SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
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Filed by the Registrant / X /
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Filed by a Party other than the Registrant / /
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CHECK THE APPROPRIATE BOX:
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/ / Preliminary Proxy Statement
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/ / Preliminary Additional Materials
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/ X / Definitive Proxy Statement
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/ / Definitive Additional Materials
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/ / Soliciting Material Pursuant to Sec. 240.14a-11(e) or
- ---- Sec. 240.14a-12
PUTNAM HIGH INCOME CONVERTIBLE AND BOND FUND
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
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/ X / $125 per Exchange Act Rules 0-11(c)(1)(ii),
- ---- 14a-6(i)(1), or 14a-6(i)(2).
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/ / $500 per each party to the controversy pursuant
- ---- to Exchange Act Rule 14a-6(i)(3).
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/ / Fee computed on table below per Exchange Act Rules
- ---- 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
<PAGE>
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11:
(4) Proposed maximum aggregate value of transaction:
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/ / Check box if any part of the fee is offset as provided
- ---- by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed: <PAGE>
IMPORTANT INFORMATION
FOR SHAREHOLDERS IN
PUTNAM HIGH INCOME CONVERTIBLE AND BOND FUND
THE DOCUMENT YOU HOLD IN YOUR HANDS CONTAINS YOUR PROXY STATEMENT
AND PROXY CARD. A PROXY CARD IS, IN ESSENCE, A BALLOT. WHEN YOU
VOTE YOUR PROXY, IT TELLS US HOW TO VOTE ON YOUR BEHALF ON
IMPORTANT ISSUES RELATING TO YOUR FUND. IF YOU COMPLETE AND SIGN
THE PROXY, WE'LL VOTE IT EXACTLY AS YOU TELL US. IF YOU SIMPLY
SIGN THE PROXY, WE'LL VOTE IT IN ACCORDANCE WITH THE TRUSTEES'
RECOMMENDATIONS ON PAGES 4 AND 5 .
WE URGE YOU TO SPEND A COUPLE OF MINUTES WITH THE PROXY
STATEMENT, FILL OUT YOUR PROXY CARD, AND RETURN IT TO US. WHEN
SHAREHOLDERS DON'T RETURN THEIR PROXIES IN SUFFICIENT NUMBERS, WE
HAVE TO INCUR THE EXPENSE OF FOLLOW-UP SOLICITATIONS, WHICH CAN
COST YOUR FUND MONEY.
WE WANT TO KNOW HOW YOU WOULD LIKE TO VOTE AND WELCOME YOUR
COMMENTS. PLEASE TAKE A FEW MOMENTS WITH THESE MATERIALS AND
RETURN YOUR PROXY TO US.
(PUTNAM LOGO APPEARS HERE)
BOSTON * LONDON * TOKYO
<PAGE>
TABLE OF CONTENTS
A Message from the Chairman. . . . . . . . . . . . . . . . . . . . . . . .1
Notice of Shareholder Meeting. . . . . . . . . . . . . . . . . . . . . . .2
Trustees' Recommendations. . . . . . . . . . . . . . . . . . . . . 4
PROXY CARD ENCLOSED
If you have any questions, please contact us at the special toll-
free number we have set up for you (1-800-225-1581) or call your
financial adviser.
<PAGE>
A MESSAGE FROM THE CHAIRMAN
(Photograph of George Putnam appears here)
Dear Shareholder:
I am writing to you to ask for your vote on important questions
that affect your investment in your fund. While you are, of
course, welcome to join us at your fund's meeting, most
shareholders cast their vote by filling out and signing the
enclosed proxy. We are asking for your vote on these matters:
1. ELECTING TRUSTEES TO OVERSEE YOUR FUND;
2. RATIFYING THE SELECTION BY THE TRUSTEES OF THE INDEPENDENT
AUDITORS OF YOUR FUND FOR ITS CURRENT FISCAL YEAR;
AND
3. APPROVING A NUMBER OF CHANGES TO YOUR FUND'S
FUNDAMENTAL INVESTMENT RESTRICTION , INCLUDING
THE ELIMINATION OF CERTAIN OF THESE
RESTRICTIONS .
Although we would like very much to have each shareholder attend
their meeting, we realize this is not possible. Whether or not
you plan to be present, we need your vote. We urge you to
complete, sign, and return the enclosed proxy card promptly. A
postage-paid envelope is enclosed.
I'm sure that you, like most people, lead a busy life and are
tempted to put this proxy aside for another day. Please don't.
When shareholders don't return their proxies, their fund may have
to incur the expense of follow-up solicitations. All
shareholders benefit from the speedy return of proxies.
Your vote is important to us. We appreciate the time and
consideration that I am sure you will give this important matter.
If you have questions about the proposals, contact your financial
adviser or call a Putnam customer service representative
at
1-800-225-1581.
Sincerely yours,
(signature of George Putnam)
George Putnam, Chairman
<PAGE>
PUTNAM HIGH INCOME CONVERTIBLE AND BOND FUND
NOTICE OF A MEETING OF SHAREHOLDERS
THIS IS THE FORMAL AGENDA FOR YOUR FUND'S SHAREHOLDER MEETING.
IT TELLS YOU WHAT MATTERS WILL BE VOTED ON AND THE TIME AND PLACE
OF THE MEETING, IF YOU CAN ATTEND IN PERSON.
To the Shareholders of Putnam High Income Convertible and Bond
Fund:
A Meeting of Shareholders of your fund will be held on July 11,
1996 at 2:00 p.m., Boston time, on the eighth floor of One Post
Office Square, Boston, Massachusetts, to consider the following:
1. FIXING THE NUMBER OF TRUSTEES AND ELECTING TRUSTEES. SEE
PAGE 6 .
2. RATIFYING THE SELECTION BY THE TRUSTEES OF THE INDEPENDENT
AUDITORS OF YOUR FUND FOR ITS CURRENT FISCAL YEAR. SEE
PAGE 22 .
3.A. APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO DIVERSIFICATION OF INVESTMENTS.
SEE PAGE 22 .
3.B . APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO OWNING 10%
OF THE VOTING SECURITIES OF A SINGLE
ISSUER. SEE PAGE 24 .
3.C . APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO MAKING
LOANS THROUGH REPURCHASE AGREEMENTS AND SECURITIES
LOANS. SEE PAGE 25 .
3.D. APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION RELATING TO INVESTMENTS IN REAL
ESTATE. SEE PAGE 27.
3.E. Approving an amendment to the fund's fundamental investment
restriction with respect to concentration of its assets.
See page 28.
3.F. Approving the elimination of the fund's fundamental
investment restriction with respect to investments in
securities of issuers in which management of the fund or
Putnam Investment Management, Inc. owns securities. See
page 29.
3.G. Approving the elimination of the fund's fundamental
investment restriction with respect to margin transactions.
See page 30.
3.H. Approving the elimination of the fund's fundamental
investment restriction with respect to short sales. See
page 31.
3.I . Approving the elimination of the fund's
fundamental investment restriction which limits
the fund's ability to pledge assets. See page
33 .
