the Registrant's Registration
Statement.
Class A Specimen share certificates for
Massachusetts, Michigan, Minnesota and Ohio -
- Incorporated by reference to Post-Effective
Amendment No. 13 to the Registrants'
Registration Statement.
4b. Class B Specimen share certificate
for Arizona --Incorporated by reference
to Post- Effective Amendment No. 4 to the
Registrant's Registration Statement.
Class B Specimen share certificate for
Florida --Incorporated by reference to Post-
Effective Amendment No. 3 to the
Registrant's Registration Statement.
Class B Specimen share certificate for New
Jersey --Incorporated by reference to Post-
Effective Amendment No. 3 to the
Registrant's Registration Statement.
Class B Specimen share certificate for
Pennsylvania --Incorporated by reference to
Post-Effective Amendment No. 6 to the
Registrant's Registration Statement.
4c. Class B Specimen share certificates for
Massachusetts , Michigan, Minnesota and
Ohio --Incorporated by reference to Post-
Effective Amendment No. 13 to the
Registrants' Registration Statement.
4d. Class M Specimen share certificates for
Florida, Massachusetts, Michigan ,
Minnesota, New Jersey, and Ohio funds --
Exhibit 3.
4e . Portions of Agreement and Declaration
of Trust relating to shareholder rights for
Arizona -- Incorporated by reference
to Post-
Effective Amendment No. 4 to the
Registrant's Registration Statement.
Portions of Agreement and Declaration of
Trust relating to shareholder rights for
Florida -- Incorporated by reference to
Post- Effective Amendment No. 4 to
the Registrant's Registration Statement.
Portions of Agreement and Declaration of
Trust relating to shareholder rights for
New Jersey -- Incorporated by reference
to Post-Effective Amendment No. 4 to
the Registrant's
Registration Statement.
Portions of Agreement and Declaration of
Trust relating to shareholder rights for
Pennsylvania -- Incorporated by reference
to Post-Effective Amendment No. 6 to
the Registrant's
Registration Statement.
Portions of Agreements and
Declarations of Trust relating to
shareholder rights for
Massachusetts ,
Michigan , Minnesota and
Ohio -- Incorporated by
reference to Post- Effective Amendment No.
13 to the Registrants'
Registration Statement.
4f. Portions of Bylaws relating to
shareholder rights for Arizona --
Incorporated by reference to Post-Effective
Amendment No. 5 to the
Registrant's Registration Statement.
Portions of Bylaws relating to
shareholder rights for Florida --
Incorporated by reference to Post-Effective
Amendment No. 5 to the Registrant's
Registration Statement.
Portions of Bylaws relating to
shareholder rights for New Jersey --
Incorporated by reference to Post-Effective
Amendment No. 5 to the Registrant's
Registration Statement.
Portions of Bylaws relating to
shareholder rights for Pennsylvania --
Incorporated by reference to Post-Effective
Amendment No. 6 to the Registrant's
Registration Statement.
Portions of Bylaws relating to
shareholder rights for Massachusetts
, Michigan , Minnesota
and Ohio -- Incorporated by reference to
Post-Effective Amendment No. 14 to the
Registrants' Registration Statement.
5. Management Contract for Arizona dated March
5, 1992 -- Incorporated by reference to Post-
Effective Amendment No. 3 to the
Registrant's Registration Statement.
Management Contract for Florida dated
December 5, 1991 -- Incorporated by reference
to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement.
Management Contract for New Jersey dated
June 6, 1991 -- Incorporated by reference to
Post-Effective Amendment No. 2 to the
Registrant's Registration Statement.
Management Contract for Pennsylvania dated
June 6, 1991 -- Incorporated by reference to
Post-Effective Amendment No. 2 to the
Registrants' Registration Statement.
Management Contracts dated July 11, 1991
with respect to Massachusetts, Michigan,
Minnesota and Ohio -- Incorporated by
reference to Post-Effective Amendment No. 10
to the Registrants' Registration Statement.
6a. Distributor's Contract for dated May 6, 1994
for Arizona -- Incorporated by reference to
Post-Effective Amendment No. 5 to the
Registrant's Registration Statement.
Distributor's Contract for dated May 6, 1994
for Florida -- Incorporated by reference to
Post-Effective Amendment No. 5 to the
Registrant's Registration Statement.
Distributor's Contract for dated May
6, 1994 for New Jersey -- Incorporated by
reference to Post-Effective Amendment No. 5
to the Registrant's Registration Statement.
Distributor's Contract for dated May 6, 1994
for Pennsylvania -- Incorporated by reference
to Post-Effective Amendment No. 7 to the
Registrant's Registration Statement.
Distributor's Contracts for dated May 6, 1994
for Massachusetts, Michigan, Minnesota and
Ohio -- Incorporated by reference to Post-
Effective Amendment No. 14 to the
Registrants' Registration Statement.
6b. Form of Specimen Dealer Sales Contract for
Arizona -- Incorporated by reference to
Post-Effective Amendment No. 4 to the
Registrant's Registration Statement.
Form of Specimen Dealer Sales Contract for
Florida -- Incorporated by reference to Post-
Effective Amendment No. 2 to the Registrant's
Registration Statement.
Form of Specimen Dealer Sales Contract for
New Jersey -- Incorporated by reference to
Post-Effective Amendment No. 2 to the
Registrant's Registration Statement.
Form of Specimen Dealer Sales Contract for
Pennsylvania -- Incorporated by reference to
Post-Effective Amendment No. 6 to the
Registrant's Registration Statement.
Form of Specimen Dealer Sales Contract for
Massachusetts, Michigan, Minnesota and Ohio
-- Incorporated by reference to Post-
Effective Amendment No. 13 to the
Registrants' Registration Statement.
6c. Form of Specimen Financial Institution Sales
Contract for Arizona -- Incorporated by
reference to Post-Effective Amendment No. 4
to the Registrant's Registration Statement.
Form of Specimen Financial Institution Sales
Contract for Florida -- Incorporated by
reference to Post-Effective Amendment No. 2
to the Registrant's Registration Statement.
Form of Specimen Financial Institution Sales
Contract for New Jersey -- Incorporated by
reference to Post-Effective Amendment No. 2
to the Registrant's Registration Statement.
Form of Specimen Financial Institution Sales
Contract for Pennsylvania -- Incorporated by
reference to Post-Effective Amendment No. 6
to the Registrant's Registration Statement.
Form of Specimen Financial Institution Sales
Contract for Massachusetts, Michigan,
Minnesota and Ohio -- Incorporated by
reference to Post-Effective Amendment No. 13
to the Registrants' Registration
Statement.
7. Not applicable.
8. Custodian Agreement dated May 3,
1991 as amended July 13, 1992 for
Arizona --Incorporated by reference to Post-
Effective Amendment No. 4 to the Registrant's
Registration Statement.
Custodian Agreement dated May 3, 1991,
as amended July 13, 1992 for Florida --
Incorporated by reference to Post-Effective
Amendment No. 2 to the Registrant's
Registration Statement.
Custodian Agreement dated May 3, 1991 as
amended July 13, 1992 for New Jersey --
Incorporated by reference to Post-Effective
Amendment No. 4 to the Registrant's
Registration Statement.
Custodian Agreement dated May 3, 1991 as
amended July 13, 1992 for Penssylvania --
Incorporated by reference to Post-Effective
Amendment No. 6 to the Registrant's
Registration Statement.
Custodian Agreement dated May 3, 1991 as
amended July 13, 1992 for Massachusetts,
Michigan, Minnesota and Ohio --Incorporated
by reference to Post-Effective Amendment No.
14 to the Registrants' Registration
Statement.
9. Investor Servicing Agreement dated June
3, 1991 for Arizona -- Incorporated
by reference to Post-Effective Amendment
No. 1 to the Registrant's Registration
Statement.
Investor Servicing Agreement dated June 3,
1991 for Florida -- Incorporated by reference
to Post-Effective Amendment No. 2 to the
Registrant's Registration Statement.
Investor Servicing Agreement dated June 3,
1991 for New Jersey -- Incorporated by
reference to Post-Effective Amendment No. 2
to the Registrant's Registration Statement.
Investor Servicing Agreement dated June 3,
1991 for Pennsylvania -- Incorporated by
reference to Post-Effective Amendment No. 4
to the Registrant's Registration Statement.
Investor Servicing Agreement dated June 3,
1991 for Massachusetts ,
Michigan , Minnesota and
Ohio -- Incorporated by
reference to Post-Effective Amendment No. 10
to the Registrants' Registration Statement.
10. Opinion of Ropes & Gray, including consent
for Arizona -- Exhibit 4.
Opinion of Ropes & Gray, including consent
for Florida -- Exhibit 5.
Opinion of Ropes & Gray, including consent
for New Jersey -- Exhibit 6.
Opinion of Ropes & Gray, including consent
for Pennsylvania -- Incorporated by
reference to Pre -Effective
Amendment No. 1 to the Registrants'
Registration Statement.
Opinions of Ropes & Gray, including consents
for Massachusetts and Ohio -- Incorporated
by reference to Post-Effective Amendment
10 to the Registrants' Registration
Statement.
Opinions of Ropes & Gray, including consents
for Michigan and Minnesota -- Incorporated by
reference to the Registrants' Initial
Registration Statement.
11. Not applicable.
12. Not applicable.
13. Investment Letters from Putnam
Investments, Inc. dated March 31,
1995 to Massachusetts ,
Michigan, Minnesota and Ohio for Class
M shares -- Exhibit 7.
Investment Letters from Putnam
Investments, Inc. dated April 30, 1995
to Florida and New Jersey for Class
M shares -- Exhibit 8.
14. Not applicable.
15a. Class A Distribution Plan and
Agreement dated March 5 , 1992, as
amended July 15, 1993 for
Arizona -- Incorporated by
reference to Post-Effective
Amendment No. 4 to the Registrant's
Registration Statement.
Class A Distribution Plan and Agreement
dated July 8, 1993 for Florida --
Incorporated by reference to Post-Effective
Amendment No. 4 to the Registrant's
Registration Statement.
Class A Distribution Plan and Agreement
dated July 9, 1993, as amended July 15, 1993
for Massachusetts --
Incorporated by reference to Post-Effective
Amendment No. 13 to the Registrant's
Registration Statement.
Class A Distribution Plans
dated May 7, 1992, as amended July 15, 1993
for Michigan , Minnesota and
Ohio -- Incorporated by reference to
Post-Effective Amendment No. 13 to the
Registrants' Registration Statement.
Class A Distribution Plan and
Agreement dated September 10
, 1992, as amended January 1,
1993 for New Jersey -- Incorporated by
reference to Post-Effective Amendment No. 4
to the Registrant's Registration Statement.
Class A Distribution Plan and Agreement
dated July 8, 1993 for Pennsylvania --
Incorporated by reference to Post-Effective
Amendment No. 6 to the Registrant's
Registration Statement.
15b. Class B Distribution Plan and Agreement
dated July 15, 1993 for Arizona --
Incorporated by reference to Post-Effective
Amendment No. 4 to the Registrant's
Registration Statement.
Class B Distribution Plan dated July 8, 1993
for Florida -- Incorporated by reference to
Post-Effective Amendment No. 3 to the
Registrant's Registration Statement.
Class B Distribution Plan dated Janaury 1,
1993 for New Jersey -- Incorporated by
reference to Post-Effective Amendment No. 4
to the Registrant's Registration Statement.
Class B Distribution Plan and Agreement
dated July 15, 1993 for Pennsylvania --
Incorporated by reference to Post-Effective
Amendment No. 6 to the Registrant's
Registration Statement.
Class B Distribution Plans and Agreements
dated July 14, 1993 for Massachusetts,
Michigan Minnesota and Ohio -- Incorporated
by reference to Post-Effective Amendment No.
13 to the Registrants' Registration
Statement.
15c. Class M Distribution Plan dated April 28,
1995 for Florida -- Exhibit 9.
Class M Distribution Plan and Agreement dated
April 28, 1995 for New Jersey -- Exhibit 10.
Class M Distribution Plan and Agreement
dated March 31, 1995 for Massachusetts --
Exhibit 11.
Class M Distribution Plan and Agreement
dated March 31, 1995 for Michigan -- Exhibit
12.
Class M Distribution Plan and Agreement dated
March 31, 1995 for Minnesota -- Exhibit 13.
Class M Distribution Plan and Agreement
dated March 31, 1995 for Ohio -- Exhibit 14.
15d. Form of Specimen Dealer Service Agreement
for Arizona -- Incorporated by reference to Post-
Effective Amendment No. 5 to the Registrant's
Registration Statement.
Form of Specimen Dealer Service Agreement for
Florida -- Incorporated by reference to
Post-Effective Amendment No. 3 to the
Registrant's Registration Statement. <PAGE>
Form of Specimen Dealer Service Agreement for
New Jersey -- Incorporated by reference to
Post-Effective Amendment No. 3 to the
Registrant's Registration Statement.
Form of Specimen Dealer Service Agreement for
Pennsylvania -- Incorporated by reference to
Post-Effective Amendment No. 7 to the
Registrant's Registration Statement.
Form of Specimen Dealer Service Agreement for
Massachusetts, Michigan, Minnesota and Ohio
-- Incorporated by reference to Post-
Effective Amendment No. 13 to the
Registrants' Registration Statement.
15e.Form of Specimen Financial Institution
Service Agreement for Arizona --Incorporated by
reference to Post-Effective Amendment No. 5 to the
Registrant's Registration Statement.
Form of Specimen Financial Institution
Service Agreement for Florida -- Incorporated
by reference to Post-Effective Amendment No.
3 to the Registrant's Registration Statement.
Form of Specimen Financial Institution
Service Agreement for New Jersey --
Incorporated by reference to Post-Effective
Amendment No. 3 to the Registrant's
Registration Statement.
Form of Specimen Financial Institution
Service Agreement for Pennsylvania --
Incorporated by reference to Post-Effective
Amendment No. 7 to the Registrant's
Registration Statement.
Form of Specimen Financial Institution
Service Agreement for Massachusetts,
Michigan, Minnesota and Ohio --
Incorporated by reference to Post-Effective
Amendment No. 13 to the Registrant's
Registration Statement.
16. Schedules for computation of
performance quotations for Arizona --
Exhibit 15 .
Schedules for computation of performance
quotations for Florida -- Exhibit
16 .
Schedules for computation of performance
quotations for Massachusetts --
Exhibit 17 .
Schedules for computation of performance
quotations for Michigan -- Exhibit
18.
Schedules for computation of performance
quotations for Minnesota -- Exhibit 19.
Schedules for computation of performance
quotations for New Jersey -- Exhibit 20.
Schedules for computation of performance
quotations for Ohio -- Exhibit 21.
Schedules for computation of performance
quotations for Pennsylvania -- Exhibit 22.<PAGE>
17a. Financial Data Schedules for Class A shares
for Arizona -- Exhibit 23 .
Financial Data Schedules for Class A shares
for Florida -- Exhibit 24 .
Financial Data Schedules for Class A shares
for Massachusetts -- Exhibit
25 .
Financial Data Schedules for Class A shares
for Michigan --Exhibit 26
.
Financial Data Schedules for Class
A shares for Minnesota --
Exhibit 27 .
Financial Data Schedules for Class
A shares for New Jersey -- Exhibit
28 .
Financial Data Schedules for Class
A shares for Ohio -- Exhibit
29 .
Financial Data Schedules for Class
A shares for Pennsylvania --
Exhibit 30.
17b. Financial Data Schedules for Class B shares
for Arizona -- Exhibit 31.
Financial Data Schedules for Class B shares
for Florida -- Exhibit 32.
Financial Data Schedules for Class B shares
for Massachusetts -- Exhibit 33.
Financial Data Schedules for Class B shares
for Michigan --Exhibit 34.
Financial Data Schedules for Class B shares
for Minnesota -- Exhibit 35.
Financial Data Schedules for Class B shares
for New Jersey -- Exhibit 36.
Financial Data Schedules for Class B shares
for Ohio -- Exhibit 37.
Financial Data Schedules for Class B shares
for Pennslyvania --Exhibit 38.
17c. Financial Data Schedules for Class M shares
for Florida -- Exhibit 39.
Financial Data Schedules for Class M shares
for Massachusetts -- Exhibit 40.
Financial Data Schedules for Class M shares
for Michigan -- Exhibit 41.
Financial Data Schedules for Class M shares
for Minnesota --Exhibit 42.
17e. Financial Data Schedules for Class M shares
for New Jersey -- Exhibit 43.
Financial Data Schedules for Class M shares
for Ohio -- Exhibit 44.
18. Rule 18f-3 Plan -- Exhibit 45 .
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANTS
None.
<PAGE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of August 31, 1995 the number of
shareholders of each Registrant's shares of beneficial
interest were as follows:
FUND NAME CLASS A CLASS
B CLASS M
Arizona 3,236 615 2
Florida 5,126 1,178 1
Massachusetts 6,535 1,588
8
Michigan 4,344 850
5 Minnesota 3,743
1,185 2
New Jersey 6,715 1,921
5
Ohio 6,197 1,206
4
Pennsylvania 5,313 1,964
6
ITEM 27. INDEMNIFICATION
The information required by this item is incorporated by
reference to each Registrant's initial Registration
Statement on Form N-1A under the Investment Company Act of 1940
File No. 811-4531, 811-6129, 811-4518, 811-4529, 811-4527
, 811-5977, 811-4528 and 811-5802 for the
Arizona, Florida, Massachusetts, Michigan, Minnesota ,
New Jersey, Ohio and Pennslyvania Funds, respectively.
<PAGE>
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Except as set forth below, the directors and officers
of the Registrant's investment adviser have been engaged during
the past two fiscal years in no business, vocation or employment
of a substantial nature other than as directors or officers of
the investment adviser or certain of its corporate affiliates.
Certain officers of the investment adviser serve as officers of
some or all of the Putnam funds. The address of the investment
adviser, its corporate affiliates and the Putnam Funds is One
Post Office Square, Boston, Massachusetts 02109.
NAME NON-PUTNAM BUSINESS AND OTHER
CONNECTIONS
Gail S. Attridge Prior to November, 1993, International
Vice President Analyst, Keystone Custodian Funds,
200 Berkeley Street, Boston, MA
02116
James D. Babcock Prior to June, 1994, Interest
Assistant Vice President Supervisor, Salomon Brothers, Inc.
7 World Trade Center, New York, NY
10048
Robert K. Baumbach Prior to August, 1994, Vice President
Vice President and Analyst, Keystone Custodian
Funds, 200 Berkeley St., Boston, MA
02110
Janet S. Becker Prior to July, 1995, National Account
Assistant Vice President Manager for Booz-Allen & Hamilton,
American Express Travel Management
Services, 100 Cambridge Park Drive,
02140; Prior to August, 1994,
Account Manager, Hilton at Dedham
Place, Dedham, MA 02026
Sharon A. Berka Prior to January, 1994, Vice
Vice President President - Compensation Manager,
BayBanks, Inc., 175 Federal Street,
Boston, MA 02110
Matthew G. Bevin Prior to February, 1995, Consultant,
Assistant Vice President SEI Corporation, 680 East Swedesford
Road, Wayne, PA 19807
Thomas Bogan Prior to November, 1994, Analyst
Senior Vice President Lord, Abbett & Co., 767 Fifth
Avenue, New York, NY 10153
Michael F. Bouscaren Prior to May, 1994, President and
Senior Vice President Chairman of the Board of Directors
at Salomon Series Funds, Inc. and a
Director of Salomon Brothers Asset
Management, 7 World Trade Center,
New York, NY 10048
Brett Browchuk Prior to April, 1994, Managing
Managing Director Director, Fidelity Investments, 82
Devonshire St., Boston, MA 02109
Andrea Burke Prior to August, 1994, Vice President
Vice President and Portfolio Manager, Back Bay
Advisors, 399 Boylston St., Boston,
MA 02116
Susan Chapman Prior to June, 1995, Vice President,
Senior Vice President Forbes, Walsh, Kelly & Company,
Inc., 17 Battery Place, New York, NY
10004
Steven Cheshire Prior to January, 1994, Assistant
Vice President Vice President, Wellington
Management, 75 State Street, Boston,
MA 02109
Louis F. Chrostowski Prior to August, 1995, Manager of
Vice President Compensation and Benefits, Itek
Optical Systems, 10 MacGuire Rd.,
Lexington, MA 02173
Judith S. Deming Prior to May, 1995, Asset Manager,
Assistant Vice President Fidelity Management & Research
Company, 82 Devonshire St., Boston,
MA 02109
John A. DeTore Prior to January, 1994, Director of
Managing Director Quantitative Portfolio Management,
Wellington Management, 75 State
Street, Boston, MA 02109
Theodore J. Deutz Prior to January, 1995, Senior Vice
Vice President President, Metropolitan West
Securities, Inc. 10880 Wilshire
Blvd., Suite 200, Los Angeles, CA
90024
Michael G. Dolan Prior to February, 1994, Senior
Assistant Vice President Financial Analyst, General Electric
Company, 1000 Western Ave., Lynn, MA
01905
Joseph J. Eagleeye Prior to August, 1994, Associate,
Assistant Vice President David Taussig & Associates, 424
University Ave., Sacramento, CA
95813
Michael T. Fitzgerald Prior to September, 1994, Senior
Senior Vice President Vice President, Vantage Global
Advisers, 1201 Morningside Dr.,
Manhattan Beach, CA 90266
Roland Gillis Prior to March, 1995, Vice President
Senior Vice President and Senior Portfolio Manager,
Keystone Group, Inc., 200 Berkeley
St., Boston, MA 02116
Mark D. Goodwin Prior to May, 1994, Manager, Audit &
Assistant Vice President Operations Analysis, Mitre
Corporation, 202 Burlington Rd.,
Bedford, MA 01730
Stephen A. Gorman Prior to July, 1994, Financial
Assistant Vice President Analyst, Boston Harbor Trust
Company, 100 Federal St., Boston, MA
02110
Jill Grossberg Prior to March, 1995, Associate
Assistant Vice President Counsel, 440 Financial Group of
and Associate Counsel Worcester, Inc., 440 Lincoln St.,
Worcester, MA 01653; Prior to
November, 1993, Counsel, Berman
DeValerio & Pease, One Liberty
Square, Boston, MA 02109
Deborah R. Healey Prior to June, 1994, Senior Equity
Senior Vice President Trader, Fidelity Management &
Research Company, 82 Devonshire St.,
Boston, MA 02109
Lisa A. Heitman Prior to July, 1994, Securities
Senior Vice President Analyst, Lord, Abbett & Company, 767
Fifth Ave., New York, NY 10153
Pamela Holding Prior to May, 1995, Senior Securities
Vice President Analyst, Kemper Financial Services,
Inc., 120 South LaSalle St.,
Chicago, IL 60603
Michael F. Hotchkiss Prior to May, 1994, Vice President,
Vice President Massachusetts Financial Services,
500 Boylston St., Boston, MA 02116
<PAGE>
Walter Hunnewell, Jr. Prior to April, 1994, Managing
Vice President Director, Veronis, Suhler &
Associates, 350 Park Avenue, New
York, NY 10022
Joseph Joseph Prior to October, 1994, Managing
Vice President Director, Vert Independent Capital
Research, 53 Wall St., New York, NY
10052
Mary E. Kearney Prior to February, 1995, Partner,
Managing Director Price Waterhouse, 160 Federal St.,
Boston, MA 02110
D. William Kohli Prior to September, 1994, Executive
Managing Director Vice President and Co-Director of
Global Bond Management, Franklin
Advisors/Templeton Investment
Counsel, 777 Mariners Island Blvd.,
San Mateo, CA 94404
Karen R. Korn Prior to June, 1994, Vice President,
Vice President Assistant to the President, Designs,
Inc. 1244 Boylston St., Chestnut
Hill, MA 02167
Peter B. Krug Prior to January, 1995, Owner and
Vice President Director, Griswold Special Care, 42
Ethan Allen Drive, Acton, MA 01720
Catherine A. Latham Prior to August, 1995, Director of
Vice President Human Resources, Electronic Data
Systems, 1601 Trapello Rd., Waltham,
MA 02154
Kevin Lemire Prior to March, 1995, Corporate
Assistant Vice President Facilities Manager, Bose
Corporation, The Mountain,
Framingham, MA 01701; Prior to June,
1994, Facilities Manager, The
Pioneer Group, 60 State St., Boston,
MA 02109
Lawrence J. Lasser Director, Marsh & McLennan Companies,
President, Director Inc., 1221 Avenue of the Americas,
and Chief Executive New York, NY 10020; Director,
Officer INROADS/Central New England, Inc.,
99 Bedford St., Boston,MA 02111
Jeffrey R. Lindsey Prior to April, 1994, Vice President
Vice President and Board Member, Strategic
Portfolio Management, 900 Ashwood
Parkway, Suite 290, Atlanta, GA
30338
James W. Lukens Prior to February, 1995, Vice
Senior Vice President President of Institutional
Marketing, Keystone Group, Inc., 200
Berkeley St., Boston, MA 02116
Michael Martino Prior to January, 1994, Executive
Managing Director Vice President and Chief Investment
Officer until 1992
Helen Mazareas Prior to May, 1995, Librarian,
Assistant Vice President Scudder, Stevens & Clark, 2
International Place, Boston, MA
02110; Prior to January, 1994,
Systems Librarian, Goodwin, Procter
& Hoar, Exchange Place, Boston, MA
02109
Alexander J. McAuley Prior to June, 1995, Vice President,
Senior Vice President Deutsche Bank Securities Corp. -
Deutsche Asset Management, 1290
Avenue of the Americas, New York, NY
10019
Susan A. McCormack Prior to May, 1994, Associate
Vice President Investment Banker, Merrill Lynch &
Co., 350 South Grand Ave., Suite
2830, Los Angeles, CA 90071
Carol McMullen Prior to June, 1995, Senior Vice,
Managing Director President and Senior Portfolio
Manager, Baring Asset Management,
125 High Street, Boston, MA 02110
Darryl Mikami Prior to June, 1995, Vice President,
Senior Vice President Fidelity Management & Research
Company, 82 Devonshire St., Boston,
MA 02109
Carol H. Miller Prior to July, 1995, Business
Assistant Vice President Development Officer, Bank of Boston
- Connecticut, 100 Pearl St.,
Hartford, CT 06101
Seung H. Minn Prior to June, 1995, Vice President
Vice President in Portfolio Management and
Research, Templeton Quantitative
Advisors, Inc.,
Maziar Minovi Prior to January, 1995, Associate
Vice President Privatization Specialist, The
International Bank for
Reconstruction and Development, 1818
H St. N.W., Washington, DC 20433
Kenneth Mongtomery Prior to July, 1995, Senior Vice
Managing Director President and Director of World Wide
Sales, Chemcial Banking Corporation,
Paul G. Murphy Prior to January, 1995, Section
Assistant Vice President Manager, First Data Corp., 53 State
Street, Boston, MA 02109
C. Patrick O'Donnell, Jr. Prior to May, 1994, President,
Managing Director Exeter Research, Inc., 163 Water
Street, Exeter, New Hampshire, 03833
Brian O'Keefe Prior to December, 1993, Vice
Vice President President - Foreign Exchange Trader,
Bank of Boston, 100 Federal Street,
Boston, MA 02109
Margaret Pietropaolo Prior to January, 1994, Data Base/
Assistant Vice President Production Analyst, Wellington
Management, 75 State Street, Boston,
MA 02109
Jane E. Price Prior to February, 1995, Associate
Assistant Vice President ERISA Attorney, Hale & Dorr,
60 State St., Boston, MA 02109
Keith Quinton Prior to July, 1995, Vice President,
Senior Vice President Falconwood Securities Corporation.,
Paul T. Quistberg Prior to July, 1995, Assistant
Assistant Vice President Investment Officer, The Travelers
Insurance Group.,
George Putnam Chairman and Director, Putnam Mutual
Chairman and Director Funds Corp.; Director, The Boston
Company, Inc., One Boston Place,
Boston, MA 02108; Director, Boston
Safe Deposit and Trust Company, One
Boston Place, Boston, MA 02108;
Director, Freeport-McMoRan, Inc.,
200 Park Avenue, New York, NY 10166;
Director, General Mills, Inc., 9200
Wayzata Boulevard, Minneapolis, MN
55440; Director, Houghton Mifflin
Company, One Beacon Street, Boston,
MA 02108; Director, Marsh & McLennan
Companies, Inc., 1221 Avenue of the
Americas, New York, NY 10020;
Director, Rockefeller Group, Inc.,
1230 Avenue of the Americas, New
York, NY 10020
Thomas Rosalanko Prior to February, 1995, Senior
Senior Vice President Account Manager, SEI Corporation,
680 East Swedesford Road, Wayne, PA
19807
Michael Scanlon Prior to February, 1995, Senior
Assistant Vice President Financial Analyst, Massachusetts
Financial Services, 500 Boylston
St., Boston, MA 02116
Robert M. Shafto Prior to January, 1995, Account
Assistant Vice President Manager, IBM Corporation, 404 Wyman
St., Waltham, MA 02254
Karen F. Smith Prior to May, 1994, Consultant and
Assistant Vice President Portfolio Manager, Wyatt Asset
Services, Inc., 1211 W.W. 5th Ave.,
Portland, OR 97204
Margaret Smith Prior to September, 1995, Vice
Senior Vice President President, State Street Research,
One Financial Center, Boston, MA
02111
Steven Spiegel Prior to December, 1994, Managing
Senior Managing Director Director/Retirement, Lehman
Brothers, Inc., 200 Vesey St., World
Financial Center, New York, NY 10285
George W. Stairs Prior to July, 1994, Equity Research
Vice President Analyst, ValueQuest Limited,
Roundy's Hill, Marblehead, MA 01945
James H. Steggall Prior to May, 1995, Senior Municipal
Assistant Vice President Analyst, Colonial Management
Associates, Inc., One Financial
Center, Boston, MA 02111; Prior to
May, 1994, Controller, Wheelabrator
Environmental Systems, Libery Lane,
Hampton, NH 03842
Karen Stewart Prior to May, 1995, Equity Research
Assistant Vice President Analyst, Chancellor Capital
Management, 1166 Avenue of the
Americas, New York, NY 10036
Roger Sullivan Prior to December, 1994, Vice
Senior Vice President President, State Street Research &
Management Co., One Financial
Center, Boston, MA 02111
Robert Swift Prior to August, 1995, Far East Team
Senior Vice President Leader and Portfolio Manager, IAI
International/Hill Samuel Investment
Advisors, 10 Fleet Place, London,
England
Jerry H. Tempelman Prior to May, 1994, Senior Money
Assistant Vice President Market Trader, State Street Bank &
Trust Co., 225 Franklin, Street,
Boston, MA 02110
Michael Temple Prior to June, 1995, Vice President,
Vice President Duff & Phelps, 55 East Monroe,
Chicago, IL 60613
Hillary F. Till Prior to May, 1994, Fixed-Income
Vice President Derivative Trader, Bank of Boston,
100 Federal Street, Boston, MA
02109; Prior to December, 1993,
Equity Analyst, Harvard Management
Company, 600 Atlantic St., Boston,
MA 02109
Lisa L. Trubiano Prior to July, 1995, Senior Marketing
Vice President Consultant, John Hancock Mutual Life
Insurance Company,
Elizabeth A. Underhill Prior to August, 1994, Vice President
Senior Vice President and Senior Equity Analyst, State
Street Bank and Trust Company, 225
Franklin St., Boston, MA 02110
Charles C. Van Vleet Prior to August, 1994, Vice President
Senior Vice President and Fixed-Income Manager, Alliance
Capital Management, 1345 Avenue of
the Americas, New York, NY 10105
Francis P. Walsh Prior to November, 1994, Research
Vice President Analyst, Furman, Selz, Inc. 230 Park
Avenue, New York, NY 10169; Prior to
December, 1993, Strategic Marketing
Analyst, Lotus Development,
Corporation 55 Cambridge Parkway,
Cambridge, MA 02142
Michael R. Weinstein Prior to March, 1994, Management
Vice President Consultant, Arthur D. Little, Acorn
Park, Cambridge, MA 02140
<PAGE>
Item 29. Principal Underwriter
(a) Putnam Mutual Funds Corp. is the principal underwriter for
each of the following investment companies, including the
Registrant:
Putnam Adjustable Rate U.S. Government Fund, Putnam American
Government Income Fund, Putnam American Renaissance Fund, Putnam
Arizona Tax Exempt Income Fund, Putnam Asia Pacific Growth Fund,
Putnam Asset Allocation Funds, Putnam Balanced Retirement Fund,
Putnam California Tax Exempt Income Trust, Putnam California Tax
Exempt Money Market Fund, Putnam Capital Appreciation Fund,
Putnam Capital Manager Trust, Putnam Convertible Income-Growth
Trust, Putnam Diversified Equity Trust, Putnam Diversified Income
Trust, Putnam Equity Income Fund, Putnam Europe Growth Fund,
Putnam Federal Income Trust, Putnam Florida Tax Exempt Income
Fund, The Putnam Fund for Growth and Income, The George Putnam
Fund of Boston, Putnam Global Governmental Income Trust, Putnam
Global Growth Fund, Putnam Growth Fund, Putnam Growth and Income
Fund, Putnam Health Sciences Trust, Putnam High Yield Trust,
Putnam High Yield Advantage Fund, Putnam Income Fund, Putnam
Intermediate Tax Exempt Income Fund, Putnam Intermediate U.S.
Government Income Fund, Putnam Investment Funds, Putnam
Investment-Grade Bond Fund, Putnam Investors Fund, Putnam
Massachusetts Tax Exempt Income Fund, Putnam Michigan Tax Exempt
Income Fund, Putnam Minnesota Tax Exempt Income Fund, Putnam
Money Market Fund, Putnam Municipal Income Fund, Putnam Natural
Resources Fund, Putnam New Jersey Tax Exempt Income Fund, Putnam
New Opportunities Fund, Putnam New York Tax Exempt Income Trust,
Putnam New York Tax Exempt Money Market Fund, Putnam New York Tax
Exempt Opportunities Fund, Putnam Ohio Tax Exempt Income Fund,
Putnam OTC Emerging Growth Fund, Putnam Overseas Growth Fund,
Putnam Pennsylvania Tax Exempt Income Fund, Putnam Preferred
Income Fund, Putnam Research Fund, Putnam Tax Exempt Income Fund,
Putnam Tax Exempt Money Market Fund, Putnam Tax-Free Income
Trust, Putnam U.S. Government Income Trust, Putnam Utilities
Growth and Income Fund, Putnam Vista Fund, Putnam Voyager Fund<PAGE>
<TABLE>
<CAPTION>
(b) The directors and officers of the Registrant's principal underwriter are:
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
<C> <C> <C>
John V. Adduci Assistant Vice President None
Christopher S. Alpaugh Vice President None
Paulette C. Amisano Vice President None
Ronald J. Anwar Vice President None
Steven E. Asher Senior Vice President None
Scott A. Avery Vice President None
Hallie L. Baron Assistant Vice President None
Ira G. Baron Senior Vice President None
John L. Bartlett Senior Vice President None
Dale Beardon Senior Vice President None
Steven M. Beatty Vice President None
Matthew F. Beaudry Vice President None
Janet S. Becker Assistant Vice President None
John J. Bent Vice President None
Thomas A. Beringer Vice President None
Sharon A. Berka Vice President None
Maureen L. Boisvert Vice President None
John F. Boneparth Managing Director None
Keith R. Bouchard Vice President None
Linda M. Brady Assistant Vice President None
Leslee R. Bresnahan Senior Vice President None
James D. Brockelman Senior Vice President None
Scott C. Brown Vice President None
Gail D. Buckner Senior Vice President None
Robert W. Burke Senior Managing Director None
Ellen S. Callahan Vice President None
Thomas C. Callahan Assistant Vice President None
Peter J. Campagna Vice President None
Robert Capone Vice President None
Charles A. Carey Vice President None
Patricia A. Cartwright Assistant Vice President None
Janet Casale-Sweeney Vice President None
Stephen J. Chaput Assistant Vice President None
Louis F. Chrostowski Vice President None
Daniel J. Church Vice President None
James E. Clinton Assistant Vice President None
Kathleen M. Collman Managing Director None
Mark L. Coneeny Vice President None
Donald A. Connelly Senior Vice President None
Karen E. Connolly Assistant Vice President None
Anna Coppola Vice President None
F. Nicholas Corvinus Senior Vice President None
Thomas A. Cosmer Vice President None
Chad H. Cristo Assistant Vice President None
Lisa M. D'Allesandro Assistant vice President None
Jessica E. Dahill Vice President None
Kenneth L. Daly Senior Vice President None
Edward H. Dane Vice President None
Nancy M. Days Assistant Vice President None
Pamela De Oliveira-Smith Assistant Vice President None
Richard D. DeSalvo Vice President None
Joseph C. DeSimone Assistant Vice President None
Daniel J. Delianedis Vice President None
Judith S. Deming Assistant Vice President None
Teresa F. Dennehy Assistant Vice President None
J. Thomas Despres Senior Vice President None
Michael G. Dolan Assistant Vice President None
Scott M. Donaldson Vice President None
Emily J. Durbin Vice President None
Dwyer Cabana, Susan Vice President None
David B. Edlin Senior Vice President None
James M. English Senior Vice President None
Vincent Esposito Managing Director None
Mary K. Farrell Assistant Vice President None
Michael J. Fechter Vice President None
Susan H. Feldman Vice President None
Paul F. Fichera Senior Vice President None
C. Nancy Fisher Senior Vice President None
Mitchell B. Fishman Senior Vice President None
Joseph C. Fiumara Vice President None
Patricia C. Flaherty Senior Vice President None
Samuel F. Gagliardi Vice President None
Karen M. Gardner Assistant Vice President None
Judy S. Gates Vice President None
Richard W. Gauger Assistant Vice President None
Joseph P. Gennaco Vice President None
Stephen E. Gibson Managing Director None
Mark P. Goodfellow Assistant Vice President None
Robert Goodman Managing Director None
Mark D. Goodwin Assistant Vice President None
Anthony J. Grace Assistant Vice President None
Linda K. Grace Assistant Vice President None
Robert G. Greenly Vice President None
Jill Grossberg Assistant Vice President None
Jeffrey P. Gubala Vice President None
James E. Halloran Vice President None
Thomas W. Halloran Vice President None
Meghan C. Hannigan Assistant Vice President None
Bruce D. Harrington Assistant Vice President None
Marilyn M. Hausammann Senior Vice President None
Howard W. Hawkins, III Vice President None
Deanna R. Hayes-Castro Vice President None
Paul P. Heffernan Vice President None
Susan M. Heimanson Vice President None
Joanne Heyman Assistant Vice President None
Bess J.M. Hochstein Vice President None
Maureen A. Holmes Assistant Vice President None
Paula J. Hoyt Assistant Vice President None
William J. Hurley Senior Vice President None
Gregory E. Hyde Senior Vice President None
Dwight D. Jacobsen Senior Vice President None
Douglas B. Jamieson Senior Managing Director, Director None
Jay M. Johnson Vice President None
Kevin M. Joyce Senior Vice President None
Karen R. Kay Senior Vice President None
Mary E. Kearney Managing Director None
John P. Keating Vice President None
A. Siobahn Kelly Assistant Vice President None
Brian J. Kelly Vice President None
Anne Kinsman Assistnat Vice President None
Deborah H. Kirk Senior Vice President None
Jill A. Koontz Assistant Vice President None
Linda G. Kraunelis Assistant Vice President None
Howard H. Kreutzberg Senior Vice President None
Marjorie B. Krieger Assistant Vice President None
Charles Lacasia Assistant Vice President None
Arthur B. Laffer, Jr. Vice President None
Catherine A. Lathan Vice President None
James D. Lathrop Vice President None
Charles C. Ledbetter Vice President None
Kevin Lemire Assistant Vice President None
Eric S. Levy Vice President None
Edward V. Lewandowski Senior Vice President None
Edward V. Lewandowski, Jr. Vice President None
Samuel L. Lieberman Vice President None
David M. Lifsitz Assistant Vice President None
Ann Marie Linehan Assistant Vice President None
Maura A. Lockwood Vice President None
Rufino R. Lomba Vice President None
Peter V. Lucas Senior Vice President None
Robert F. Lucey Senior Managing Director, Director None
Kathryn A. Lucier Assistant Vice President None
Alana Madden Vice President None
Ann Malatos Assistant Vice President None
Bonnie Mallin Vice President None
Renee L. Maloof Assistant Vice President None
Frederick S. Marius Assistant Vice President None
Karen E. Marotta Vice President None
Kathleen M. McAnulty Assistant Vice President None
Anne B. McCarthy Assistant Vice President None
Paul McConville Vice President None
Marla J. McDougall Assistant Vice President None
Walter S. McFarland Vice President None
Mark J. McKenna Senior Vice President None
Gregory J. McMillan Vice President None
Claye A. Metelmann Vice President None
J. Chris Meyer Senior Vice President None
Bart D. Miller Vice President None
Douglas W. Miller Vice President None
Jeffery M. Miller Senior Vice President None
Ronald K. Mills Vice President None
Peter M. Moore Assistant Vice President None
Mitchell Moret Senior Vice President None
Donald E. Mullen Vice President None
Paul G. Murphy Assistant Vice President None
Brendan R. Murray Vice President None
Robert Nadherny Vice President None
Alexander L. Nelson Managing Director None
John P. Nickodemus Vice President None
Michael C. Noonis Assistant Vice President None
Kristen P. O'Brien Vice President None
Kevin L. O'Shea Senior Vice President None
Nathan D. O'Steen Assistant Vice President None
Joseph R. Palombo Managing Director None
Scott A. Papes Vice President None
Cynthia O. Parr Vice President None
John D. Pataccoli Vice President None
John G. Phoenix Vice President None
Joseph Phoenix Senior Vice President None
Jeffrey E. Place Senior Vice President None
Keith Plapinger Vice President None
Jane E. Price Assistant Vice President None
Douglas H. Powell Vice President None
Susannah Psomas Vice President None
Scott M. Pulkrabek Vice President None
George Putnam Director Chairman & President
George A. Rio Senior Vice President None
Debra V. Rothman Vice President None
Robert B. Rowe Vice President None
Kevin A. Rowell Senior Vice President None
Thomas C. Rowley Vice President None
Charles A. Ruys de Perez Senior Vice President None
Deborah A. Ryan Assistant Vice President None
Robert M. Santosuosso Assistant Vice President None
Debra J. Sarkisian Assistant Vice President None
Catherine A. Saunders Senior Vice President None
Robbin L. Saunders Assistant Vice President None
Karl W. Saur Vice President None
Michael Scanlon Assistant Vice President None
Shannon D. Schofield Vice President None
Christine A. Scordato Vice President None
Joseph W. Scott Assistant Vice President None
John B. Shamburg Vice President None
Kathleen G. Sharpless Managing Director None
John F. Sharry Managing Director None
Stuart D. Sheppard Assistant Vice President None
William N. Shiebler Director and President Vice President
Daniel S. Shore Vice President None
Mark J. Siebold Assistant Vice President None
Gordon H. Silver Senior Managing Director Vice President
John Skistimas, Jr. Assistant Vice President None
Steven Spiegel Senior Managing Director None
Nicholas T. Stanojev Senior Vice President None
Paul R. Stickney Vice President None
Brian L. Sullivan Vice President None
Guy Sullivan Seniior Vice President None
Kevin J. Sullivan Vice President None
Moira Sullivan Vice President None
James S. Tambone Managing Director None
B. Iris Tanner Assistant Vice President None
Louis Tasiopoulos Managing Director None
David S. Taylor Vice President None
John R. Telling Vice President None
Richard B. Tibbetts Senior Vice President None
Patrice M. Tirado Vice President None
Janet E. Tosi Assistant Vice President None
John C. Tredinnick Vice President None
Bonnie L. Troped Vice President None
Christine M. Twigg Assistant Vice Presient None
Larry R. Unger Vice President None
Douglas J. Vander Linde Senior Vice President None
Edward F. Whalen Vice President None
Robert J. Wheeler Senior Vice President None
John B. White Vice President None
Kirk E. Williamson Senior Vice President None
Leigh T. Williamson Vice President None
Jane Wolfson Vice President None
Benjamin I. Woloshin Vice President None
William H. Woolverton Senior Vice President None
Timothy R. Young Vice President None
SooHee L. Zebedee Vice President None
Laura J. Zografos Vice President None
</TABLE>
The principal business address of each person listed above is One
Post Office Square, Boston, MA 02109, except for:
Mr. Alpaugh, 5980 Richmond Highway, Alexandria, VA 22303
Mr. Anwar, 131 Crystal Road, Colmar, PA 18915
Mr. Avery, 7031 Spring Ridge Rd., Cary NC 27511
Mr. Baron, 31 Cala Moreya, Laguna Niguel, CA 92667
Mr. Bartlett, 7 Fairfield St., Boston, MA 02116
Mr. Beatty, 200 High St., Winchester, MA 01890
Mr. Beringer, 4915 Dupont Avenue South, Minneapolis, MN 55409
Ms. Besset, 1140 North LaSalle Blvd, Chicago, IL 60610
Mr. Bouchard, 18 Brice Rd., Annapolis, MD 21401
Mr. Brockelman, 94 Middleton Rd., Boxford, MA 01921
Mr. Brown, 2012 West Grove Drive, Gibson, PA 15044
Ms. Buckner, 21012 West Grove Drive, Gibsonia, PA 15044
Mr. Campagna, 2091-B Lake Park Drive, Smyrna, GA 30080
Ms. Castro, 26 Gould Road, Andover, MA 01810
Mr. Church, 4504 Sir Winston Place, Charlotte, NC 28211
Mr. Cristo, 11 Schenck Ave., Great Neck, NY 11021
Mr. Coneeny, 10 Amherst St., Arlington, MA 02174
Mr. Connelly, 4634 Mirada Way, Sarasota, FL 34238
Mr. Corvinus, 208 Water St., Newburyport, MA 01950
Ms. Dahill, 270-1 C Iven Ave., St. David's, PA 19087
Mr. Deliandis, 206 Promontory Drive, Newport Beach, CA 92660
Mr. DeSalvo, 54 Morriss Place, Maddison, NJ 07940
Mr. DeSimone, Pheasant Run Apartments, Inlet Ridge Drive,
Maryland Heights, MO 63043
Ms. Dwyer-Cabana, 7730 Herrick Park, Hudson, OH 44236
Mr. Edlin, 7 River Road, 305 Palmer Point, Cos Cob, CT 06807
Mr. English, 1184 Pintail Circle, Boulder, CO 80303
Mr. Goodman, 14 Clover Place, Cos Cob, CT 06807
Mr. Gubala, 4308 Rickover Drive, Dallas, TX 75244
Mr. J. Halloran, 978 W. Creek Lane, Westlake Village, CA 91362
Mr. T. Halloran, 19449 Misty Lake Dr., Strongsville, OH 44136
Mr. Hyde, 3305 Sulky, Marietta, GA 30067
Mr. Jacobsen, 2744 Joyce Ridge Drive, Chesterfield, MO 63017
Mr. Johnson, 200 Clock Tower Place, Carmel, CA 93923
Mr. Keating, 5521 Greenville Avenue, Dallas, TX 75206
Mr. Kelley, 3356 North Lakeharbor Lane, Boise, ID 83703
Ms. Kelly, 31 Jeffrey's Neck Road, Ipswich, MA 01938
Ms. Kinsman, 9599 Brookview Circle, Woodbury, MN 55125
Ms. Kirk, 124 Rivermist Dr., Buffalo, NY 14202
Ms. Kraunelis, 584 East Eighth St., South Boston, MA 02127
Mr. Lathrop, 14814 Straub Hill Lane, Chesterfield, MO 63017
Mr. Lewandowski, 805 Darrell Road, Hillsborough, CA 94010
Mr. Lewandowski, Jr., 1 Kara East, Irvine, CA 92720
Mr. Lieberman, 200 Roy St., Seattle, WA 98109
Ms. Madden, 8649 North Himes Avenue, Tampa, FL 33614
Mr. McConville, 515 S. Arlington Heights Rd., Arlington
Heights, IL 6005
Mr. McFarland, 8012 Dancing Fern Trail, Chattanooga, TN 37421
Mr. McMillan, 203 D. Zigler St., Zelienople, PA 16063
Mr. McMurtrie, 14529 Glastonbury, Detroit, MI 48223
Mr. B. Miller, 24815 Acropolis Drive, Mission Viejo, CA 92691
Mr. D. Miller, 70 Williams St., Greenwich, CT 06380
Mr. Moret, 4519 Lawn Avenue, Western Springs, IL 60558
Mr. Murray, 710 Cheyenne Drive, Franklin Lakes, NJ 07417
Mr. Nadherny, 9714 Marmount Drive, Seattle, WA 98117
Mr. Nickodemus, 463 Village Oaks Court, Ann Arbor, MI 48103
Mr. O'Steen, 2091-B Lake Park Drive, Smyrna, GA 30080
Mr. Papes, 3102 Wood View Bridge Drive, Kansas City, KS 66103
Mr. Pataccoli, 333 39th St., Manhattan Beach, CA 90266
Mr. Joe Phoenix, 1426 Asbury Avenue, Hubbard Woods, IL 60093
Mr. John Phoenix, 709 South Rome Avenue, Tampa, FL 33606
Mr. Place, 4211 Loch Highland Parkway, Roswell, GA 30075
Mr. Pulkrabek, 190 Jefferson Lane, Streamwood, IL 60107
Mr. Powell, 1508 Ruth Lane, Newport Beach, CA 92660
Mr. Rowe, 109 Shore Drive, Longwood, FL 32779
Mr. Rowell, 2240 Union St., San Francisco, CA 94123
Mr. Rowley, 237 Peeke Avenue, Kirkwood, MO 63122
Ms. Sarkisian, 1 Goodridge Ct., Boston, MA 02113
Ms. Saunders, 39939 Stevenson Common, Freemont, CA 94538
Ms. Schofield, 618 Rimington Lane, Decatur, GA 30030
Mr. Shamburg, 10603 N. 100th Street, Scottsdale, AZ 85260
Mr. Shore, 2870 Pharr Court South, N.W., Atlanta, GA 30305
Mr. Stickney, 1314 Log Cabin Lane, St. Louis, MO 63124
Mr. B. Sullivan, 777 Pinoake Road, Pittsburgh, PA 15243
Mr. G. Sullivan, 35 Marlborough St., Boston, MA 02116
Ms. M. Sullivan, 493 Zinfandel Lane, St. Helena, CA 94574
Ms. Sweeney, 31 Heritage Way, Marblehead, MA 01945
Mr. Tambone, 10 Commercial Wharf, Boston, MA 02110
Mr. Tasiopolous, 5 Homestead Farms Drive, Norwell, MA 02061
Mr. Tredinnick, 2995 Glenwood Drive, Boulder, CO 80301
Mr. Telling, 5 Spindriff Court, Williamsville, NY 14221
Mr. Unger, 212 E. Broadway, New York, NY 10002
Mr. Williamson, 111 Maple Ridge Way, Covington, LA 70433
Mr. White, 10 Mannion Place, Littleton, MA 01460
Mr. Woloshin, 100 West 89th St., New York, NY 10024
Ms. Zografos, 12712 Coeur de Monde Ct., St. Louis, MO 63146
<PAGE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Persons maintaining physical possession of accounts, books
and other documents required to be maintained by Section 31(a) of
the Investment Company Act of 1940 and the Rules promulgated
thereunder are Registrants' Clerk, Beverly Marcus; Registrants'
investment adviser, Putnam Investment Management, Inc.;
Registrants' principal underwriter, Putnam Mutual Funds Corp.;
Registrants' custodian, Putnam Fiduciary Trust Company ("PFTC");
and Registrant's transfer and dividend disbursing agent, Putnam
Investor Services, a division of PFTC. The address of the Clerk,
investment adviser, principal underwriter, and custodian and
transfer and dividend disbursing agent is One Post Office Square,
Boston, Massachusetts 02109.
ITEM 31. MANAGEMENT SERVICES
None.
ITEM 32. UNDERTAKINGS
Each Registrant undertakes to furnish to each
person to whom a prospectus of that Registrant is delivered a
copy of that Registrant's latest annual report to shareholders,
upon request and without charge.
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in
the the following Post-Effective Amendments, of our
reports (as dated below) on our audits of the financial
statements and "Financial highlights" of Putnam
Arizona Tax Exempt Income Fund, Putnam Michigan Tax Exempt
Income Fund , Putnam New Jersey Tax Exempt Income
Fund and Putnam Ohio Tax Exempt Income Fund , which
reports are included in the Annual Reports for each Fund for the
year ended May 31, 1994, which is incorporated by reference in
the Registration Statement :
Fund PEA # File # Date of Report
Arizona 6 33-37992 July 17, 1995
Michigan 15 33-8923 July 17, 1995
New Jersey 6 33-32550 July 14, 1995
Ohio 15 33-8924 July 17,
1995
We also consent to the references to our Firm under the caption
"Independent Accountants and Financial Statements" in the
Statement of Additional Information.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
September 26, 1995
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus and Statement of Additional Information constituting
parts of the following Post-Effective
Amendments
(the "Registration Statements") of our reports
relating to the financial statements and financial highlights
appearing in the May 31, 1995 Annual Reports of
Putnam Florida Tax Exempt Income Fund (dated July 17, 1995),
Putnam Massachusetts Tax Exempt Income Fund (dated July 13,
1995), Putnam Minnesota Tax Exempt Income Fund (dated
July 12, 1995) and Putnam Pennsylvania Tax Exempt Income Fund
(dated July 13, 1995) , which financial statements and
financial highlights are also incorporated by reference into the
Registration Statement :
Fund PEA# File #
Arizona 6 33-37992
Florida 6 33-35677
Massachusetts 15 33-5416
Michigan 15 33-8923
Minnesota 15 33-8916
New Jersey 6 33-32550
Ohio 15 33-8924
Pennsylvania 8 33-28321
We also consent to the references to us under the heading
"Independent Accountants and Financial Statements" in such
Statement of Additional Information and under the heading
"Financial highlights" in such Prospectus.
Price Waterhouse LLP
Boston, Massachusetts
September 27, 1995
<PAGE>
NOTICE
A copy of each Agreement and Declaration of Trust of Putnam
Arizona Tax Exempt Income Fund, Putnam Florida Tax Exempt
Income Fund, Putnam Massachusetts Tax Exempt Income Fund
, Putnam Michigan Tax Exempt Income Fund ,
Putnam Minnesota Tax Exempt Income Fund , Putnam New Jersey
Tax Exempt Income Fund, Putnam Ohio Tax Exempt Income Fund
and Putnam Pennsylvania Tax Exempt Income Fund are on
file with the Secretary of State of The Commonwealth of
Massachusetts and notice is hereby given that this instrument is
executed on behalf of each Registrant by an officer of each
Registrant as an officer and not individually and the obligations
of or arising out of this instrument are not binding upon any of
the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Registrants.
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of Putnam Arizona Tax
Exempt Income Fund , hereby severally constitute and
appoint George Putnam, Charles E. Porter, Gordon H. Silver,
Edward A. Benjamin, Timothy W. Diggins and John W. Gerstmayr, and
each of them singly, my true and lawful attorneys, with full
power to them and each of them, to sign for me, and in my name
and in the capacity indicated below, the Registration Statement
on Form N-1A of Putnam Arizona Tax Exempt Income Fund
and any and all amendments (including post-effective
amendments) to said Registration Statement and to file the same
with all exhibits thereto, and other documents in connection
thereunder, with the Securities and Exchange Commission, granting
unto my said attorneys, and each of them acting alone, full power
and authority to do and perform each and every act and thing
requisite or necessary to be done in the premises, as fully to
all intents and purposes as he or she might or could do in
person, and hereby ratify and confirm all that said attorneys or
any of them may lawfully do or cause to be done by virtue
thereof.
WITNESS my hand and seal on the date set forth below.
Signature Title Date
/s/ Eli Shapiro
ELI SHAPIRO Trustee April 19,
1995
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of Putnam Florida Tax
Exempt Income Fund , hereby severally constitute and
appoint George Putnam, Charles E. Porter, Gordon H. Silver,
Edward A. Benjamin, Timothy W. Diggins and John W. Gerstmayr, and
each of them singly, my true and lawful attorneys, with full
power to them and each of them, to sign for me, and in my name
and in the capacity indicated below, the Registration Statement
on Form N-1A of Putnam Florida Tax Exempt Income Fund
and any and all amendments (including post-effective
amendments) to said Registration Statement and to file the same
with all exhibits thereto, and other documents in connection
thereunder, with the Securities and Exchange Commission, granting
unto my said attorneys, and each of them acting alone, full power
and authority to do and perform each and every act and thing
requisite or necessary to be done in the premises, as fully to
all intents and purposes as he or she might or could do in
person, and hereby ratify and confirm all that said attorneys or
any of them may lawfully do or cause to be done by virtue
thereof.
WITNESS my hand and seal on the date set forth below.
Signature Title Date
/s/ Eli Shapiro
ELI SHAPIRO Trustee April 19,
1995
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of Putnam Massachusetts
Tax Exempt Income Fund , hereby severally constitute and
appoint George Putnam, Charles E. Porter, Gordon H. Silver,
Edward A. Benjamin, Timothy W. Diggins and John W. Gerstmayr, and
each of them singly, my true and lawful attorneys, with full
power to them and each of them, to sign for me, and in my name
and in the capacity indicated below, the Registration Statement
on Form N-1A of Putnam Massachusetts Tax Exempt Income
Fund and any and all amendments (including post-
effective amendments) to said Registration Statement and to file
the same with all exhibits thereto, and other documents in
connection thereunder, with the Securities and Exchange
Commission, granting unto my said attorneys, and each of them
acting alone, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in the
premises, as fully to all intents and purposes as he or she might
or could do in person, and hereby ratify and confirm all that
said attorneys or any of them may lawfully do or cause to be done
by virtue thereof.
WITNESS my hand and seal on the date set forth below.
Signature Title Date
/s/ Eli Shapiro
ELI SHAPIRO Trustee April 19,
1995<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of Putnam Minnesota Tax
Exempt Income Fund , hereby severally constitute and
appoint George Putnam, Charles E. Porter, Gordon H. Silver,
Edward A. Benjamin, Timothy W. Diggins and John W. Gerstmayr, and
each of them singly, my true and lawful attorneys, with full
power to them and each of them, to sign for me, and in my name
and in the capacity indicated below, the Registration Statement
on Form N-1A of Putnam Minnesota Tax Exempt Income Fund
and any and all amendments (including post-effective
amendments) to said Registration Statement and to file the same
with all exhibits thereto, and other documents in connection
thereunder, with the Securities and Exchange Commission, granting
unto my said attorneys, and each of them acting alone, full power
and authority to do and perform each and every act and thing
requisite or necessary to be done in the premises, as fully to
all intents and purposes as he or she might or could do in
person, and hereby ratify and confirm all that said attorneys or
any of them may lawfully do or cause to be done by virtue
thereof.
WITNESS my hand and seal on the date set forth below.
Signature Title Date
/s/ Eli Shapiro
Eli Shapiro Trustee April 19, 1995
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of Putnam Michigan Tax Exempt Income
Fund, hereby severally constitute and appoint George Putnam,
Charles E. Porter, Gordon H. Silver, Edward A. Benjamin, Timothy
W. Diggins and John W. Gerstmayr, and each of them singly, my
true and lawful attorneys, with full power to them and each of
them, to sign for me, and in my name and in the capacity
indicated below, the Registration Statement on Form N-1A of
Putnam Michigan Tax Exempt Income Fund and any and all amendments
(including post-effective amendments) to said Registration
Statement and to file the same with all exhibits thereto, and
other documents in connection thereunder, with the Securities and
Exchange Commission, granting unto my said attorneys, and each of
them acting alone, full power and authority to do and perform
each and every act and thing requisite or necessary to be done in
the premises, as fully to all intents and purposes as he or she
might or could do in person, and hereby ratify and confirm all
that said attorneys or any of them may lawfully do or cause to be
done by virtue thereof.
WITNESS my hand and seal on the date set forth below.
Signature Title Date
/s/ Eli Shapiro
ELI SHAPIRO Trustee April 19, 1995
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of Putnam New Jersey Tax Exempt
Income Fund, hereby severally constitute and appoint George
Putnam, Charles E. Porter, Gordon H. Silver, Edward A. Benjamin,
Timothy W. Diggins and John W. Gerstmayr, and each of them
singly, my true and lawful attorneys, with full power to them and
each of them, to sign for me, and in my name and in the capacity
indicated below, the Registration Statement on Form N-1A of
Putnam New Jersey Tax Exempt Income Fund and any and all
amendments (including post-effective amendments) to said
Registration Statement and to file the same with all exhibits
thereto, and other documents in connection thereunder, with the
Securities and Exchange Commission, granting unto my said
attorneys, and each of them acting alone, full power and
authority to do and perform each and every act and thing
requisite or necessary to be done in the premises, as fully to
all intents and purposes as he or she might or could do in
person, and hereby ratify and confirm all that said attorneys or
any of them may lawfully do or cause to be done by virtue
thereof.
WITNESS my hand and seal on the date set forth below.
Signature Title Date
/s/ Eli Shapiro
ELI SHAPIRO Trustee April 19, 1995
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of Putnam Ohio Tax Exempt Income
Fund, hereby severally constitute and appoint George Putnam,
Charles E. Porter, Gordon H. Silver, Edward A. Benjamin, Timothy
W. Diggins and John W. Gerstmayr, and each of them singly, my
true and lawful attorneys, with full power to them and each of
them, to sign for me, and in my name and in the capacity
indicated below, the Registration Statement on Form N-1A of
Putnam Ohio Tax Exempt Income Fund and any and all amendments
(including post-effective amendments) to said Registration
Statement and to file the same with all exhibits thereto, and
other documents in connection thereunder, with the Securities and
Exchange Commission, granting unto my said attorneys, and each of
them acting alone, full power and authority to do and perform
each and every act and thing requisite or necessary to be done in
the premises, as fully to all intents and purposes as he or she
might or could do in person, and hereby ratify and confirm all
that said attorneys or any of them may lawfully do or cause to be
done by virtue thereof.
WITNESS my hand and seal on the date set forth below.
Signature Title Date
/s/ Eli Shapiro
ELI SHAPIRO Trustee April 19, 1995<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of Putnam Pennsylvania Tax Exempt
Income Fund, hereby severally constitute and appoint George
Putnam, Charles E. Porter, Gordon H. Silver, Edward A. Benjamin,
Timothy W. Diggins and John W. Gerstmayr, and each of them
singly, my true and lawful attorneys, with full power to them and
each of them, to sign for me, and in my name and in the capacity
indicated below, the Registration Statement on Form N-1A of
Putnam Pennsylvania Tax Exempt Income Fund and any and all
amendments (including post-effective amendments) to said
Registration Statement and to file the same with all exhibits
thereto, and other documents in connection thereunder, with the
Securities and Exchange Commission, granting unto my said
attorneys, and each of them acting alone, full power and
authority to do and perform each and every act and thing
requisite or necessary to be done in the premises, as fully to
all intents and purposes as he or she might or could do in
person, and hereby ratify and confirm all that said attorneys or
any of them may lawfully do or cause to be done by virtue
thereof.
WITNESS my hand and seal on the date set forth below.
Signature Title Date
/s/ Eli Shapiro
Eli Shapiro Trustee April 19,
1995
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrants certify that
it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston,
and The Commonwealth of Massachusetts, on the 27th day
of September, 1995 .
PUTNAM ARIZONA TAX EXEMPT INCOME
FUND
PUTNAM FLORIDA TAX EXEMPT INCOME
FUND
PUTNAM MASSACHUSETTS TAX EXEMPT
INCOME FUND
PUTNAM MICHIGAN TAX EXEMPT INCOME FUND
PUTNAM MINNESOTA TAX EXEMPT INCOME FUND
PUTNAM NEW JERSEY TAX EXEMPT INCOME FUND
PUTNAM OHIO TAX EXEMPT INCOME FUND
PUTNAM PENNSYLVANIA TAX EXEMPT INCOME
FUND
By: Gordon H. Silver, Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statements of Putnam Arizona
Tax Exempt Income Fund, Putnam Florida Tax Exempt Income Fund,
Putnam Massachusetts Tax Exempt Income Fund , Putnam
Michigan Tax Exempt Income Fund , Putnam Minnesota Tax
Exempt Income Fund , Putnam New Jersey Tax Exempt Income
Fund, Putnam Ohio Tax Exempt Income Fund and Putnam
Pennsylvania Tax Exempt Income Fund have been signed below by
the following persons in the capacities and on the dates
indicated.
SIGNATURE TITLE
George Putnam President and Chairman of
the Board; Principal
Executive Officer; Trustee
William F. Pounds Vice Chairman and Trustee
John D. Hughes Vice President, Treasurer
and Principal Financial
Officer
Paul G. Bucuvalas Assistant Treasurer and Principal
Accounting Officer
Jameson A. Baxter Trustee
Hans H. Estin Trustee
John A. Hill Trustee
Elizabeth T. Kennan Trustee
Lawrence J. Lasser Trustee
Robert E. Patterson Trustee
Donald S. Perkins Trustee
George Putnam, III Trustee
Eli Shapiro Trustee
A.J.C. Smith Trustee
W. Nicholas Thorndike Trustee
By: Gordon H. Silver, as
Attorney-in-Fact
September 27, 1995
PUTNAM MASSACHUSETTS TAX EXEMPT INCOME FUND
AMENDED AND RESTATED AGREEMENT
AND DECLARATION OF TRUST
This AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
made at Boston, Massachusetts, this 15th day of September, 1995,
hereby amends and restates in its entirety the Agreement and
Declaration of Trust dated March 7, 1986, as heretofore amended,
by the Trustees hereunder and by the holders of shares of
beneficial interest issued or to be issued hereunder as
hereinafter provided. This Amended and Restated Agreement and
Declaration of Trust shall be effective upon filing with the
Secretary of State of The Commonwealth of Massachusetts.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business
of an investment company; and
WHEREAS, the Trustees have agreed to manage all property
coming into their hands as trustees of a Massachusetts voluntary
association with transferable shares in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will
hold all cash, securities and other assets, which they may from
time to time acquire in any manner as Trustees hereunder IN TRUST
to manage and dispose of the same upon the following terms and
conditions for the pro rata benefit of the holders from time to
time of Shares in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
Name
Section 1. This Trust shall be known as "Putnam
Massachusetts Tax Exempt Income Fund", and the Trustees shall
conduct the business of the Trust under that name or any other
name as they may from time to time determine.
Definitions
Section 2. Whenever used herein, unless otherwise required
by the context or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust
established by this Agreement and Declaration of Trust, as
amended from time to time;
<PAGE>
(b) "Trustees" refers to the Trustees of the Trust named
herein or elected in accordance with Article IV;
(c) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest in the
Trust shall be divided from time to time or, if more than
one series or class of Shares is authorized by the Trustees,
the equal proportionate transferable units into which each
series or class of Shares shall be divided from time to
time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of
1940 and the Rules and Regulations thereunder, all as
amended from time to time;
(f) The terms "Affiliated Person", "Assignment",
"Commission", "Interested Person", "Principal Underwriter"
and "Majority Shareholder Vote" (the 67% or 50% requirement
of the third sentence of Section 2(a)(42) of the 1940 Act,
whichever may be applicable) shall have the meanings given
them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Amended and
Restated Agreement and Declaration of Trust as amended or
restated from time to time; and
(h) "Bylaws" shall mean the Bylaws of the Trust as amended
from time to time;
(i) The term "series" or "series of Shares" refers to the
one or more separate investment portfolios of the Trust
into which the assets and liabilities of the Trust may
be divided and the Shares of the Trust representing
the beneficial interest of Shareholders in such
respective portfolios; and
(j) The term "class" or "class of Shares" refers to the
division of Shares into two or more classes as provided
in Article III, Section 1 hereof.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to provide investors a managed
investment primarily in securities, debt instruments and other
instruments and rights of a financial character.
<PAGE>
ARTICLE III
Shares
Division of Beneficial Interest
Section 1. The Shares of the Trust shall be issued in one
or more series as the Trustees may, without shareholder approval,
authorize. Each series shall be preferred over all other series
in respect of the assets allocated to that series. The
beneficial interest in each series shall at all times be divided
into Shares, without par value, each of which shall, except as
provided in the following sentence represent an equal
proportionate interest in the series with each other Share of the
same series, none having priority or preference over
another. The Trustees may, without shareholder approval, divide
the Shares of any series into two or more classes, Shares of each
such class having such preferences and special or relative rights
and privileges (including conversion rights, if any) as the
Trustees may determine and as shall be set forth in the Bylaws.
The number of Shares authorized shall be unlimited. The Trustees
may from time to time divide or combine the Shares of any series
or class into a greater or lesser number without thereby changing
the proportionate beneficial interest in the series or class.
Ownership of Shares
Section 2. The ownership of Shares shall be recorded on the
books of the Trust or a transfer or similar agent. No
certificates certifying the ownership of Shares shall be issued
except as the Trustees may otherwise determine from time to time.
The Trustees may make such rules as they consider appropriate for
the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the
Trust or any transfer or similar agent, as the case may be, shall
be conclusive as to who are the Shareholders of each series and
class and as to the number of Shares of each series and class
held from time to time by each Shareholder.
Investment in the Trust
Section 3. The Trustees shall accept investments in the
Trust from such persons and on such terms and for such
consideration, which may consist of cash or tangible or
intangible property or a combination thereof, as they or the
Bylaws from time to time authorize.
All consideration received by the Trust for the issue or
sale of Shares of each series, together with all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, and any
funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall irrevocably belong to the
series of Shares with respect to which the same were received by
the Trust for all purposes, subject only to the rights of
creditors, and shall be so handled upon the books of account of
the Trust and are herein referred to as "assets of" such series.
No Preemptive Rights
Section 4. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities
issued by the Trust.
Status of Shares and Limitation of Personal Liability
Section 5. Shares shall be deemed to be personal property
giving only the rights provided in this Declaration of Trust or
the Bylaws. Every Shareholder by virtue of having become a
Shareholder shall be held to have expressly assented and agreed
to the terms of this Declaration of Trust and the Bylaws and to
have become a party hereto. The death of a Shareholder during
the continuance of the Trust shall not operate to terminate the
same nor entitle the representative of any deceased Shareholder
to an accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but only to the rights of said
decedent under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of
the Trust property or right to call for a partition or division
of the same or for an accounting, nor shall the ownership of
Shares constitute the Shareholders partners. Neither the Trust
nor the Trustees, nor any officer, employee or agent of the Trust
shall have any power to bind personally any Shareholder, nor
except as specifically provided herein to call upon any
Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time
personally agree to pay.
ARTICLE IV
The Trustees
Election
Section 1. A Trustee may be elected either by the Trustees
or by the Shareholders. There shall be not less than three
Trustees. The number of Trustees shall be fixed by the Trustees.
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. At any meeting called for the purpose, a
Trustee may be removed by vote of two-thirds of the outstanding
shares. The initial Trustees, each of whom shall serve until the
first meeting of Shareholders at which Trustees are elected and
until his successor is elected and qualified, or until he sooner
dies, resigns or is removed shall be George Putnam, Richard M.
Cutler and Alla O'Brien and such other persons as the Trustee or
Trustees then in office shall, prior to any sale of Shares
pursuant to public offering, appoint.
Effect of Death, Resignation, etc. of a Trustee
Section 2. The death, declination, resignation, retirement,
removal or incapacity of the Trustees, or any one of them, shall
not operate to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust.
Powers
Section 3. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient
to carry out that responsibility. Without limiting the
foregoing, the Trustees may adopt Bylaws not inconsistent with
this Declaration of Trust providing for the conduct of the
business of the Trust and may amend and repeal them to the extent
that such Bylaws do not reserve that right to the Shareholders;
they may fill vacancies in or add to their number, and may elect
and remove such officers and appoint and terminate such agents as
they consider appropriate; they may appoint from their own
number, and terminate, any one or more committees consisting of
two or more Trustees, including an executive committee which may,
when the Trustees are not in session, exercise some or all of the
power and authority of the Trustees as the Trustees may
determine; they may employ one or more custodians of the assets
of the Trust and may authorize such custodians to employ
subcustodians and to deposit all or any part of such assets in a
system or systems for the central handling of securities, retain
a transfer agent or a Shareholder servicing agent, or both,
provide for the distribution of Shares by the Trust, through one
or more principal underwriters or otherwise, set record dates for
the determination of Shareholders with respect to various
matters, and in general delegate such authority as they consider
desirable to any officer of the Trust, to any committee of the
Trustees and to any agent or employee of the Trust or to any such
custodian or underwriter.
Without limiting the foregoing, the Trustees shall have
power and authority:
(a) To invest and reinvest cash, and to hold cash
uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate,
write options on and lease any or all of the assets of the
Trust;
(c) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or
property; and to execute and deliver proxies or powers of
attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power
and discretion with relation to securities or property as
the Trustees shall deem proper;
(d) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities;
(e) To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or
other negotiable form, or in the name of the Trustees or of
the Trust or in the name of a custodian, subcustodian or
other depositary or a nominee or nominees or otherwise;
(f) Subject to the provisions of Article III, Section 3, to
allocate assets, liabilities, income and expenses of the
Trust to a particular series of Shares or to apportion the
same among two or more series, provided that any liabilities
or expenses incurred by or arising in connection with a
particular series of Shares shall be payable solely out of
the assets of that series; and to the extent necessary or
appropriate to give effect to the preferences and special or
relative rights and privileges of any classes of Shares, to
allocate assets, liabilities, income and expenses of a
series to a particular class of Shares of that series or to
apportion the same among two or more classes of Shares of
that series;
(g) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation
or issuer, any security of which is or was held in the
Trust; to consent to any contract, lease, mortgage, purchase
or sale of property by such corporation or issuer, and to
pay calls or subscriptions with respect to any security held
in the Trust;
(h) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in
that connection to deposit any security with, or transfer
any security to, any such committee, depositary or trustee,
and to delegate to them such power and authority with
relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree
to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the
Trustees shall deem proper;
<PAGE>
(i) To compromise, arbitrate or otherwise adjust claims in
favor of or against the Trust or any matter in controversy,
including but not limited to claims for taxes;
(j) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(k) To borrow funds;
(l) To endorse or guarantee the payment of any notes or
other obligations of any person; to make contracts of
guaranty or suretyship, or otherwise assume liability for
payment thereof; and to mortgage and pledge the Trust
property or any part thereof to secure any of or all such
obligations;
(m) To purchase and pay for entirely out of Trust property
such insurance as they may deem necessary or appropriate for
the conduct of the business, including without limitation,
insurance policies insuring the assets of the Trust and
payment of distributions and principal on its portfolio
investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents,
investment advisers or managers, principal underwriters, or
independent contractors of the Trust individually against
all claims and liabilities of every nature arising by reason
of holding, being or having held any such office or
position, or by reason of any action alleged to have been
taken or omitted by any such person as Shareholder, Trustee,
officer, employee, agent, investment adviser or manager,
principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would have
the power to indemnify such person against such liability;
and
(n) To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and
carry out pension, profit-sharing, share bonus, share
purchase, savings, thrift and other retirement, incentive
and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits, for
any or all of the Trustees, officers, employees and agents
of the Trust.