3.J . APPROVING THE ELIMINATION OF THE FUND'S
FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO OIL, GAS AND MINERAL LEASES. SEE
PAGE 34 .
3.K . APPROVING THE ELIMINATION OF THE FUND'S
FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO INVESTING TO GAIN CONTROL OF A
COMPANY'S MANAGEMENT. SEE PAGE 35 .
4. TRANSACTING OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
By the Trustees
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson A. Baxter Donald S. Perkins
Hans H. Estin George Putnam, III
John A. Hill Eli Shapiro
Elizabeth T. Kennan A.J.C. Smith
Lawrence J. Lasser W. Nicholas Thorndike
Robert E. Patterson
WE URGE YOU TO MARK, SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN
THE POSTAGE-PAID ENVELOPE PROVIDED SO YOU WILL BE REPRESENTED AT
THE MEETING.
May 6 , 1996
<PAGE>
PROXY STATEMENT
THIS DOCUMENT WILL GIVE YOU THE INFORMATION YOU NEED TO VOTE ON
THE MATTERS LISTED ON THE PREVIOUS PAGE. MUCH OF THE INFORMATION
IN THE PROXY STATEMENT IS REQUIRED UNDER RULES OF THE SECURITIES
AND EXCHANGE COMMISSION (SEC); SOME OF IT IS TECHNICAL. IF THERE
IS ANYTHING YOU DON'T UNDERSTAND, PLEASE CONTACT US AT OUR
SPECIAL TOLL-FREE NUMBER, 1-800-225-1581, OR CALL YOUR FINANCIAL
ADVISER.
WHO IS ASKING FOR MY VOTE?
THE ENCLOSED PROXY IS SOLICITED BY THE TRUSTEES OF PUTNAM HIGH
INCOME CONVERTIBLE AND BOND FUND for use at the Meeting of
Shareholders of the fund to be held on July 11, 1996, and, if
your fund's meeting is adjourned, at any later meetings, for the
purposes stated in the Notice of Meeting (see previous page).
HOW DO YOUR FUND'S TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE ON
THESE PROPOSALS?
The Trustees recommend that you vote
1. FOR FIXING THE NUMBER OF TRUSTEES AS PROPOSED AND THE
ELECTION OF ALL NOMINEES;
2. FOR SELECTING PRICE WATERHOUSE LLP AS THE INDEPENDENT
AUDITORS OF YOUR FUND;
3.A. FOR AMENDING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO DIVERSIFICATION OF INVESTMENTS;
3.B. FOR AMENDING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO OWNING 10% OF THE VOTING
SECURITIES OF A SINGLE ISSUER;
3.C. FOR AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO MAKING LOANS THROUGH REPURCHASE AGREEMENTS
AND SECURITIES LOANS;
3.D. FOR AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
RELATING TO INVESTMENTS IN REAL ESTATE;
3.E. FOR AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO CONCENTRATION OF ITS ASSETS;
3.F. FOR ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO INVESTMENTS IN SECURITIES
OF ISSUERS IN WHICH MANAGEMENT OF THE FUND OR PUTNAM
INVESTMENT MANAGEMENT, INC. OWNS SECURITIES;
3.G. FOR ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO MARGIN TRANSACTIONS;
3.H. FOR ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO SHORT SALES;
3.I. FOR ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WHICH LIMITS THE FUND'S ABILITY TO PLEDGE
ASSETS;
3.J. FOR ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO OIL, GAS AND
MINERAL LEASES; AND
3.K. FOR ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO INVESTING TO GAIN
CONTROL OF A COMPANY'S MANAGEMENT.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on April 12,
1996, are entitled to be present and to vote at the meeting or
any adjourned meeting. The Notice of Meeting, the proxy, and the
Proxy Statement have been mailed to shareholders of record on or
about May 6 , 1996.
Each share is entitled to one vote. Shares represented by duly
executed proxies will be voted in accordance with shareholders'
instructions. If you sign the proxy, but don't fill in a vote,
your shares will be voted in accordance with the Trustees'
recommendations. If any other business is brought before the
meeting, your shares will be voted at the Trustees' discretion.
THE PROPOSALS
I. ELECTION OF TRUSTEES
WHO ARE THE NOMINEES FOR TRUSTEES?
The Nominating Committee of the Trustees recommends that the
number of Trustees be fixed at thirteen and that you vote for the
election of the nominees described below. Each nominee is
currently a Trustee of your fund and of the other Putnam funds.
The Nominating Committee of the Trustees consists solely of
Trustees who are not "interested persons" (as defined in the
Investment Company Act of 1940) of your fund or of Putnam
Investment Management, Inc., your fund's investment manager
("Putnam Management").
JAMESON ADKINS BAXTER
[INSERT PICTURE]
Ms. Baxter, age 52, is the President of Baxter Associates, Inc.,
a management and financial consulting firm which she founded in
1986. During that time, she was also a Vice President and
Principal of the Regency Group, Inc., and a Consultant to First
Boston Corporation, both of which are investment banking firms.
From 1965 to 1986, Ms. Baxter held various positions in
investment banking and corporate finance at First Boston.
Ms. Baxter currently also serves as a Director of Banta
Corporation, Avondale Federal Savings Bank, and ASHTA Chemicals,
Inc. She is also the Chairman Emeritus of the Board of Trustees
of Mount Holyoke College, having previously served as Chairman
for five years and as a Board member for thirteen years;
an Honorary Trustee and past President of the Board of Trustees
of the Emma Willard School; and a Chair of the Board of Governors
of Good Shepherd Hospital. Ms. Baxter is a graduate of Mount
Holyoke College.
HANS H. ESTIN
[INSERT PICTURE]
Mr. Estin, age 67, is a Chartered Financial Analyst and the Vice
Chairman of North American Management Corp., a registered
investment adviser serving individual clients and their families.
Mr. Estin currently also serves as a Director of The Boston
Company, Inc., a registered investment adviser which provides
administrative and investment management services to mutual funds
and other institutional investors, and Boston Safe Deposit and
Trust Company; a Corporation Member of Massachusetts General
Hospital; and a Trustee of New England Aquarium. He previously
served as the Chairman of the Board of Trustees of Boston
University and is currently active in various other civic
associations, including the Boys & Girls Clubs of Boston, Inc.
Mr. Estin is a graduate of Harvard College and holds honorary
doctorates from Merrimack College and Boston University.
JOHN A. HILL
[INSERT PICTURE]
Mr. Hill, age 54, is the Chairman and Managing Director of First
Reserve Corporation, a registered investment adviser investing in
companies in the world-wide energy industry on behalf of
institutional investors.
Prior to acquiring First Reserve in 1983, Mr. Hill held executive
positions with several investment advisory firms and held various
positions with the Federal government, including Associate
Director of the Office of Management and Budget and Deputy
Administrator of the Federal Energy Administration.
Mr. Hill currently also serves as a Director of Snyder Oil
Corporation, an exploration and production company which he
founded, Maverick Tube Corporation, a manufacturer of structural
steel, pipe and well casings, PetroCorp Incorporated, an
exploration and production company, Weatherford Enterra, Inc.,
an oil field service company, various private companies
controlled by First Reserve Corporation, and various First
Reserve Funds. He is also a Member of the Board of Advisors of
Fund Directions. He is currently active in various business
associations, including the Economic Club of New York, and
lectures on energy issues in the United States and Europe. Mr.
Hill is a graduate of Southern Methodist University.
ELIZABETH T. KENNAN
[INSERT PICTURE]
Ms. Kennan, age 58, is President Emeritus and Professor of Mount
Holyoke College. From 1978 through June 1995, she was President
of Mount Holyoke College. From 1966 to 1978, she was on the
faculty of Catholic University, where she taught history and
published numerous articles.
Ms. Kennan currently also serves as a Director of NYNEX
Corporation, a telecommunications company, Northeast Utilities,
the Kentucky Home Life Insurance Companies, and Talbots, a
women's clothing retailer. She also serves as a Member of The
Folger Shakespeare Library Committee. She is currently active in
various educational and civic associations, including the
Committee on Economic Development and the Council on Foreign
Relations. Ms. Kennan is a graduate of Mount Holyoke College,
the University of Washington and St. Hilda College at Oxford
University and holds several honorary doctorates.
<PAGE>
LAWRENCE J. LASSER*
[INSERT PICTURE]
Mr. Lasser, age 53, is the Vice President of your fund and the
other Putnam funds. He has been the President, Chief Executive
Officer and a Director of Putnam Investments, Inc. and Putnam
Management since 1985, having begun his career there in 1969.
Mr. Lasser currently also serves as a Director of Marsh &
McLennan Companies, Inc., the parent company of Putnam
Management, and INROADS/Central New England, Inc., a job market
internship program for minority high school and college students.
He is a Member of the Board of Overseers of the Museum of
Science, the Museum of Fine Arts and the Isabella Stewart Gardner
Museum in Boston. He is also a Trustee of the Beth Israel
Hospital and Buckingham, Browne and Nichols School. Mr. Lasser
is a graduate of Antioch College and Harvard Business School.
ROBERT E. PATTERSON
[INSERT PICTURE]
Mr. Patterson, age 51, is the Executive Vice President and
Director of Acquisitions of Cabot Partners Limited Partnership, a
registered investment adviser which manages real estate
investments for institutional investors. Prior to 1990, he was
the Executive Vice President of Cabot, Cabot & Forbes Realty
Advisors, Inc., the predecessor company of Cabot Partners. Prior
to that, he was a Senior Vice President of the Beal Companies, a
real estate management, investment and development company. He
has also worked as an attorney and held various positions in
state government, including the founding Executive Director of
the Massachusetts Industrial Finance Agency.
Mr. Patterson currently also serves as Chairman of the Joslin
Diabetes Center and as a Director of Brandywine Trust Company.
Mr. Patterson is a graduate of Harvard College and Harvard Law
School.
DONALD S. PERKINS*
[INSERT PICTURE]
Mr. Perkins, age 69, is the retired Chairman of the Board of
Jewel Companies, Inc., a diversified retailer, where among other
roles he served as President, Chief Executive Officer and
Chairman of the Board from 1965 to 1980. He currently also
serves as a Director of various other public corporations,
including American Telephone & Telegraph Company, AON Corp., an
insurance company, Cummins Engine Company, Inc., an engine and
power generator equipment manufacturer and assembler, Current
Assets L.L.C., a corporation providing financial staffing
services, Illinova and Illinois Power Co., Inland Steel
Industries, Inc., LaSalle Street Fund, Inc., a real estate
investment trust, Springs Industries, Inc., a textile
manufacturer, and Time Warner, Inc., one of the nation's largest
media conglomerates. He previously served as a director of
several other major public corporations, including Corning Glass
Works, Eastman Kodak Company, Firestone Tire & Rubber Company and
Kmart Corporation.
Mr. Perkins currently also serves as a Trustee and Vice Chairman
of Northwestern University and as a Trustee of the Hospital
Research and Education Trust. He is currently active in various
civic and business associations, including the Business Council
and the Civic Committee of the Commercial Club of Chicago, of
which he is the founding Chairman. Mr. Perkins is a graduate of
Yale University and Harvard Business School and holds an honorary
Doctorate from Loyola University of Chicago.
WILLIAM F. POUNDS
[INSERT PICTURE]
Dr. Pounds, age 68, is the Vice Chairman of your fund and of the
other Putnam funds. He has been a Professor of Management at the
Alfred P. Sloan School of Management at the Massachusetts
Institute of Technology since 1961 and served as Dean of that
School from 1966 to 1980. He previously served as Senior Advisor
to the Rockefeller Family and Associates and was a past Chairman
of Rockefeller & Co., Inc., a registered investment adviser which
manages Rockefeller family assets, and Rockefeller Trust Company.
Dr. Pounds currently also serves as a Director of IDEXX
Laboratories, Inc., M/A-COM, Inc., EG&G, Inc., Perseptive
Biosystems, Inc., Management Sciences For Health, Inc. and Sun
Company, Inc. He is also a Trustee of the Museum of Fine Arts in
Boston; an Overseer of WGBH Educational Foundation, and a Fellow
of The American Academy of Arts and Sciences. He previously
served as a director of Fisher-Price, Inc., a major toy
manufacturer and General Mills, Inc., a major manufacturer and
distributor of food products. Dr. Pounds is a graduate of
Carnegie Mellon University.
GEORGE PUTNAM*
[INSERT PICTURE]
Mr. Putnam, age 69, is the Chairman and President of your fund
and of the other Putnam funds. He is the Chairman and a Director
of Putnam Management and Putnam Mutual Funds Corp. and a director
of Marsh & McLennan, their parent company. Mr. Putnam is the son
of the founder of the Putnam funds and Putnam Management and has
been employed in various capacities by Putnam Management since
1951, including Chief Executive Officer from 1961 to 1973. He is
a former Overseer and Treasurer of Harvard University; a past
Chairman of the Harvard Management Company; and a Trustee
Emeritus of Wellesley College and Bradford College.
Mr. Putnam currently also serves as a Director of The Boston
Company, Inc., Boston Safe Deposit and Trust Company, Freeport-
McMoRan, Inc., Freeport Copper and Gold, Inc., McMoRan Oil and
Gas, Inc., mining and natural resources companies, General Mills,
Inc., a major manufacturer of food products, Houghton Mifflin
Company, a major publishing company, and Rockefeller Group, Inc.,
a real estate manager. He is also a Trustee of Massachusetts
General Hospital, McLean Hospital, Vincent Memorial Hospital,
WGBH Educational Foundation and the Museum of Fine Arts and the
Museum of Science in Boston; the New England Aquarium, an
Overseer of Northeastern University; and a Fellow of The American
Academy of Arts and Sciences. Mr. Putnam is a graduate of
Harvard College and Harvard Business School and holds honorary
doctorates from Bates College and Harvard University.