The Trustees shall not in any way be bound or limited by any
present or future law or custom in regard to investments by
trustees. Except as otherwise provided herein or from time to
time in the Bylaws, any action to be taken by the Trustees may be
taken by a majority of the Trustees present at a meeting of
Trustees (a quorum being present), within or without
Massachusetts, including any meeting held by means of a
conference telephone or other communications equipment by means
of which all persons participating in the meeting can hear each
other at the same time and participation by such means shall
constitute presence in person at a meeting, or by written
consents of a majority of the Trustees then in office.
Payment of Expenses by Trust
Section 4. The Trustees are authorized to pay or to cause
to be paid out of the assets of the Trust all expenses, fees,
charges, taxes and liabilities incurred or arising in connection
with the Trust, or in connection with the management thereof,
including, but not limited to, the Trustees' compensation and
such expenses and charges for the services of the Trust's
officers, employees, investment adviser or manager, principal
underwriter, auditor, counsel, custodian, transfer agent,
Shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees
may deem necessary or proper to incur, provided, however, that
all expenses, fees, charges, taxes and liabilities incurred or
arising in connection with a particular series of Shares shall be
payable solely out of the assets of that series.
Ownership of Assets of the Trust
Section 5. Title to all of the assets of each series of
Shares and of the Trust shall at all times be considered as
vested in the Trustees.
Advisory, Management and Distribution
Section 6. Subject to a favorable Majority Shareholder
Vote, the Trustees may, at any time and from time to time,
contract for exclusive or nonexclusive advisory and/or management
services with any corporation, trust, association or other
organization (the "Manager"), every such contract to comply with
such requirements and restrictions as may be set forth in the
Bylaws; and any such contract may contain such other terms
interpretive of or in addition to said requirements and
restrictions as the Trustees may determine, including, without
limitation, authority to determine from time to time what
investments shall be purchased, held, sold or exchanged and what
portion, if any, of the assets of the Trust shall be held
uninvested and to make changes in the Trust's investments. The
Trustees may also, at any time and from time to time, contract
with the Manager or any other corporation, trust, association or
other organization, appointing it exclusive or nonexclusive
distributor or principal underwriter for the Shares, every such
contract to comply with such requirements and restrictions as may
be set forth in the Bylaws; and any such contract may contain
such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee,
employee, manager, adviser, principal underwriter or
distributor or agent of or for any corporation, trust,
association, or other organization, or of or for any parent
or affiliate of any organization, with which an advisory or
management contract, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing
or other agency contract may have been or may hereafter be
made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in
the Trust, or that
(ii) any corporation, trust, association or other
organization with which an advisory or management contract
or principal underwriter's or distributor's contract, or
transfer, Shareholder servicing or other agency contract may
have been or may hereafter be made also has an advisory or
management contract, or transfer, Shareholder servicing or
other agency contract with one or more other corporations,
trusts, associations, or other organizations, or has other
business or interests,
shall not affect the validity of any such contract or disqualify
any Shareholder, Trustee or officer of the Trust from voting upon
or executing the same or create any liability or accountability
to the Trust or its Shareholders.
ARTICLE V
Shareholders' Voting Powers and Meetings
Voting Powers
Section 1. Subject to the voting powers of one or more
classes of shares as set forth elsewhere in this Declaration of
Trust or in the Bylaws, the Shareholders shall have power to vote
only (i) for the election of Trustees as provided in Article IV,
Section 1, (ii) for the removal of Trustees as provided in
Article IV, Section 1, (iii) with respect to any Manager as
provided in Article IV, Section 6, (iv) with respect to any
termination of this Trust to the extent and as provided in
Article IX, Section 4, (v) with respect to any amendment of this
Declaration of Trust to the extent and as provided in Article IX,
Section 7, (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
Trust or the Shareholders, and (vii) with respect to such
additional matters relating to the Trust as may be required by
this Declaration of Trust, the Bylaws or any registration of the
Trust with the Securities and Exchange Commission (or any
successor agency) or any state, or as the Trustees may consider
necessary or desirable. Each whole Share shall be entitled to
one vote as to any matter on which it is entitled to vote and
each fractional Share shall be entitled to a proportionate
fractional vote. Notwithstanding any other provision of this
Declaration of Trust, on any matter submitted to a vote of
Shareholders, all Shares of the Trust then entitled to vote shall
be voted in the aggregate as a single class without regard to
series or classes of shares, except (1) when required by the 1940
Act or when the Trustees shall have determined that the matter
affects one or more series or classes of Shares materially
differently, Shares shall be voted by individual series or class;
and (2) when the Trustees have determined that the matter affects
only the interests of one or more series or classes, then only
Shareholders of such series or classes shall be entitled to vote
thereon. There shall be no cumulative voting in the election of
Trustees. Shares may be voted in person or by proxy. A proxy
with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior
to exercise of the proxy the Trust receives a specific written
notice to the contrary from any one of them. A proxy purporting
to be executed by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. Until
Shares of any series or class are issued, the Trustees may
exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the Bylaws to be
taken by Shareholders as to such series or class.
Voting Power and Meetings
Section 2. Meetings of Shareholders of any or all series or
classes may be called by the Trustees from time to time for the
purpose of taking action upon any matter requiring the vote or
authority of the Shareholders of such series or classes as herein
provided or upon any other matter deemed by the Trustees to be
necessary or desirable. Written notice of any meeting of
Shareholders shall be given or caused to be given by the Trustees
by mailing such notice at least seven days before such meeting,
postage prepaid, stating the time, place and purpose of the
meeting, to each Shareholder entitled to vote at such meeting at
the Shareholder's address as it appears on the records of the
Trust. If the Trustees shall fail to call or give notice of any
meeting of Shareholders for a period of 30 days after written
application by Shareholders holding at least 10% of the then
outstanding Shares of all series and classes entitled to vote at
such meeting requesting that a meeting be called for a purpose
requiring action by the Shareholders as provided herein or in the
Bylaws, then Shareholders holding at least 10% of the then
outstanding Shares of all series and classes entitled to vote at
such meeting or of all series if all series are entitled to vote
at such meeting may call and give notice of such meeting, and
thereupon the meeting shall be held in the manner provided for
herein in case of call thereof by the Trustees. Notice of a
meeting need not be given to any Shareholder if a written waiver
of notice, executed by him or her before or after the meeting, is
filed with the records of the meeting, or to any Shareholder who
attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her.
Quorum and Required Vote
Section 3. Thirty percent of Shares entitled to vote on a
particular matter shall be a quorum for the transaction of
business on that matter at a Shareholders' meeting, except that
where any provision of law or of this Declaration of Trust
permits or requires that holders of any series or class shall
vote as an individual series or class, then thirty percent of the
aggregate number of Shares of that series or class entitled to
vote shall be necessary to constitute a quorum for the
transaction of business by that series or class. Any lesser
number shall be sufficient for adjournments. Any adjourned
session or sessions may be held, within a reasonable time after
the date set for the original meeting, without the necessity of
further notice. Except when a larger vote is required by any
provision of this Declaration of Trust or the Bylaws, or by the
1940 Act, a majority of the Shares voted shall decide any
questions and a plurality shall elect a Trustee, provided that
where any provision of law or of this Declaration of Trust
permits or requires that the holders of any series or class shall
vote as an individual series or class, then a majority of the
Shares of that series or class voted on the matter (or a
plurality with respect to the election of a Trustee) shall decide
that matter insofar as that series or class is concerned.
Action by Written Consent
Section 4. Any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote
on the matter (or such larger proportion thereof as shall be
required by any express provision of this Declaration of Trust or
the Bylaws) consent to the action in writing and such written
consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
<PAGE>
Additional Provisions
Section 5. The Bylaws may include further provisions not
inconsistent with this Declaration of Trust, regarding
Shareholders' voting powers, the conduct of meetings and related
matters.
ARTICLE VI
Distributions, Redemptions and Repurchases
Distributions
Section 1. The Trustees may each year, or more frequently
if they so determine, distribute to the Shareholders of each
series out of the assets of such series such amounts as the
Trustees may determine. Any such distribution to the
Shareholders of a particular series shall be made to said
Shareholders pro rata in proportion to the number of Shares of
such series held by each of them, except to the extent otherwise
required or permitted by the preferences and special or relative
rights and privileges of any classes of Shares of that series,
and any distribution to the Shareholders of a particular class of
Shares shall be made to such Shareholders pro rata in proportion
to the number of Shares of such class held by each of them.
Such distributions shall be made in cash or Shares or a
combination thereof as determined by the Trustees. Any such
distribution paid in Shares will be paid at the net asset value
thereof as determined in accordance with the Bylaws.
Redemptions and Repurchases
Section 2. The Trust shall purchase such Shares as are
offered by any Shareholder for redemption, upon the presentation
of any certificate for the Shares to be purchased, a proper
instrument of transfer and a request directed to the Trust or a
person designated by the Trust that the Trust purchase such
Shares, or in accordance with such other procedures for
redemption as the Trustees may from time to time authorize; and
the Trust will pay therefor the net asset value thereof, as next
determined in accordance with the Bylaws. Payment for said
Shares shall be made by the Trust to the Shareholder within seven
days after the date on which the request is made. The obligation
set forth in this Section 2 is subject to the provision that in
the event that any time the New York Stock Exchange is closed for
other than customary weekends or holidays, or, if permitted by
rules of the Securities and Exchange Commission, during periods
when trading on the Exchange is restricted or during any
emergency which makes it impractical for the Trust to dispose of
its investments or to determine fairly the value of its net
assets, or during any other period permitted by order of the
Securities and Exchange Commission for the protection of
investors, such obligation may be suspended or postponed by the
Trustees. The Trust may also purchase or repurchase Shares at a
price not exceeding the net asset value of such Shares in effect
when the purchase or repurchase or any contract to purchase or
repurchase is made.
Redemptions at the Option of the Trust
Section 3. The Trust shall have the right at its option and
at any time to redeem Shares of any Shareholder at the net asset
value thereof as determined in accordance with the Bylaws: (i)
if at such time such Shareholder owns fewer Shares than, or
Shares having an aggregate net asset value of less than, an
amount determined from time to time by the Trustees; or (ii) to
the extent that such Shareholder owns Shares of a particular
series or class of Shares equal to or in excess of a percentage
of the outstanding Shares of that series or class determined from
time to time by the Trustees; or (iii) to the extent that such
Shareholder owns Shares of the Trust representing a percentage
equal to or in excess of such percentage of the aggregate number
of outstanding Shares of the Trust or the aggregate net asset
value of the Trust determined from time to time by the Trustees.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
Compensation
Section 1. The Trustees as such shall be entitled to
reasonable compensation from the Trust; they may fix the amount
of their compensation. Nothing herein shall in any way prevent
the employment of any Trustee for advisory, management, legal,
accounting, investment banking or other services and payment for
the same by the Trust.
Limitation of Liability
Section 2. The Trustees shall not be responsible or liable
in any event for any neglect or wrongdoing of any officer, agent,
employee, manager or principal underwriter of the Trust, nor
shall any Trustee be responsible for the act or omission of any
other Trustee, but nothing herein contained shall protect any
Trustee against any liability to which he or she would otherwise
be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his or her office.
Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever executed or
done by or on behalf of the Trust or the Trustees or any of them
in connection with the Trust shall be conclusively deemed to have
been executed or done only in or with respect to their or his or
her capacity as Trustees or Trustee, and such Trustees or Trustee
shall not be personally liable thereon.
ARTICLE VIII
Indemnification
Trustees, Officers, etc.
Section 1. The Trust shall indemnify each of its Trustees
and officers (including persons who serve at the Trust's request
as directors, officers or trustees of another organization in
which the Trust has any interest as a shareholder, creditor or
otherwise) (hereinafter referred to as a "Covered Person")
against all liabilities and expenses, including but not limited
to amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and counsel fees reasonably incurred by any
Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which
such Covered Person may be or may have been involved as a party
or otherwise or with which such Covered Person may be or may have
been threatened, while in office or thereafter, by reason of
being or having been such a Covered Person except with respect to
any matter as to which such Covered Person shall have been
finally adjudicated in any such action, suit or other proceeding
(a) not to have acted in good faith in the reasonable belief that
such Covered Person's action was in the best interests of the
Trust or (b) to be liable to the Trust or its Shareholders by
reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such
Covered Person's office. Expenses, including counsel fees so
incurred by any such Covered Person (but excluding amounts paid
in satisfaction of judgments, in compromise or as fines or
penalties), shall be paid from time to time by the Trust in
advance of the final disposition of any such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such
Covered Person to repay amounts so paid to the Trust if it is
ultimately determined that indemnification of such expenses is
not authorized under this Article, provided, however, that either
(a) such Covered Person shall have provided appropriate security
for such undertaking, (b) the Trust shall be insured against
losses arising from any such advance payments or (c) either a
majority of the disinterested Trustees acting on the matter
(provided that a majority of the disinterested Trustees then in
office act on the matter), or independent legal counsel in a
written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a full trial type inquiry)
that there is reason to believe that such Covered Person will be
found entitled to indemnification under this Article.
Compromise Payment
Section 2. As to any matter disposed of (whether by a
compromise payment, pursuant to a consent decree or otherwise)
without an adjudication by a court, or by any other body before
which the proceeding was brought, that such Covered Person either
(a) did not act in good faith in the reasonable belief that his
or her action was in the best interests of the Trust or (b) is
liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office,
indemnification shall be provided if (a) approved as in the best
interests of the Trust, after notice that it involves such
indemnification, by at least a majority of the disinterested
Trustees acting on the matter (provided that a majority of the
disinterested Trustees then in office act on the matter) upon a
determination, based upon a review of readily available facts (as
opposed to a full trial type inquiry) that such Covered Person
acted in good faith in the reasonable belief that his or her
action was in the best interests of the Trust and is not liable
to the Trust or its Shareholders by reason of wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office, or (b) there has
been obtained an opinion in writing of independent legal counsel,
based upon a review of readily available facts (as opposed to a
full trial type inquiry) to the effect that such Covered Person
appears to have acted in good faith in the reasonable belief that
his or her action was in the best interests of the Trust and that
such indemnification would not protect such Covered Person
against any liability to the Trust to which he or she would
otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of his or her office. Any approval pursuant to this
Section shall not prevent the recovery from any Covered Person of
any amount paid to such Covered Person in accordance with this
Section as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have
acted in good faith in the reasonable belief that such Covered
Person's action was in the best interests of the Trust or to have
been liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's
office.
Indemnification Not Exclusive
Section 3. The right of indemnification hereby provided
shall not be exclusive of or affect any other rights to which
such Covered Person may be entitled. As used in this Article
VIII, the term "Covered Person" shall include such person's
heirs, executors and administrators and a "disinterested Trustee"
is a Trustee who is not an "interested person" of the Trust as
defined in Section 2(a)(19) of the 1940 Act (or who has been
exempted from being an "interested person" by any rule,
regulation or order of the Commission) and against whom none of
such actions, suits or other proceedings or another action, suit
or other proceeding on the same or similar grounds is then or has
been pending. Nothing contained in this Article shall affect any
rights to indemnification to which personnel of the Trust, other
than Trustees or officers, and other persons may be entitled by
contract or otherwise under law, nor the power of the Trust to
purchase and maintain liability insurance on behalf of any such
person.
Shareholders
Section 4. In case any Shareholder or former Shareholder
shall be held to be personally liable solely by reason of his or
her being or having been a Shareholder and not because of his or
her acts or omissions or for some other reason, the Shareholder
or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general
successor) shall be entitled to be held harmless from and
indemnified against all loss and expense arising from such
liability, but only out of the assets of the particular series of
Shares of which he or she is or was a Shareholder.
ARTICLE IX
Miscellaneous
Trustees, Shareholders, etc. Not Personally Liable; Notice
Section 1. All persons extending credit to, contracting
with or having any claim against the Trust or a particular series
of Shares shall look only to the assets of the Trust or the
assets of that particular series of Shares for payment under such
credit, contract or claim, and neither the Shareholders nor the
Trustees, nor any of the Trust's officers, employees or agents,
whether past, present or future, shall be personally liable
therefor. Nothing in this Declaration of Trust shall protect any
Trustee against any liability to which such Trustee would
otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or
undertaking made or issued by the Trustees or by any officer or
officers shall give notice that this Declaration of Trust is on
file with the Secretary of The Commonwealth of Massachusetts and
shall recite that the same was executed or made by or on behalf
of the Trust or by them as Trustee or Trustees or as officer or
officers and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders
individually but are binding only upon the assets and property of
the Trust, and may contain such further recital as he or she or
they may deem appropriate, but the omission thereof shall not
operate to bind any Trustee or Trustees or officer or officers or
Shareholder or Shareholders individually.
Trustee's Good Faith Action, Expert Advice, No Bond or Surety
Section 2. The exercise by the Trustees of their powers and
discretions hereunder shall be binding upon everyone interested.
A Trustee shall be liable for his or her own wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and for nothing
else, and shall not be liable for errors of judgment or mistakes
of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this
Declaration of Trust, and shall be under no liability for any act
or omission in accordance with such advice or for failing to
follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustee
Section 3. No person dealing with the Trustees shall be
bound to make any inquiry concerning the validity of any
transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the
Trust or upon its order.
Duration and Termination of Trust
Section 4. Unless terminated as provided herein, the Trust
shall continue without limitation of time. The Trust 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 by
written notice to the Shareholders. Any series of Shares may be
terminated at any time by vote of Shareholders holding at least
66-2/3% of the Shares of such series entitled to vote or by the
Trustees by written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of
Shares, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or
anticipated, of the Trust or of the particular series as may be
determined by the Trustees, the Trust shall in accordance with
such procedures as the Trustees consider appropriate reduce the
remaining assets to distributable form in cash or shares or other
securities, or any combination thereof, and distribute the
proceeds to the Shareholders of the series involved, ratably
according to the number of Shares of such series held by the
several Shareholders of such series on the date of termination,
except to the extent otherwise required or permitted by the
preferences and special or relative rights and privileges of any
classes of any series of Shares of the Trust, provided that any
distribution to the Shareholders of a particular class of any
series of Shares shall be made to such Shareholders pro rata in
proportion to the number of Shares of such class held by each of
them.
Filing of Copies, References, Headings
Section 5. The original or a copy of this instrument and of
each amendment hereto shall be kept at the office of the Trust
where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the
Trust with the Secretary of State of The Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any
other governmental office where such filing may from time to time
be required. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any
such amendments have been made and as to any matters in
connection with the Trust hereunder, and, with the same effect as
if it were the original, may rely on a copy certified by an
officer of the Trust to be a copy of this instrument or of any
such amendments. In this instrument and in any such amendment,
references to this instrument and all expressions like "herein",
"hereof" and "hereunder" shall be deemed to refer to this
instrument as amended or affected by any such amendments.
Headings are placed herein for convenience of reference only and
shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of
which shall be deemed an original.
Applicable Law
Section 6. This Declaration of Trust is made in The
Commonwealth of Massachusetts, and it is created under and is to
be governed by and construed and administered according to the
laws of said Commonwealth. The Trust shall be of the type
commonly called a Massachusetts business trust, and without
limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust.
Amendments
Section 7. This 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 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 and
class not affected shall be required. Amendments having the
purpose of changing the name of the Trust 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.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being a majority of the
Trustees of the Trust, hereunto set their hands and seals in the
City of Boston, Massachusetts, for themselves and their assigns,
as of the day and year first above written.
/s/ George Putnam /s/ Donald S. Perkins
- ------------------------ ---------------------------
George Putnam Donald S. Perkins
/s/ Jameson A. Baxter /s/ William F. Pounds
- ------------------------ ---------------------------
Jameson A. Baxter William F. Pounds
/s/ Hans H. Estin /s/ George Putnam, III
- ------------------------ ---------------------------
Hans H. Estin George Putnam, III
/s/ John A. Hill Eli Shapiro
- ------------------------ ---------------------------
John A. Hill Eli Shapiro
/s/ Elizabeth T. Kennan /s/ A.J.C. Smith
- ------------------------ ---------------------------
Elizabeth T. Kennan A.J.C. Smith
/s/ Lawrence J. Lasser /s/ W. Nicholas Thorndike
- ------------------------ ---------------------------
Lawrence J. Lasser W. Nicholas Thorndike
- ------------------------
Robert E. Patterson
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Boston, September 15, 1995
Suffolk, ss.
Then personally appeared each of the above named Trustees of
Putnam Massachusetts Tax Exempt Income Fund and acknowledged the
foregoing instrument to be their free act and deed, before me,
/s/ Beth F. Marino
----------------------------
Notary Public
My commission expires:
4/6/2001
The address of the Trust is One Post Office Square, Boston,
Massachusetts 02109
PUTNAM MICHIGAN TAX EXEMPT INCOME FUND
AMENDED AND RESTATED AGREEMENT
AND DECLARATION OF TRUST
This AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
made at Boston, Massachusetts, this 15th day of September, 1995,
hereby amends and restates in its entirety the Agreement and
Declaration of Trust dated September 2, 1986, as heretofore
amended, by the Trustees hereunder and by the holders of shares
of beneficial interest issued or to be issued hereunder as
hereinafter provided. This Amended and Restated Agreement and
Declaration of Trust shall be effective upon filing with the
Secretary of State of The Commonwealth of Massachusetts.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business
of an investment company; and
WHEREAS, the Trustees have agreed to manage all property
coming into their hands as trustees of a Massachusetts voluntary
association with transferable shares in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will
hold all cash, securities and other assets, which they may from
time to time acquire in any manner as Trustees hereunder IN TRUST
to manage and dispose of the same upon the following terms and
conditions for the pro rata benefit of the holders from time to
time of Shares in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
Name
Section 1. This Trust shall be known as "Putnam Michigan
Tax Exempt Income Fund", and the Trustees shall conduct the
business of the Trust under that name or any other name as they
may from time to time determine.
Definitions
Section 2. Whenever used herein, unless otherwise required
by the context or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust
established by this Agreement and Declaration of Trust, as
amended from time to time;
<PAGE>
(b) "Trustees" refers to the Trustees of the Trust named
herein or elected in accordance with Article IV;
(c) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest in the
Trust shall be divided from time to time or, if more than
one series or class of Shares is authorized by the Trustees,
the equal proportionate transferable units into which each
series or class of Shares shall be divided from time to
time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of
1940 and the Rules and Regulations thereunder, all as
amended from time to time;
(f) The terms "Affiliated Person", "Assignment",
"Commission", "Interested Person", "Principal Underwriter"
and "Majority Shareholder Vote" (the 67% or 50% requirement
of the third sentence of Section 2(a)(42) of the 1940 Act,
whichever may be applicable) shall have the meanings given
them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Amended and
Restated Agreement and Declaration of Trust as amended or
restated from time to time; and
(h) "Bylaws" shall mean the Bylaws of the Trust as amended
from time to time;
(i) The term "series" or "series of Shares" refers to the
one or more separate investment portfolios of the Trust
into which the assets and liabilities of the Trust may
be divided and the Shares of the Trust representing
the beneficial interest of Shareholders in such
respective portfolios; and
(j) The term "class" or "class of Shares" refers to the
division of Shares into two or more classes as provided
in Article III, Section 1 hereof.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to provide investors a managed
investment primarily in securities, debt instruments and other
instruments and rights of a financial character.
<PAGE>
ARTICLE III
Shares
Division of Beneficial Interest
Section 1. The Shares of the Trust shall be issued in one
or more series as the Trustees may, without shareholder approval,
authorize. Each series shall be preferred over all other series
in respect of the assets allocated to that series. The
beneficial interest in each series shall at all times be divided
into Shares, without par value, each of which shall, except as
provided in the following sentence represent an equal
proportionate interest in the series with each other Share of the
same series, none having priority or preference over
another. The Trustees may, without shareholder approval, divide
the Shares of any series into two or more classes, Shares of each
such class having such preferences and special or relative rights
and privileges (including conversion rights, if any) as the
Trustees may determine and as shall be set forth in the Bylaws.
The number of Shares authorized shall be unlimited. The Trustees
may from time to time divide or combine the Shares of any series
or class into a greater or lesser number without thereby changing
the proportionate beneficial interest in the series or class.
Ownership of Shares
Section 2. The ownership of Shares shall be recorded on the
books of the Trust or a transfer or similar agent. No
certificates certifying the ownership of Shares shall be issued
except as the Trustees may otherwise determine from time to time.
The Trustees may make such rules as they consider appropriate for
the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the
Trust or any transfer or similar agent, as the case may be, shall
be conclusive as to who are the Shareholders of each series and
class and as to the number of Shares of each series and class
held from time to time by each Shareholder.
Investment in the Trust
Section 3. The Trustees shall accept investments in the
Trust from such persons and on such terms and for such
consideration, which may consist of cash or tangible or
intangible property or a combination thereof, as they or the
Bylaws from time to time authorize.
All consideration received by the Trust for the issue or
sale of Shares of each series, together with all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, and any
funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall irrevocably belong to the
series of Shares with respect to which the same were received by
the Trust for all purposes, subject only to the rights of
creditors, and shall be so handled upon the books of account of
the Trust and are herein referred to as "assets of" such series.
No Preemptive Rights
Section 4. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities
issued by the Trust.
Status of Shares and Limitation of Personal Liability
Section 5. Shares shall be deemed to be personal property
giving only the rights provided in this Declaration of Trust or
the Bylaws. Every Shareholder by virtue of having become a
Shareholder shall be held to have expressly assented and agreed
to the terms of this Declaration of Trust and the Bylaws and to
have become a party hereto. The death of a Shareholder during
the continuance of the Trust shall not operate to terminate the
same nor entitle the representative of any deceased Shareholder
to an accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but only to the rights of said
decedent under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of
the Trust property or right to call for a partition or division
of the same or for an accounting, nor shall the ownership of
Shares constitute the Shareholders partners. Neither the Trust
nor the Trustees, nor any officer, employee or agent of the Trust
shall have any power to bind personally any Shareholder, nor
except as specifically provided herein to call upon any
Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time
personally agree to pay.
ARTICLE IV
The Trustees
Election
Section 1. A Trustee may be elected either by the Trustees
or by the Shareholders. There shall be not less than three
Trustees. The number of Trustees shall be fixed by the Trustees.
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. At any meeting called for the purpose, a
Trustee may be removed by vote of two-thirds of the outstanding
shares. The initial Trustees, each of whom shall serve until the
first meeting of Shareholders at which Trustees are elected and
until his successor is elected and qualified, or until he sooner
dies, resigns or is removed shall be George Putnam, Richard M.
Cutler and Alla O'Brien and such other persons as the Trustee or
Trustees then in office shall, prior to any sale of Shares
pursuant to public offering, appoint.
Effect of Death, Resignation, etc. of a Trustee
Section 2. The death, declination, resignation, retirement,
removal or incapacity of the Trustees, or any one of them, shall
not operate to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust.
Powers
Section 3. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient
to carry out that responsibility. Without limiting the
foregoing, the Trustees may adopt Bylaws not inconsistent with
this Declaration of Trust providing for the conduct of the
business of the Trust and may amend and repeal them to the extent
that such Bylaws do not reserve that right to the Shareholders;
they may fill vacancies in or add to their number, and may elect
and remove such officers and appoint and terminate such agents as
they consider appropriate; they may appoint from their own
number, and terminate, any one or more committees consisting of
two or more Trustees, including an executive committee which may,
when the Trustees are not in session, exercise some or all of the
power and authority of the Trustees as the Trustees may
determine; they may employ one or more custodians of the assets
of the Trust and may authorize such custodians to employ
subcustodians and to deposit all or any part of such assets in a
system or systems for the central handling of securities, retain
a transfer agent or a Shareholder servicing agent, or both,
provide for the distribution of Shares by the Trust, through one
or more principal underwriters or otherwise, set record dates for
the determination of Shareholders with respect to various
matters, and in general delegate such authority as they consider
desirable to any officer of the Trust, to any committee of the
Trustees and to any agent or employee of the Trust or to any such
custodian or underwriter.
Without limiting the foregoing, the Trustees shall have
power and authority:
(a) To invest and reinvest cash, and to hold cash
uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate,
write options on and lease any or all of the assets of the
Trust;
(c) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or
property; and to execute and deliver proxies or powers of
attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power
and discretion with relation to securities or property as
the Trustees shall deem proper;
(d) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities;
(e) To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or
other negotiable form, or in the name of the Trustees or of
the Trust or in the name of a custodian, subcustodian or
other depositary or a nominee or nominees or otherwise;
(f) Subject to the provisions of Article III, Section 3, to
allocate assets, liabilities, income and expenses of the
Trust to a particular series of Shares or to apportion the
same among two or more series, provided that any liabilities
or expenses incurred by or arising in connection with a
particular series of Shares shall be payable solely out of
the assets of that series; and to the extent necessary or
appropriate to give effect to the preferences and special or
relative rights and privileges of any classes of Shares, to
allocate assets, liabilities, income and expenses of a
series to a particular class of Shares of that series or to
apportion the same among two or more classes of Shares of
that series;
(g) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation
or issuer, any security of which is or was held in the
Trust; to consent to any contract, lease, mortgage, purchase
or sale of property by such corporation or issuer, and to
pay calls or subscriptions with respect to any security held
in the Trust;
(h) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in
that connection to deposit any security with, or transfer
any security to, any such committee, depositary or trustee,
and to delegate to them such power and authority with
relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree
to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the
Trustees shall deem proper;
<PAGE>
(i) To compromise, arbitrate or otherwise adjust claims in
favor of or against the Trust or any matter in controversy,
including but not limited to claims for taxes;
(j) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(k) To borrow funds;
(l) To endorse or guarantee the payment of any notes or
other obligations of any person; to make contracts of
guaranty or suretyship, or otherwise assume liability for
payment thereof; and to mortgage and pledge the Trust
property or any part thereof to secure any of or all such
obligations;
(m) To purchase and pay for entirely out of Trust property
such insurance as they may deem necessary or appropriate for
the conduct of the business, including without limitation,
insurance policies insuring the assets of the Trust and
payment of distributions and principal on its portfolio
investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents,
investment advisers or managers, principal underwriters, or
independent contractors of the Trust individually against
all claims and liabilities of every nature arising by reason
of holding, being or having held any such office or
position, or by reason of any action alleged to have been
taken or omitted by any such person as Shareholder, Trustee,
officer, employee, agent, investment adviser or manager,
principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would have
the power to indemnify such person against such liability;
and
(n) To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and
carry out pension, profit-sharing, share bonus, share
purchase, savings, thrift and other retirement, incentive
and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits, for
any or all of the Trustees, officers, employees and agents
of the Trust.
The Trustees shall not in any way be bound or limited by any
present or future law or custom in regard to investments by
trustees. Except as otherwise provided herein or from time to
time in the Bylaws, any action to be taken by the Trustees may be
taken by a majority of the Trustees present at a meeting of
Trustees (a quorum being present), within or without
Massachusetts, including any meeting held by means of a
conference telephone or other communications equipment by means
of which all persons participating in the meeting can hear each
other at the same time and participation by such means shall
constitute presence in person at a meeting, or by written
consents of a majority of the Trustees then in office.
Payment of Expenses by Trust
Section 4. The Trustees are authorized to pay or to cause
to be paid out of the assets of the Trust all expenses, fees,
charges, taxes and liabilities incurred or arising in connection
with the Trust, or in connection with the management thereof,
including, but not limited to, the Trustees' compensation and
such expenses and charges for the services of the Trust's
officers, employees, investment adviser or manager, principal
underwriter, auditor, counsel, custodian, transfer agent,
Shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees
may deem necessary or proper to incur, provided, however, that
all expenses, fees, charges, taxes and liabilities incurred or
arising in connection with a particular series of Shares shall be
payable solely out of the assets of that series.
Ownership of Assets of the Trust
Section 5. Title to all of the assets of each series of
Shares and of the Trust shall at all times be considered as
vested in the Trustees.
Advisory, Management and Distribution
Section 6. Subject to a favorable Majority Shareholder
Vote, the Trustees may, at any time and from time to time,
contract for exclusive or nonexclusive advisory and/or management
services with any corporation, trust, association or other
organization (the "Manager"), every such contract to comply with
such requirements and restrictions as may be set forth in the
Bylaws; and any such contract may contain such other terms
interpretive of or in addition to said requirements and
restrictions as the Trustees may determine, including, without
limitation, authority to determine from time to time what
investments shall be purchased, held, sold or exchanged and what
portion, if any, of the assets of the Trust shall be held
uninvested and to make changes in the Trust's investments. The
Trustees may also, at any time and from time to time, contract
with the Manager or any other corporation, trust, association or
other organization, appointing it exclusive or nonexclusive
distributor or principal underwriter for the Shares, every such
contract to comply with such requirements and restrictions as may
be set forth in the Bylaws; and any such contract may contain
such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee,
employee, manager, adviser, principal underwriter or
distributor or agent of or for any corporation, trust,
association, or other organization, or of or for any parent
or affiliate of any organization, with which an advisory or
management contract, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing
or other agency contract may have been or may hereafter be
made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in
the Trust, or that
(ii) any corporation, trust, association or other
organization with which an advisory or management contract
or principal underwriter's or distributor's contract, or
transfer, Shareholder servicing or other agency contract may
have been or may hereafter be made also has an advisory or
management contract, or transfer, Shareholder servicing or
other agency contract with one or more other corporations,
trusts, associations, or other organizations, or has other
business or interests,
shall not affect the validity of any such contract or disqualify
any Shareholder, Trustee or officer of the Trust from voting upon
or executing the same or create any liability or accountability
to the Trust or its Shareholders.
ARTICLE V
Shareholders' Voting Powers and Meetings
Voting Powers
Section 1. Subject to the voting powers of one or more
classes of shares as set forth elsewhere in this Declaration of
Trust or in the Bylaws, the Shareholders shall have power to vote
only (i) for the election of Trustees as provided in Article IV,
Section 1, (ii) for the removal of Trustees as provided in
Article IV, Section 1, (iii) with respect to any Manager as
provided in Article IV, Section 6, (iv) with respect to any
termination of this Trust to the extent and as provided in
Article IX, Section 4, (v) with respect to any amendment of this
Declaration of Trust to the extent and as provided in Article IX,
Section 7, (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
Trust or the Shareholders, and (vii) with respect to such
additional matters relating to the Trust as may be required by
this Declaration of Trust, the Bylaws or any registration of the
Trust with the Securities and Exchange Commission (or any
successor agency) or any state, or as the Trustees may consider
necessary or desirable. Each whole Share shall be entitled to
one vote as to any matter on which it is entitled to vote and
each fractional Share shall be entitled to a proportionate
fractional vote. Notwithstanding any other provision of this
Declaration of Trust, on any matter submitted to a vote of
Shareholders, all Shares of the Trust then entitled to vote shall
be voted in the aggregate as a single class without regard to
series or classes of shares, except (1) when required by the 1940
Act or when the Trustees shall have determined that the matter
affects one or more series or classes of Shares materially
differently, Shares shall be voted by individual series or class;
and (2) when the Trustees have determined that the matter affects
only the interests of one or more series or classes, then only
Shareholders of such series or classes shall be entitled to vote
thereon. There shall be no cumulative voting in the election of
Trustees. Shares may be voted in person or by proxy. A proxy
with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior
to exercise of the proxy the Trust receives a specific written
notice to the contrary from any one of them. A proxy purporting
to be executed by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. Until
Shares of any series or class are issued, the Trustees may
exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the Bylaws to be
taken by Shareholders as to such series or class.
Voting Power and Meetings
Section 2. Meetings of Shareholders of any or all series or
classes may be called by the Trustees from time to time for the
purpose of taking action upon any matter requiring the vote or
authority of the Shareholders of such series or classes as herein
provided or upon any other matter deemed by the Trustees to be
necessary or desirable. Written notice of any meeting of
Shareholders shall be given or caused to be given by the Trustees
by mailing such notice at least seven days before such meeting,
postage prepaid, stating the time, place and purpose of the
meeting, to each Shareholder entitled to vote at such meeting at
the Shareholder's address as it appears on the records of the
Trust. If the Trustees shall fail to call or give notice of any
meeting of Shareholders for a period of 30 days after written
application by Shareholders holding at least 10% of the then
outstanding Shares of all series and classes entitled to vote at
such meeting requesting that a meeting be called for a purpose
requiring action by the Shareholders as provided herein or in the
Bylaws, then Shareholders holding at least 10% of the then
outstanding Shares of all series and classes entitled to vote at
such meeting or of all series if all series are entitled to vote
at such meeting may call and give notice of such meeting, and
thereupon the meeting shall be held in the manner provided for
herein in case of call thereof by the Trustees. Notice of a
meeting need not be given to any Shareholder if a written waiver
of notice, executed by him or her before or after the meeting, is
filed with the records of the meeting, or to any Shareholder who
attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her.