GEORGE PUTNAM, III*
[INSERT PICTURE]
Mr. Putnam, age 44, is the President of New Generation Research,
Inc., a publisher of financial advisory and other research
services relating to bankrupt and distressed companies, and New
Generation Advisers, Inc., a registered investment adviser which
provides advice to private funds specializing in investments in
such companies. Prior to founding New Generation in 1985, Mr.
Putnam was an attorney with the Philadelphia law firm Dechert
Price & Rhoads.
Mr. Putnam currently also serves as a Director of the
Massachusetts Audubon Society. He is also a Trustee of the Sea
Education Association and St. Mark's School and an Overseer of
the New England Medical Center. Mr. Putnam is a graduate of
Harvard College, Harvard Business School and Harvard Law School.
ELI SHAPIRO
[INSERT PICTURE]
Dr. Shapiro, age 79, is the Alfred P. Sloan Professor of
Management, Emeritus at the Alfred P. Sloan School of Management
at the Massachusetts Institute of Technology, having served on
the faculty of the Sloan School for eighteen years. He
previously was also on the faculty of Harvard Business School,
The University of Chicago School of Business and Brooklyn
College. During his academic career, Dr. Shapiro authored
numerous publications concerning finance and related topics. He
previously served as the President and Chief Executive of the
National Bureau of Economic Research and also provided economic
and financial consulting services to various clients.
Dr. Shapiro currently serves as a Director of Nomura Dividend
Income Fund, Inc., a privately held registered investment company
managed by Putnam Management. He is also a past Director of many
companies, including Reece Corporation, a sewing machine
manufacturer, Commonwealth Mortgage, Dexter Corporation, a
manufacturer of plastics and related products, Avis Corporation,
a car rental company, Connecticut Bank and Trust Company,
Connecticut National Gas Corporation, the Federal Home Loan Bank
of Boston, where he served as Chairman from 1977 to 1989,
Travelers' Corporation, an insurance company, and Norlin
Corporation, a musical instrument manufacturer; and a past
Trustee of Mount Holyoke College and the Putnam funds (from 1984
to 1989).
Dr. Shapiro is a Fellow of The American Academy of Arts and
Sciences and is active in various professional and civic
associations, including the American Economic Association, the
American Finance Association and the Council on Foreign
Relations. Dr. Shapiro is a graduate of Brooklyn College and
Columbia University.
A.J.C. SMITH*
[INSERT PICTURE]
Mr. Smith, age 62, is the Chairman and Chief Executive Officer of
Marsh & McLennan Companies, Inc. He has been employed by Marsh &
McLennan and related companies in various capacities since 1961.
Mr. Smith is a Director of the Trident Corp., and he also serves
as a Trustee of the Carnegie Hall Society, the Central Park
Conservancy, The American Institute for Chartered Property
Underwriters, and is a Founder of the Museum of Scotland Society.
He was educated in Scotland and is a Fellow of the Faculty of
Actuaries in Edinburgh, a Fellow of the Canadian Institute of
Actuaries, a Fellow of the Conference of Actuaries in Public
Practice, an Associate of the Society of Actuaries, a Member of
the American Academy of Actuaries, the International Actuarial
Association and the International Association of Consulting
Actuaries.
W. NICHOLAS THORNDIKE**
[INSERT PICTURE]
Mr. Thorndike, age 63, serves as a Director of various
corporations and charitable organizations, including Data General
Corporation, a computer and high technology company, Bradley Real
Estate, Inc., a real estate investment firm, Providence Journal
Co., a newspaper publisher and owner of television stations, and
Courier Corporation, a book binding and printing company. He is
also a Trustee of Eastern Utilities Associates, Massachusetts
General Hospital, where he previously served as chairman and
president, and Northeastern University.
Prior to December 1988, he was the Chairman of the Board and
Managing Partner of Wellington Management Company/Thorndike,
Doran, Paine & Lewis, a registered investment adviser which
manages mutual funds and institutional assets. He also
previously served as a Trustee of the Wellington Group of Funds
(now The Vanguard Group) and was the Chairman and a Director of
Ivest Fund, Inc. Mr. Thorndike is a graduate of Harvard College.
- ----------------------------
* Nominees who are or may be deemed to be "interested persons"
(as defined in the Investment Company Act of 1940) of your
fund, Putnam Management, and Putnam Mutual Funds Corp.
("Putnam Mutual Funds"), the principal underwriter for all
the open-end Putnam funds and an affiliate of Putnam
Management. Messrs. Putnam, Lasser, and Smith are deemed
"interested persons" by virtue of their positions as
officers or shareholders of your fund, or directors of
Putnam Management, Putnam Mutual Funds, or Marsh & McLennan
Companies, Inc., the parent company of Putnam Management and
Putnam Mutual Funds. Mr. George Putnam, III, Mr. Putnam's
son, is also an "interested person" of your fund, Putnam
Management, and Putnam Mutual Funds. Mr. Perkins may be
deemed to be an "interested person" of your fund because of
his service as a director of certain publicly held companies
that include registered broker-dealer firms among their
subsidiaries. Neither your fund nor any of the other Putnam
funds currently engages in any transactions with such firms
except that certain of such firms act as dealers in the
retail sale of shares of certain Putnam funds in the
ordinary course of their business. The balance of the
nominees are not "interested persons."
** In February 1994 Mr. Thorndike accepted appointment as a
successor trustee of certain private trusts in which he has
no beneficial interest. At that time he also became
Chairman of the Board of two privately owned corporations
controlled by such trusts, serving in that capacity until
October 1994. These corporations filed voluntary petitions
for relief under Chapter 11 of the U.S. Bankruptcy Code in
August 1994.
Except as indicated above, the principal occupations and business
experience of the nominees for the last five years have been with
the employers indicated, although in some cases they have held
different positions with those employers. All the nominees were
elected by the shareholders in July, 1995. The 13 nominees for
election as Trustees at the shareholder meeting of your fund who
receive the greatest number of votes will be elected Trustees of
your fund. The Trustees serve until their successors are elected
and qualified. Each of the nominees has agreed to serve as a
Trustee if elected. If any of the nominees is unavailable for
election at the time of the meeting, which is not anticipated,
the Trustees may vote for other nominees at their discretion, or
the Trustees may recommend that the shareholders fix the number
of Trustees at less than 13 for your fund.
WHAT ARE THE TRUSTEES' RESPONSIBILITIES?
Your fund's Trustees are responsible for the general oversight of
your fund's business and for assuring that your fund is managed
in the best interests of its shareholders. The Trustees
periodically review your fund's investment performance as well as
the quality of other services provided to your fund and its
shareholders by Putnam Management and its affiliates, including
administration, custody and investor servicing. At least
annually, the Trustees review the fees paid to Putnam Management
and its affiliates for these services and the overall level of
your fund's operating expenses. In carrying out these
responsibilities, the Trustees are assisted by an independent
administrative staff and by your fund's auditors and legal
counsel, which are selected by the Trustees and are independent
of Putnam Management and its affiliates.
DO THE TRUSTEES HAVE A STAKE IN YOUR FUND?
The Trustees believe it is important that each Trustee have a
significant investment in the Putnam funds. The Trustees
allocate their investments among the more than 99 Putnam funds
based on their own investment needs. The Trustees' aggregate
investments in the Putnam funds total over $ million. The
table below lists each Trustee's current investments in the fund
and in the Putnam funds as a group.
<PAGE>
SHARE OWNERSHIP BY TRUSTEES
YEAR FIRST NUMBER OF
ELECTED AS NUMBER OF SHARES OF
TRUSTEE OF SHARES OF THE ALL PUTNAM
THE PUTNAM FUND OWNED FUNDS OWNED
TRUSTEES FUNDS AS OF 3/15/96* AS OF 3/15/96**
- ------------------------------------------------------------------------------
Jameson A. Baxter 1994 100 303,417
Hans H. Estin 1972 645 346,438
John A. Hill 1985 2,100 1,358,924
Elizabeth T. Kennan 1992 214 314,395
Lawrence J. Lasser 1992 100 8,864,380
Robert E. Patterson 1984 616 737,582
Donald S. Perkins 1982 3,609 2,126,688
William F. Pounds 1971 500 4,706,601
George Putnam 1957 1,000 20,996,054
George Putnam, III 1984 500 3,405,083
Eli Shapiro 1995+ --- 926,071
A.J.C. Smith 1986 200(1) 1,090,348
W. Nicholas Thorndike 1992 145 743,637
- -------------------------------------------------------------------------------
* Except as noted below, each Trustee has sole investment power and
sole voting
power with respect to his or her shares of the fund .
** These holdings do not include shares of Putnam money market funds.
+ Dr. Shapiro previously served as a Trustee of the Putnam funds from 1984
to 1989.
(1)Mr. Smith has shared investment power and shared voting power with
respect to
such shares.
As of March 15, 1996, the Trustees and officers of the fund owned a total of
9,729 shares
of the fund, comprising less than 1% of its outstanding shares of the fund
on that date.
<PAGE>
WHAT ARE SOME OF THE WAYS IN WHICH THE TRUSTEES REPRESENT
SHAREHOLDER INTERESTS?
The Trustees believe that, as substantial investors in the Putnam
funds, their interests are closely aligned with those of
individual shareholders. Among other ways, the Trustees seek to
represent shareholder interests:
by carefully reviewing your fund's investment
performance on an individual basis with your fund's
managers;
by also carefully reviewing the quality of the various
other services provided to the funds and their
shareholders by Putnam Management and its affiliates;
by discussing with senior management of Putnam
Management steps being taken to address any performance
deficiencies;
by reviewing the fees paid to Putnam Management to
ensure that such fees remain reasonable and competitive
with those of other mutual funds, while at the same
time providing Putnam Management sufficient resources
to continue to provide high quality services in the
future;
by monitoring potential conflicts between the funds and
Putnam Management and its affiliates to ensure that the
funds continue to be managed in the best interests of
their shareholders;
by also monitoring potential conflicts among funds to
ensure that shareholders continue to realize the
benefits of participation in a large and diverse family
of funds.
HOW OFTEN DO THE TRUSTEES MEET?
The Trustees meet each month (except August) over a two-day
period to review the operations of your fund and of the other
Putnam funds. A portion of these meetings is devoted to meetings
of various Committees of the board which focus on particular
matters. These include: the Contract Committee, which reviews
all contractual arrangements with Putnam Management and its
affiliates; the Communication and Service Committee, which
reviews the quality of services provided by your fund's investor
servicing agent and custodian; the Pricing, Brokerage and Special
Investments Committee, which reviews matters relating to
valuation of securities, best execution, brokerage costs and
allocations and new investment techniques; the Audit Committee,
which reviews accounting policies and the adequacy of internal
controls and supervises the engagement of the funds' auditors;
the Compensation, Administration and Legal Affairs Committee,
which reviews the compensation of the Trustees and their
administrative staff and supervises the engagement of the funds'
independent counsel; and the Nominating Committee, which is
responsible for selecting nominees for election as Trustees.
Each Trustee generally attends at least two formal committee
meetings during such monthly meeting of the Trustees. During
1995, the average Trustee participated in approximately 40
committee and board meetings. In addition, the Trustees meet in
small groups with Chief Investment Officers and Portfolio
Managers to review recent performance and the current investment
climate for selected funds. These meetings ensure that each
fund's performance is reviewed in detail at least twice a year.
The Contract Committee typically meets on several additional
occasions during the year to carry out its responsibilities.
Other Committees, including an Executive Committee, may also meet
on special occasions as the need arises.
WHAT ARE THE TRUSTEES PAID FOR THEIR SERVICES?
Your fund pays each Trustee a fee for his or her services. Each
Trustee also receives fees for serving as Trustee of the 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 fees paid to each
Trustee by your fund and by all of the Putnam funds are shown
below:
COMPENSATION TABLE
Total
Aggregate compensation
compensation from all
Trustees from the fund* Putnam funds**
- --------------------------------------------------------------
Jameson A. Baxter $927 $150,854
Hans H. Estin 927 150,854
John A. Hill*** 922 149,854
Elizabeth T. Kennan 916 148,854
Lawrence J. Lasser 927 150,854
Robert E. Patterson 937 152,854
Donald S. Perkins 927 150,854
William F. Pounds 927 149,854
George Putnam 927 150,854
George Putnam, III 927 150,854
Eli Shapiro**** 302 95,372
A.J.C. Smith 916 149,854
W. Nicholas Thorndike 937 152,854
* 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, 1995,
there were 99 funds in the Putnam family.
*** Includes compensation deferred pursuant to a Trustee
Compensation Deferral Plan. The total amount of deferred
compensation payable to Mr. Hill by all Putnam funds as of
August 31 , 1995 was $17,217.31 , including
income earned on such amounts.
**** Elected as a Trustee in April 1995.
Your fund's 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 1995 and was eligible to receive
benefits under these Guidelines would have received an annual
benefit of $66,749, 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 about your fund, including further
information about its Trustees and officers, please see "Further
Information About Your Fund," on page 40 .
PUTNAM INVESTMENTS
Putnam Investment Management, Inc. and its affiliate, Putnam
Fiduciary Trust Company, your fund's investor servicing agent and
custodian, are wholly owned by Putnam Investments, Inc., One Post
Office Square, Boston, Massachusetts 02109, a holding company
that is in turn wholly owned by Marsh & McLennan Companies, Inc.,
which has executive offices at 1166 Avenue of the Americas, New
York, New York 10036. Marsh & McLennan Companies, Inc., and its
operating subsidiaries are professional services firms with
insurance and reinsurance brokering, consulting, and investment
management businesses.
2. SELECTION OF INDEPENDENT AUDITORS
Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts,
independent accountants, has been selected by the Trustees as
auditors of your fund for the current fiscal year. Among the
country's preeminent accounting firms, this firm also serves as
the auditor for approximately half of the other funds in the
Putnam family. It was selected primarily on the basis of its
expertise as auditors of investment companies, the quality of its
audit services, and the competitiveness of the fees charged for
these services.
A majority of the votes on the matter is necessary to ratify the
selection of auditors. A representative of the independent
auditors is expected to be present at the meeting to make
statements and to respond to appropriate questions.