Quorum and Required Vote
Section 3. Thirty percent of Shares entitled to vote on a
particular matter shall be a quorum for the transaction of
business on that matter at a Shareholders' meeting, except that
where any provision of law or of this Declaration of Trust
permits or requires that holders of any series or class shall
vote as an individual series or class, then thirty percent of the
aggregate number of Shares of that series or class entitled to
vote shall be necessary to constitute a quorum for the
transaction of business by that series or class. Any lesser
number shall be sufficient for adjournments. Any adjourned
session or sessions may be held, within a reasonable time after
the date set for the original meeting, without the necessity of
further notice. Except when a larger vote is required by any
provision of this Declaration of Trust or the Bylaws, or by the
1940 Act, a majority of the Shares voted shall decide any
questions and a plurality shall elect a Trustee, provided that
where any provision of law or of this Declaration of Trust
permits or requires that the holders of any series or class shall
vote as an individual series or class, then a majority of the
Shares of that series or class voted on the matter (or a
plurality with respect to the election of a Trustee) shall decide
that matter insofar as that series or class is concerned.
Action by Written Consent
Section 4. Any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote
on the matter (or such larger proportion thereof as shall be
required by any express provision of this Declaration of Trust or
the Bylaws) consent to the action in writing and such written
consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
<PAGE>
Additional Provisions
Section 5. The Bylaws may include further provisions not
inconsistent with this Declaration of Trust, regarding
Shareholders' voting powers, the conduct of meetings and related
matters.
ARTICLE VI
Distributions, Redemptions and Repurchases
Distributions
Section 1. The Trustees may each year, or more frequently
if they so determine, distribute to the Shareholders of each
series out of the assets of such series such amounts as the
Trustees may determine. Any such distribution to the
Shareholders of a particular series shall be made to said
Shareholders pro rata in proportion to the number of Shares of
such series held by each of them, except to the extent otherwise
required or permitted by the preferences and special or relative
rights and privileges of any classes of Shares of that series,
and any distribution to the Shareholders of a particular class of
Shares shall be made to such Shareholders pro rata in proportion
to the number of Shares of such class held by each of them.
Such distributions shall be made in cash or Shares or a
combination thereof as determined by the Trustees. Any such
distribution paid in Shares will be paid at the net asset value
thereof as determined in accordance with the Bylaws.
Redemptions and Repurchases
Section 2. The Trust shall purchase such Shares as are
offered by any Shareholder for redemption, upon the presentation
of any certificate for the Shares to be purchased, a proper
instrument of transfer and a request directed to the Trust or a
person designated by the Trust that the Trust purchase such
Shares, or in accordance with such other procedures for
redemption as the Trustees may from time to time authorize; and
the Trust will pay therefor the net asset value thereof, as next
determined in accordance with the Bylaws. Payment for said
Shares shall be made by the Trust to the Shareholder within seven
days after the date on which the request is made. The obligation
set forth in this Section 2 is subject to the provision that in
the event that any time the New York Stock Exchange is closed for
other than customary weekends or holidays, or, if permitted by
rules of the Securities and Exchange Commission, during periods
when trading on the Exchange is restricted or during any
emergency which makes it impractical for the Trust to dispose of
its investments or to determine fairly the value of its net
assets, or during any other period permitted by order of the
Securities and Exchange Commission for the protection of
investors, such obligation may be suspended or postponed by the
Trustees. The Trust may also purchase or repurchase Shares at a
price not exceeding the net asset value of such Shares in effect
when the purchase or repurchase or any contract to purchase or
repurchase is made.
Redemptions at the Option of the Trust
Section 3. The Trust shall have the right at its option and
at any time to redeem Shares of any Shareholder at the net asset
value thereof as determined in accordance with the Bylaws: (i)
if at such time such Shareholder owns fewer Shares than, or
Shares having an aggregate net asset value of less than, an
amount determined from time to time by the Trustees; or (ii) to
the extent that such Shareholder owns Shares of a particular
series or class of Shares equal to or in excess of a percentage
of the outstanding Shares of that series or class determined from
time to time by the Trustees; or (iii) to the extent that such
Shareholder owns Shares of the Trust representing a percentage
equal to or in excess of such percentage of the aggregate number
of outstanding Shares of the Trust or the aggregate net asset
value of the Trust determined from time to time by the Trustees.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
Compensation
Section 1. The Trustees as such shall be entitled to
reasonable compensation from the Trust; they may fix the amount
of their compensation. Nothing herein shall in any way prevent
the employment of any Trustee for advisory, management, legal,
accounting, investment banking or other services and payment for
the same by the Trust.
Limitation of Liability
Section 2. The Trustees shall not be responsible or liable
in any event for any neglect or wrongdoing of any officer, agent,
employee, manager or principal underwriter of the Trust, nor
shall any Trustee be responsible for the act or omission of any
other Trustee, but nothing herein contained shall protect any
Trustee against any liability to which he or she would otherwise
be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his or her office.
Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever executed or
done by or on behalf of the Trust or the Trustees or any of them
in connection with the Trust shall be conclusively deemed to have
been executed or done only in or with respect to their or his or
her capacity as Trustees or Trustee, and such Trustees or Trustee
shall not be personally liable thereon.
ARTICLE VIII
Indemnification
Trustees, Officers, etc.
Section 1. The Trust shall indemnify each of its Trustees
and officers (including persons who serve at the Trust's request
as directors, officers or trustees of another organization in
which the Trust has any interest as a shareholder, creditor or
otherwise) (hereinafter referred to as a "Covered Person")
against all liabilities and expenses, including but not limited
to amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and counsel fees reasonably incurred by any
Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which
such Covered Person may be or may have been involved as a party
or otherwise or with which such Covered Person may be or may have
been threatened, while in office or thereafter, by reason of
being or having been such a Covered Person except with respect to
any matter as to which such Covered Person shall have been
finally adjudicated in any such action, suit or other proceeding
(a) not to have acted in good faith in the reasonable belief that
such Covered Person's action was in the best interests of the
Trust or (b) to be liable to the Trust or its Shareholders by
reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such
Covered Person's office. Expenses, including counsel fees so
incurred by any such Covered Person (but excluding amounts paid
in satisfaction of judgments, in compromise or as fines or
penalties), shall be paid from time to time by the Trust in
advance of the final disposition of any such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such
Covered Person to repay amounts so paid to the Trust if it is
ultimately determined that indemnification of such expenses is
not authorized under this Article, provided, however, that either
(a) such Covered Person shall have provided appropriate security
for such undertaking, (b) the Trust shall be insured against
losses arising from any such advance payments or (c) either a
majority of the disinterested Trustees acting on the matter
(provided that a majority of the disinterested Trustees then in
office act on the matter), or independent legal counsel in a
written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a full trial type inquiry)
that there is reason to believe that such Covered Person will be
found entitled to indemnification under this Article.
Compromise Payment
Section 2. As to any matter disposed of (whether by a
compromise payment, pursuant to a consent decree or otherwise)
without an adjudication by a court, or by any other body before
which the proceeding was brought, that such Covered Person either
(a) did not act in good faith in the reasonable belief that his
or her action was in the best interests of the Trust or (b) is
liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office,
indemnification shall be provided if (a) approved as in the best
interests of the Trust, after notice that it involves such
indemnification, by at least a majority of the disinterested
Trustees acting on the matter (provided that a majority of the
disinterested Trustees then in office act on the matter) upon a
determination, based upon a review of readily available facts (as
opposed to a full trial type inquiry) that such Covered Person
acted in good faith in the reasonable belief that his or her
action was in the best interests of the Trust and is not liable
to the Trust or its Shareholders by reason of wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office, or (b) there has
been obtained an opinion in writing of independent legal counsel,
based upon a review of readily available facts (as opposed to a
full trial type inquiry) to the effect that such Covered Person
appears to have acted in good faith in the reasonable belief that
his or her action was in the best interests of the Trust and that
such indemnification would not protect such Covered Person
against any liability to the Trust to which he or she would
otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of his or her office. Any approval pursuant to this
Section shall not prevent the recovery from any Covered Person of
any amount paid to such Covered Person in accordance with this
Section as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have
acted in good faith in the reasonable belief that such Covered
Person's action was in the best interests of the Trust or to have
been liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's
office.
Indemnification Not Exclusive
Section 3. The right of indemnification hereby provided
shall not be exclusive of or affect any other rights to which
such Covered Person may be entitled. As used in this Article
VIII, the term "Covered Person" shall include such person's
heirs, executors and administrators and a "disinterested Trustee"
is a Trustee who is not an "interested person" of the Trust as
defined in Section 2(a)(19) of the 1940 Act (or who has been
exempted from being an "interested person" by any rule,
regulation or order of the Commission) and against whom none of
such actions, suits or other proceedings or another action, suit
or other proceeding on the same or similar grounds is then or has
been pending. Nothing contained in this Article shall affect any
rights to indemnification to which personnel of the Trust, other
than Trustees or officers, and other persons may be entitled by
contract or otherwise under law, nor the power of the Trust to
purchase and maintain liability insurance on behalf of any such
person.
Shareholders
Section 4. In case any Shareholder or former Shareholder
shall be held to be personally liable solely by reason of his or
her being or having been a Shareholder and not because of his or
her acts or omissions or for some other reason, the Shareholder
or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general
successor) shall be entitled to be held harmless from and
indemnified against all loss and expense arising from such
liability, but only out of the assets of the particular series of
Shares of which he or she is or was a Shareholder.
ARTICLE IX
Miscellaneous
Trustees, Shareholders, etc. Not Personally Liable; Notice
Section 1. All persons extending credit to, contracting
with or having any claim against the Trust or a particular series
of Shares shall look only to the assets of the Trust or the
assets of that particular series of Shares for payment under such
credit, contract or claim, and neither the Shareholders nor the
Trustees, nor any of the Trust's officers, employees or agents,
whether past, present or future, shall be personally liable
therefor. Nothing in this Declaration of Trust shall protect any
Trustee against any liability to which such Trustee would
otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or
undertaking made or issued by the Trustees or by any officer or
officers shall give notice that this Declaration of Trust is on
file with the Secretary of The Commonwealth of Massachusetts and
shall recite that the same was executed or made by or on behalf
of the Trust or by them as Trustee or Trustees or as officer or
officers and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders
individually but are binding only upon the assets and property of
the Trust, and may contain such further recital as he or she or
they may deem appropriate, but the omission thereof shall not
operate to bind any Trustee or Trustees or officer or officers or
Shareholder or Shareholders individually.
Trustee's Good Faith Action, Expert Advice, No Bond or Surety
Section 2. The exercise by the Trustees of their powers and
discretions hereunder shall be binding upon everyone interested.
A Trustee shall be liable for his or her own wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and for nothing
else, and shall not be liable for errors of judgment or mistakes
of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this
Declaration of Trust, and shall be under no liability for any act
or omission in accordance with such advice or for failing to
follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustee
Section 3. No person dealing with the Trustees shall be
bound to make any inquiry concerning the validity of any
transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the
Trust or upon its order.
Duration and Termination of Trust
Section 4. Unless terminated as provided herein, the Trust
shall continue without limitation of time. The Trust 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 by
written notice to the Shareholders. Any series of Shares may be
terminated at any time by vote of Shareholders holding at least
66-2/3% of the Shares of such series entitled to vote or by the
Trustees by written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of
Shares, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or
anticipated, of the Trust or of the particular series as may be
determined by the Trustees, the Trust shall in accordance with
such procedures as the Trustees consider appropriate reduce the
remaining assets to distributable form in cash or shares or other
securities, or any combination thereof, and distribute the
proceeds to the Shareholders of the series involved, ratably
according to the number of Shares of such series held by the
several Shareholders of such series on the date of termination,
except to the extent otherwise required or permitted by the
preferences and special or relative rights and privileges of any
classes of any series of Shares of the Trust, provided that any
distribution to the Shareholders of a particular class of any
series of Shares shall be made to such Shareholders pro rata in
proportion to the number of Shares of such class held by each of
them.
Filing of Copies, References, Headings
Section 5. The original or a copy of this instrument and of
each amendment hereto shall be kept at the office of the Trust
where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the
Trust with the Secretary of State of The Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any
other governmental office where such filing may from time to time
be required. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any
such amendments have been made and as to any matters in
connection with the Trust hereunder, and, with the same effect as
if it were the original, may rely on a copy certified by an
officer of the Trust to be a copy of this instrument or of any
such amendments. In this instrument and in any such amendment,
references to this instrument and all expressions like "herein",
"hereof" and "hereunder" shall be deemed to refer to this
instrument as amended or affected by any such amendments.
Headings are placed herein for convenience of reference only and
shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of
which shall be deemed an original.
Applicable Law
Section 6. This Declaration of Trust is made in The
Commonwealth of Massachusetts, and it is created under and is to
be governed by and construed and administered according to the
laws of said Commonwealth. The Trust shall be of the type
commonly called a Massachusetts business trust, and without
limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust.
Amendments
Section 7. This 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 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 and
class not affected shall be required. Amendments having the
purpose of changing the name of the Trust 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.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being a majority of the
Trustees of the Trust, hereunto set their hands and seals in the
City of Boston, Massachusetts, for themselves and their assigns,
as of the day and year first above written.
/s/ George Putnam /s/ Donald S. Perkins
- ------------------------ ---------------------------
George Putnam Donald S. Perkins
/s/ Jameson A. Baxter /s/ William F. Pounds
- ------------------------ ---------------------------
Jameson A. Baxter William F. Pounds
/s/ Hans H. Estin /s/ George Putnam, III
- ------------------------ ---------------------------
Hans H. Estin George Putnam, III
/s/ John A. Hill Eli Shapiro
- ------------------------ ---------------------------
John A. Hill Eli Shapiro
/s/ Elizabeth T. Kennan /s/ A.J.C. Smith
- ------------------------ ---------------------------
Elizabeth T. Kennan A.J.C. Smith
/s/ Lawrence J. Lasser /s/ W. Nicholas Thorndike
- ------------------------ ---------------------------
Lawrence J. Lasser W. Nicholas Thorndike
- ------------------------
Robert E. Patterson
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Boston, September 15, 1995
Suffolk, ss.
Then personally appeared each of the above named Trustees of
Putnam Michigan Tax Exempt Income Fund and acknowledged the
foregoing instrument to be their free act and deed, before me,
/s/ Beth F. Marino
----------------------------
Notary Public
My commission expires:
4/6/2001
The address of the Trust is One Post Office Square, Boston,
Massachusetts 02109
<PAGE>
PUTNAM MINNESOTA TAX EXEMPT INCOME FUND
AMENDED AND RESTATED AGREEMENT
AND DECLARATION OF TRUST
This AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
made at Boston, Massachusetts, this 15th day of September, 1995,
hereby amends and restates in its entirety the Agreement and
Declaration of Trust dated September 2, 1986, as heretofore
amended, by the Trustees hereunder and by the holders of shares
of beneficial interest issued or to be issued hereunder as
hereinafter provided. This Amended and Restated Agreement and
Declaration of Trust shall be effective upon filing with the
Secretary of State of The Commonwealth of Massachusetts.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business
of an investment company; and
WHEREAS, the Trustees have agreed to manage all property
coming into their hands as trustees of a Massachusetts voluntary
association with transferable shares in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will
hold all cash, securities and other assets, which they may from
time to time acquire in any manner as Trustees hereunder IN TRUST
to manage and dispose of the same upon the following terms and
conditions for the pro rata benefit of the holders from time to
time of Shares in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
Name
Section 1. This Trust shall be known as "Putnam Minnesota
Tax Exempt Income Fund", and the Trustees shall conduct the
business of the Trust under that name or any other name as they
may from time to time determine.
Definitions
Section 2. Whenever used herein, unless otherwise required
by the context or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust
established by this Agreement and Declaration of Trust, as
amended from time to time;
<PAGE>
(b) "Trustees" refers to the Trustees of the Trust named
herein or elected in accordance with Article IV;
(c) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest in the
Trust shall be divided from time to time or, if more than
one series or class of Shares is authorized by the Trustees,
the equal proportionate transferable units into which each
series or class of Shares shall be divided from time to
time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of
1940 and the Rules and Regulations thereunder, all as
amended from time to time;
(f) The terms "Affiliated Person", "Assignment",
"Commission", "Interested Person", "Principal Underwriter"
and "Majority Shareholder Vote" (the 67% or 50% requirement
of the third sentence of Section 2(a)(42) of the 1940 Act,
whichever may be applicable) shall have the meanings given
them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Amended and
Restated Agreement and Declaration of Trust as amended or
restated from time to time; and
(h) "Bylaws" shall mean the Bylaws of the Trust as amended
from time to time;
(i) The term "series" or "series of Shares" refers to the
one or more separate investment portfolios of the Trust
into which the assets and liabilities of the Trust may
be divided and the Shares of the Trust representing
the beneficial interest of Shareholders in such
respective portfolios; and
(j) The term "class" or "class of Shares" refers to the
division of Shares into two or more classes as provided
in Article III, Section 1 hereof.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to provide investors a managed
investment primarily in securities, debt instruments and other
instruments and rights of a financial character.
<PAGE>
ARTICLE III
Shares
Division of Beneficial Interest
Section 1. The Shares of the Trust shall be issued in one
or more series as the Trustees may, without shareholder approval,
authorize. Each series shall be preferred over all other series
in respect of the assets allocated to that series. The
beneficial interest in each series shall at all times be divided
into Shares, without par value, each of which shall, except as
provided in the following sentence represent an equal
proportionate interest in the series with each other Share of the
same series, none having priority or preference over
another. The Trustees may, without shareholder approval, divide
the Shares of any series into two or more classes, Shares of each
such class having such preferences and special or relative rights
and privileges (including conversion rights, if any) as the
Trustees may determine and as shall be set forth in the Bylaws.
The number of Shares authorized shall be unlimited. The Trustees
may from time to time divide or combine the Shares of any series
or class into a greater or lesser number without thereby changing
the proportionate beneficial interest in the series or class.
Ownership of Shares
Section 2. The ownership of Shares shall be recorded on the
books of the Trust or a transfer or similar agent. No
certificates certifying the ownership of Shares shall be issued
except as the Trustees may otherwise determine from time to time.
The Trustees may make such rules as they consider appropriate for
the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the
Trust or any transfer or similar agent, as the case may be, shall
be conclusive as to who are the Shareholders of each series and
class and as to the number of Shares of each series and class
held from time to time by each Shareholder.
Investment in the Trust
Section 3. The Trustees shall accept investments in the
Trust from such persons and on such terms and for such
consideration, which may consist of cash or tangible or
intangible property or a combination thereof, as they or the
Bylaws from time to time authorize.
All consideration received by the Trust for the issue or
sale of Shares of each series, together with all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, and any
funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall irrevocably belong to the
series of Shares with respect to which the same were received by
the Trust for all purposes, subject only to the rights of
creditors, and shall be so handled upon the books of account of
the Trust and are herein referred to as "assets of" such series.
No Preemptive Rights
Section 4. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities
issued by the Trust.
Status of Shares and Limitation of Personal Liability
Section 5. Shares shall be deemed to be personal property
giving only the rights provided in this Declaration of Trust or
the Bylaws. Every Shareholder by virtue of having become a
Shareholder shall be held to have expressly assented and agreed
to the terms of this Declaration of Trust and the Bylaws and to
have become a party hereto. The death of a Shareholder during
the continuance of the Trust shall not operate to terminate the
same nor entitle the representative of any deceased Shareholder
to an accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but only to the rights of said
decedent under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of
the Trust property or right to call for a partition or division
of the same or for an accounting, nor shall the ownership of
Shares constitute the Shareholders partners. Neither the Trust
nor the Trustees, nor any officer, employee or agent of the Trust
shall have any power to bind personally any Shareholder, nor
except as specifically provided herein to call upon any
Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time
personally agree to pay.
ARTICLE IV
The Trustees
Election
Section 1. A Trustee may be elected either by the Trustees
or by the Shareholders. There shall be not less than three
Trustees. The number of Trustees shall be fixed by the Trustees.
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. At any meeting called for the purpose, a
Trustee may be removed by vote of two-thirds of the outstanding
shares. The initial Trustees, each of whom shall serve until the
first meeting of Shareholders at which Trustees are elected and
until his successor is elected and qualified, or until he sooner
dies, resigns or is removed shall be George Putnam, Richard M.
Cutler and Alla O'Brien and such other persons as the Trustee or
Trustees then in office shall, prior to any sale of Shares
pursuant to public offering, appoint.
Effect of Death, Resignation, etc. of a Trustee
Section 2. The death, declination, resignation, retirement,
removal or incapacity of the Trustees, or any one of them, shall
not operate to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust.
Powers
Section 3. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient
to carry out that responsibility. Without limiting the
foregoing, the Trustees may adopt Bylaws not inconsistent with
this Declaration of Trust providing for the conduct of the
business of the Trust and may amend and repeal them to the extent
that such Bylaws do not reserve that right to the Shareholders;
they may fill vacancies in or add to their number, and may elect
and remove such officers and appoint and terminate such agents as
they consider appropriate; they may appoint from their own
number, and terminate, any one or more committees consisting of
two or more Trustees, including an executive committee which may,
when the Trustees are not in session, exercise some or all of the
power and authority of the Trustees as the Trustees may
determine; they may employ one or more custodians of the assets
of the Trust and may authorize such custodians to employ
subcustodians and to deposit all or any part of such assets in a
system or systems for the central handling of securities, retain
a transfer agent or a Shareholder servicing agent, or both,
provide for the distribution of Shares by the Trust, through one
or more principal underwriters or otherwise, set record dates for
the determination of Shareholders with respect to various
matters, and in general delegate such authority as they consider
desirable to any officer of the Trust, to any committee of the
Trustees and to any agent or employee of the Trust or to any such
custodian or underwriter.
Without limiting the foregoing, the Trustees shall have
power and authority:
(a) To invest and reinvest cash, and to hold cash
uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate,
write options on and lease any or all of the assets of the
Trust;
(c) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or
property; and to execute and deliver proxies or powers of
attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power
and discretion with relation to securities or property as
the Trustees shall deem proper;
(d) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities;
(e) To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or
other negotiable form, or in the name of the Trustees or of
the Trust or in the name of a custodian, subcustodian or
other depositary or a nominee or nominees or otherwise;
(f) Subject to the provisions of Article III, Section 3, to
allocate assets, liabilities, income and expenses of the
Trust to a particular series of Shares or to apportion the
same among two or more series, provided that any liabilities
or expenses incurred by or arising in connection with a
particular series of Shares shall be payable solely out of
the assets of that series; and to the extent necessary or
appropriate to give effect to the preferences and special or
relative rights and privileges of any classes of Shares, to
allocate assets, liabilities, income and expenses of a
series to a particular class of Shares of that series or to
apportion the same among two or more classes of Shares of
that series;
(g) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation
or issuer, any security of which is or was held in the
Trust; to consent to any contract, lease, mortgage, purchase
or sale of property by such corporation or issuer, and to
pay calls or subscriptions with respect to any security held
in the Trust;
(h) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in
that connection to deposit any security with, or transfer
any security to, any such committee, depositary or trustee,
and to delegate to them such power and authority with
relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree
to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the
Trustees shall deem proper;
<PAGE>
(i) To compromise, arbitrate or otherwise adjust claims in
favor of or against the Trust or any matter in controversy,
including but not limited to claims for taxes;
(j) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(k) To borrow funds;
(l) To endorse or guarantee the payment of any notes or
other obligations of any person; to make contracts of
guaranty or suretyship, or otherwise assume liability for
payment thereof; and to mortgage and pledge the Trust
property or any part thereof to secure any of or all such
obligations;
(m) To purchase and pay for entirely out of Trust property
such insurance as they may deem necessary or appropriate for
the conduct of the business, including without limitation,
insurance policies insuring the assets of the Trust and
payment of distributions and principal on its portfolio
investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents,
investment advisers or managers, principal underwriters, or
independent contractors of the Trust individually against
all claims and liabilities of every nature arising by reason
of holding, being or having held any such office or
position, or by reason of any action alleged to have been
taken or omitted by any such person as Shareholder, Trustee,
officer, employee, agent, investment adviser or manager,
principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would have
the power to indemnify such person against such liability;
and
(n) To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and
carry out pension, profit-sharing, share bonus, share
purchase, savings, thrift and other retirement, incentive
and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits, for
any or all of the Trustees, officers, employees and agents
of the Trust.
The Trustees shall not in any way be bound or limited by any
present or future law or custom in regard to investments by
trustees. Except as otherwise provided herein or from time to
time in the Bylaws, any action to be taken by the Trustees may be
taken by a majority of the Trustees present at a meeting of
Trustees (a quorum being present), within or without
Massachusetts, including any meeting held by means of a
conference telephone or other communications equipment by means
of which all persons participating in the meeting can hear each
other at the same time and participation by such means shall
constitute presence in person at a meeting, or by written
consents of a majority of the Trustees then in office.
Payment of Expenses by Trust
Section 4. The Trustees are authorized to pay or to cause
to be paid out of the assets of the Trust all expenses, fees,
charges, taxes and liabilities incurred or arising in connection
with the Trust, or in connection with the management thereof,
including, but not limited to, the Trustees' compensation and
such expenses and charges for the services of the Trust's
officers, employees, investment adviser or manager, principal
underwriter, auditor, counsel, custodian, transfer agent,
Shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees
may deem necessary or proper to incur, provided, however, that
all expenses, fees, charges, taxes and liabilities incurred or
arising in connection with a particular series of Shares shall be
payable solely out of the assets of that series.
Ownership of Assets of the Trust
Section 5. Title to all of the assets of each series of
Shares and of the Trust shall at all times be considered as
vested in the Trustees.
Advisory, Management and Distribution
Section 6. Subject to a favorable Majority Shareholder
Vote, the Trustees may, at any time and from time to time,
contract for exclusive or nonexclusive advisory and/or management
services with any corporation, trust, association or other
organization (the "Manager"), every such contract to comply with
such requirements and restrictions as may be set forth in the
Bylaws; and any such contract may contain such other terms
interpretive of or in addition to said requirements and
restrictions as the Trustees may determine, including, without
limitation, authority to determine from time to time what
investments shall be purchased, held, sold or exchanged and what
portion, if any, of the assets of the Trust shall be held
uninvested and to make changes in the Trust's investments. The
Trustees may also, at any time and from time to time, contract
with the Manager or any other corporation, trust, association or
other organization, appointing it exclusive or nonexclusive
distributor or principal underwriter for the Shares, every such
contract to comply with such requirements and restrictions as may
be set forth in the Bylaws; and any such contract may contain
such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee,
employee, manager, adviser, principal underwriter or
distributor or agent of or for any corporation, trust,
association, or other organization, or of or for any parent
or affiliate of any organization, with which an advisory or
management contract, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing
or other agency contract may have been or may hereafter be
made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in
the Trust, or that
(ii) any corporation, trust, association or other
organization with which an advisory or management contract
or principal underwriter's or distributor's contract, or
transfer, Shareholder servicing or other agency contract may
have been or may hereafter be made also has an advisory or
management contract, or transfer, Shareholder servicing or
other agency contract with one or more other corporations,
trusts, associations, or other organizations, or has other
business or interests,
shall not affect the validity of any such contract or disqualify
any Shareholder, Trustee or officer of the Trust from voting upon
or executing the same or create any liability or accountability
to the Trust or its Shareholders.
ARTICLE V
Shareholders' Voting Powers and Meetings
Voting Powers
Section 1. Subject to the voting powers of one or more
classes of shares as set forth elsewhere in this Declaration of
Trust or in the Bylaws, the Shareholders shall have power to vote
only (i) for the election of Trustees as provided in Article IV,
Section 1, (ii) for the removal of Trustees as provided in
Article IV, Section 1, (iii) with respect to any Manager as
provided in Article IV, Section 6, (iv) with respect to any
termination of this Trust to the extent and as provided in
Article IX, Section 4, (v) with respect to any amendment of this
Declaration of Trust to the extent and as provided in Article IX,
Section 7, (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
Trust or the Shareholders, and (vii) with respect to such
additional matters relating to the Trust as may be required by
this Declaration of Trust, the Bylaws or any registration of the
Trust with the Securities and Exchange Commission (or any
successor agency) or any state, or as the Trustees may consider
necessary or desirable. Each whole Share shall be entitled to
one vote as to any matter on which it is entitled to vote and
each fractional Share shall be entitled to a proportionate
fractional vote. Notwithstanding any other provision of this
Declaration of Trust, on any matter submitted to a vote of
Shareholders, all Shares of the Trust then entitled to vote shall
be voted in the aggregate as a single class without regard to
series or classes of shares, except (1) when required by the 1940
Act or when the Trustees shall have determined that the matter
affects one or more series or classes of Shares materially
differently, Shares shall be voted by individual series or class;
and (2) when the Trustees have determined that the matter affects
only the interests of one or more series or classes, then only
Shareholders of such series or classes shall be entitled to vote
thereon. There shall be no cumulative voting in the election of
Trustees. Shares may be voted in person or by proxy. A proxy
with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior
to exercise of the proxy the Trust receives a specific written
notice to the contrary from any one of them. A proxy purporting
to be executed by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. Until
Shares of any series or class are issued, the Trustees may
exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the Bylaws to be
taken by Shareholders as to such series or class.
Voting Power and Meetings
Section 2. Meetings of Shareholders of any or all series or
classes may be called by the Trustees from time to time for the
purpose of taking action upon any matter requiring the vote or
authority of the Shareholders of such series or classes as herein
provided or upon any other matter deemed by the Trustees to be
necessary or desirable. Written notice of any meeting of
Shareholders shall be given or caused to be given by the Trustees
by mailing such notice at least seven days before such meeting,
postage prepaid, stating the time, place and purpose of the
meeting, to each Shareholder entitled to vote at such meeting at
the Shareholder's address as it appears on the records of the
Trust. If the Trustees shall fail to call or give notice of any
meeting of Shareholders for a period of 30 days after written
application by Shareholders holding at least 10% of the then
outstanding Shares of all series and classes entitled to vote at
such meeting requesting that a meeting be called for a purpose
requiring action by the Shareholders as provided herein or in the
Bylaws, then Shareholders holding at least 10% of the then
outstanding Shares of all series and classes entitled to vote at
such meeting or of all series if all series are entitled to vote
at such meeting may call and give notice of such meeting, and
thereupon the meeting shall be held in the manner provided for
herein in case of call thereof by the Trustees. Notice of a
meeting need not be given to any Shareholder if a written waiver
of notice, executed by him or her before or after the meeting, is
filed with the records of the meeting, or to any Shareholder who
attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her.
Quorum and Required Vote
Section 3. Thirty percent of Shares entitled to vote on a
particular matter shall be a quorum for the transaction of
business on that matter at a Shareholders' meeting, except that
where any provision of law or of this Declaration of Trust
permits or requires that holders of any series or class shall
vote as an individual series or class, then thirty percent of the
aggregate number of Shares of that series or class entitled to
vote shall be necessary to constitute a quorum for the
transaction of business by that series or class. Any lesser
number shall be sufficient for adjournments. Any adjourned
session or sessions may be held, within a reasonable time after
the date set for the original meeting, without the necessity of
further notice. Except when a larger vote is required by any
provision of this Declaration of Trust or the Bylaws, or by the
1940 Act, a majority of the Shares voted shall decide any
questions and a plurality shall elect a Trustee, provided that
where any provision of law or of this Declaration of Trust
permits or requires that the holders of any series or class shall
vote as an individual series or class, then a majority of the
Shares of that series or class voted on the matter (or a
plurality with respect to the election of a Trustee) shall decide
that matter insofar as that series or class is concerned.
Action by Written Consent
Section 4. Any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote
on the matter (or such larger proportion thereof as shall be
required by any express provision of this Declaration of Trust or
the Bylaws) consent to the action in writing and such written
consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
<PAGE>
Additional Provisions
Section 5. The Bylaws may include further provisions not
inconsistent with this Declaration of Trust, regarding
Shareholders' voting powers, the conduct of meetings and related
matters.
ARTICLE VI
Distributions, Redemptions and Repurchases
Distributions
Section 1. The Trustees may each year, or more frequently
if they so determine, distribute to the Shareholders of each
series out of the assets of such series such amounts as the
Trustees may determine. Any such distribution to the
Shareholders of a particular series shall be made to said
Shareholders pro rata in proportion to the number of Shares of
such series held by each of them, except to the extent otherwise
required or permitted by the preferences and special or relative
rights and privileges of any classes of Shares of that series,
and any distribution to the Shareholders of a particular class of
Shares shall be made to such Shareholders pro rata in proportion
to the number of Shares of such class held by each of them.
Such distributions shall be made in cash or Shares or a
combination thereof as determined by the Trustees. Any such
distribution paid in Shares will be paid at the net asset value
thereof as determined in accordance with the Bylaws.
Redemptions and Repurchases
Section 2. The Trust shall purchase such Shares as are
offered by any Shareholder for redemption, upon the presentation
of any certificate for the Shares to be purchased, a proper
instrument of transfer and a request directed to the Trust or a
person designated by the Trust that the Trust purchase such
Shares, or in accordance with such other procedures for
redemption as the Trustees may from time to time authorize; and
the Trust will pay therefor the net asset value thereof, as next
determined in accordance with the Bylaws. Payment for said
Shares shall be made by the Trust to the Shareholder within seven
days after the date on which the request is made. The obligation
set forth in this Section 2 is subject to the provision that in
the event that any time the New York Stock Exchange is closed for
other than customary weekends or holidays, or, if permitted by
rules of the Securities and Exchange Commission, during periods
when trading on the Exchange is restricted or during any
emergency which makes it impractical for the Trust to dispose of
its investments or to determine fairly the value of its net
assets, or during any other period permitted by order of the
Securities and Exchange Commission for the protection of
investors, such obligation may be suspended or postponed by the
Trustees. The Trust may also purchase or repurchase Shares at a
price not exceeding the net asset value of such Shares in effect
when the purchase or repurchase or any contract to purchase or
repurchase is made.
Redemptions at the Option of the Trust
Section 3. The Trust shall have the right at its option and
at any time to redeem Shares of any Shareholder at the net asset
value thereof as determined in accordance with the Bylaws: (i)
if at such time such Shareholder owns fewer Shares than, or
Shares having an aggregate net asset value of less than, an
amount determined from time to time by the Trustees; or (ii) to
the extent that such Shareholder owns Shares of a particular
series or class of Shares equal to or in excess of a percentage
of the outstanding Shares of that series or class determined from
time to time by the Trustees; or (iii) to the extent that such
Shareholder owns Shares of the Trust representing a percentage
equal to or in excess of such percentage of the aggregate number
of outstanding Shares of the Trust or the aggregate net asset
value of the Trust determined from time to time by the Trustees.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
Compensation
Section 1. The Trustees as such shall be entitled to
reasonable compensation from the Trust; they may fix the amount
of their compensation. Nothing herein shall in any way prevent
the employment of any Trustee for advisory, management, legal,
accounting, investment banking or other services and payment for
the same by the Trust.
Limitation of Liability
Section 2. The Trustees shall not be responsible or liable
in any event for any neglect or wrongdoing of any officer, agent,
employee, manager or principal underwriter of the Trust, nor
shall any Trustee be responsible for the act or omission of any
other Trustee, but nothing herein contained shall protect any
Trustee against any liability to which he or she would otherwise
be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his or her office.
Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever executed or
done by or on behalf of the Trust or the Trustees or any of them
in connection with the Trust shall be conclusively deemed to have
been executed or done only in or with respect to their or his or
her capacity as Trustees or Trustee, and such Trustees or Trustee
shall not be personally liable thereon.
ARTICLE VIII
Indemnification
Trustees, Officers, etc.
Section 1. The Trust shall indemnify each of its Trustees
and officers (including persons who serve at the Trust's request
as directors, officers or trustees of another organization in
which the Trust has any interest as a shareholder, creditor or
otherwise) (hereinafter referred to as a "Covered Person")
against all liabilities and expenses, including but not limited
to amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and counsel fees reasonably incurred by any
Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which
such Covered Person may be or may have been involved as a party
or otherwise or with which such Covered Person may be or may have
been threatened, while in office or thereafter, by reason of
being or having been such a Covered Person except with respect to
any matter as to which such Covered Person shall have been
finally adjudicated in any such action, suit or other proceeding
(a) not to have acted in good faith in the reasonable belief that
such Covered Person's action was in the best interests of the
Trust or (b) to be liable to the Trust or its Shareholders by
reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such
Covered Person's office. Expenses, including counsel fees so
incurred by any such Covered Person (but excluding amounts paid
in satisfaction of judgments, in compromise or as fines or
penalties), shall be paid from time to time by the Trust in
advance of the final disposition of any such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such
Covered Person to repay amounts so paid to the Trust if it is
ultimately determined that indemnification of such expenses is
not authorized under this Article, provided, however, that either
(a) such Covered Person shall have provided appropriate security
for such undertaking, (b) the Trust shall be insured against
losses arising from any such advance payments or (c) either a
majority of the disinterested Trustees acting on the matter
(provided that a majority of the disinterested Trustees then in
office act on the matter), or independent legal counsel in a
written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a full trial type inquiry)
that there is reason to believe that such Covered Person will be
found entitled to indemnification under this Article.