3. PROPOSALS A. - K .
As described in the following proposals, the Trustees are
recommending that shareholders approve a number of changes to the
fund's fundamental investment restrictions, including the
elimination of certain restrictions. The purpose of these
proposed changes is to increase the fund's investment flexibility
and to bring the fund's policies more in line with those of many
other Putnam funds.
The adoption of any of these proposals is not contingent on the
adoption of any other proposal.
3.A. AMENDING THE FUND'S FUNDAMENTAL RESTRICTION WITH RESPECT TO
DIVERSIFICATION OF INVESTMENTS
The Trustees are recommending that the fund's fundamental
investment restriction relating to the diversification of its
investments be revised to grant the fund the maximum investment
flexibility permitted by the Investment Company Act of 1940
("1940 Act"). Under the 1940 Act, the fund, as a diversified
fund, generally may not, with respect to 75% of its total assets,
invest more than 5% of its total assets in the securities of any
one issuer (except U.S. government securities). The remaining
25% of the fund's total assets is not subject to this
restriction.
The fund's current restriction is more restrictive, and states
that the fund may not:
"Invest in securities of any issuer if, immediately after
such investment, 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 and principal by the U.S. government or its
agencies or instrumentalities."
The amended fundamental investment restriction is set forth
below.
"The fund may not ...
With respect to 75% of its total assets, invest in
the securities of any issuer if 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."
If the proposed change is approved, the fund will be able to
invest up to 25% of its total assets in the securities of any one
issuer. The amended restriction would continue to exclude from
its limitations U.S. government securities. Following the
amendment, the fund would continue to be a diversified investment
company for purposes of the 1940 Act.
The proposed amendment will enable the fund to invest a greater
percentage of its assets in the securities that Putnam Management
believes offer the potential for current income. However, during
times when Putnam Management invests a higher percentage of the
fund's assets in one or more issuers, the net asset value
of the fund may fluctuate more widely than the net
asset value of a portfolio investing in a larger
number of issuers.
REQUIRED VOTE. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at a meeting if more than 50% of the
outstanding shares of the fund are present at the meeting
in person or by proxy.
3.B
. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO OWNING 10% OF THE SECURITIES OF A SINGLE ISSUER
The Trustees are recommending that the fund's fundamental
investment restriction with respect to investments in the
securities of a single issuer be revised to grant the fund the
maximum flexibility permitted under the 1940 Act. The 1940 Act
prohibits a diversified fund such as the fund from investing,
with respect to 75% of its total assets, in the securities of an
issuer if as a result it would own more than 10% of the
outstanding voting securities of that issuer. The fund's current
investment restriction, which is more restrictive than the 1940
Act, states that the fund may not:
"Acquire more than 10% of the voting securities of any
issuer."
The amended fundamental investment restriction is set forth
below.
"The fund may not ...
With respect to 75% of its total assets, acquire more than
10% of the outstanding voting securities of any
issuer."
Putnam Management recommended the proposed change to the Trustees
because it believes that the fund's current restriction is
overbroad and unnecessarily restrictive. Putnam Management also
believes that limiting this restriction to 75% of the fund's
assets will enhance the fund's investment flexibility. Putnam
Management has advised the Trustees that the current restriction
could prevent the fund from investing in certain opportunities to
the fullest extent that Putnam Management believes would best
serve the fund's investment objective.
If the amendment is approved, the fund will only be able to
purchase more than 10% of the voting securities of an issuer with
respect to 25% of the fund's total assets. To the extent the
fund individually or with other funds and accounts managed by
Putnam Management or its affiliates owns all or a major portion
of the outstanding securities of a particular issuer, under
adverse market or economic conditions or in the event of adverse
changes in the financial condition of the issuer the fund could
find it more difficult to sell these 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. In addition, certain of the companies in which the fund
may invest following the amendment could have relatively small
equity market capitalizations (e.g.. under $1 billion). Such
companies often have limited product lines, markets or financial
resources. They may trade less frequently and in limited volume,
and only in the over-the-counter market or on a regional
securities exchange. As a result, the securities of these
companies may fluctuate in value more than those of larger, more
established companies. 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.
REQUIRED VOTE. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at a meeting if more than 50% of the
outstanding shares of the fund are present at the meeting
in person or by proxy.
3.C
. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO MAKING LOANS THROUGH REPURCHASE AGREEMENTS AND
SECURITIES LOANS
The Trustees are recommending that the fund's current fundamental
investment restrictions with respect to making loans be revised
to remove the asset limitations on the fund's ability to enter
into repurchase agreements and securities loans. The relevant
restriction currently states that the fund may not:
"Make loans, except by purchase of debt obligations in which
the fund may invest consistent with its investment policies,
by entering into repurchase agreements with respect to not
more than 25% of its total assets (taken at current value),
or through the lending its portfolio securities with respect
to not more than 25% of its total assets."
The amended fundamental investment restriction is set forth
below.
"The fund may not ...
Make loans, except by purchase of debt obligations in which
the fund may invest consistent with its investment policies,
by entering into repurchase agreements, or by lending its
portfolio securities."
Following the amendment, the fund may, consistent with its
investment objective and policies, enter into such transactions
without limit. Putnam Management recommended this amendment to
the Trustees because it believes that the increased investment
flexibility could assist the fund in achieving its investment
objective because repurchase agreements and securities loans
often offer opportunities for increased investment return.
When the fund enters into a REPURCHASE AGREEMENT, it purchases a
debt instrument for a relatively short period (usually not more
than one week), which the seller agrees to repurchase at a fixed
time and price, representing the fund's cost plus interest. When
the fund enters into a SECURITIES LOAN, it lends certain of its
portfolio securities to broker-dealers or other parties and
typically receives an interest payment in return. These
transactions must be fully collateralized at all times, and
involve some risk to the fund if the other party should default
on its obligation and the fund is delayed or prevented from
recovering the collateral or completing the transaction. Also,
if the other party in these transactions should become involved
in bankruptcy or insolvency proceedings, it is possible that the
fund may be treated as an unsecured creditor and be required to
return the underlying collateral to the other party's estate.
REQUIRED VOTE. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at a meeting if more than 50% of the
outstanding shares of the fund are present at the meeting in
person or by proxy.
3.D. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO INVESTMENTS IN REAL ESTATE
The Trustees are recommending that the fund's current fundamental
investment restriction relating to investments in real estate be
revised to permit the fund to acquire and dispose of real estate
acquired through the exercise of rights in certain debt
obligations held by the fund. The fun's current fundamental
restriction does not permit the fund to purchase or sell real
estate directly, although the fund may invest in a variety of
securities the value of which is dependent upon the value of real
estate. The current restriction states that the fund may not:
"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."
The proposed amended fundamental investment restriction is set
forth below.
"The fund may not. . ."
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 which represent interests in 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."
Putnam Management believes that the amendment will allow the fund
to take full advantage of rights it may have as a holder of
certain debt obligations which are secured by real estate. The
amended restriction would allow the fund to own real estate
directly as a result of the exercise of its rights in connection
with debt obligations it owns. In such cases, the ability to
acquire and dispose of real estate may serve to protect the fund
during times where an issuer of debt securities is otherwise
unable to meet its obligations.
To the extent the fund invests in real estate-related securities,
it will be subject to the risks associated with the real estate
market. These risks may include declines in the value of real
estate, changes in general or local economic conditions,
overbuilding, difficulty in completing construction, increased
competition, changes in zoning laws, increases in property taxes
and operating expenses, and variations in rental income.
Generally, increases in interest rates will increase the costs of
obtaining financing, which may result in a decrease in the value
of such investments.
REQUIRED VOTE. Approval of the this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the Fund, or (2) 67% or more of the shares
of the fund present at a meeting if more than 50% of the
outstanding shares of the fund are present at the meeting in
person or by proxy.
3.E. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO CONCENTRATION OF ITS ASSETS
The Trustees are recommending that the fund's fundamental
investment restriction regarding concentration of its assets be
revised to make it clear that the fund may invest more than 25%
of its total assets in the securities of the U.S. government, its
agencies or instrumentalities. The current restriction states
that the fund may not "[i]nvest more than 25% of the value of its
total assets in any one industry."
The proposed amended fundamental restriction, which makes certain
other clarifying changes, is set forth below.
"The fund may not. . .
Purchase securities (other than securities of the U.S.
government, its agencies or instrumentalities) if as a
result of such purchase more than 25% of the fun's total
assets would be invested in any one industry."
Putnam Management recommended this amendment to the Trustees to
make it clear that the fund may invest in the securities of the
U.S. government or its agencies or instrumentalities without
regard to the 25% limit. Putnam Management believes that the
current restriction does not prevent the fund from investing in
such securities without limit, because the SEC takes the position
that government issuers, including agencies and instrumentalities
of governmental issuers, are not members of any industry.
However, to avoid any ambiguity in the future, Putnam Management
believes that this clarification should be make at this time.
REQUIRED VOTE. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at a meeting if more than 50% of the
outstanding shares of the fund are present at the meeting in
person or by proxy.
3.F. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTMENTS IN SECURITIES OF ISSUERS IN
WHICH MANAGEMENT OF THE FUND OR PUTNAM MANAGEMENT OWNS
SECURITIES
The Trustees are recommending eliminating the fund's fundamental
investment restriction which states that the fund may not:
"Invest in any securities of any issuer, if, to the
knowledge of the fund, officers and Trustees of the fund and
officers and directors of Putnam who beneficially own more
than 0.5% of the securities of that issuer together own more
than 5% of such securities."
Putnam Management recommended to the Trustees eliminating this
policy because it is unnecessarily restrictive. Putnam
Management also believes that eliminating the restriction will
enhance the fund's investment flexibility. Putnam Management has
advised the Trustees that the restriction could prevent the fund
from investing in certain opportunities to the fullest extent
that Putnam Management believes would best serve the fund's
investment objective.
REQUIRED VOTE. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at a meeting if more than 50% of the
outstanding shares of the fund are present at the meeting in
person or by proxy.
3.G
. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO MARGIN TRANSACTIONS
The Trustees are recommending that the fund's fundamental
investment restriction with respect to margin transactions be
eliminated. The current restriction states that the fund may
not:
"Purchase securities on margin, except such short-term
credits as may be necessary for the clearance of purchases
and sales of securities, and except that it may make margin
payments in connection with transactions in futures
contracts and options."
Putnam Management recommended to the Trustees that this
fundamental investment restriction be eliminated because it is
unnecessary in light of current regulatory requirements; the 1940
Act does not require the fund to have such a restriction. Margin
transactions involve the purchase of securities with money
borrowed from a broker by placing cash or eligible securities,
called "margin", with a broker as collateral against the loan.
The fund's ability to engage in margin transactions is limited to
the extent such transactions are considered borrowing, since the
fund's policies currently prohibit the fund from borrowing money
except for temporary or emergency purposes.
REQUIRED VOTE. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at a meeting if more than 50% of the
outstanding shares of the fund are present at the meeting
in person or by proxy.
3.H
. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO SHORT SALES
The Trustees are recommending that the fund's fundamental
investment restriction with respect to short sales be eliminated.
The current restriction states that the fund may not:
"Make short sales of securities or maintain a short position
in securities 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."
Putnam Management recommended to the Trustees eliminating this
restriction because it is unnecessary in light of current
regulatory requirements; the 1940 Act does not require the fund
to have such a restriction. In addition, the fund's potential
use of short sales is subject to SEC guidelines, which are
discussed below. Putnam Management believes that the increased
investment flexibility will assist the Fund in meeting its
investment objective.
In a typical short sale, the fund borrows securities from a
broker that it anticipates will decline in value in order to sell
to a third party. Following this short sale, the fund becomes
obligated to return securities of the same issue and quantity to
the broker to settle the loan at some future date. If the
securities sold short decline in value, the fund makes a profit
equal to the decline minus any associated costs, such as
commissions, by buying equivalent securities at such lower value
and delivering them to the broker. If the securities sold short
increase in value, the fund realizes a loss equal to the value of
the increase plus any associated costs. The fund collateralizes
its short position by delivering to the broker an amount equal to
the proceeds of the short sale and an additional margin amount as
required by law. In addition, current SEC guidelines require the
fund to maintain in a segregated account cash, U.S. government
securities or other liquid high grade debt obligations equal to
the current market value of the securities sold short minus the
margin amount delivered to the broker. The value of the
segregated account is marked to market daily to reflect any
changes in value of the fund's short position.
REQUIRED VOTE. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at a meeting if more than 50% of the
outstanding shares of the fund are present at the meeting
in person or by proxy.
3.I
. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WHICH LIMITS THE FUND'S ABILITY TO PLEDGE ASSETS
The Trustees are recommending that the fund's fundamental
investment restriction which limits the fund's ability to pledge
its assets be eliminated. The current restriction states that
the fund may not:
"Pledge, hypothecate, mortgage or otherwise encumber its
assets in excess of 15% of its total assets (taken at
current value) and then only to secure borrowings permitted
by restriction 1 above. Collateral arrangements with
respect to margin for futures contracts and options are not
deemed to be pledges or other encumbrances for purposes of
this restriction." [Restriction 1 referred to in this
restriction allows the fund to borrow money in amounts of up
to 15% of the value of its total assets for temporary or
emergency purposes.]
This proposal would remove all restrictions on the fund's ability
to pledge assets. Putnam Management recommended this proposal to
the Trustees because it believes that the fund's current limits
on pledging may conflict with the fund's ability to borrow money
for temporary or emergency purposes. This conflict arises
because lenders may require borrowers such as the fund to pledge
assets in order to collateralize the amount borrowed. Often,
these collateral requirements are for amounts larger than the
principal amount of the loan. If the fund needed to borrow the
maximum amount permitted by it policies (currently 15% of its
total assets), it might be possible that a bank would require
collateral in excess of 15% of the fund's total assets.
Therefore, the limit on pledging assets may have the effect of
reducing the amount that the fund may borrow in these situations.