Compromise Payment
Section 2. As to any matter disposed of (whether by a
compromise payment, pursuant to a consent decree or otherwise)
without an adjudication by a court, or by any other body before
which the proceeding was brought, that such Covered Person either
(a) did not act in good faith in the reasonable belief that his
or her action was in the best interests of the Trust or (b) is
liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office,
indemnification shall be provided if (a) approved as in the best
interests of the Trust, after notice that it involves such
indemnification, by at least a majority of the disinterested
Trustees acting on the matter (provided that a majority of the
disinterested Trustees then in office act on the matter) upon a
determination, based upon a review of readily available facts (as
opposed to a full trial type inquiry) that such Covered Person
acted in good faith in the reasonable belief that his or her
action was in the best interests of the Trust and is not liable
to the Trust or its Shareholders by reason of wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office, or (b) there has
been obtained an opinion in writing of independent legal counsel,
based upon a review of readily available facts (as opposed to a
full trial type inquiry) to the effect that such Covered Person
appears to have acted in good faith in the reasonable belief that
his or her action was in the best interests of the Trust and that
such indemnification would not protect such Covered Person
against any liability to the Trust to which he or she would
otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of his or her office. Any approval pursuant to this
Section shall not prevent the recovery from any Covered Person of
any amount paid to such Covered Person in accordance with this
Section as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have
acted in good faith in the reasonable belief that such Covered
Person's action was in the best interests of the Trust or to have
been liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's
office.
Indemnification Not Exclusive
Section 3. The right of indemnification hereby provided
shall not be exclusive of or affect any other rights to which
such Covered Person may be entitled. As used in this Article
VIII, the term "Covered Person" shall include such person's
heirs, executors and administrators and a "disinterested Trustee"
is a Trustee who is not an "interested person" of the Trust as
defined in Section 2(a)(19) of the 1940 Act (or who has been
exempted from being an "interested person" by any rule,
regulation or order of the Commission) and against whom none of
such actions, suits or other proceedings or another action, suit
or other proceeding on the same or similar grounds is then or has
been pending. Nothing contained in this Article shall affect any
rights to indemnification to which personnel of the Trust, other
than Trustees or officers, and other persons may be entitled by
contract or otherwise under law, nor the power of the Trust to
purchase and maintain liability insurance on behalf of any such
person.
Shareholders
Section 4. In case any Shareholder or former Shareholder
shall be held to be personally liable solely by reason of his or
her being or having been a Shareholder and not because of his or
her acts or omissions or for some other reason, the Shareholder
or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general
successor) shall be entitled to be held harmless from and
indemnified against all loss and expense arising from such
liability, but only out of the assets of the particular series of
Shares of which he or she is or was a Shareholder.
ARTICLE IX
Miscellaneous
Trustees, Shareholders, etc. Not Personally Liable; Notice
Section 1. All persons extending credit to, contracting
with or having any claim against the Trust or a particular series
of Shares shall look only to the assets of the Trust or the
assets of that particular series of Shares for payment under such
credit, contract or claim, and neither the Shareholders nor the
Trustees, nor any of the Trust's officers, employees or agents,
whether past, present or future, shall be personally liable
therefor. Nothing in this Declaration of Trust shall protect any
Trustee against any liability to which such Trustee would
otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or
undertaking made or issued by the Trustees or by any officer or
officers shall give notice that this Declaration of Trust is on
file with the Secretary of The Commonwealth of Massachusetts and
shall recite that the same was executed or made by or on behalf
of the Trust or by them as Trustee or Trustees or as officer or
officers and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders
individually but are binding only upon the assets and property of
the Trust, and may contain such further recital as he or she or
they may deem appropriate, but the omission thereof shall not
operate to bind any Trustee or Trustees or officer or officers or
Shareholder or Shareholders individually.
Trustee's Good Faith Action, Expert Advice, No Bond or Surety
Section 2. The exercise by the Trustees of their powers and
discretions hereunder shall be binding upon everyone interested.
A Trustee shall be liable for his or her own wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and for nothing
else, and shall not be liable for errors of judgment or mistakes
of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this
Declaration of Trust, and shall be under no liability for any act
or omission in accordance with such advice or for failing to
follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustee
Section 3. No person dealing with the Trustees shall be
bound to make any inquiry concerning the validity of any
transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the
Trust or upon its order.
Duration and Termination of Trust
Section 4. Unless terminated as provided herein, the Trust
shall continue without limitation of time. The Trust 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 by
written notice to the Shareholders. Any series of Shares may be
terminated at any time by vote of Shareholders holding at least
66-2/3% of the Shares of such series entitled to vote or by the
Trustees by written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of
Shares, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or
anticipated, of the Trust or of the particular series as may be
determined by the Trustees, the Trust shall in accordance with
such procedures as the Trustees consider appropriate reduce the
remaining assets to distributable form in cash or shares or other
securities, or any combination thereof, and distribute the
proceeds to the Shareholders of the series involved, ratably
according to the number of Shares of such series held by the
several Shareholders of such series on the date of termination,
except to the extent otherwise required or permitted by the
preferences and special or relative rights and privileges of any
classes of any series of Shares of the Trust, provided that any
distribution to the Shareholders of a particular class of any
series of Shares shall be made to such Shareholders pro rata in
proportion to the number of Shares of such class held by each of
them.
Filing of Copies, References, Headings
Section 5. The original or a copy of this instrument and of
each amendment hereto shall be kept at the office of the Trust
where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the
Trust with the Secretary of State of The Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any
other governmental office where such filing may from time to time
be required. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any
such amendments have been made and as to any matters in
connection with the Trust hereunder, and, with the same effect as
if it were the original, may rely on a copy certified by an
officer of the Trust to be a copy of this instrument or of any
such amendments. In this instrument and in any such amendment,
references to this instrument and all expressions like "herein",
"hereof" and "hereunder" shall be deemed to refer to this
instrument as amended or affected by any such amendments.
Headings are placed herein for convenience of reference only and
shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of
which shall be deemed an original.
Applicable Law
Section 6. This Declaration of Trust is made in The
Commonwealth of Massachusetts, and it is created under and is to
be governed by and construed and administered according to the
laws of said Commonwealth. The Trust shall be of the type
commonly called a Massachusetts business trust, and without
limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust.
Amendments
Section 7. This 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 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 and
class not affected shall be required. Amendments having the
purpose of changing the name of the Trust 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.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being a majority of the
Trustees of the Trust, hereunto set their hands and seals in the
City of Boston, Massachusetts, for themselves and their assigns,
as of the day and year first above written.
/s/ George Putnam /s/ Donald S. Perkins
- ------------------------ ---------------------------
George Putnam Donald S. Perkins
/s/ Jameson A. Baxter /s/ William F. Pounds
- ------------------------ ---------------------------
Jameson A. Baxter William F. Pounds
/s/ Hans H. Estin /s/ George Putnam, III
- ------------------------ ---------------------------
Hans H. Estin George Putnam, III
/s/ John A. Hill Eli Shapiro
- ------------------------ ---------------------------
John A. Hill Eli Shapiro
/s/ Elizabeth T. Kennan /s/ A.J.C. Smith
- ------------------------ ---------------------------
Elizabeth T. Kennan A.J.C. Smith
/s/ Lawrence J. Lasser /s/ W. Nicholas Thorndike
- ------------------------ ---------------------------
Lawrence J. Lasser W. Nicholas Thorndike
- ------------------------
Robert E. Patterson
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Boston, September 15, 1995
Suffolk, ss.
Then personally appeared each of the above named Trustees of
Putnam Minnesota Tax Exempt Income Fund and acknowledged the
foregoing instrument to be their free act and deed, before me,
/s/ Beth F. Marino
----------------------------
Notary Public
My commission expires:
4/6/2001
The address of the Trust is One Post Office Square, Boston,
Massachusetts 02109
<PAGE>
PUTNAM OHIO TAX EXEMPT INCOME FUND
AMENDED AND RESTATED AGREEMENT
AND DECLARATION OF TRUST
This AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
made at Boston, Massachusetts, this 15th day of September, 1995,
hereby amends and restates in its entirety the Agreement and
Declaration of Trust dated September 2, 1986, as heretofore
amended, by the Trustees hereunder and by the holders of shares
of beneficial interest issued or to be issued hereunder as
hereinafter provided. This Amended and Restated Agreement and
Declaration of Trust shall be effective upon filing with the
Secretary of State of The Commonwealth of Massachusetts.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business
of an investment company; and
WHEREAS, the Trustees have agreed to manage all property
coming into their hands as trustees of a Massachusetts voluntary
association with transferable shares in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will
hold all cash, securities and other assets, which they may from
time to time acquire in any manner as Trustees hereunder IN TRUST
to manage and dispose of the same upon the following terms and
conditions for the pro rata benefit of the holders from time to
time of Shares in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
Name
Section 1. This Trust shall be known as "Putnam Ohio Tax
Exempt Income Fund", and the Trustees shall conduct the business
of the Trust under that name or any other name as they may from
time to time determine.
Definitions
Section 2. Whenever used herein, unless otherwise required
by the context or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust
established by this Agreement and Declaration of Trust, as
amended from time to time;
<PAGE>
(b) "Trustees" refers to the Trustees of the Trust named
herein or elected in accordance with Article IV;
(c) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest in the
Trust shall be divided from time to time or, if more than
one series or class of Shares is authorized by the Trustees,
the equal proportionate transferable units into which each
series or class of Shares shall be divided from time to
time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of
1940 and the Rules and Regulations thereunder, all as
amended from time to time;
(f) The terms "Affiliated Person", "Assignment",
"Commission", "Interested Person", "Principal Underwriter"
and "Majority Shareholder Vote" (the 67% or 50% requirement
of the third sentence of Section 2(a)(42) of the 1940 Act,
whichever may be applicable) shall have the meanings given
them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Amended and
Restated Agreement and Declaration of Trust as amended or
restated from time to time; and
(h) "Bylaws" shall mean the Bylaws of the Trust as amended
from time to time;
(i) The term "series" or "series of Shares" refers to the
one or more separate investment portfolios of the Trust
into which the assets and liabilities of the Trust may
be divided and the Shares of the Trust representing
the beneficial interest of Shareholders in such
respective portfolios; and
(j) The term "class" or "class of Shares" refers to the
division of Shares into two or more classes as provided
in Article III, Section 1 hereof.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to provide investors a managed
investment primarily in securities, debt instruments and other
instruments and rights of a financial character.
<PAGE>
ARTICLE III
Shares
Division of Beneficial Interest
Section 1. The Shares of the Trust shall be issued in one
or more series as the Trustees may, without shareholder approval,
authorize. Each series shall be preferred over all other series
in respect of the assets allocated to that series. The
beneficial interest in each series shall at all times be divided
into Shares, without par value, each of which shall, except as
provided in the following sentence represent an equal
proportionate interest in the series with each other Share of the
same series, none having priority or preference over
another. The Trustees may, without shareholder approval, divide
the Shares of any series into two or more classes, Shares of each
such class having such preferences and special or relative rights
and privileges (including conversion rights, if any) as the
Trustees may determine and as shall be set forth in the Bylaws.
The number of Shares authorized shall be unlimited. The Trustees
may from time to time divide or combine the Shares of any series
or class into a greater or lesser number without thereby changing
the proportionate beneficial interest in the series or class.
Ownership of Shares
Section 2. The ownership of Shares shall be recorded on the
books of the Trust or a transfer or similar agent. No
certificates certifying the ownership of Shares shall be issued
except as the Trustees may otherwise determine from time to time.
The Trustees may make such rules as they consider appropriate for
the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the
Trust or any transfer or similar agent, as the case may be, shall
be conclusive as to who are the Shareholders of each series and
class and as to the number of Shares of each series and class
held from time to time by each Shareholder.
Investment in the Trust
Section 3. The Trustees shall accept investments in the
Trust from such persons and on such terms and for such
consideration, which may consist of cash or tangible or
intangible property or a combination thereof, as they or the
Bylaws from time to time authorize.
All consideration received by the Trust for the issue or
sale of Shares of each series, together with all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, and any
funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall irrevocably belong to the
series of Shares with respect to which the same were received by
the Trust for all purposes, subject only to the rights of
creditors, and shall be so handled upon the books of account of
the Trust and are herein referred to as "assets of" such series.
No Preemptive Rights
Section 4. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities
issued by the Trust.
Status of Shares and Limitation of Personal Liability
Section 5. Shares shall be deemed to be personal property
giving only the rights provided in this Declaration of Trust or
the Bylaws. Every Shareholder by virtue of having become a
Shareholder shall be held to have expressly assented and agreed
to the terms of this Declaration of Trust and the Bylaws and to
have become a party hereto. The death of a Shareholder during
the continuance of the Trust shall not operate to terminate the
same nor entitle the representative of any deceased Shareholder
to an accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but only to the rights of said
decedent under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of
the Trust property or right to call for a partition or division
of the same or for an accounting, nor shall the ownership of
Shares constitute the Shareholders partners. Neither the Trust
nor the Trustees, nor any officer, employee or agent of the Trust
shall have any power to bind personally any Shareholder, nor
except as specifically provided herein to call upon any
Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time
personally agree to pay.
ARTICLE IV
The Trustees
Election
Section 1. A Trustee may be elected either by the Trustees
or by the Shareholders. There shall be not less than three
Trustees. The number of Trustees shall be fixed by the Trustees.
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. At any meeting called for the purpose, a
Trustee may be removed by vote of two-thirds of the outstanding
shares. The initial Trustees, each of whom shall serve until the
first meeting of Shareholders at which Trustees are elected and
until his successor is elected and qualified, or until he sooner
dies, resigns or is removed shall be George Putnam, Richard M.
Cutler and Alla O'Brien and such other persons as the Trustee or
Trustees then in office shall, prior to any sale of Shares
pursuant to public offering, appoint.
Effect of Death, Resignation, etc. of a Trustee
Section 2. The death, declination, resignation, retirement,
removal or incapacity of the Trustees, or any one of them, shall
not operate to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust.
Powers
Section 3. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient
to carry out that responsibility. Without limiting the
foregoing, the Trustees may adopt Bylaws not inconsistent with
this Declaration of Trust providing for the conduct of the
business of the Trust and may amend and repeal them to the extent
that such Bylaws do not reserve that right to the Shareholders;
they may fill vacancies in or add to their number, and may elect
and remove such officers and appoint and terminate such agents as
they consider appropriate; they may appoint from their own
number, and terminate, any one or more committees consisting of
two or more Trustees, including an executive committee which may,
when the Trustees are not in session, exercise some or all of the
power and authority of the Trustees as the Trustees may
determine; they may employ one or more custodians of the assets
of the Trust and may authorize such custodians to employ
subcustodians and to deposit all or any part of such assets in a
system or systems for the central handling of securities, retain
a transfer agent or a Shareholder servicing agent, or both,
provide for the distribution of Shares by the Trust, through one
or more principal underwriters or otherwise, set record dates for
the determination of Shareholders with respect to various
matters, and in general delegate such authority as they consider
desirable to any officer of the Trust, to any committee of the
Trustees and to any agent or employee of the Trust or to any such
custodian or underwriter.
Without limiting the foregoing, the Trustees shall have
power and authority:
(a) To invest and reinvest cash, and to hold cash
uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate,
write options on and lease any or all of the assets of the
Trust;
(c) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or
property; and to execute and deliver proxies or powers of
attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power
and discretion with relation to securities or property as
the Trustees shall deem proper;
(d) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities;
(e) To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or
other negotiable form, or in the name of the Trustees or of
the Trust or in the name of a custodian, subcustodian or
other depositary or a nominee or nominees or otherwise;
(f) Subject to the provisions of Article III, Section 3, to
allocate assets, liabilities, income and expenses of the
Trust to a particular series of Shares or to apportion the
same among two or more series, provided that any liabilities
or expenses incurred by or arising in connection with a
particular series of Shares shall be payable solely out of
the assets of that series; and to the extent necessary or
appropriate to give effect to the preferences and special or
relative rights and privileges of any classes of Shares, to
allocate assets, liabilities, income and expenses of a
series to a particular class of Shares of that series or to
apportion the same among two or more classes of Shares of
that series;
(g) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation
or issuer, any security of which is or was held in the
Trust; to consent to any contract, lease, mortgage, purchase
or sale of property by such corporation or issuer, and to
pay calls or subscriptions with respect to any security held
in the Trust;
(h) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in
that connection to deposit any security with, or transfer
any security to, any such committee, depositary or trustee,
and to delegate to them such power and authority with
relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree
to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the
Trustees shall deem proper;
<PAGE>
(i) To compromise, arbitrate or otherwise adjust claims in
favor of or against the Trust or any matter in controversy,
including but not limited to claims for taxes;
(j) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(k) To borrow funds;
(l) To endorse or guarantee the payment of any notes or
other obligations of any person; to make contracts of
guaranty or suretyship, or otherwise assume liability for
payment thereof; and to mortgage and pledge the Trust
property or any part thereof to secure any of or all such
obligations;
(m) To purchase and pay for entirely out of Trust property
such insurance as they may deem necessary or appropriate for
the conduct of the business, including without limitation,
insurance policies insuring the assets of the Trust and
payment of distributions and principal on its portfolio
investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents,
investment advisers or managers, principal underwriters, or
independent contractors of the Trust individually against
all claims and liabilities of every nature arising by reason
of holding, being or having held any such office or
position, or by reason of any action alleged to have been
taken or omitted by any such person as Shareholder, Trustee,
officer, employee, agent, investment adviser or manager,
principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would have
the power to indemnify such person against such liability;
and
(n) To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and
carry out pension, profit-sharing, share bonus, share
purchase, savings, thrift and other retirement, incentive
and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits, for
any or all of the Trustees, officers, employees and agents
of the Trust.
The Trustees shall not in any way be bound or limited by any
present or future law or custom in regard to investments by
trustees. Except as otherwise provided herein or from time to
time in the Bylaws, any action to be taken by the Trustees may be
taken by a majority of the Trustees present at a meeting of
Trustees (a quorum being present), within or without
Massachusetts, including any meeting held by means of a
conference telephone or other communications equipment by means
of which all persons participating in the meeting can hear each
other at the same time and participation by such means shall
constitute presence in person at a meeting, or by written
consents of a majority of the Trustees then in office.
Payment of Expenses by Trust
Section 4. The Trustees are authorized to pay or to cause
to be paid out of the assets of the Trust all expenses, fees,
charges, taxes and liabilities incurred or arising in connection
with the Trust, or in connection with the management thereof,
including, but not limited to, the Trustees' compensation and
such expenses and charges for the services of the Trust's
officers, employees, investment adviser or manager, principal
underwriter, auditor, counsel, custodian, transfer agent,
Shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees
may deem necessary or proper to incur, provided, however, that
all expenses, fees, charges, taxes and liabilities incurred or
arising in connection with a particular series of Shares shall be
payable solely out of the assets of that series.
Ownership of Assets of the Trust
Section 5. Title to all of the assets of each series of
Shares and of the Trust shall at all times be considered as
vested in the Trustees.
Advisory, Management and Distribution
Section 6. Subject to a favorable Majority Shareholder
Vote, the Trustees may, at any time and from time to time,
contract for exclusive or nonexclusive advisory and/or management
services with any corporation, trust, association or other
organization (the "Manager"), every such contract to comply with
such requirements and restrictions as may be set forth in the
Bylaws; and any such contract may contain such other terms
interpretive of or in addition to said requirements and
restrictions as the Trustees may determine, including, without
limitation, authority to determine from time to time what
investments shall be purchased, held, sold or exchanged and what
portion, if any, of the assets of the Trust shall be held
uninvested and to make changes in the Trust's investments. The
Trustees may also, at any time and from time to time, contract
with the Manager or any other corporation, trust, association or
other organization, appointing it exclusive or nonexclusive
distributor or principal underwriter for the Shares, every such
contract to comply with such requirements and restrictions as may
be set forth in the Bylaws; and any such contract may contain
such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee,
employee, manager, adviser, principal underwriter or
distributor or agent of or for any corporation, trust,
association, or other organization, or of or for any parent
or affiliate of any organization, with which an advisory or
management contract, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing
or other agency contract may have been or may hereafter be
made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in
the Trust, or that
(ii) any corporation, trust, association or other
organization with which an advisory or management contract
or principal underwriter's or distributor's contract, or
transfer, Shareholder servicing or other agency contract may
have been or may hereafter be made also has an advisory or
management contract, or transfer, Shareholder servicing or
other agency contract with one or more other corporations,
trusts, associations, or other organizations, or has other
business or interests,
shall not affect the validity of any such contract or disqualify
any Shareholder, Trustee or officer of the Trust from voting upon
or executing the same or create any liability or accountability
to the Trust or its Shareholders.
ARTICLE V
Shareholders' Voting Powers and Meetings
Voting Powers
Section 1. Subject to the voting powers of one or more
classes of shares as set forth elsewhere in this Declaration of
Trust or in the Bylaws, the Shareholders shall have power to vote
only (i) for the election of Trustees as provided in Article IV,
Section 1, (ii) for the removal of Trustees as provided in
Article IV, Section 1, (iii) with respect to any Manager as
provided in Article IV, Section 6, (iv) with respect to any
termination of this Trust to the extent and as provided in
Article IX, Section 4, (v) with respect to any amendment of this
Declaration of Trust to the extent and as provided in Article IX,
Section 7, (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
Trust or the Shareholders, and (vii) with respect to such
additional matters relating to the Trust as may be required by
this Declaration of Trust, the Bylaws or any registration of the
Trust with the Securities and Exchange Commission (or any
successor agency) or any state, or as the Trustees may consider
necessary or desirable. Each whole Share shall be entitled to
one vote as to any matter on which it is entitled to vote and
each fractional Share shall be entitled to a proportionate
fractional vote. Notwithstanding any other provision of this
Declaration of Trust, on any matter submitted to a vote of
Shareholders, all Shares of the Trust then entitled to vote shall
be voted in the aggregate as a single class without regard to
series or classes of shares, except (1) when required by the 1940
Act or when the Trustees shall have determined that the matter
affects one or more series or classes of Shares materially
differently, Shares shall be voted by individual series or class;
and (2) when the Trustees have determined that the matter affects
only the interests of one or more series or classes, then only
Shareholders of such series or classes shall be entitled to vote
thereon. There shall be no cumulative voting in the election of
Trustees. Shares may be voted in person or by proxy. A proxy
with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior
to exercise of the proxy the Trust receives a specific written
notice to the contrary from any one of them. A proxy purporting
to be executed by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. Until
Shares of any series or class are issued, the Trustees may
exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the Bylaws to be
taken by Shareholders as to such series or class.
Voting Power and Meetings
Section 2. Meetings of Shareholders of any or all series or
classes may be called by the Trustees from time to time for the
purpose of taking action upon any matter requiring the vote or
authority of the Shareholders of such series or classes as herein
provided or upon any other matter deemed by the Trustees to be
necessary or desirable. Written notice of any meeting of
Shareholders shall be given or caused to be given by the Trustees
by mailing such notice at least seven days before such meeting,
postage prepaid, stating the time, place and purpose of the
meeting, to each Shareholder entitled to vote at such meeting at
the Shareholder's address as it appears on the records of the
Trust. If the Trustees shall fail to call or give notice of any
meeting of Shareholders for a period of 30 days after written
application by Shareholders holding at least 10% of the then
outstanding Shares of all series and classes entitled to vote at
such meeting requesting that a meeting be called for a purpose
requiring action by the Shareholders as provided herein or in the
Bylaws, then Shareholders holding at least 10% of the then
outstanding Shares of all series and classes entitled to vote at
such meeting or of all series if all series are entitled to vote
at such meeting may call and give notice of such meeting, and
thereupon the meeting shall be held in the manner provided for
herein in case of call thereof by the Trustees. Notice of a
meeting need not be given to any Shareholder if a written waiver
of notice, executed by him or her before or after the meeting, is
filed with the records of the meeting, or to any Shareholder who
attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her.
Quorum and Required Vote
Section 3. Thirty percent of Shares entitled to vote on a
particular matter shall be a quorum for the transaction of
business on that matter at a Shareholders' meeting, except that
where any provision of law or of this Declaration of Trust
permits or requires that holders of any series or class shall
vote as an individual series or class, then thirty percent of the
aggregate number of Shares of that series or class entitled to
vote shall be necessary to constitute a quorum for the
transaction of business by that series or class. Any lesser
number shall be sufficient for adjournments. Any adjourned
session or sessions may be held, within a reasonable time after
the date set for the original meeting, without the necessity of
further notice. Except when a larger vote is required by any
provision of this Declaration of Trust or the Bylaws, or by the
1940 Act, a majority of the Shares voted shall decide any
questions and a plurality shall elect a Trustee, provided that
where any provision of law or of this Declaration of Trust
permits or requires that the holders of any series or class shall
vote as an individual series or class, then a majority of the
Shares of that series or class voted on the matter (or a
plurality with respect to the election of a Trustee) shall decide
that matter insofar as that series or class is concerned.
Action by Written Consent
Section 4. Any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote
on the matter (or such larger proportion thereof as shall be
required by any express provision of this Declaration of Trust or
the Bylaws) consent to the action in writing and such written
consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
<PAGE>
Additional Provisions
Section 5. The Bylaws may include further provisions not
inconsistent with this Declaration of Trust, regarding
Shareholders' voting powers, the conduct of meetings and related
matters.
ARTICLE VI
Distributions, Redemptions and Repurchases
Distributions
Section 1. The Trustees may each year, or more frequently
if they so determine, distribute to the Shareholders of each
series out of the assets of such series such amounts as the
Trustees may determine. Any such distribution to the
Shareholders of a particular series shall be made to said
Shareholders pro rata in proportion to the number of Shares of
such series held by each of them, except to the extent otherwise
required or permitted by the preferences and special or relative
rights and privileges of any classes of Shares of that series,
and any distribution to the Shareholders of a particular class of
Shares shall be made to such Shareholders pro rata in proportion
to the number of Shares of such class held by each of them.
Such distributions shall be made in cash or Shares or a
combination thereof as determined by the Trustees. Any such
distribution paid in Shares will be paid at the net asset value
thereof as determined in accordance with the Bylaws.
Redemptions and Repurchases
Section 2. The Trust shall purchase such Shares as are
offered by any Shareholder for redemption, upon the presentation
of any certificate for the Shares to be purchased, a proper
instrument of transfer and a request directed to the Trust or a
person designated by the Trust that the Trust purchase such
Shares, or in accordance with such other procedures for
redemption as the Trustees may from time to time authorize; and
the Trust will pay therefor the net asset value thereof, as next
determined in accordance with the Bylaws. Payment for said
Shares shall be made by the Trust to the Shareholder within seven
days after the date on which the request is made. The obligation
set forth in this Section 2 is subject to the provision that in
the event that any time the New York Stock Exchange is closed for
other than customary weekends or holidays, or, if permitted by
rules of the Securities and Exchange Commission, during periods
when trading on the Exchange is restricted or during any
emergency which makes it impractical for the Trust to dispose of
its investments or to determine fairly the value of its net
assets, or during any other period permitted by order of the
Securities and Exchange Commission for the protection of
investors, such obligation may be suspended or postponed by the
Trustees. The Trust may also purchase or repurchase Shares at a
price not exceeding the net asset value of such Shares in effect
when the purchase or repurchase or any contract to purchase or
repurchase is made.
Redemptions at the Option of the Trust
Section 3. The Trust shall have the right at its option and
at any time to redeem Shares of any Shareholder at the net asset
value thereof as determined in accordance with the Bylaws: (i)
if at such time such Shareholder owns fewer Shares than, or
Shares having an aggregate net asset value of less than, an
amount determined from time to time by the Trustees; or (ii) to
the extent that such Shareholder owns Shares of a particular
series or class of Shares equal to or in excess of a percentage
of the outstanding Shares of that series or class determined from
time to time by the Trustees; or (iii) to the extent that such
Shareholder owns Shares of the Trust representing a percentage
equal to or in excess of such percentage of the aggregate number
of outstanding Shares of the Trust or the aggregate net asset
value of the Trust determined from time to time by the Trustees.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
Compensation
Section 1. The Trustees as such shall be entitled to
reasonable compensation from the Trust; they may fix the amount
of their compensation. Nothing herein shall in any way prevent
the employment of any Trustee for advisory, management, legal,
accounting, investment banking or other services and payment for
the same by the Trust.
Limitation of Liability
Section 2. The Trustees shall not be responsible or liable
in any event for any neglect or wrongdoing of any officer, agent,
employee, manager or principal underwriter of the Trust, nor
shall any Trustee be responsible for the act or omission of any
other Trustee, but nothing herein contained shall protect any
Trustee against any liability to which he or she would otherwise
be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his or her office.
Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever executed or
done by or on behalf of the Trust or the Trustees or any of them
in connection with the Trust shall be conclusively deemed to have
been executed or done only in or with respect to their or his or
her capacity as Trustees or Trustee, and such Trustees or Trustee
shall not be personally liable thereon.
ARTICLE VIII
Indemnification
Trustees, Officers, etc.
Section 1. The Trust shall indemnify each of its Trustees
and officers (including persons who serve at the Trust's request
as directors, officers or trustees of another organization in
which the Trust has any interest as a shareholder, creditor or
otherwise) (hereinafter referred to as a "Covered Person")
against all liabilities and expenses, including but not limited
to amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and counsel fees reasonably incurred by any
Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which
such Covered Person may be or may have been involved as a party
or otherwise or with which such Covered Person may be or may have
been threatened, while in office or thereafter, by reason of
being or having been such a Covered Person except with respect to
any matter as to which such Covered Person shall have been
finally adjudicated in any such action, suit or other proceeding
(a) not to have acted in good faith in the reasonable belief that
such Covered Person's action was in the best interests of the
Trust or (b) to be liable to the Trust or its Shareholders by
reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such
Covered Person's office. Expenses, including counsel fees so
incurred by any such Covered Person (but excluding amounts paid
in satisfaction of judgments, in compromise or as fines or
penalties), shall be paid from time to time by the Trust in
advance of the final disposition of any such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such
Covered Person to repay amounts so paid to the Trust if it is
ultimately determined that indemnification of such expenses is
not authorized under this Article, provided, however, that either
(a) such Covered Person shall have provided appropriate security
for such undertaking, (b) the Trust shall be insured against
losses arising from any such advance payments or (c) either a
majority of the disinterested Trustees acting on the matter
(provided that a majority of the disinterested Trustees then in
office act on the matter), or independent legal counsel in a
written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a full trial type inquiry)
that there is reason to believe that such Covered Person will be
found entitled to indemnification under this Article.
Compromise Payment
Section 2. As to any matter disposed of (whether by a
compromise payment, pursuant to a consent decree or otherwise)
without an adjudication by a court, or by any other body before
which the proceeding was brought, that such Covered Person either
(a) did not act in good faith in the reasonable belief that his
or her action was in the best interests of the Trust or (b) is
liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office,
indemnification shall be provided if (a) approved as in the best
interests of the Trust, after notice that it involves such
indemnification, by at least a majority of the disinterested
Trustees acting on the matter (provided that a majority of the
disinterested Trustees then in office act on the matter) upon a
determination, based upon a review of readily available facts (as
opposed to a full trial type inquiry) that such Covered Person
acted in good faith in the reasonable belief that his or her
action was in the best interests of the Trust and is not liable
to the Trust or its Shareholders by reason of wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office, or (b) there has
been obtained an opinion in writing of independent legal counsel,
based upon a review of readily available facts (as opposed to a
full trial type inquiry) to the effect that such Covered Person
appears to have acted in good faith in the reasonable belief that
his or her action was in the best interests of the Trust and that
such indemnification would not protect such Covered Person
against any liability to the Trust to which he or she would
otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of his or her office. Any approval pursuant to this
Section shall not prevent the recovery from any Covered Person of
any amount paid to such Covered Person in accordance with this
Section as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have
acted in good faith in the reasonable belief that such Covered
Person's action was in the best interests of the Trust or to have
been liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's
office.
Indemnification Not Exclusive
Section 3. The right of indemnification hereby provided
shall not be exclusive of or affect any other rights to which
such Covered Person may be entitled. As used in this Article
VIII, the term "Covered Person" shall include such person's
heirs, executors and administrators and a "disinterested Trustee"
is a Trustee who is not an "interested person" of the Trust as
defined in Section 2(a)(19) of the 1940 Act (or who has been
exempted from being an "interested person" by any rule,
regulation or order of the Commission) and against whom none of
such actions, suits or other proceedings or another action, suit
or other proceeding on the same or similar grounds is then or has
been pending. Nothing contained in this Article shall affect any
rights to indemnification to which personnel of the Trust, other
than Trustees or officers, and other persons may be entitled by
contract or otherwise under law, nor the power of the Trust to
purchase and maintain liability insurance on behalf of any such
person.
Shareholders
Section 4. In case any Shareholder or former Shareholder
shall be held to be personally liable solely by reason of his or
her being or having been a Shareholder and not because of his or
her acts or omissions or for some other reason, the Shareholder
or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general
successor) shall be entitled to be held harmless from and
indemnified against all loss and expense arising from such
liability, but only out of the assets of the particular series of
Shares of which he or she is or was a Shareholder.
ARTICLE IX
Miscellaneous
Trustees, Shareholders, etc. Not Personally Liable; Notice
Section 1. All persons extending credit to, contracting
with or having any claim against the Trust or a particular series
of Shares shall look only to the assets of the Trust or the
assets of that particular series of Shares for payment under such
credit, contract or claim, and neither the Shareholders nor the
Trustees, nor any of the Trust's officers, employees or agents,
whether past, present or future, shall be personally liable
therefor. Nothing in this Declaration of Trust shall protect any
Trustee against any liability to which such Trustee would
otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or
undertaking made or issued by the Trustees or by any officer or
officers shall give notice that this Declaration of Trust is on
file with the Secretary of The Commonwealth of Massachusetts and
shall recite that the same was executed or made by or on behalf
of the Trust or by them as Trustee or Trustees or as officer or
officers and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders
individually but are binding only upon the assets and property of
the Trust, and may contain such further recital as he or she or
they may deem appropriate, but the omission thereof shall not
operate to bind any Trustee or Trustees or officer or officers or
Shareholder or Shareholders individually.
Trustee's Good Faith Action, Expert Advice, No Bond or Surety
Section 2. The exercise by the Trustees of their powers and
discretions hereunder shall be binding upon everyone interested.
A Trustee shall be liable for his or her own wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and for nothing
else, and shall not be liable for errors of judgment or mistakes
of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this
Declaration of Trust, and shall be under no liability for any act
or omission in accordance with such advice or for failing to
follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustee
Section 3. No person dealing with the Trustees shall be
bound to make any inquiry concerning the validity of any
transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the
Trust or upon its order.
Duration and Termination of Trust
Section 4. Unless terminated as provided herein, the Trust
shall continue without limitation of time. The Trust 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 by
written notice to the Shareholders. Any series of Shares may be
terminated at any time by vote of Shareholders holding at least
66-2/3% of the Shares of such series entitled to vote or by the
Trustees by written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of
Shares, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or
anticipated, of the Trust or of the particular series as may be
determined by the Trustees, the Trust shall in accordance with
such procedures as the Trustees consider appropriate reduce the
remaining assets to distributable form in cash or shares or other
securities, or any combination thereof, and distribute the
proceeds to the Shareholders of the series involved, ratably
according to the number of Shares of such series held by the
several Shareholders of such series on the date of termination,
except to the extent otherwise required or permitted by the
preferences and special or relative rights and privileges of any
classes of any series of Shares of the Trust, provided that any
distribution to the Shareholders of a particular class of any
series of Shares shall be made to such Shareholders pro rata in
proportion to the number of Shares of such class held by each of
them.
Filing of Copies, References, Headings
Section 5. The original or a copy of this instrument and of
each amendment hereto shall be kept at the office of the Trust
where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the
Trust with the Secretary of State of The Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any
other governmental office where such filing may from time to time
be required. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any
such amendments have been made and as to any matters in
connection with the Trust hereunder, and, with the same effect as
if it were the original, may rely on a copy certified by an
officer of the Trust to be a copy of this instrument or of any
such amendments. In this instrument and in any such amendment,
references to this instrument and all expressions like "herein",
"hereof" and "hereunder" shall be deemed to refer to this
instrument as amended or affected by any such amendments.
Headings are placed herein for convenience of reference only and
shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of
which shall be deemed an original.
Applicable Law
Section 6. This Declaration of Trust is made in The
Commonwealth of Massachusetts, and it is created under and is to
be governed by and construed and administered according to the
laws of said Commonwealth. The Trust shall be of the type
commonly called a Massachusetts business trust, and without
limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust.
Amendments
Section 7. This 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 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 and
class not affected shall be required. Amendments having the
purpose of changing the name of the Trust 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.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being a majority of the
Trustees of the Trust, hereunto set their hands and seals in the
City of Boston, Massachusetts, for themselves and their assigns,
as of the day and year first above written.
/s/ George Putnam /s/ Donald S. Perkins
- ------------------------ ---------------------------
George Putnam Donald S. Perkins
/s/ Jameson A. Baxter /s/ William F. Pounds
- ------------------------ ---------------------------
Jameson A. Baxter William F. Pounds
/s/ Hans H. Estin /s/ George Putnam, III
- ------------------------ ---------------------------
Hans H. Estin George Putnam, III
/s/ John A. Hill Eli Shapiro
- ------------------------ ---------------------------
John A. Hill Eli Shapiro
/s/ Elizabeth T. Kennan /s/ A.J.C. Smith
- ------------------------ ---------------------------
Elizabeth T. Kennan A.J.C. Smith
/s/ Lawrence J. Lasser /s/ W. Nicholas Thorndike
- ------------------------ ---------------------------
Lawrence J. Lasser W. Nicholas Thorndike
- ------------------------
Robert E. Patterson
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Boston, September 15, 1995
Suffolk, ss.
Then personally appeared each of the above named Trustees of
Putnam Ohio Tax Exempt Income Fund and acknowledged the foregoing
instrument to be their free act and deed, before me,
/s/ Beth F. Marino
----------------------------
Notary Public
My commission expires:
4/6/2001
The address of the Trust is One Post Office Square, Boston,
Massachusetts 02109
PUTNAM INVESTMENTS
(Logo)
PUTNAM MASSACHUSETTS TAX EXEMPT INCOME FUND
A Massachusetts Business Trust
Class M Shares
Trust Certificate
Account No. Certificate No. Shares
CUSIP 74683H 20 0
THIS CERTIFIES THAT
is the owner of Class M shares of
beneficial interest in Putnam Massachusetts Tax Exempt Income
Fund, fully paid and nonassessable, the said shares being issued,
received and held under and subject to the terms and provisions
of the Agreement and Declaration of Trust dated as of March 7,
1986, establishing the Trust, and all amendments thereto, copies
of which are on file with the Secretary of State of The
Commonwealth of Massachusetts. The said owner by accepting this
certificate agrees to and is bound by all of the said terms and
provisions. The shares represented hereby are transferable in
writing by the owner thereof in person or by attorney upon
surrender of this certificate to the Trustees properly endorsed
for transfer. This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of
the Putnam Massachusetts Tax Exempt Income Fund. This
certificate is not valid unless countersigned by the Investor
Servicing Agent.
In Witness Whereof the Trustees of Putnam Massachusetts Tax
Exempt Income Fund have caused the following facsimile signatures
to be affixed to this certificate.
Dated: COUNTERSIGNED:
PUTNAM INVESTOR SERVICES
a division of Putnam Fiduciary
Trust Company
INVESTOR SERVICING AGENT
BY
FOR THE TRUSTEES AUTHORIZED SIGNATURE
<PAGE>
PUTNAM INVESTMENTS
(Logo)
PUTNAM MICHIGAN TAX EXEMPT INCOME FUND
A Massachusetts Business Trust
Class M Shares
Trust Certificate
Account No. Certificate No. Shares
CUSIP 74683L 20 1
THIS CERTIFIES THAT
is the owner of Class M shares of
beneficial interest in Putnam Michigan Tax Exempt Income Fund,
fully paid and nonassessable, the said shares being issued,
received and held under and subject to the terms and provisions
of the Agreement and Declaration of Trust dated as of September
2, 1986, establishing the Trust, and all amendments thereto,
copies of which are on file with the Secretary of State of The
Commonwealth of Massachusetts. The said owner by accepting this
certificate agrees to and is bound by all of the said terms and
provisions. The shares represented hereby are transferable in
writing by the owner thereof in person or by attorney upon
surrender of this certificate to the Trustees properly endorsed
for transfer. This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of
the Putnam Michigan Tax Exempt Income Fund. This certificate is
not valid unless countersigned by the Investor Servicing Agent.
In Witness Whereof the Trustees of Putnam Michigan Tax
Exempt Income Fund have caused the following facsimile signatures
to be affixed to this certificate.
Dated: COUNTERSIGNED:
PUTNAM INVESTOR SERVICES
a division of Putnam Fiduciary
Trust Company
INVESTOR SERVICING AGENT
BY
FOR THE TRUSTEES AUTHORIZED SIGNATURE
PUTNAM INVESTMENTS
(Logo)
PUTNAM MINNESOTA TAX EXEMPT INCOME FUND
A Massachusetts Business Trust
Class M Shares
Trust Certificate
Account No. Certificate No. Shares
CUSIP 74683M 20 9
THIS CERTIFIES THAT
is the owner of Class M shares of
beneficial interest in Putnam Minnesota Tax Exempt Income Fund,
fully paid and nonassessable, the said shares being issued,
received and held under and subject to the terms and provisions
of the Agreement and Declaration of Trust dated as of September
2, 1986, establishing the Trust, and all amendments thereto,
copies of which are on file with the Secretary of State of The
Commonwealth of Massachusetts. The said owner by accepting this
certificate agrees to and is bound by all of the said terms and
provisions. The shares represented hereby are transferable in
writing by the owner thereof in person or by attorney upon
surrender of this certificate to the Trustees properly endorsed
for transfer. This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of
the Putnam Minnesota Tax Exempt Income Fund. This certificate is
not valid unless countersigned by the Investor Servicing Agent.
In Witness Whereof the Trustees of Putnam Minnesota Tax
Exempt Income Fund have caused the following facsimile signatures
to be affixed to this certificate.
Dated: COUNTERSIGNED:
PUTNAM INVESTOR SERVICES
a division of Putnam Fiduciary
Trust Company
INVESTOR SERVICING AGENT
BY
FOR THE TRUSTEES AUTHORIZED SIGNATURE
<PAGE>
PUTNAM INVESTMENTS
(Logo)
PUTNAM OHIO TAX EXEMPT INCOME FUND
A Massachusetts Business Trust
Class M Shares
Trust Certificate
Account No. Certificate No. Shares
CUSIP 746849 20 9
THIS CERTIFIES THAT
is the owner of Class M shares of
beneficial interest in Putnam Ohio Tax Exempt Income Fund, fully
paid and nonassessable, the said shares being issued, received
and held under and subject to the terms and provisions of the
Agreement and Declaration of Trust dated as of March 7, 1986,
establishing the Trust, and all amendments thereto, copies of
which are on file with the Secretary of State of The Commonwealth
of Massachusetts. The said owner by accepting this certificate
agrees to and is bound by all of the said terms and provisions.
The shares represented hereby are transferable in writing by the
owner thereof in person or by attorney upon surrender of this
certificate to the Trustees properly endorsed for transfer. This
certificate is executed on behalf of the Trustees as Trustees and
not individually and the obligations hereof are not binding upon
any of the Trustees or shareholders individually but are binding
only upon the assets and property of the Putnam Ohio Tax Exempt
Income Fund. This certificate is not valid unless countersigned
by the Investor Servicing Agent.
In Witness Whereof the Trustees of Putnam Ohio Tax Exempt
Income Fund have caused the following facsimile signatures to be
affixed to this certificate.
Dated: COUNTERSIGNED:
PUTNAM INVESTOR SERVICES
a division of Putnam Fiduciary
Trust Company
INVESTOR SERVICING AGENT
BY
FOR THE TRUSTEES AUTHORIZED SIGNATURE
<PAGE>
PUTNAM INVESTMENTS
(Logo)
PUTNAM FLORIDA TAX EXEMPT INCOME FUND
A Massachusetts Business Trust
Class M Shares
Trust Certificate
Account No. Certificate No. Shares
CUSIP 746752 30 2
THIS CERTIFIES THAT
is the owner of Class M shares of
beneficial interest in Putnam Florida Tax Exempt Income Fund,
fully paid and nonassessable, the said shares being issued,
received and held under and subject to the terms and provisions
of the Agreement and Declaration of Trust dated as of June 27,
1990, establishing the Trust, and all amendments thereto, copies
of which are on file with the Secretary of State of The
Commonwealth of Massachusetts. The said owner by accepting this
certificate agrees to and is bound by all of the said terms and
provisions. The shares represented hereby are transferable in
writing by the owner thereof in person or by attorney upon
surrender of this certificate to the Trustees properly endorsed
for transfer. This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of
the Putnam Florida Tax Exempt Income Fund. This certificate is
not valid unless countersigned by the Investor Servicing Agent.
In Witness Whereof the Trustees of Putnam Florida Tax Exempt
Income Fund have caused the following facsimile signatures to be
affixed to this certificate.
Dated: COUNTERSIGNED:
PUTNAM INVESTOR SERVICES
a division of Putnam Fiduciary
Trust Company
INVESTOR SERVICING AGENT
BY
FOR THE TRUSTEES AUTHORIZED SIGNATURE
<PAGE>
PUTNAM INVESTMENTS
(Logo)
PUTNAM NEW JERSEY TAX EXEMPT INCOME FUND
A Massachusetts Business Trust
Class M Shares
Trust Certificate
Account No. Certificate No. Shares
CUSIP 746915 30 5
THIS CERTIFIES THAT
is the owner of Class M shares of
beneficial interest in Putnam New Jersey Tax Exempt Income Fund,
fully paid and nonassessable, the said shares being issued,
received and held under and subject to the terms and provisions
of the Agreement and Declaration of Trust dated as of November
17, 1989, establishing the Trust, and all amendments thereto,
copies of which are on file with the Secretary of State of The
Commonwealth of Massachusetts. The said owner by accepting this
certificate agrees to and is bound by all of the said terms and
provisions. The shares represented hereby are transferable in
writing by the owner thereof in person or by attorney upon
surrender of this certificate to the Trustees properly endorsed
for transfer. This certificate is executed on behalf of the
Trustees as Trustees and not individually and the obligations
hereof are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of
the Putnam New Jersey Tax Exempt Income Fund. This certificate
is not valid unless countersigned by the Investor Servicing
Agent.
In Witness Whereof the Trustees of Putnam New Jersey Tax
Exempt Income Fund have caused the following facsimile signatures
to be affixed to this certificate.
Dated: COUNTERSIGNED:
PUTNAM INVESTOR SERVICES
a division of Putnam Fiduciary
Trust Company
INVESTOR SERVICING AGENT
BY
FOR THE TRUSTEES AUTHORIZED SIGNATURE
ROPES & GRAY
One International Place
Boston, Massachusetts 02110-2624
(617) 951-7000
September 26, 1995
PUTNAM ARIZONA TAX EXEMPT INCOME FUND (the "Fund")
One Post Office Square
Boston, Massachusetts 02109
Gentlemen:
You have informed us that you propose to offer and sell from
time to time 778,568 of your shares of beneficial interest (the
"Shares"), for cash or securities at the net asset value per
share,
determined in accordance with your Bylaws, which Shares are in
addition to your shares of beneficial interest which you have
previously offered and sold or which you are currently offering.
We have examined copies of (i) your Agreement and
Declaration
of Trust as on file at the office of the Secretary of State of
The
Commonwealth of Massachusetts, which provides for an unlimited
number of authorized shares of beneficial interest, and (ii) your
Bylaws, which provide for the issue and sale by the Fund of such
Shares.
We assume that appropriate action will be taken to register
or
qualify the sale of the Shares under any applicable state and
federal laws regulating offerings and sales of securities.
Based upon the foregoing, we are of the opinion that:
1. The Fund is a legally organized and validly existing
voluntary association with transferable shares of beneficial
interest under the laws of The Commonwealth of Massachusetts and
is
authorized to issue an unlimited number of shares of beneficial
interest.
2. Upon the issue of any of the Shares referred to in the
first paragraph hereof for cash or securities at net asset value,
and the receipt of the appropriate consideration therefor as
provided in your Bylaws, such Shares so issued will be validly
issued, fully paid and nonassessable by the Fund.
<PAGE>
ROPES & GRAY
Putnam Arizona Tax Exempt Income Fund -2- September 26,
1995
The Fund is an entity of the type commonly known as a
"Massachusetts business trust". Under Massachusetts law,
shareholders could, under certain circumstances, be held
personally
liable for the obligations of the Fund. However, the Agreement
and
Declaration of Trust disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such
disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Fund or its Trustees. The
Agreement and Declaration of Trust provides for indemnification
out
of the property of the Fund for all loss and expense of any
shareholder of the Fund held personally liable for the
obligations
of the Fund solely by reason of his being or having been a
shareholder. Thus, the risk of a shareholder's incurring
financial
loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet
its
obligations.
We understand that this opinion is to be used in connection
with the registration of the Shares for offering and sale
pursuant
to the Securities Act of 1933, as amended, and the provisions of
Rule 24e-2 under the Investment Company Act of 1940, as amended.
We consent to the filing of this opinion with and as a part of
Post-Effective Amendment No. 6 to your Registration Statement
No.
33-37992.
Very truly yours,
Ropes & Gray
ROPES & GRAY
One International Place
Boston, Massachusetts 02110-2624
(617) 951-7000
September 26, 1995
PUTNAM FLORIDA TAX EXEMPT INCOME FUND (the "Fund")
One Post Office Square
Boston, Massachusetts 02109
Gentlemen:
You have informed us that you propose to offer and sell from
time to time 1,854,662 of your shares of beneficial interest (the
"Shares"), for cash or securities at the net asset value per
share,
determined in accordance with your Bylaws, which Shares are in
addition to your shares of beneficial interest which you have
previously offered and sold or which you are currently offering.
We have examined copies of (i) your Agreement and
Declaration
of Trust as on file at the office of the Secretary of State of
The
Commonwealth of Massachusetts, which provides for an unlimited
number of authorized shares of beneficial interest, and (ii) your
Bylaws, which provide for the issue and sale by the Fund of such
Shares.
We assume that appropriate action will be taken to register
or
qualify the sale of the Shares under any applicable state and
federal laws regulating offerings and sales of securities.
Based upon the foregoing, we are of the opinion that:
1. The Fund is a legally organized and validly existing
voluntary association with transferable shares of beneficial
interest under the laws of The Commonwealth of Massachusetts and
is
authorized to issue an unlimited number of shares of beneficial
interest.
2. Upon the issue of any of the Shares referred to in the
first paragraph hereof for cash or securities at net asset value,
and the receipt of the appropriate consideration therefor as
provided in your Bylaws, such Shares so issued will be validly
issued, fully paid and nonassessable by the Fund.
<PAGE>
ROPES & GRAY
Putnam Florida Tax Exempt Income Fund -2- September 26,
1995
The Fund is an entity of the type commonly known as a
"Massachusetts business trust". Under Massachusetts law,
shareholders could, under certain circumstances, be held
personally
liable for the obligations of the Fund. However, the Agreement
and
Declaration of Trust disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such
disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Fund or its Trustees. The
Agreement and Declaration of Trust provides for indemnification
out
of the property of the Fund for all loss and expense of any
shareholder of the Fund held personally liable for the
obligations
of the Fund solely by reason of his being or having been a
shareholder. Thus, the risk of a shareholder's incurring
financial
loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet
its
obligations.
We understand that this opinion is to be used in connection
with the registration of the Shares for offering and sale
pursuant
to the Securities Act of 1933, as amended, and the provisions of
Rule 24e-2 under the Investment Company Act of 1940, as amended.
We consent to the filing of this opinion with and as a part of
Post-Effective Amendment No. 6 to your Registration Statement
No.
33-35677.
Very truly yours,
Ropes & Gray
ROPES & GRAY
One International Place
Boston, Massachusetts 02110-2624
(617) 951-7000
September 26, 1995
PUTNAM NEW JERSEY TAX EXEMPT INCOME FUND (the "Fund")
One Post Office Square
Boston, Massachusetts 02109
Gentlemen:
You have informed us that you propose to offer and sell from
time to time 619,559 of your shares of beneficial interest (the
"Shares"), for cash or securities at the net asset value per
share,
determined in accordance with your Bylaws, which Shares are in
addition to your shares of beneficial interest which you have
previously offered and sold or which you are currently offering.
We have examined copies of (i) your Agreement and
Declaration
of Trust as on file at the office of the Secretary of State of
The
Commonwealth of Massachusetts, which provides for an unlimited
number of authorized shares of beneficial interest, and (ii) your
Bylaws, which provide for the issue and sale by the Fund of such
Shares.
We assume that appropriate action will be taken to register
or
qualify the sale of the Shares under any applicable state and
federal laws regulating offerings and sales of securities.
Based upon the foregoing, we are of the opinion that:
1. The Fund is a legally organized and validly existing
voluntary association with transferable shares of beneficial
interest under the laws of The Commonwealth of Massachusetts and
is
authorized to issue an unlimited number of shares of beneficial
interest.
2. Upon the issue of any of the Shares referred to in the
first paragraph hereof for cash or securities at net asset value,
and the receipt of the appropriate consideration therefor as
provided in your Bylaws, such Shares so issued will be validly
issued, fully paid and nonassessable by the Fund.
<PAGE>
ROPES & GRAY
Putnam New Jersey Tax Exempt Income Fund -2- September 26,
1995
The Fund is an entity of the type commonly known as a
"Massachusetts business trust". Under Massachusetts law,
shareholders could, under certain circumstances, be held
personally
liable for the obligations of the Fund. However, the Agreement
and
Declaration of Trust disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such
disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Fund or its Trustees. The
Agreement and Declaration of Trust provides for indemnification
out
of the property of the Fund for all loss and expense of any
shareholder of the Fund held personally liable for the
obligations
of the Fund solely by reason of his being or having been a
shareholder. Thus, the risk of a shareholder's incurring
financial
loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet
its
obligations.
We understand that this opinion is to be used in connection
with the registration of the Shares for offering and sale
pursuant
to the Securities Act of 1933, as amended, and the provisions of
Rule 24e-2 under the Investment Company Act of 1940, as amended.
We consent to the filing of this opinion with and as a part of
Post-Effective Amendment No. 6 to your Registration Statement
No.
33-32550.
Very truly yours,
Ropes & Gray
March 31, 1995
Putnam Massachusetts Tax Exempt Income Fund II
One Post Office Square
Boston, MA 02109
Gentlemen:
In connection with your sale to us today of 110.865 Class M
shares of beneficial interest (the "Shares") in Putnam
Massachusetts Tax Exempt Income Fund II (the "Fund"), we
understand
that: (i) the Shares have not been registered under the
Securities
Act of 1933, as amended; (ii) your sale of the Shares to us is in
reliance on the sale's being exempt under Section 4(2) of the Act
as not involving any public offering; and (iii) in part, your
reliance on such exemption is predicated on our representation,
which we hereby confirm, that we are acquiring the Shares for
investment and for our own account as the sole beneficial owner
hereof, and not with a view to or in connection with any resale
or
distribution of any or all of the Shares or of any interest
therein. We hereby agree that we will not sell, assign or
transfer
the Shares or any interest therein except upon repurchase or
redemption by the Fund unless and until the Shares have been
registered under the Securities Act of 1933, as amended, or you
have received an opinion of your counsel indicating to your
satisfaction that such sale, assignment or transfer will not
violate the provisions of the Securities Act of 1933, as amended,
or any rules and regulations promulgated thereunder.
We further agree, pursuant to the requirements of the Staff
of
the Securities and Exchange Commission, that if any of the Shares
are redeemed during the first five years of the Fund's operations
by any holder thereof, the redemption proceeds will be reduced by
the amount of the then unamortized organizational expenses in the
same ratio as the number of Shares redeemed bears to the number
of
Shares held at the time of redemption.
This letter is intended to take effect as an instrument
under
seal, shall be construed under the laws of Massachusetts, and is
delivered at Boston, Massachusetts, as of the date written above.
Very truly yours,
PUTNAM INVESTMENTS, INC.
By: -----------------------------
Steven E. Asher
Senior Vice President
<PAGE>
March 31, 1995
Putnam Michigan Tax Exempt Income Fund II
One Post Office Square
Boston, MA 02109
Gentlemen:
In connection with your sale to us today of 113.379 Class M
shares of beneficial interest (the "Shares") in Putnam Michigan
Tax
Exempt Income Fund II (the "Fund"), we understand that: (i) the
Shares have not been registered under the Securities Act of 1933,
as amended; (ii) your sale of the Shares to us is in reliance on
the sale's being exempt under Section 4(2) of the Act as not
involving any public offering; and (iii) in part, your reliance
on
such exemption is predicated on our representation, which we
hereby
confirm, that we are acquiring the Shares for investment and for
our own account as the sole beneficial owner hereof, and not with
a view to or in connection with any resale or distribution of any
or all of the Shares or of any interest therein. We hereby agree
that we will not sell, assign or transfer the Shares or any
interest therein except upon repurchase or redemption by the Fund
unless and until the Shares have been registered under the
Securities Act of 1933, as amended, or you have received an
opinion
of your counsel indicating to your satisfaction that such sale,
assignment or transfer will not violate the provisions of the
Securities Act of 1933, as amended, or any rules and regulations
promulgated thereunder.
We further agree, pursuant to the requirements of the Staff
of
the Securities and Exchange Commission, that if any of the Shares
are redeemed during the first five years of the Fund's operations
by any holder thereof, the redemption proceeds will be reduced by
the amount of the then unamortized organizational expenses in the
same ratio as the number of Shares redeemed bears to the number
of
Shares held at the time of redemption.
This letter is intended to take effect as an instrument
under
seal, shall be construed under the laws of Massachusetts, and is
delivered at Boston, Massachusetts, as of the date written above.
Very truly yours,
PUTNAM INVESTMENTS, INC.
By: -----------------------------
Steven E. Asher
Senior Vice President
<PAGE>
March 31, 1995
Putnam Minnesota Tax Exempt Income Fund II
One Post Office Square
Boston, MA 02109
Gentlemen:
In connection with your sale to us today of 114.025 Class M
shares of beneficial interest (the "Shares") in Putnam Minnesota
Tax Exempt Income Fund II (the "Fund"), we understand that: (i)
the
Shares have not been registered under the Securities Act of 1933,
as amended; (ii) your sale of the Shares to us is in reliance on
the sale's being exempt under Section 4(2) of the Act as not
involving any public offering; and (iii) in part, your reliance
on
such exemption is predicated on our representation, which we
hereby
confirm, that we are acquiring the Shares for investment and for
our own account as the sole beneficial owner hereof, and not with
a view to or in connection with any resale or distribution of any
or all of the Shares or of any interest therein. We hereby agree
that we will not sell, assign or transfer the Shares or any
interest therein except upon repurchase or redemption by the Fund
unless and until the Shares have been registered under the
Securities Act of 1933, as amended, or you have received an
opinion
of your counsel indicating to your satisfaction that such sale,
assignment or transfer will not violate the provisions of the
Securities Act of 1933, as amended, or any rules and regulations
promulgated thereunder.
We further agree, pursuant to the requirements of the Staff
of
the Securities and Exchange Commission, that if any of the Shares
are redeemed during the first five years of the Fund's operations
by any holder thereof, the redemption proceeds will be reduced by
the amount of the then unamortized organizational expenses in the
same ratio as the number of Shares redeemed bears to the number
of
Shares held at the time of redemption.
This letter is intended to take effect as an instrument
under
seal, shall be construed under the laws of Massachusetts, and is
delivered at Boston, Massachusetts, as of the date written above.
Very truly yours,
PUTNAM INVESTMENTS, INC.
By: -----------------------------
Steven E. Asher
Senior Vice President
<PAGE>
March 31, 1995
Putnam Ohio Tax Exempt Income Fund II
One Post Office Square
Boston, MA 02109
Gentlemen:
In connection with your sale to us today of 114.155 Class M
shares of beneficial interest (the "Shares") in Putnam Ohio Tax
Exempt Income Fund II (the "Fund"), we understand that: (i) the
Shares have not been registered under the Securities Act of 1933,
as amended; (ii) your sale of the Shares to us is in reliance on
the sale's being exempt under Section 4(2) of the Act as not
involving any public offering; and (iii) in part, your reliance
on
such exemption is predicated on our representation, which we
hereby
confirm, that we are acquiring the Shares for investment and for
our own account as the sole beneficial owner hereof, and not with
a view to or in connection with any resale or distribution of any
or all of the Shares or of any interest therein. We hereby agree
that we will not sell, assign or transfer the Shares or any
interest therein except upon repurchase or redemption by the Fund
unless and until the Shares have been registered under the
Securities Act of 1933, as amended, or you have received an
opinion
of your counsel indicating to your satisfaction that such sale,
assignment or transfer will not violate the provisions of the
Securities Act of 1933, as amended, or any rules and regulations
promulgated thereunder.
We further agree, pursuant to the requirements of the Staff
of
the Securities and Exchange Commission, that if any of the Shares
are redeemed during the first five years of the Fund's operations
by any holder thereof, the redemption proceeds will be reduced by
the amount of the then unamortized organizational expenses in the
same ratio as the number of Shares redeemed bears to the number
of
Shares held at the time of redemption.
This letter is intended to take effect as an instrument
under
seal, shall be construed under the laws of Massachusetts, and is
delivered at Boston, Massachusetts, as of the date written above.
Very truly yours,
PUTNAM INVESTMENTS, INC.
By: -----------------------------
Steven E. Asher
Senior Vice President
April 28, 1995
Putnam New Jersey Tax Exempt Income Fund
One Post Office Square
Boston, MA 02109
Gentlemen:
In connection with your sale to us today of 114.416 Class M
shares of beneficial interest (the "Shares") in Putnam New Jersey
Tax Exempt Income Fund (the "Fund"), we understand that: (i) the
Shares have not been registered under the Securities Act of 1933,
as amended; (ii) your sale of the Shares to us is in reliance on
the sale's being exempt under Section 4(2) of the Act as not
involving any public offering; and (iii) in part, your reliance
on
such exemption is predicated on our representation, which we
hereby
confirm, that we are acquiring the Shares for investment and for
our own account as the sole beneficial owner hereof, and not with
a view to or in connection with any resale or distribution of any
or all of the Shares or of any interest therein. We hereby agree
that we will not sell, assign or transfer the Shares or any
interest therein except upon repurchase or redemption by the Fund
unless and until the Shares have been registered under the
Securities Act of 1933, as amended, or you have received an
opinion
of your counsel indicating to your satisfaction that such sale,
assignment or transfer will not violate the provisions of the
Securities Act of 1933, as amended, or any rules and regulations
promulgated thereunder.
We further agree, pursuant to the requirements of the Staff
of
the Securities and Exchange Commission, that if any of the Shares
are redeemed during the first five years of the Fund's operations
by any holder thereof, the redemption proceeds will be reduced by
the amount of the then unamortized organizational expenses in the
same ratio as the number of Shares redeemed bears to the number
of
Shares held at the time of redemption.
This letter is intended to take effect as an instrument
under
seal, shall be construed under the laws of Massachusetts, and is
delivered at Boston, Massachusetts, as of the date written above.
Very truly yours,
PUTNAM INVESTMENTS, INC.
By: -----------------------------
Steven E. Asher
Senior Vice President
April 28, 1995
Putnam Florida Tax Exempt Income Fund
One Post Office Square
Boston, MA 02109
Gentlemen:
In connection with your sale to us today of 112.740 Class M
shares of beneficial interest (the "Shares") in Putnam Florida
Tax
Exempt Income Fund (the "Fund"), we understand that: (i) the
Shares
have not been registered under the Securities Act of 1933, as
amended; (ii) your sale of the Shares to us is in reliance on the
sale's being exempt under Section 4(2) of the Act as not
involving
any public offering; and (iii) in part, your reliance on such
exemption is predicated on our representation, which we hereby
confirm, that we are acquiring the Shares for investment and for
our own account as the sole beneficial owner hereof, and not with
a view to or in connection with any resale or distribution of any
or all of the Shares or of any interest therein. We hereby agree
that we will not sell, assign or transfer the Shares or any
interest therein except upon repurchase or redemption by the Fund
unless and until the Shares have been registered under the
Securities Act of 1933, as amended, or you have received an
opinion
of your counsel indicating to your satisfaction that such sale,
assignment or transfer will not violate the provisions of the
Securities Act of 1933, as amended, or any rules and regulations
promulgated thereunder.
We further agree, pursuant to the requirements of the Staff
of
the Securities and Exchange Commission, that if any of the Shares
are redeemed during the first five years of the Fund's operations
by any holder thereof, the redemption proceeds will be reduced by
the amount of the then unamortized organizational expenses in the
same ratio as the number of Shares redeemed bears to the number
of
Shares held at the time of redemption.
This letter is intended to take effect as an instrument
under
seal, shall be construed under the laws of Massachusetts, and is
delivered at Boston, Massachusetts, as of the date written above.
Very truly yours,
PUTNAM INVESTMENTS, INC.
By: -----------------------------
Steven E. Asher
Senior Vice President
PUTNAM FLORIDA TAX EXEMPT INCOME FUND
CLASS M
DISTRIBUTION PLAN AND AGREEMENT
This Plan and Agreement (the "Plan") constitutes the
Distribution Plan for the Class M shares of Putnam Florida Tax
Exempt Income Fund, a Massachusetts business trust (the "Trust"),
adopted pursuant to the provisions of Rule 12b-1 under the
Investment Company Act of 1940 (the "Act") and the related
agreement between the Trust and Putnam Mutual Funds Corp.
("PMF"). During the effective term of this Plan, the Trust may
incur expenses primarily intended to result in the sale of its
Class M shares upon the terms and conditions hereinafter set
forth:
Section 1. The Trust shall pay to PMF a monthly fee at the
annual rate of 1.00% of the average net asset value of the Class
M shares of the Trust, as determined at the close of each
business day during the month, to compensate PMF for services
provided and expenses incurred by it in connection with the
offering of the Trust's Class M shares, which may include,
without limitation, payments by PMF to investment dealers with
respect to Class M shares, as set forth in the then current
Prospectus or Statement of Additional Information of the Trust,
including the payment of a service fee of up to 0.25% of such net
asset value for the purpose of maintaining or improving services
provided to shareholders by PMF and investment dealers. Such
fees shall be payable for each month within 15 days after the
close of such month. A majority of the Qualified Trustees, as
defined below, may, from time to time, reduce the amount of such
payments, or may suspend the operation of the Plan for such
period or periods of time as they may determine.
Section 2. This Plan shall not take effect until:
(a) it has been approved by a vote of a majority of the
outstanding Class M shares of the Trust;
(b) it has been approved, together with any related
agreements, by votes of the majority (or whatever greater
percentage may, from time to time, be required by Section
12(b) of the Act or the rules and regulations thereunder)
of both (i) the Trustees of the Trust, and (ii) the
Qualified Trustees of the Trust, cast in person at a
meeting called for the purpose of voting on this Plan or
such agreement; and
(c) the Trust has received the proceeds of the initial
public offering of its Class M shares.
<PAGE>
Section 3. This Plan shall continue in effect for a period
of more than one year after it takes effect only so long as
such
continuance is specifically approved at least annually in the
manner provided for approval of this Plan in Section 2(b).
Section 4. PMF shall provide to the Trustees of the Trust,
and the Trustees shall review, at least quarterly, a written
report of the amounts so expended and the purposes for which such
expenditures were made.
Section 5. This Plan may be terminated at any time by vote
of a majority of the Qualified Trustees or by vote of the
majority of the outstanding Class M shares of the Trust.
Section 6. All agreements with any person relating to
implementation of this Plan shall be in writing, and any
agreement related to this Plan shall provide:
(a) that such agreement may be terminated at any time,
without payment of any penalty, by vote of a majority
of the Qualified Trustees or by vote of a majority of
the outstanding Class M shares of the Trust, on not
more than 60 days' written notice to any other party
to the agreement; and
(b) that such agreement shall terminate automatically in
the event of its assignment.
Section 7. This Plan may not be amended to increase
materially the amount of distribution expenses permitted pursuant
to Section 1 hereof without the approval of a majority of the
outstanding Class M shares of the Trust and all material
amendments to this Plan shall be approved in the manner provided
for approval of this Plan in Section 2(b).
Section 8. As used in this Plan, (a) the term "Qualified
Trustees" shall mean those Trustees of the Trust who are not
interested persons of the Trust, and have no direct or indirect
financial interest in the operation of this Plan or any
agreements related to it, and (b) the term "majority of the
outstanding Class M shares of the Trust" means the affirmative
vote, at a duly called and held meeting of Class M shareholders
of the Trust, (i) of the holders of 67% or more of the Class M
shares of the Trust present (in person or by proxy) and entitled
to vote at such meeting, if the holders of more than 50% of the
outstanding Class M shares of the Trust entitled to vote at such
meeting are present in person or by proxy, or (ii) of the holders
of more than 50% of the outstanding Class M shares of the Trust
entitled to vote at such meeting, whichever is less, and (c) the
terms "assignment" and "interested person" shall have the
respective meanings specified in the Act and the rules and
regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
Section 9. A copy of the Agreement and Declaration of
Trust of the Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts and notice is hereby given that
this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually, and that the obligations
of or arising out of this instrument are not binding upon any of
the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Trust.
Executed as of April 28, 1995.
PUTNAM MUTUAL FUNDS CORP. PUTNAM FLORIDA TAX EXEMPT
INCOME FUND
By: ---------------------- By: --------------------------
William N. Shiebler Charles E. Porter
President Executive Vice President
PUTNAM NEW JERSEY TAX EXEMPT INCOME FUND
CLASS M
DISTRIBUTION PLAN AND AGREEMENT
This Plan and Agreement (the "Plan") constitutes the
Distribution Plan for the Class M shares of Putnam New Jersey Tax
Exempt Income Fund, a Massachusetts business trust (the "Trust"),
adopted pursuant to the provisions of Rule 12b-1 under the
Investment Company Act of 1940 (the "Act") and the related
agreement between the Trust and Putnam Mutual Funds Corp.
("PMF"). During the effective term of this Plan, the Trust may
incur expenses primarily intended to result in the sale of its
Class M shares upon the terms and conditions hereinafter set
forth:
Section 1. The Trust shall pay to PMF a monthly fee at the
annual rate of 1.00% of the average net asset value of the Class
M shares of the Trust, as determined at the close of each
business day during the month, to compensate PMF for services
provided and expenses incurred by it in connection with the
offering of the Trust's Class M shares, which may include,
without limitation, payments by PMF to investment dealers with
respect to Class M shares, as set forth in the then current
Prospectus or Statement of Additional Information of the Trust,
including the payment of a service fee of up to 0.25% of such net
asset value for the purpose of maintaining or improving services
provided to shareholders by PMF and investment dealers. Such
fees shall be payable for each month within 15 days after the
close of such month. A majority of the Qualified Trustees, as
defined below, may, from time to time, reduce the amount of such
payments, or may suspend the operation of the Plan for such
period or periods of time as they may determine.
Section 2. This Plan shall not take effect until:
(a) it has been approved by a vote of a majority of the
outstanding Class M shares of the Trust;
(b) it has been approved, together with any related
agreements, by votes of the majority (or whatever greater
percentage may, from time to time, be required by Section
12(b) of the Act or the rules and regulations thereunder)
of both (i) the Trustees of the Trust, and (ii) the
Qualified Trustees of the Trust, cast in person at a
meeting called for the purpose of voting on this Plan or
such agreement; and
(c) the Trust has received the proceeds of the initial
public offering of its Class M shares.
<PAGE>
Section 3. This Plan shall continue in effect for a period
of more than one year after it takes effect only so long as
such
continuance is specifically approved at least annually in the
manner provided for approval of this Plan in Section 2(b).
Section 4. PMF shall provide to the Trustees of the Trust,
and the Trustees shall review, at least quarterly, a written
report of the amounts so expended and the purposes for which such
expenditures were made.
Section 5. This Plan may be terminated at any time by vote
of a majority of the Qualified Trustees or by vote of the
majority of the outstanding Class M shares of the Trust.
Section 6. All agreements with any person relating to
implementation of this Plan shall be in writing, and any
agreement related to this Plan shall provide:
(a) that such agreement may be terminated at any time,
without payment of any penalty, by vote of a majority
of the Qualified Trustees or by vote of a majority of
the outstanding Class M shares of the Trust, on not
more than 60 days' written notice to any other party
to the agreement; and
(b) that such agreement shall terminate automatically in
the event of its assignment.
Section 7. This Plan may not be amended to increase
materially the amount of distribution expenses permitted pursuant
to Section 1 hereof without the approval of a majority of the
outstanding Class M shares of the Trust and all material
amendments to this Plan shall be approved in the manner provided
for approval of this Plan in Section 2(b).
Section 8. As used in this Plan, (a) the term "Qualified
Trustees" shall mean those Trustees of the Trust who are not
interested persons of the Trust, and have no direct or indirect
financial interest in the operation of this Plan or any
agreements related to it, and (b) the term "majority of the
outstanding Class M shares of the Trust" means the affirmative
vote, at a duly called and held meeting of Class M shareholders
of the Trust, (i) of the holders of 67% or more of the Class M
shares of the Trust present (in person or by proxy) and entitled
to vote at such meeting, if the holders of more than 50% of the
outstanding Class M shares of the Trust entitled to vote at such
meeting are present in person or by proxy, or (ii) of the holders
of more than 50% of the outstanding Class M shares of the Trust
entitled to vote at such meeting, whichever is less, and (c) the
terms "assignment" and "interested person" shall have the
respective meanings specified in the Act and the rules and
regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
Section 9. A copy of the Agreement and Declaration of
Trust of the Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts and notice is hereby given that
this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually, and that the obligations
of or arising out of this instrument are not binding upon any of
the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Trust.
Executed as of April 28, 1995.
PUTNAM MUTUAL FUNDS CORP. PUTNAM NEW JERSEY TAX EXEMPT
INCOME FUND
By: ---------------------- By: --------------------------
William N. Shiebler Charles E. Porter
President Executive Vice President
PUTNAM MASSACHUSETTS TAX EXEMPT INCOME FUND II
CLASS M
DISTRIBUTION PLAN AND AGREEMENT
This Plan and Agreement (the "Plan") constitutes the
Distribution Plan for the Class M shares of Putnam Massachusetts
Tax Exempt Income Fund II, a Massachusetts business trust (the
"Trust"), adopted pursuant to the provisions of Rule 12b-1 under
the Investment Company Act of 1940 (the "Act") and the related
agreement between the Trust and Putnam Mutual Funds Corp.
("PMF"). During the effective term of this Plan, the Trust may
incur expenses primarily intended to result in the sale of its
Class M shares upon the terms and conditions hereinafter set
forth:
Section 1. The Trust shall pay to PMF a monthly fee at the
annual rate of 1.00% of the average net asset value of the Class
M shares of the Trust, as determined at the close of each
business day during the month, to compensate PMF for services
provided and expenses incurred by it in connection with the
offering of the Trust's Class M shares, which may include,
without limitation, payments by PMF to investment dealers with
respect to Class M shares, as set forth in the then current
Prospectus or Statement of Additional Information of the Trust,
including the payment of a service fee of up to 0.25% of such net
asset value for the purpose of maintaining or improving services
provided to shareholders by PMF and investment dealers. Such
fees shall be payable for each month within 15 days after the
close of such month. A majority of the Qualified Trustees, as
defined below, may, from time to time, reduce the amount of such
payments, or may suspend the operation of the Plan for such
period or periods of time as they may determine.
Section 2. This Plan shall not take effect until:
(a) it has been approved by a vote of a majority of the
outstanding Class M shares of the Trust;
(b) it has been approved, together with any related
agreements, by votes of the majority (or whatever greater
percentage may, from time to time, be required by Section
12(b) of the Act or the rules and regulations thereunder)
of both (i) the Trustees of the Trust, and (ii) the
Qualified Trustees of the Trust, cast in person at a
meeting called for the purpose of voting on this Plan or
such agreement; and
(c) the Trust has received the proceeds of the initial
public offering of its Class M shares.
<PAGE>
Section 3. This Plan shall continue in effect for a period
of more than one year after it takes effect only so long as
such
continuance is specifically approved at least annually in the
manner provided for approval of this Plan in Section 2(b).
Section 4. PMF shall provide to the Trustees of the Trust,
and the Trustees shall review, at least quarterly, a written
report of the amounts so expended and the purposes for which such
expenditures were made.
Section 5. This Plan may be terminated at any time by vote
of a majority of the Qualified Trustees or by vote of the
majority of the outstanding Class M shares of the Trust.
Section 6. All agreements with any person relating to
implementation of this Plan shall be in writing, and any
agreement related to this Plan shall provide:
(a) that such agreement may be terminated at any time,
without payment of any penalty, by vote of a majority
of the Qualified Trustees or by vote of a majority of
the outstanding Class M shares of the Trust, on not
more than 60 days' written notice to any other party
to the agreement; and
(b) that such agreement shall terminate automatically in
the event of its assignment.
Section 7. This Plan may not be amended to increase
materially the amount of distribution expenses permitted pursuant
to Section 1 hereof without the approval of a majority of the
outstanding Class M shares of the Trust and all material
amendments to this Plan shall be approved in the manner provided
for approval of this Plan in Section 2(b).
Section 8. As used in this Plan, (a) the term "Qualified
Trustees" shall mean those Trustees of the Trust who are not
interested persons of the Trust, and have no direct or indirect
financial interest in the operation of this Plan or any
agreements related to it, and (b) the term "majority of the
outstanding Class M shares of the Trust" means the affirmative
vote, at a duly called and held meeting of Class M shareholders
of the Trust, (i) of the holders of 67% or more of the Class M
shares of the Trust present (in person or by proxy) and entitled
to vote at such meeting, if the holders of more than 50% of the
outstanding Class M shares of the Trust entitled to vote at such
meeting are present in person or by proxy, or (ii) of the holders
of more than 50% of the outstanding Class M shares of the Trust
entitled to vote at such meeting, whichever is less, and (c) the
terms "assignment" and "interested person" shall have the
respective meanings specified in the Act and the rules and
regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
Section 9. A copy of the Agreement and Declaration of
Trust of the Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts and notice is hereby given that
this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually, and that the obligations
of or arising out of this instrument are not binding upon any of
the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Trust.
Executed as of March 31, 1995.
PUTNAM MUTUAL FUNDS CORP. PUTNAM MASSACHUSETTS TAX EXEMPT
INCOME FUND II
By: ---------------------- By: --------------------------
William N. Shiebler Charles E. Porter
President Executive Vice President
PUTNAM MICHIGAN TAX EXEMPT INCOME FUND II
CLASS M
DISTRIBUTION PLAN AND AGREEMENT
This Plan and Agreement (the "Plan") constitutes the
Distribution Plan for the Class M shares of Putnam Michigan Tax
Exempt Income Fund II, a Massachusetts business trust (the
"Trust"), adopted pursuant to the provisions of Rule 12b-1 under
the Investment Company Act of 1940 (the "Act") and the related
agreement between the Trust and Putnam Mutual Funds Corp.
("PMF"). During the effective term of this Plan, the Trust may
incur expenses primarily intended to result in the sale of its
Class M shares upon the terms and conditions hereinafter set
forth:
Section 1. The Trust shall pay to PMF a monthly fee at the
annual rate of 1.00% of the average net asset value of the Class
M shares of the Trust, as determined at the close of each
business day during the month, to compensate PMF for services
provided and expenses incurred by it in connection with the
offering of the Trust's Class M shares, which may include,
without limitation, payments by PMF to investment dealers with
respect to Class M shares, as set forth in the then current
Prospectus or Statement of Additional Information of the Trust,
including the payment of a service fee of up to 0.25% of such net
asset value for the purpose of maintaining or improving services
provided to shareholders by PMF and investment dealers. Such
fees shall be payable for each month within 15 days after the
close of such month. A majority of the Qualified Trustees, as
defined below, may, from time to time, reduce the amount of such
payments, or may suspend the operation of the Plan for such
period or periods of time as they may determine.
Section 2. This Plan shall not take effect until:
(a) it has been approved by a vote of a majority of the
outstanding Class M shares of the Trust;
(b) it has been approved, together with any related
agreements, by votes of the majority (or whatever greater
percentage may, from time to time, be required by Section
12(b) of the Act or the rules and regulations thereunder)
of both (i) the Trustees of the Trust, and (ii) the
Qualified Trustees of the Trust, cast in person at a
meeting called for the purpose of voting on this Plan or
such agreement; and
(c) the Trust has received the proceeds of the initial
public offering of its Class M shares.
<PAGE>
Section 3. This Plan shall continue in effect for a period
of more than one year after it takes effect only so long as
such
continuance is specifically approved at least annually in the
manner provided for approval of this Plan in Section 2(b).
Section 4. PMF shall provide to the Trustees of the Trust,
and the Trustees shall review, at least quarterly, a written
report of the amounts so expended and the purposes for which such
expenditures were made.
Section 5. This Plan may be terminated at any time by vote
of a majority of the Qualified Trustees or by vote of the
majority of the outstanding Class M shares of the Trust.
Section 6. All agreements with any person relating to
implementation of this Plan shall be in writing, and any
agreement related to this Plan shall provide:
(a) that such agreement may be terminated at any time,
without payment of any penalty, by vote of a majority
of the Qualified Trustees or by vote of a majority of
the outstanding Class M shares of the Trust, on not
more than 60 days' written notice to any other party
to the agreement; and
(b) that such agreement shall terminate automatically in
the event of its assignment.
Section 7. This Plan may not be amended to increase
materially the amount of distribution expenses permitted pursuant
to Section 1 hereof without the approval of a majority of the
outstanding Class M shares of the Trust and all material
amendments to this Plan shall be approved in the manner provided
for approval of this Plan in Section 2(b).
Section 8. As used in this Plan, (a) the term "Qualified
Trustees" shall mean those Trustees of the Trust who are not
interested persons of the Trust, and have no direct or indirect
financial interest in the operation of this Plan or any
agreements related to it, and (b) the term "majority of the
outstanding Class M shares of the Trust" means the affirmative
vote, at a duly called and held meeting of Class M shareholders
of the Trust, (i) of the holders of 67% or more of the Class M
shares of the Trust present (in person or by proxy) and entitled
to vote at such meeting, if the holders of more than 50% of the
outstanding Class M shares of the Trust entitled to vote at such
meeting are present in person or by proxy, or (ii) of the holders
of more than 50% of the outstanding Class M shares of the Trust
entitled to vote at such meeting, whichever is less, and (c) the
terms "assignment" and "interested person" shall have the
respective meanings specified in the Act and the rules and
regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
Section 9. A copy of the Agreement and Declaration of
Trust of the Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts and notice is hereby given that
this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually, and that the obligations
of or arising out of this instrument are not binding upon any of
the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Trust.
Executed as of March 31, 1995.
PUTNAM MUTUAL FUNDS CORP. PUTNAM MICHIGAN TAX EXEMPT
INCOME FUND II
By: ---------------------- By: --------------------------
William N. Shiebler Charles E. Porter
President Executive Vice President
PUTNAM MINNESOTA TAX EXEMPT INCOME FUND II
CLASS M
DISTRIBUTION PLAN AND AGREEMENT
This Plan and Agreement (the "Plan") constitutes the
Distribution Plan for the Class M shares of Putnam Minnesota Tax
Exempt Income Fund II, a Massachusetts business trust (the
"Trust"), adopted pursuant to the provisions of Rule 12b-1 under
the Investment Company Act of 1940 (the "Act") and the related
agreement between the Trust and Putnam Mutual Funds Corp.
("PMF"). During the effective term of this Plan, the Trust may
incur expenses primarily intended to result in the sale of its
Class M shares upon the terms and conditions hereinafter set
forth:
Section 1. The Trust shall pay to PMF a monthly fee at the
annual rate of 1.00% of the average net asset value of the Class
M shares of the Trust, as determined at the close of each
business day during the month, to compensate PMF for services
provided and expenses incurred by it in connection with the
offering of the Trust's Class M shares, which may include,
without limitation, payments by PMF to investment dealers with
respect to Class M shares, as set forth in the then current
Prospectus or Statement of Additional Information of the Trust,
including the payment of a service fee of up to 0.25% of such net
asset value for the purpose of maintaining or improving services
provided to shareholders by PMF and investment dealers. Such
fees shall be payable for each month within 15 days after the
close of such month. A majority of the Qualified Trustees, as
defined below, may, from time to time, reduce the amount of such
payments, or may suspend the operation of the Plan for such
period or periods of time as they may determine.
Section 2. This Plan shall not take effect until:
(a) it has been approved by a vote of a majority of the
outstanding Class M shares of the Trust;
(b) it has been approved, together with any related
agreements, by votes of the majority (or whatever greater
percentage may, from time to time, be required by Section
12(b) of the Act or the rules and regulations thereunder)
of both (i) the Trustees of the Trust, and (ii) the
Qualified Trustees of the Trust, cast in person at a
meeting called for the purpose of voting on this Plan or
such agreement; and
(c) the Trust has received the proceeds of the initial
public offering of its Class M shares.
<PAGE>
Section 3. This Plan shall continue in effect for a period
of more than one year after it takes effect only so long as
such
continuance is specifically approved at least annually in the
manner provided for approval of this Plan in Section 2(b).
Section 4. PMF shall provide to the Trustees of the Trust,
and the Trustees shall review, at least quarterly, a written
report of the amounts so expended and the purposes for which such
expenditures were made.
Section 5. This Plan may be terminated at any time by vote
of a majority of the Qualified Trustees or by vote of the
majority of the outstanding Class M shares of the Trust.
Section 6. All agreements with any person relating to
implementation of this Plan shall be in writing, and any
agreement related to this Plan shall provide:
(a) that such agreement may be terminated at any time,
without payment of any penalty, by vote of a majority
of the Qualified Trustees or by vote of a majority of
the outstanding Class M shares of the Trust, on not
more than 60 days' written notice to any other party
to the agreement; and
(b) that such agreement shall terminate automatically in
the event of its assignment.
Section 7. This Plan may not be amended to increase
materially the amount of distribution expenses permitted pursuant
to Section 1 hereof without the approval of a majority of the
outstanding Class M shares of the Trust and all material
amendments to this Plan shall be approved in the manner provided
for approval of this Plan in Section 2(b).
Section 8. As used in this Plan, (a) the term "Qualified
Trustees" shall mean those Trustees of the Trust who are not
interested persons of the Trust, and have no direct or indirect
financial interest in the operation of this Plan or any
agreements related to it, and (b) the term "majority of the
outstanding Class M shares of the Trust" means the affirmative
vote, at a duly called and held meeting of Class M shareholders
of the Trust, (i) of the holders of 67% or more of the Class M
shares of the Trust present (in person or by proxy) and entitled
to vote at such meeting, if the holders of more than 50% of the
outstanding Class M shares of the Trust entitled to vote at such
meeting are present in person or by proxy, or (ii) of the holders
of more than 50% of the outstanding Class M shares of the Trust
entitled to vote at such meeting, whichever is less, and (c) the
terms "assignment" and "interested person" shall have the
respective meanings specified in the Act and the rules and
regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
Section 9. A copy of the Agreement and Declaration of
Trust of the Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts and notice is hereby given that
this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually, and that the obligations
of or arising out of this instrument are not binding upon any of
the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Trust.
Executed as of March 31, 1995.
PUTNAM MUTUAL FUNDS CORP. PUTNAM MINNESOTA TAX EXEMPT
INCOME FUND II
By: ---------------------- By: --------------------------
William N. Shiebler Charles E. Porter
President Executive Vice President
PUTNAM OHIO TAX EXEMPT INCOME FUND II
CLASS M
DISTRIBUTION PLAN AND AGREEMENT
This Plan and Agreement (the "Plan") constitutes the
Distribution Plan for the Class M shares of Putnam Ohio Tax
Exempt Income Fund II, a Massachusetts business trust (the
"Trust"), adopted pursuant to the provisions of Rule 12b-1 under
the Investment Company Act of 1940 (the "Act") and the related
agreement between the Trust and Putnam Mutual Funds Corp.
("PMF"). During the effective term of this Plan, the Trust may
incur expenses primarily intended to result in the sale of its
Class M shares upon the terms and conditions hereinafter set
forth:
Section 1. The Trust shall pay to PMF a monthly fee at the
annual rate of 1.00% of the average net asset value of the Class
M shares of the Trust, as determined at the close of each
business day during the month, to compensate PMF for services
provided and expenses incurred by it in connection with the
offering of the Trust's Class M shares, which may include,
without limitation, payments by PMF to investment dealers with
respect to Class M shares, as set forth in the then current
Prospectus or Statement of Additional Information of the Trust,
including the payment of a service fee of up to 0.25% of such net
asset value for the purpose of maintaining or improving services
provided to shareholders by PMF and investment dealers. Such
fees shall be payable for each month within 15 days after the
close of such month. A majority of the Qualified Trustees, as
defined below, may, from time to time, reduce the amount of such
payments, or may suspend the operation of the Plan for such
period or periods of time as they may determine.
Section 2. This Plan shall not take effect until:
(a) it has been approved by a vote of a majority of the
outstanding Class M shares of the Trust;
(b) it has been approved, together with any related
agreements, by votes of the majority (or whatever greater
percentage may, from time to time, be required by Section
12(b) of the Act or the rules and regulations thereunder)
of both (i) the Trustees of the Trust, and (ii) the
Qualified Trustees of the Trust, cast in person at a
meeting called for the purpose of voting on this Plan or
such agreement; and
(c) the Trust has received the proceeds of the initial
public offering of its Class M shares.
<PAGE>
Section 3. This Plan shall continue in effect for a period
of more than one year after it takes effect only so long as
such
continuance is specifically approved at least annually in the
manner provided for approval of this Plan in Section 2(b).
Section 4. PMF shall provide to the Trustees of the Trust,
and the Trustees shall review, at least quarterly, a written
report of the amounts so expended and the purposes for which such
expenditures were made.
Section 5. This Plan may be terminated at any time by vote
of a majority of the Qualified Trustees or by vote of the
majority of the outstanding Class M shares of the Trust.
Section 6. All agreements with any person relating to
implementation of this Plan shall be in writing, and any
agreement related to this Plan shall provide:
(a) that such agreement may be terminated at any time,
without payment of any penalty, by vote of a majority
of the Qualified Trustees or by vote of a majority of
the outstanding Class M shares of the Trust, on not
more than 60 days' written notice to any other party
to the agreement; and
(b) that such agreement shall terminate automatically in
the event of its assignment.
Section 7. This Plan may not be amended to increase
materially the amount of distribution expenses permitted pursuant
to Section 1 hereof without the approval of a majority of the
outstanding Class M shares of the Trust and all material
amendments to this Plan shall be approved in the manner provided
for approval of this Plan in Section 2(b).
Section 8. As used in this Plan, (a) the term "Qualified
Trustees" shall mean those Trustees of the Trust who are not
interested persons of the Trust, and have no direct or indirect
financial interest in the operation of this Plan or any
agreements related to it, and (b) the term "majority of the
outstanding Class M shares of the Trust" means the affirmative
vote, at a duly called and held meeting of Class M shareholders
of the Trust, (i) of the holders of 67% or more of the Class M
shares of the Trust present (in person or by proxy) and entitled
to vote at such meeting, if the holders of more than 50% of the
outstanding Class M shares of the Trust entitled to vote at such
meeting are present in person or by proxy, or (ii) of the holders
of more than 50% of the outstanding Class M shares of the Trust
entitled to vote at such meeting, whichever is less, and (c) the
terms "assignment" and "interested person" shall have the
respective meanings specified in the Act and the rules and
regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
Section 9. A copy of the Agreement and Declaration of
Trust of the Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts and notice is hereby given that
this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually, and that the obligations
of or arising out of this instrument are not binding upon any of
the Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Trust.
Executed as of March 31, 1995.
PUTNAM MUTUAL FUNDS CORP. PUTNAM OHIO TAX EXEMPT
INCOME FUND II
By: ---------------------- By: --------------------------
William N. Shiebler Charles E. Porter
President Executive Vice President
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Arizona Tax Exempt Income Fund -- Class A
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
1/30/91
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 n/a $1,000
ERV = Ending Redeemable Value $1,025 n/a $1,391
T = Average Annual
Total Return +2.53% n/a +7.89%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $692,100
Expenses $98,600
Reimbursement $0
Average shares 15,165,592
NAV $9.00
Sales Charge 4.75%
POP $9.45
Yield at POP 5.02%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
5.02% 5.02%
- ------ = ------ = 8.80%
1-42.98% 57.02%
<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Arizona Tax Exempt Income Fund -- Class B
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
7/15/93
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 n/a $1,000
ERV = Ending Redeemable Value $1,019 n/a $1,018
$
T = Average Annual
Total Return +1.88% % +0.94%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $107,162
Expenses $26,489
Reimbursement $0
Average shares 2,351,451
NAV $8.99
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 4.62%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
4.62% 4.62%
- ------ = ------ = 8.10%
1-42.98% 57.02%
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Florida Tax Exempt Income Fund -- Class A
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
8/24/90
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 n/a 1,000
ERV = Ending Redeemable Value $1,040 n/a $1,402
T = Average Annual
Total Return +4.05% n/a 7.35%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $1,325,642
Expenses $170,460
Reimbursement $0
Average shares 29,740,842
NAV $9.12
Sales Charge 4.75%
POP $9.57
Yield at POP 4.92%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
4.92% 4.92%
- ------ = ------ = 8.15%
1-39.6% 60.4%
<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Florida Tax Exempt Income Fund -- Class B
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
1/4/93
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 n/a $1,000
ERV = Ending Redeemable Value $1,035 n/a $1,090
T = Average Annual
Total Return +3.52% n/a +3.63%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $214,567
Expenses $50,914
Reimbursement $0
Average shares 4,817,238
NAV $9.12
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 4.51%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
4.51% 4.51%
- ------ = ------ = 7.47%
1-39.6% 60.40%
<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Florida Tax Exempt Income Fund -- Class M
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
5/1/95
TOTAL RETURN
Formula -- Cumulative Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 n/a $1,000
ERV = Ending Redeemable Value n/a n/a $999
$
T = Cumulative
Total Return n/a n/a -0.10%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $5
Expenses $1
Reimbursement $0
Average shares 113
NAV $9.12
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 4.93%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
4.76% 4.76%
- ------ = ------ = 7.88%
1-39.6% 60.40%
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Massachusetts Tax Exempt Income Fund -- Class A
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
10/23/89
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 $1,000 $1,000
ERV = Ending Redeemable Value $1,033 $1,465 $1,525
T = Average Annual
Total Return +3.31% +7.93% +7.82%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $1,314,271
Expenses $164,523
Reimbursement $0
Average shares 27,172,788
NAV $9.21
Sales Charge 4.75%
POP $9.67
Yield at POP 5.31%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
5.31% 5.31%
- ------ = ------ = 9.99%
1-46.85% 53.15%
<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Massachusetts Tax Exempt Income Fund -- Class B
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
7/15/93
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 n/a $1,000
ERV = Ending Redeemable Value $1,026 n/a $1,026
T = Average Annual
Total Return +2.64% n/a +1.38%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $240,120
Expenses $54,332
Reimbursement $0
Average shares 4,972,779
NAV $9.20
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 4.92%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
4.92% 4.92%
- ------ = ------ = 9.26%
1-46.85% 53.15%
<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Massachusetts Tax Exempt Income Fund -- Class M
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
4/1/95
TOTAL RETURN
Formula -- Cumulative Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment n/a n/a $1,000
ERV = Ending Redeemable Value n/a n/a $982
T = Cumulative
Total Return n/a n/a -1.83%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $66
Expenses $11
Reimbursement $0
Average shares 1,511
NAV $9.21
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 4.84%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
4.67% 4.67%
- ------ = ------ = 8.79%
1-46.85% 53.15%
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Michigan Tax Exempt Income Fund -- Class A
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
10/23/89
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 $1,000 $1,000
ERV = Ending Redeemable Value $1,024 $1,399 $1,444
T = Average Annual
Total Return +2.38% +6.94% +6.76%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $719,600
Expenses $102,582
Reimbursement $0
Average shares 15,005,992
NAV $9.01
Sales Charge 4.75%
POP $9.46
Yield at POP 5.27%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
5.27% 5.27%
- ------ = ------ = 9.13%
1-42.26% 57.74%
<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Michigan Tax Exempt Income Fund -- Class B
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
7/15/93
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 n/a $1,000
ERV = Ending Redeemable Value $1,017 n/a $1,022
T = Average Annual
Total Return +1.72% n/a +1.15%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $109,678
Expenses $26,594
Reimbursement $0
Average shares 2,292,773
NAV $9.00
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 4.88%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
4.88% 4.88%
- ------ = ------ = 8.45%
1-42.26% 57.74%
<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Michigan Tax Exempt Income Fund -- Class M
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
4/1/95
TOTAL RETURN
Formula -- Cumulative Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment n/a n/a $1,000
ERV = Ending Redeemable Value n/a n/a $997
T = Cumulative
Total Return n/a n/a -0.33%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $634
Expenses $119
Reimbursement $0
Average shares 13,234
NAV $9.00
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 5.25%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
5.06% 5.06%
- ------ = ------ = 8.76%
1-42.26% 57.74%
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Minnesota Tax Exempt Income Fund -- Class A
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
10/23/89
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 $1,000 $1,000
ERV = Ending Redeemable Value $1,028 $1,378 $1,422
T = Average Annual
Total Return +2.75% +6.62% +6.48%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $507,012
Expenses $70,932
Reimbursement $0
Average shares 10,957,882
NAV $8.95
Sales Charge 4.75%
POP $9.40
Yield at POP 5.14%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
5.14% 5.14%
- ------ = ------ = 9.30%
1-44.73% 55.27%
<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Minnesota Tax Exempt Income Fund -- Class B
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
7/15/93
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 n/a $1,000
ERV = Ending Redeemable Value $1,022 n/a $1,029
T = Average Annual
Total Return +2.17% n/a +1.55%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $98,501
Expenses $23,839
Reimbursement $0
Average shares 2,136,239
NAV $8.92
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 4.75%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
4.75% 4.75%
- ------ = ------ = 8.59%
1-44.73% 55.27%
<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Minnesota Tax Exempt Income Fund -- Class M
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
4/1/95
TOTAL RETURN
Formula -- Cumulative Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment n/a n/a $1,000
ERV = Ending Redeemable Value n/a n/a $996
T = Cumulative
Total Return n/a n/a -0.41%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $5
Expenses $1
Reimbursement $0
Average shares 114
NAV $8.95
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 5.32%
<PAGE>
Class M
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
5.13% 5.13%
- ------ = ------ = 9.28%
1-44.73% 55.27%
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam New Jersey Tax Exempt Income Fund -- Class A
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
2/20/90
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 $1,000 $1,000
ERV = Ending Redeemable Value $1,027 $1,420 $1,444
T = Average Annual
Total Return +2.67% +7.26% +7.21%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $1,249,588
Expenses $170,150
Reimbursement $0
Average shares 26,982,842
NAV $8.98
Sales Charge 4.75%
POP $9.43
Yield at POP 5.15%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
5.15% 5.15%
- ------ = ------ = 9.13%
1-43.57% 56.43%
<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam New Jersey Tax Exempt Income Fund -- Class B
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
1/4/93
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 n/a $1,000
ERV = Ending Redeemable Value $1,020 n/a $1,095
T = Average Annual
Total Return +1.98% n/a +3.82%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $296,362
Expenses $70,856
Reimbursement $0
Average shares 6,411,647
NAV $8.97
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 4.75%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
4.75% 4.75%
- ------ = ------ = 8.42%
1-43.57% 56.43%
<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam New Jersey Tax Exempt Income Fund -- Class M
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
5/1/95
TOTAL RETURN
Formula -- Cumulative Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment n/a n/a 1,000
ERV = Ending Redeemable Value n/a n/a $999
T = Cumulative
Total Return n/a n/a -0.10%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $5
Expenses $1
Reimbursement $0
Average shares 113
NAV $9.12
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 4.93%
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Ohio Tax Exempt Income Fund -- Class A
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
10/23/89
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 $1,000 $1,000
ERV = Ending Redeemable Value $1,029 $1,404 $1,446
T = Average Annual
Total Return +2.90% +7.02% +6.80%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $946,318
Expenses $127,506
Reimbursement $0
Average shares 21,645,396
NAV $8.95
Sales Charge 4.75%
POP $9.40
Yield at POP 4.88%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
4.88% 4.88%
- ------ = ------ = 8.73%
1-44.13% 55.87%
<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Ohio Tax Exempt Income Fund -- Class B
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
7/15/93
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 n/a $1,000
ERV = Ending Redeemable Value $1,024 n/a $1,027
$
T = Average Annual
Total Return +2.39% n/a +1.44%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $157,902
Expenses $38,388
Reimbursement $0
Average shares 3,614,932
NAV $8.94
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 4.48%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
4.48% 4.48%
- ------ = ------ = 8.02%
1-44.13% 55.87%<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Ohio Tax Exempt Income Fund -- Class M
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
4/1/95
TOTAL RETURN
Formula -- Cumulative Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment n/a n/a $1,000
ERV = Ending Redeemable Value n/a n/a $997
T = Cumulative
Total Return n/a n/a -0.26%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $5
Expenses $1
Reimbursement $0
Average shares 115
NAV $8.95
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 4.63%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
4.47% 4.47%
- ------ = ------ = 8.00%
1-44.13% 55.87%
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Pennsylvania Tax Exempt Income Fund -- Class A
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
7/21/89
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 $1,000 $1,000
ERV = Ending Redeemable Value $1,035 $1,459 $1,522
T = Average Annual
Total Return +3.55% +7.85% +7.43%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $927,079
Expenses $125,634
Reimbursement $0
Average shares 19,220,935
NAV $9.24
Sales Charge 4.75%
POP $9.70
Yield at POP 5.21%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
5.21% 5.21%
- ------ = ------ = 8.87%
1-41.29% 58.71%
<PAGE>
SCHEDULES FOR COMPUTATION OF PERFORMANCE QUOTATIONS
Fund name: Putnam Pennsylvania Tax Exempt Income Fund -- Class B
Fiscal period ending: 5/31/95
Inception date (if less than 10 years of performance):
7/15/95
TOTAL RETURN
Formula -- Average Annual Total Return: ERV = P(1+T)^n
n = Number of Time Periods 1 Year 5 Years 10 Years*
P = Initial Investment $1,000 n/a $1,000
ERV = Ending Redeemable Value $1,030 n/a $1,036
T = Average Annual
Total Return 3.01% n/a 1.90%*
*Life of fund, if less than 10 years
YIELD
Formula:
Interest + Dividends - Expenses
2 (-------------------------------------------------- +1)(6) -1
POP x Average shares
Interest and Dividends $222,624
Expenses $52,942
Reimbursement $0
Average shares 4,629,547
NAV $9.23
Maximum Contingent Deferred
Sales Charge 5.0%
Yield at NAV 4.81%
<PAGE>
TAX-EXEMPT EQUIVALENT YIELD
Formula: 30 day yield
--------------- = TAX EQUIVALENT YIELD
1-(Highest Individual Tax Rate)
4.81% 4.81%
- ------ = ------ = 8.19%
1-41.29% 58.71%
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED
FROM Putnam Arizona Tax Exempt Income Fund Class A AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000869392
<NAME> PUTNAM ARIZONA TAX EXEMPT INCOME FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 145,934,549
<INVESTMENTS-AT-VALUE> 153,038,043
<RECEIVABLES> 8,879,392
<ASSETS-OTHER> 109,586
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 162,027,021
<PAYABLE-FOR-SECURITIES> 2,922,125
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 968,213
<TOTAL-LIABILITIES> 3,890,338
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 157,268,516
<SHARES-COMMON-STOCK> 15,166,568
<SHARES-COMMON-PRIOR> 16,171,783
<ACCUMULATED-NII-CURRENT> 106,796
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (6,342,123)
<ACCUM-APPREC-OR-DEPREC> 7,103,494
<NET-ASSETS> 158,136,683
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,790,831
<OTHER-INCOME> 0
<EXPENSES-NET> 1,155,747
<NET-INVESTMENT-INCOME> 6,635,084
<REALIZED-GAINS-CURRENT> (3,979,037)
<APPREC-INCREASE-CURRENT> 6,447,029
<NET-CHANGE-FROM-OPS> 9,103,076
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,840,450)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,316,331
<NUMBER-OF-SHARES-REDEEMED> (2,631,078)
<SHARES-REINVESTED> 309,532
<NET-CHANGE-IN-ASSETS> (1,060,463)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 5,215
<OVERDIST-NET-GAINS-PRIOR> 2,352,754
<GROSS-ADVISORY-FEES> 683,508
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,155,747
<AVERAGE-NET-ASSETS> 134,221,124
<PER-SHARE-NAV-BEGIN> 8.84
<PER-SHARE-NII> .38
<PER-SHARE-GAIN-APPREC> .17
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.38)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.01
<EXPENSE-RATIO> .70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED
FROM Putnam Florida Tax Exempt Income Fund Class A AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000864488
<NAME> PUTNAM FLORIDA TAX EXEMPT INCOME FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 290,638,746
<INVESTMENTS-AT-VALUE> 304,544,678
<RECEIVABLES> 18,342,046
<ASSETS-OTHER> 441,879
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 323,328,603
<PAYABLE-FOR-SECURITIES> 5,988,106
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,449,438
<TOTAL-LIABILITIES> 7,437,544
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 310,995,854
<SHARES-COMMON-STOCK> 29,753,721
<SHARES-COMMON-PRIOR> 31,499,499
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 365,028
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 8,645,699
<ACCUM-APPREC-OR-DEPREC> 13,905,932
<NET-ASSETS> 315,891,059
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 18,579,265
<OTHER-INCOME> 0
<EXPENSES-NET> 2,776,358
<NET-INVESTMENT-INCOME> 15,802,907
<REALIZED-GAINS-CURRENT> (5,408,850)
<APPREC-INCREASE-CURRENT> 17,688,731
<NET-CHANGE-FROM-OPS> 28,082,788
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (13,983,260)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,779,235
<NUMBER-OF-SHARES-REDEEMED> 8,212,455
<SHARES-REINVESTED> 687,442
<NET-CHANGE-IN-ASSETS> 2,716,092
<ACCUMULATED-NII-PRIOR> 56,157
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 3,202,112
<GROSS-ADVISORY-FEES> 1,686,928
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,776,358
<AVERAGE-NET-ASSETS> 266,318,937
<PER-SHARE-NAV-BEGIN> 8.77
<PER-SHARE-NII> .46
<PER-SHARE-GAIN-APPREC> .35
<PER-SHARE-DIVIDEND> (.46)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.12
<EXPENSE-RATIO> .83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED
FROM Putnam Massachusetts Tax Exempt Income Fund II Class A AND
IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000792288
<NAME> PUTNAM MASSACHUSETTS TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1994
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 277,523,012
<INVESTMENTS-AT-VALUE> 291,551,663
<RECEIVABLES> 13,055,592
<ASSETS-OTHER> 163,377
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 304,770,632
<PAYABLE-FOR-SECURITIES> 3,505,146
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,439,097
<TOTAL-LIABILITIES> 5,944,243
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 293,641,031
<SHARES-COMMON-STOCK> 27,274,597
<SHARES-COMMON-PRIOR> 27,006,382
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (98,234)
<ACCUMULATED-NET-GAINS> (8,348,121)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 13,631,713
<NET-ASSETS> 298,826,389
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 19,277,296
<OTHER-INCOME> 0
<EXPENSES-NET> 2,658,701
<NET-INVESTMENT-INCOME> 16,618,595
<REALIZED-GAINS-CURRENT> (7,682,592)
<APPREC-INCREASE-CURRENT> 13,419,888
<NET-CHANGE-FROM-OPS> 22,355,891
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (14,766,465)
<DISTRIBUTIONS-OF-GAINS> (449,070)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,201,533
<NUMBER-OF-SHARES-REDEEMED> (5,929,229)
<SHARES-REINVESTED> 995,911
<NET-CHANGE-IN-ASSETS> 31,290,325
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (118,519)
<OVERDIST-NET-GAINS-PRIOR> (147,427)
<GROSS-ADVISORY-FEES> 1,638,366
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,658,701
<AVERAGE-NET-ASSETS> 239,657,573
<PER-SHARE-NAV-BEGIN> 9.05
<PER-SHARE-NII> .55
<PER-SHARE-GAIN-APPREC> .18
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.57)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.21
<EXPENSE-RATIO> .89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED
FROM Putnam Michigan Tax Exempt Income Fund II Class A AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000794611
<NAME> PUTNAM MICHIGAN TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 144,924,512
<INVESTMENTS-AT-VALUE> 151,397,181
<RECEIVABLES> 6,90,6173
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 158,303,354
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,102,739
<TOTAL-LIABILITIES> 1,102,739
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 153,658,479
<SHARES-COMMON-STOCK> 15,089,622
<SHARES-COMMON-PRIOR> 14,487,549
<ACCUMULATED-NII-CURRENT> 96,048
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,026,581)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,472,669
<NET-ASSETS> 157,200,615
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 9,985,388
<OTHER-INCOME> 0
<EXPENSES-NET> 1,460,950
<NET-INVESTMENT-INCOME> 8,524,438
<REALIZED-GAINS-CURRENT> (2,253,536)
<APPREC-INCREASE-CURRENT> 4,230,455
<NET-CHANGE-FROM-OPS> 10,501,357
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7,601,592)
<DISTRIBUTIONS-OF-GAINS> (9,763)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,755,569
<NUMBER-OF-SHARES-REDEEMED> (1,683,464)
<SHARES-REINVESTED> 529,968
<NET-CHANGE-IN-ASSETS> 18,028,744
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (735,622)
<OVERDISTRIB-NII-PRIOR> (52,244)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 858,323
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,460,950
<AVERAGE-NET-ASSETS> 128,083,335
<PER-SHARE-NAV-BEGIN> 8.90
<PER-SHARE-NII> .52
<PER-SHARE-GAIN-APPREC> .11
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.52)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.01
<EXPENSE-RATIO> .95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM Putnam Minnesota Tax Exempt Income Fund II Class
A AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000794612
<NAME> PUTNAM MINNESOTA TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 112,649,991
<INVESTMENTS-AT-VALUE> 118,080,556
<RECEIVABLES> 3,339,345
<ASSETS-OTHER> 245,406
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 121,665,307
<PAYABLE-FOR-SECURITIES> 2,963,468
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 584,465
<TOTAL-LIABILITIES> 3,547,933
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 115,954,754
<SHARES-COMMON-STOCK> 10,999,904
<SHARES-COMMON-PRIOR> 10,871,939
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (17,447)
<ACCUMULATED-NET-GAINS> (3,250,498)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,430,565
<NET-ASSETS> 118,117,374
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,328,445
<OTHER-INCOME> 0
<EXPENSES-NET> 1,146,848
<NET-INVESTMENT-INCOME> 6,181,597
<REALIZED-GAINS-CURRENT> (2,755,350)
<APPREC-INCREASE-CURRENT> 4,773,882
<NET-CHANGE-FROM-OPS> 8,200,129
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,435,247)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,196,795
<NUMBER-OF-SHARES-REDEEMED> (1,492,954)
<SHARES-REINVESTED> 424,124
<NET-CHANGE-IN-ASSETS> 13,656,997
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (309,428)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (64,452)
<GROSS-ADVISORY-FEES> 643,810
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,146,848
<AVERAGE-NET-ASSETS> 93,671,269
<PER-SHARE-NAV-BEGIN> 8.79
<PER-SHARE-NII> .51
<PER-SHARE-GAIN-APPREC> .15
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.50)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.95
<EXPENSE-RATIO> .99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED
FROM Putnam New Jersey Tax Exempt Income Fund Class A AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000857463
<NAME> PUTNAM NEW JERSEY TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 282,179,370
<INVESTMENTS-AT-VALUE> 294,024,150
<RECEIVABLES> 8,499,180
<ASSETS-OTHER> 229,821
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 302,753,051
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,592,499
<TOTAL-LIABILITIES> 1,592,499
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 300,090,590
<SHARES-COMMON-STOCK> 27,009,966
<SHARES-COMMON-PRIOR> 28,154,702
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 18,267
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 10,120,082
<ACCUM-APPREC-OR-DEPREC> 11,208,311
<NET-ASSETS> 301,160,552
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 17,853,607
<OTHER-INCOME> 0
<EXPENSES-NET> 2,805,062
<NET-INVESTMENT-INCOME> 15,048,545
<REALIZED-GAINS-CURRENT> (8,453,743)
<APPREC-INCREASE-CURRENT> 15,717,027
<NET-CHANGE-FROM-OPS> 22,311,829
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (12,600,443)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,583,766
<NUMBER-OF-SHARES-REDEEMED> (5,543,768)
<SHARES-REINVESTED> 815,266
<NET-CHANGE-IN-ASSETS> 9,907,840
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 21,796
<OVERDIST-NET-GAINS-PRIOR> 1,654,257
<GROSS-ADVISORY-FEES> 1,588,880
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,805,062
<AVERAGE-NET-ASSETS> 236,161,075
<PER-SHARE-NAV-BEGIN> 8.75
<PER-SHARE-NII> .46
<PER-SHARE-GAIN-APPREC> .23
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.46)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.98
<EXPENSE-RATIO> .87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED
FROM Putnam Ohio Tax Exempt Income Fund II Class A AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000794616
<NAME> PUTNAM OHIO TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 218,443,481
<INVESTMENTS-AT-VALUE> 228,668,328
<RECEIVABLES> 4,721,580
<ASSETS-OTHER> 470,796
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 233,860,704
<PAYABLE-FOR-SECURITIES> 6,255,766
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,581,371
<TOTAL-LIABILITIES> 7,837,137
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 220,259,333
<SHARES-COMMON-STOCK> 21,585,186
<SHARES-COMMON-PRIOR> 22,067,955
<ACCUMULATED-NII-CURRENT> 4,919
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (4,381,157)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,140,472
<NET-ASSETS> 226,023,567
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14,784,644
<OTHER-INCOME> 0
<EXPENSES-NET> 2,164,439
<NET-INVESTMENT-INCOME> 12,620,205
<REALIZED-GAINS-CURRENT> (3,996,686)
<APPREC-INCREASE-CURRENT> 8,118,467
<NET-CHANGE-FROM-OPS> 16,741,986
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (11,195,160)
<DISTRIBUTIONS-OF-GAINS> (258,158)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,641,894
<NUMBER-OF-SHARES-REDEEMED> (2,976,624)
<SHARES-REINVESTED> 851,961
<NET-CHANGE-IN-ASSETS> 13,935,154
<ACCUMULATED-NII-PRIOR> (115,422)
<ACCUMULATED-GAINS-PRIOR> (89,382)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,286,605
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,164,439
<AVERAGE-NET-ASSETS> 189,500,422
<PER-SHARE-NAV-BEGIN> 8.80
<PER-SHARE-NII> .52
<PER-SHARE-GAIN-APPREC> .15
<PER-SHARE-DIVIDEND> (.51)
<PER-SHARE-DISTRIBUTIONS> (.01)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.95
<EXPENSE-RATIO> .93
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED
FROM Putnam Pennsylvania Tax Exempt Income Class A AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000794615
<NAME> PUTNAM PENNSYLVANIA TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 212,601,017
<INVESTMENTS-AT-VALUE> 223,237,981
<RECEIVABLES> 4,851,162
<ASSETS-OTHER> 278,469
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 228,367,612
<PAYABLE-FOR-SECURITIES> 4,067,885
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,263,050
<TOTAL-LIABILITIES> 5,330,935
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 213,375,603
<SHARES-COMMON-STOCK> 19,352,957
<SHARES-COMMON-PRIOR> 19,101,804
<ACCUMULATED-NII-CURRENT> 76,798
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,052,688)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,636,964
<NET-ASSETS> 223,036,677
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,542,788
<OTHER-INCOME> 0
<EXPENSES-NET> 531,958
<NET-INVESTMENT-INCOME> 3,010,830
<REALIZED-GAINS-CURRENT> (192,151)
<APPREC-INCREASE-CURRENT> 6,309,302
<NET-CHANGE-FROM-OPS> 9,127,981
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,522,292)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,088,734
<NUMBER-OF-SHARES-REDEEMED> (996,648)
<SHARES-REINVESTED> 159,067
<NET-CHANGE-IN-ASSETS> 14,798,918
<ACCUMULATED-NII-PRIOR> 90,838
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (848,055)
<GROSS-ADVISORY-FEES> 323,968
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 531,958
<AVERAGE-NET-ASSETS> 173,828,860
<PER-SHARE-NAV-BEGIN> 8.98
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> .26
<PER-SHARE-DIVIDEND> (.13)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.24
<EXPENSE-RATIO> .21
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam Arizona Tax Exempt Income Fund Class B AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000869392
<NAME> PUTNAM ARIZONA TAX EXEMPT INCOME FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 145,934,549
<INVESTMENTS-AT-VALUE> 153,038,043
<RECEIVABLES> 8,879,392
<ASSETS-OTHER> 109,586
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 162,027,021
<PAYABLE-FOR-SECURITIES> 2,922,125
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 968,213
<TOTAL-LIABILITIES> 3,890,338
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 157,268,516
<SHARES-COMMON-STOCK> 2,394,416
<SHARES-COMMON-PRIOR> 1,839,263
<ACCUMULATED-NII-CURRENT> 106,796
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (6,342,123)
<ACCUM-APPREC-OR-DEPREC> 7,103,494
<NET-ASSETS> 158,136,683
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,790,831
<OTHER-INCOME> 0
<EXPENSES-NET> 1,155,747
<NET-INVESTMENT-INCOME> 6,635,084
<REALIZED-GAINS-CURRENT> (3,979,037)
<APPREC-INCREASE-CURRENT> 6,447,029
<NET-CHANGE-FROM-OPS> 9,103,076
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (700,347)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 733,286
<NUMBER-OF-SHARES-REDEEMED> (219,915)
<SHARES-REINVESTED> 41,782
<NET-CHANGE-IN-ASSETS> (1,060,463)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 5,215
<OVERDIST-NET-GAINS-PRIOR> 2,352,754
<GROSS-ADVISORY-FEES> 683,508
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,155,747
<AVERAGE-NET-ASSETS> 18,018,143
<PER-SHARE-NAV-BEGIN> 8.83
<PER-SHARE-NII> .34
<PER-SHARE-GAIN-APPREC> .17
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.34)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.00
<EXPENSE-RATIO> 1.19
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam Florida Tax Exempt Income Fund Class B AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000864488
<NAME> PUTNAM FLORIDA TAX EXEMPT INCOME FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 290,638,746
<INVESTMENTS-AT-VALUE> 304,544,678
<RECEIVABLES> 18,342,046
<ASSETS-OTHER> 441,879
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 323,328,603
<PAYABLE-FOR-SECURITIES> 5,988,106
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,449,438
<TOTAL-LIABILITIES> 7,437,544
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 310,995,854
<SHARES-COMMON-STOCK> 4,890,302
<SHARES-COMMON-PRIOR> 4,214,021
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 365,028
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 8,645,699
<ACCUM-APPREC-OR-DEPREC> 13,905,932
<NET-ASSETS> 315,891,059
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 18,579,265
<OTHER-INCOME> 0
<EXPENSES-NET> 2,776,358
<NET-INVESTMENT-INCOME> 15,802,907
<REALIZED-GAINS-CURRENT> (5,408,850)
<APPREC-INCREASE-CURRENT> 17,688,731
<NET-CHANGE-FROM-OPS> 28,082,788
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,853,733)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,642,091
<NUMBER-OF-SHARES-REDEEMED> 1,047,931
<SHARES-REINVESTED> 82,121
<NET-CHANGE-IN-ASSETS> 2,716,092
<ACCUMULATED-NII-PRIOR> 56,157
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 3,202,112
<GROSS-ADVISORY-FEES> 1,686,928
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,776,358
<AVERAGE-NET-ASSETS> 40,036,844
<PER-SHARE-NAV-BEGIN> 8.76
<PER-SHARE-NII> .40
<PER-SHARE-GAIN-APPREC> .36
<PER-SHARE-DIVIDEND> (.40)
<PER-SHARE-DISTRIBUTIONS> (.40)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.12
<EXPENSE-RATIO> 1.42
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam Massachusetts Tax Exempt Income Fund II Class B AND
IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000792288
<NAME> PUTNAM MASSACHUSETTS TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1994
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 277,523,012
<INVESTMENTS-AT-VALUE> 291,551,663
<RECEIVABLES> 13,055,592
<ASSETS-OTHER> 163,377
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 304,770,632
<PAYABLE-FOR-SECURITIES> 3,505,146
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,439,097
<TOTAL-LIABILITIES> 5,944,243
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 293,641,031
<SHARES-COMMON-STOCK> 5,169,525
<SHARES-COMMON-PRIOR> 2,542,905
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (98,234)
<ACCUMULATED-NET-GAINS> (8,348,121)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 13,631,713
<NET-ASSETS> 298,826,389
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 19,277,296
<OTHER-INCOME> 0
<EXPENSES-NET> 2,658,701
<NET-INVESTMENT-INCOME> 16,618,595
<REALIZED-GAINS-CURRENT> (7,682,592)
<APPREC-INCREASE-CURRENT> 13,419,888
<NET-CHANGE-FROM-OPS> 22,355,891
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,834,523)
<DISTRIBUTIONS-OF-GAINS> (65,122)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,031,023
<NUMBER-OF-SHARES-REDEEMED> (535,729)
<SHARES-REINVESTED> 131,326
<NET-CHANGE-IN-ASSETS> 31,290,325
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (118,519)
<OVERDIST-NET-GAINS-PRIOR> (147,427)
<GROSS-ADVISORY-FEES> 1,638,366
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,658,701
<AVERAGE-NET-ASSETS> 33,420,179
<PER-SHARE-NAV-BEGIN> 9.05
<PER-SHARE-NII> .49
<PER-SHARE-GAIN-APPREC> .17
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.51)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.20
<EXPENSE-RATIO> 1.53
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam Michigan Tax Exempt Income Fund II Class B AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000794611
<NAME> PUTNAM MICHIGAN TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 144,924,512
<INVESTMENTS-AT-VALUE> 151,397,181
<RECEIVABLES> 6,906,173
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 158,303,354
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,102,739
<TOTAL-LIABILITIES> 1,102,739
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 153,658,479
<SHARES-COMMON-STOCK> 2,341,519
<SHARES-COMMON-PRIOR> 1,152,226
<ACCUMULATED-NII-CURRENT> 96,048
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,026,581)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,472,669
<NET-ASSETS> 157,200,615
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 9,985,388
<OTHER-INCOME> 0
<EXPENSES-NET> 1,460,950
<NET-INVESTMENT-INCOME> 8,524,438
<REALIZED-GAINS-CURRENT> (2,253,536)
<APPREC-INCREASE-CURRENT> 4,230,455
<NET-CHANGE-FROM-OPS> 10,501,357
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (798,353)
<DISTRIBUTIONS-OF-GAINS> (1,025)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,289,625
<NUMBER-OF-SHARES-REDEEMED> (162,158)
<SHARES-REINVESTED> 61,826
<NET-CHANGE-IN-ASSETS> 18,028,744
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (735,622)
<OVERDISTRIB-NII-PRIOR> (52,244)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 858,323
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,460,950
<AVERAGE-NET-ASSETS> 14,972,033
<PER-SHARE-NAV-BEGIN> 8.90
<PER-SHARE-NII> .47
<PER-SHARE-GAIN-APPREC> .10
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.47)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.00
<EXPENSE-RATIO> 1.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam Minnesota Tax Exempt Income Fund II Class B AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000794612
<NAME> PUTNAM MINNESOTA TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 112,649,991
<INVESTMENTS-AT-VALUE> 118,080,556
<RECEIVABLES> 3,339,345
<ASSETS-OTHER> 245,406
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 121,665,307
<PAYABLE-FOR-SECURITIES> 2,963,468
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 584,465
<TOTAL-LIABILITIES> 3,547,933
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 115,954,754
<SHARES-COMMON-STOCK> 2,208,418
<SHARES-COMMON-PRIOR> 1,011,320
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (17,447)
<ACCUMULATED-NET-GAINS> (3,250,498)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,430,565
<NET-ASSETS> 118,117,374
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,328,445
<OTHER-INCOME> 0
<EXPENSES-NET> 1,146,848
<NET-INVESTMENT-INCOME> 6,181,597
<REALIZED-GAINS-CURRENT> (2,755,350)
<APPREC-INCREASE-CURRENT> 4,773,882
<NET-CHANGE-FROM-OPS> 8,200,129
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (711,465)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,302,085
<NUMBER-OF-SHARES-REDEEMED> (156,444)
<SHARES-REINVESTED> 51,457
<NET-CHANGE-IN-ASSETS> 13,656,997
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (309,428)
<OVERDISTRIB-NII-PRIOR> (64,452)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 643,810
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,146,848
<AVERAGE-NET-ASSETS> 13,644,936
<PER-SHARE-NAV-BEGIN> 8.77
<PER-SHARE-NII> .45
<PER-SHARE-GAIN-APPREC> .15
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.45)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.92
<EXPENSE-RATIO> 1.63
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam New Jersey Tax Exempt Income Fund Class B AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000857463
<NAME> PUTNAM NEW JERSEY TAX EXEMPT INCOME FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 282,179,370
<INVESTMENTS-AT-VALUE> 294,024,150
<RECEIVABLES> 8,499,180
<ASSETS-OTHER> 229,821
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 302,753,051
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,592,499
<TOTAL-LIABILITIES> 1,592,499
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 300,090,590
<SHARES-COMMON-STOCK> 6,530,449
<SHARES-COMMON-PRIOR> 5,135,694
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 10,120,082
<ACCUM-APPREC-OR-DEPREC> 11,208,311
<NET-ASSETS> 301,160,552
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 17,853,607
<OTHER-INCOME> 0
<EXPENSES-NET> 2,805,062
<NET-INVESTMENT-INCOME> 15,048,545
<REALIZED-GAINS-CURRENT> (8,453,743)
<APPREC-INCREASE-CURRENT> 15,717,027
<NET-CHANGE-FROM-OPS> 22,311,829
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,404,816)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,071,094
<NUMBER-OF-SHARES-REDEEMED> (839,933)
<SHARES-REINVESTED> 163,594
<NET-CHANGE-IN-ASSETS> 9,907,840
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 21,796
<OVERDIST-NET-GAINS-PRIOR> 1,654,257
<GROSS-ADVISORY-FEES> 1,588,880
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,805,062
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 8.75
<PER-SHARE-NII> .41
<PER-SHARE-GAIN-APPREC> (.22)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.41)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.97
<EXPENSE-RATIO> 1.46
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam Ohio Tax Exempt Income Fund II Class B AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000794616
<NAME> PUTNAM OHIO TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 218,443,481
<INVESTMENTS-AT-VALUE> 228,668,328
<RECEIVABLES> 4,721,580
<ASSETS-OTHER> 470,796
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 233,860,704
<PAYABLE-FOR-SECURITIES> 6,255,766
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,581,371
<TOTAL-LIABILITIES> 7,837,137
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 220,259,333
<SHARES-COMMON-STOCK> 3,674,021
<SHARES-COMMON-PRIOR> 2,042,303
<ACCUMULATED-NII-CURRENT> 4,919
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (4,381,157)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,140,472
<NET-ASSETS> 226,023,567
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14,784,644
<OTHER-INCOME> 0
<EXPENSES-NET> 2,164,439
<NET-INVESTMENT-INCOME> 12,620,205
<REALIZED-GAINS-CURRENT> (3,996,686)
<APPREC-INCREASE-CURRENT> 8,118,467
<NET-CHANGE-FROM-OPS> 16,741,986
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,307,862)
<DISTRIBUTIONS-OF-GAINS> (33,773)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,872,645
<NUMBER-OF-SHARES-REDEEMED> (335,544)
<SHARES-REINVESTED> 94,617
<NET-CHANGE-IN-ASSETS> 13,935,154
<ACCUMULATED-NII-PRIOR> (115,422)
<ACCUMULATED-GAINS-PRIOR> (89,382)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,286,605
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,164,439
<AVERAGE-NET-ASSETS> 24,963,134
<PER-SHARE-NAV-BEGIN> 8.79
<PER-SHARE-NII> .46
<PER-SHARE-GAIN-APPREC> .16
<PER-SHARE-DIVIDEND> (.46)
<PER-SHARE-DISTRIBUTIONS> (.01)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.94
<EXPENSE-RATIO> 1.58
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam Pennsylvania Tax Exempt Income Class B AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000794615
<NAME> PUTNAM PENNSYLVANIA TAX EXEMPT INCOME FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 212,601,017
<INVESTMENTS-AT-VALUE> 223,237,981
<RECEIVABLES> 4,851,162
<ASSETS-OTHER> 278,469
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 228,367,612
<PAYABLE-FOR-SECURITIES> 4,067,885
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,263,050
<TOTAL-LIABILITIES> 5,330,935
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 213,375,603
<SHARES-COMMON-STOCK> 4,795,664
<SHARES-COMMON-PRIOR> 4,086,943
<ACCUMULATED-NII-CURRENT> 76,798
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,052,688)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,636,964
<NET-ASSETS> 223,036,677
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,542,788
<OTHER-INCOME> 0
<EXPENSES-NET> 531,958
<NET-INVESTMENT-INCOME> 3,010,830
<REALIZED-GAINS-CURRENT> (192,151)
<APPREC-INCREASE-CURRENT> 6,309,302
<NET-CHANGE-FROM-OPS> 9,127,981
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (515060)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 767,770
<NUMBER-OF-SHARES-REDEEMED> (92,606)
<SHARES-REINVESTED> 33,557
<NET-CHANGE-IN-ASSETS> 14,798,918
<ACCUMULATED-NII-PRIOR> 90,838
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (848,055)
<GROSS-ADVISORY-FEES> 323,968
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 531,958
<AVERAGE-NET-ASSETS> 40,061,532
<PER-SHARE-NAV-BEGIN> 8.97
<PER-SHARE-NII> .11
<PER-SHARE-GAIN-APPREC> .27
<PER-SHARE-DIVIDEND> (.12)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.23
<EXPENSE-RATIO> .38
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam Florida Tax Exempt Income Fund Class M AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000864488
<NAME> PUTNAM FLORIDA TAX EXEMPT INCOME FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 290,638,746
<INVESTMENTS-AT-VALUE> 304,544,678
<RECEIVABLES> 18,342,046
<ASSETS-OTHER> 441,879
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 323,328,603
<PAYABLE-FOR-SECURITIES> 5,988,106
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,449,438
<TOTAL-LIABILITIES> 7,437,544
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 310,995,854
<SHARES-COMMON-STOCK> 113
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 365,028
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 8,645,699
<ACCUM-APPREC-OR-DEPREC> 13,905,932
<NET-ASSETS> 315,891,059
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 18,579,265
<OTHER-INCOME> 0
<EXPENSES-NET> 2,776,358
<NET-INVESTMENT-INCOME> 15,802,907
<REALIZED-GAINS-CURRENT> (5,408,850)
<APPREC-INCREASE-CURRENT> 17,688,731
<NET-CHANGE-FROM-OPS> 28,082,788
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,716,092
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,686,928
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,776,358
<AVERAGE-NET-ASSETS> 1,016
<PER-SHARE-NAV-BEGIN> 8.87
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> .25
<PER-SHARE-DIVIDEND> (.04)
<PER-SHARE-DISTRIBUTIONS> (.04)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.12
<EXPENSE-RATIO> .10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam Massachusetts Tax Exempt Income Fund II Class M AND
IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000792288
<NAME> PUTNAM MASSACHUSETTS TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1994
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 277,523,012
<INVESTMENTS-AT-VALUE> 291,551,663
<RECEIVABLES> 13,055,592
<ASSETS-OTHER> 163,377
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 304,770,632
<PAYABLE-FOR-SECURITIES> 3,505,146
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,439,097
<TOTAL-LIABILITIES> 5,944,243
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 293,641,031
<SHARES-COMMON-STOCK> 2,345
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (98,243)
<ACCUMULATED-NET-GAINS> (8,348,121)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 13,631,713
<NET-ASSETS> 298,826,389
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 19,277,296
<OTHER-INCOME> 0
<EXPENSES-NET> 2,658,701
<NET-INVESTMENT-INCOME> 16,618,595
<REALIZED-GAINS-CURRENT> (7,682,592)
<APPREC-INCREASE-CURRENT> 13,419,888
<NET-CHANGE-FROM-OPS> 22,355,891
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (73)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,342
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 3
<NET-CHANGE-IN-ASSETS> 31,290,325
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (118,519)
<OVERDIST-NET-GAINS-PRIOR> (147,427)
<GROSS-ADVISORY-FEES> 1,638,366
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,658,701
<AVERAGE-NET-ASSETS> 12,119
<PER-SHARE-NAV-BEGIN> 9.10
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> .11
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.03)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.21
<EXPENSE-RATIO> .06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam Michigan Tax Exempt Income Fund II Class M AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000794611
<NAME> PUTNAM MICHIGAN TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 144,924,512
<INVESTMENTS-AT-VALUE> 151,397,181
<RECEIVABLES> 6,90,6173
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 158,303,354
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,102,739
<TOTAL-LIABILITIES> 1,102,739
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 153,658,479
<SHARES-COMMON-STOCK> 13,253
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 96,048
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,026,581)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,472,669
<NET-ASSETS> 157,200,615
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 9,985,388
<OTHER-INCOME> 0
<EXPENSES-NET> 1,460,950
<NET-INVESTMENT-INCOME> 8,524,438
<REALIZED-GAINS-CURRENT> (2,253,536)
<APPREC-INCREASE-CURRENT> 4,230,455
<NET-CHANGE-FROM-OPS> 10,501,357
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (915)
<DISTRIBUTIONS-OF-GAINS> (2)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13,191
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 62
<NET-CHANGE-IN-ASSETS> 18,028,744
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (735,622)
<OVERDISTRIB-NII-PRIOR> (52,244)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 858,323
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,460,950
<AVERAGE-NET-ASSETS> 91,915
<PER-SHARE-NAV-BEGIN> 8.80
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> .21
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.06)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.00
<EXPENSE-RATIO> .20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam Minnesota Tax Exempt Income Fund II Class M AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000794612
<NAME> PUTNAM MINNESOTA TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 112,649,991
<INVESTMENTS-AT-VALUE> 118,080,556
<RECEIVABLES> 3,339,345
<ASSETS-OTHER> 245,406
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 121,665,307
<PAYABLE-FOR-SECURITIES> 2,963,468
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 584,465
<TOTAL-LIABILITIES> 3,547,933
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 115,954,754
<SHARES-COMMON-STOCK> 115
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (17,447)
<ACCUMULATED-NET-GAINS> (3,250,498)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,430,565
<NET-ASSETS> 118,117,374
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,328,445
<OTHER-INCOME> 0
<EXPENSES-NET> 1,146,848
<NET-INVESTMENT-INCOME> 6,181,597
<REALIZED-GAINS-CURRENT> (2,755,350)
<APPREC-INCREASE-CURRENT> 4,773,882
<NET-CHANGE-FROM-OPS> 8,200,129
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 115
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 13,656,997
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (309,428)
<OVERDISTRIB-NII-PRIOR> (64,452)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 643,810
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,146,848
<AVERAGE-NET-ASSETS> 1,008
<PER-SHARE-NAV-BEGIN> 8.77
<PER-SHARE-NII> .08
<PER-SHARE-GAIN-APPREC> .17
<PER-SHARE-DIVIDEND> (.07)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.95
<EXPENSE-RATIO> .16
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam New Jersey Tax Exempt Income Fund Class M AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000857463
<NAME> PUTNAM NEW JERSEY TAX EXEMPT INCOME FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 282,179,370
<INVESTMENTS-AT-VALUE> 294,024,150
<RECEIVABLES> 8,499,080
<ASSETS-OTHER> 229,821
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 302,753,051
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,592,499
<TOTAL-LIABILITIES> 1,592,499
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 300,090,590
<SHARES-COMMON-STOCK> 115
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 10,120,082
<ACCUM-APPREC-OR-DEPREC> 11,208,311
<NET-ASSETS> 301,160,552
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 17,853,607
<OTHER-INCOME> 0
<EXPENSES-NET> 2,805,062
<NET-INVESTMENT-INCOME> 15,048,545
<REALIZED-GAINS-CURRENT> (8,453,743)
<APPREC-INCREASE-CURRENT> 15,717,027
<NET-CHANGE-FROM-OPS> 22,311,829
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 115
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 9,907,840
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,588,880
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,805,062
<AVERAGE-NET-ASSETS> 22,353
<PER-SHARE-NAV-BEGIN> 8.74
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> .28
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.08)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.98
<EXPENSE-RATIO> .09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM Putnam Ohio Tax Exempt Income Fund II Class M AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000794616
<NAME> PUTNAM OHIO TAX EXEMPT INCOME FUND II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-END> MAY-31-1995
<INVESTMENTS-AT-COST> 218,443,481
<INVESTMENTS-AT-VALUE> 228,668,328
<RECEIVABLES> 4,721,580
<ASSETS-OTHER> 470,796
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 233,860,704
<PAYABLE-FOR-SECURITIES> 6,255,766
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,581,371
<TOTAL-LIABILITIES> 7,837,137
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 220,259,333
<SHARES-COMMON-STOCK> 115
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 4,919
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (4,381,157)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,140,472
<NET-ASSETS> 226,023,567
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14,784,644
<OTHER-INCOME> 0
<EXPENSES-NET> 2,164,439
<NET-INVESTMENT-INCOME> 12,620,205
<REALIZED-GAINS-CURRENT> (3,996,686)
<APPREC-INCREASE-CURRENT> 8,118,467
<NET-CHANGE-FROM-OPS> 16,741,986
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 115
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 13,935,154
<ACCUMULATED-NII-PRIOR> (115,422)
<ACCUMULATED-GAINS-PRIOR> (89,382)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,286,605
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,164,439
<AVERAGE-NET-ASSETS> 1,010
<PER-SHARE-NAV-BEGIN> 8.76
<PER-SHARE-NII> .08
<PER-SHARE-GAIN-APPREC> .19
<PER-SHARE-DIVIDEND> (.08)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.95
<EXPENSE-RATIO> .20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
PUTNAM FUNDS
Plan pursuant to Rule 18f-3(D) under the
Investment Company act of 1940
Effective July 1, 1995*
Each of the open-end investment companies managed by Putnam
Investment Management, Inc. (each a "Fund" and, together, the
"Funds") may from time to time issue one or more of the following
classes of shares: Class A shares, Class B shares, Class C
shares, Class M shares and Class Y shares. Each class is subject
to such investment minimums and other conditions of eligibility
as are set forth in the Funds' registration statements as from
time to time in effect. The differences in expenses among these
classes of shares, and the conversion and exchange features of
each class of shares, are set forth below in this Plan. Except
as noted below, expenses are allocated among the classes of
shares of each Fund based upon the net assets of each Fund
attributable to shares of each class. This Plan is subject to
change, to the extent permitted by law and by the Agreement and
Declaration of Trust and By-laws of each Fund, by action of the
Trustees of each Fund.
- ---------------------------
*The Funds have been offering multiple classes of shares,
prior to the effectiveness of this Plan, pursuant to an exemptive
order of the Securities and Exchange Commission. This Plan is
intended to permit the Funds to offer multiple classes of shares
pursuant to Rule 18f-3 under the Investment Company Act of 1940,
without any change in the arrangements and expense allocations
that have previously been approved by the Trustees of each Fund
under such order of exemption.
<PAGE>
CLASS A SHARES
DISTRIBUTION AND SERVICE FEES
Class A shares pay distribution and service fees pursuant to
plans (the "Class A Plans") adopted pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (the "1940 Act"). Class A
shares also bear any costs associated with obtaining shareholder
approval of the Class A Plans (or an amendment to a Class A
Plan). Pursuant to the Class A Plans, Class A shares may pay up
to 0.35% of the relevant Fund's average net assets attributable
to the Class A shares* (which percentage may be less for certain
Funds, as described in the Funds' registration statements as from
time to time in effect). Amounts payable under the Class A Plans
are subject to such further limitations as the Trustees may from
time to time determine and as set forth in the registration
statement of each Fund as from time to time in effect.
CONVERSION FEATURES
Class A shares do not convert to any other class of shares.
EXCHANGE FEATURES
Class A shares of any Fund may be exchanged, at the holder's
option, for Class A shares of any other Fund that offers Class A
shares without the payment of a sales charge beginning 15 days
after purchase, provided that Class A shares of such other Fund
are available to residents of the relevant state. The holding
period for determining any contingent deferred sales charge (a
"CDSC") will include the holding period of the shares exchanged,
and will be calculated using the schedule of any Fund into or
from which shares have been exchanged that would result in the
highest CDSC applicable to such Class A shares.
- ---------------------------
*Class A shares of Putnam Diversified Equity Trust may pay
up to 0.65% of average net assets attributable to Class A shares.
<PAGE>
INITIAL SALES CHARGE
Class A shares are offered at a public offering price that
is equal to their net asset value ("NAV") plus a sales charge of
up to 5.75% of the public offering price (which maximum may be
less for certain Funds, as described in each Fund's registration
statement as from time to time in effect). The sales charges on
Class A shares are subject to reduction or waiver as permitted by
Rule 22d-1 under the 1940 Act and as described in the Funds'
registration statements as from time to time in effect.
CONTINGENT DEFERRED SALES CHARGE
Purchases of Class A shares of $1 million or more that are
redeemed within one or two years of purchase are subject to a
CDSC of 1.00% and 0.50%, respectively, of either the purchase
price or the NAV of the shares redeemed, whichever is less.
Class A shares are not otherwise subject to a CDSC.
The CDSC on Class A shares is subject to reduction or waiver
in certain circumstances, as permitted by Rule 6c-10 under the
1940 Act and as described in the Funds' registration statements
as from time to time in effect.
CLASS B SHARES
DISTRIBUTION AND SERVICE FEES
Class B shares pay distribution and service fees pursuant to
plans adopted pursuant to Rule 12b-1 under the 1940 Act (the
"Class B Plans"). Class B shares also bear any costs associated
with obtaining shareholder approval of the Class B Plans (or an
amendment to a Class B Plan). Pursuant to the Class B Plans,
Class B shares may pay up to 1.00% of the relevant Fund's average
net assets attributable to Class B shares (which percentage may
be less for certain Funds, as described in the Funds'
registration statements as from time to time in effect). Amounts
payable under the Class B Plans are subject to such further
limitations as the Trustees may from time to time determine and
as set forth in the registration statement of each Fund as from
time to time in effect.
CONVERSION FEATURES
Class B shares automatically convert to Class A shares of
the same Fund at the end of the month eight years after purchase
(or such earlier date as the Trustees of a Fund may authorize),
except that Class B shares purchased through the reinvestment of
dividends and other distributions on Class B shares convert to
Class A shares at the same time as the shares with respect to
which they were purchased are converted and Class B shares
acquired by the exchange of Class B shares of another Fund will
convert to Class A shares based on the time of the initial
purchase.
EXCHANGE FEATURES
Class B shares of any Fund may be exchanged, at the holder's
option, for Class B shares of any other Fund that offers Class B
shares without the payment of a sales charge beginning 15 days
after purchase, provided that Class B shares of such other Fund
are available to residents of the relevant state. The holding
period for determining any CDSC will include the holding period
of the shares exchanged, and will be calculated using the
schedule of any Fund into or from which shares have been
exchanged that would result in the highest CDSC applicable to
such Class B shares.
INITIAL SALES CHARGE
Class B shares are offered at their NAV, without an initial
sales charge.
CONTINGENT DEFERRED SALES CHARGE
Class B shares that are redeemed within 6 years of purchase
are subject to a CDSC of up to 5.00% of either the purchase price
or the NAV of the shares redeemed, whichever is less (which
period may be shorter and which percentage may be less for
certain Funds, as described in the Funds' registration statements
as from time to time in effect); such percentage declines the
longer the shares are held, as described in the Funds'
registration statements as from time to time in effect. Class B
shares purchased with reinvested dividends or capital gains are
not subject to a CDSC.
The CDSC on Class B shares is subject to reduction or waiver
in certain circumstances, as permitted by Rule 6c-10 under the
1940 Act and as described in the Funds' registration statements
as from time to time in effect.
CLASS C SHARES
DISTRIBUTION AND SERVICE FEES
Class C shares pay distribution and service fees pursuant to
plans adopted pursuant to Rule 12b-1 under the 1940 Act (the
"Class C Plans"). Class C shares also bear any costs associated
with obtaining shareholder approval of the Class C Plans (or an
amendment to a Class C Plan). Pursuant to the Class C Plans,
Class C shares may pay up to 1.00% of the relevant Fund's average
net assets attributable to the Class C shares (which percentage
may be less for certain Funds, as described in the Funds'
registration statements as from time to time in effect). Amounts
payable under the Class C Plans are subject to such further
limitations as the Trustees may from time to time determine and
as set forth in the registration statement of each Fund as from
time to time in effect.
CONVERSION FEATURES
Class C shares do not convert to any other class of shares.
EXCHANGE FEATURES
Class C shares of any Fund may be exchanged, at the holder's
option, for Class C shares of any other Fund that offers Class C
shares without the payment of a sales charge beginning 15 days
after purchase, provided that Class C shares of such other Fund
are available to residents of the relevant state. The holding
period for determining any CDSC will include the holding period
of the shares exchanged, and will be calculated using the
schedule of any Fund into or from which shares have been
exchanged that would result in the highest CDSC applicable to
such Class C shares.
<PAGE>
INITIAL SALES CHARGE
Class C shares are offered at their NAV, without an initial
sales charge.
CONTINGENT DEFERRED SALES CHARGE
Class C shares are subject to a 1.00% CDSC if the shares are
redeemed within one year of purchase. The CDSC on Class C shares
is subject to reduction or waiver in certain circumstances, as
permitted by Rule 6c-10 under the 1940 Act and as described in
the Funds' registration statements as from time to time in
effect.
CLASS M SHARES
DISTRIBUTION AND SERVICE FEES
Class M shares pay distribution and service fees pursuant to
plans adopted pursuant to Rule 12b-1 under the 1940 Act (the
"Class M Plans"). Class M shares also bear any costs associated
with obtaining shareholder approval of the Class M Plans (or an
amendment to a Class M Plan). Pursuant to the Class M Plans,
Class M shares may pay up to 1.00% of the relevant Fund's average
net assets attributable to Class M shares (which percentage may
be less for certain Funds, as described in the Funds'
registration statements as from time to time in effect). Amounts
payable under the Class M Plans are subject to such further
limitations as the Trustees may from time to time determine and
as set forth in the registration statement of each Fund as from
time to time in effect.
CONVERSION FEATURES
Class M shares do not convert to any other class of shares.
EXCHANGE FEATURES
Class M shares of any Fund may be exchanged, at the holder's
option, for Class M shares of any other Fund that offers Class M
shares without the payment of a sales charge beginning 15 days
after purchase, provided that Class M shares of such other Fund
are available to residents of the relevant state.
INITIAL SALES CHARGE
Class M shares are offered at a public offering price that
is equal to their NAV plus a sales charge of up to 3.50% of the
public offering price (which maximum may be less for certain
Funds, as described in each Fund's registration statement as from
time to time in effect). The sales charges on Class M shares are
subject to reduction or waiver as permitted by Rule 22d-1 under
the 1940 Act and as described in the Funds' registration
statements as from time to time in effect.
CONTINGENT DEFERRED SALES CHARGE
Class M shares are not subject to any CDSC.
CLASS Y SHARES
DISTRIBUTION AND SERVICE FEES
Class Y shares do not pay a distribution fee.
CONVERSION FEATURES
Class Y shares do not convert to any other class of shares.
EXCHANGE FEATURES
Class Y shares of any Fund may be exchanged, at the holder's
option, for Class Y shares of any other Fund that offers Class Y
shares without the payment of a sales charge beginning 15 days
after purchase, provided that Class Y shares of such other Fund
are available to residents of the relevant state, and further
provided that shares of such other Fund are available through the
relevant employer's plan.
<PAGE>
INITIAL SALES CHARGE
Class Y shares are offered at their NAV, without an initial
sales charge.
CONTINGENT DEFERRED SALES CHARGE
Class Y shares are not subject to any CDSC.
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