Pledging assets does entail certain risks. To the extent that
the fund pledges its assets, the fund may have less flexibility
in liquidating its assets and meeting certain obligations.
REQUIRED VOTE. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at a meeting if more than 50% of the
outstanding shares of the fund are present at the meeting
in person or by proxy.
3.J
. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO OIL, GAS AND MINERAL LEASES
The Trustees are recommending that the fund's fundamental
investment restriction relating to the fund's investments in oil,
gas and minerals be eliminated. The current restriction states
that the fund may not:
"Buy or sell oil, gas, or other mineral leases, rights or
royalty contracts, although it may purchase securities of
issuers which deal in, represent interests in or are secured
by interests in such leases, rights, or contracts."
Putnam Management recommended that the Trustees eliminate this
restriction because it is unnecessary in light of current
regulatory requirements; the 1940 Act does not require that the
fund have such a restriction. Putnam Management also believes
that eliminating the restriction will provide the fund with
maximum investment flexibility, although Putnam Management has no
current intention of causing the fund to invest in such
securities.
Investments in oil, gas and other mineral leases, rights or
royalty contracts entail certain risks. The prices of these
investments are subject to substantial fluctuations, and may be
affected by unpredictable economic and political circumstances
such as social, political, or military disturbances, the taxation
and regulatory policies of various governments, the activities
and policies of OPEC (an organization of major oil producing
countries), the existence of cartels in such industries, the
discovery of new reserves and the development of new techniques
for producing, refining and transporting such materials and
related products, the development of new technology, energy
conservation practices, and the development of alternative energy
sources and alternative uses for such materials and related
products.
REQUIRED VOTE. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at a meeting if more than 50% of the
outstanding shares of the fund are present at the meeting
in person or by proxy.
3.K
. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTING TO GAIN CONTROL OF A
COMPANY'S MANAGEMENT
The Trustees are recommending that the fund's fundamental
investment restriction which states that the fund may not "[m]ake
investments for the purpose of gaining control of a company's
management" be eliminated. Eliminating the restriction would
make it clear that the Fund can freely exercise its rights as a
shareholder of the various companies in which it invests. These
rights may include the right to actively oppose management of
such companies or to support the management of such companies.
Putnam Management believes that this ability will allow the fund
maximum flexibility to protect the value of its investments
through influencing management of companies in which it invests.
According to its current investment policies, the fund will
continue to limit its holdings to 10% of the voting securities of
any company (which would only apply to 75% of the fund's assets
if proposal 3.C. is approved). Putnam Management believes that
the fund should be allowed to freely communicate its views as a
shareholder on matters of policy to management, the board of
directors, and shareholders of a company when a policy may affect
the value of the fund's investment. These activities may include
the fund, either individually or with others, seeking changes in
a company's goals, management, or board of directors, seeking the
sale of some or all of a company's assets, or voting to
participate in or oppose a takeover effort with respect to a
company. Although Putnam Management believes that the fund
currently may engage in many if not all of these activities
without necessarily violating this restriction, it believes that
eliminating the restriction will eliminate any potential obstacle
to the fund in protecting its interests as a shareholder.
This area of corporate activity is highly prone to litigation,
and whether or not the restriction is eliminated, the fund may be
drawn into lawsuits related to these activities. The fund will
direct its efforts toward those instances where Putnam Management
believes the potential for benefit to the fund outweighs
potential litigation risks.
REQUIRED VOTE. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at a meeting if more than 50% of the
outstanding shares of the fund are present at the meeting
in person or by proxy.
FURTHER INFORMATION ABOUT VOTING AND THE SHAREHOLDER MEETING
QUORUM AND METHODS OF TABULATION. A majority of the shares
entitled to vote -- present in person or represented by proxy --
constitutes a quorum for the transaction of business with respect
to any proposal at the meeting. Shares represented by proxies
that reflect abstentions and "broker non-votes" (i.e., shares
held by brokers or nominees as to which (i) instructions have not
been received from the beneficial owners or the persons entitled
to vote and (ii) the broker or nominee does not have the
discretionary voting power on a particular matter) will be
counted as shares that are present and entitled to vote on the
matter for purposes of determining the presence of a quorum.
Votes cast by proxy or in person at the meeting will be counted
by persons appointed by your fund as tellers for the meeting.
The tellers will count the total number of votes cast "for"
approval of the proposals for purposes of determining whether
sufficient affirmative votes have been cast. With respect to the
election of Trustees and selection of auditors, neither
abstentions nor broker non-votes have any effect on the outcome
of the proposal. With respect to any other proposals,
abstentions and broker non-votes have the effect of a negative
vote on the proposal.
OTHER BUSINESS. The Trustees know of no other business to be
brought before the meeting. However, if any other matters
properly come before the meeting, it is their intention that
proxies that do not contain specific restrictions to the contrary
will be voted on such matters in accordance with the judgment of
the persons named as proxies in the enclosed form of proxy.
SIMULTANEOUS MEETINGS. The meeting of shareholders of your fund
is called to be held at the same time as the meetings of
shareholders of certain of the other Putnam funds. It is
anticipated that all meetings will be held simultaneously. If
any shareholder at the meeting objects to the holding of a
simultaneous meeting and moves for an adjournment of the meeting
to a time promptly after the simultaneous meetings, the persons
named as proxies will vote in favor of such adjournment.
SOLICITATION OF PROXIES. In addition to soliciting proxies by
mail, Trustees of your fund and employees of Putnam Management,
Putnam Fiduciary Trust Company, and Putnam Mutual Funds may
solicit proxies in person or by telephone. Your fund may also
arrange to have votes recorded by telephone. The telephone
voting procedure is designed to authenticate shareholders'
identities, to allow shareholders to authorize the voting of
their shares in accordance with their instructions and to confirm
that their instructions have been properly recorded. Your fund
has been advised by counsel that these procedures are consistent
with the requirements of applicable law. If these procedures
were subject to a successful legal challenge, such votes would
not be counted at the meeting. Your fund is unaware of any such
challenge at this time. Shareholders would be called at the
phone number Putnam Investments has in its records for their
accounts, and would be asked for their Social Security number or
other identifying information. The shareholders would then be
given an opportunity to authorize proxies to vote their shares at
the meeting in accordance with their instructions. To ensure
that the shareholders' instructions have been recorded correctly,
they will also receive a confirmation of their instructions in
the mail. A special toll-free number will be available in case
the information contained in the confirmation is incorrect.
Your fund's Trustees have adopted a general policy of maintaining
confidentiality in the voting of proxies. Consistent with this
policy, your fund may solicit proxies from shareholders who have
not voted their shares or who have abstained from voting.
Persons holding shares as nominees will upon request be
reimbursed for their reasonable expenses in soliciting
instructions from their principals. Your fund has retained at
its expense D.F. King & Co. Inc., 77 Water Street, New York, NY
10005, to aid in the solicitation instructions for nominee
accounts, for a fee not to exceed $5,000 plus reasonable out-of-
pocket expenses for mailing and phone costs.
REVOCATION OF PROXIES. Proxies, including proxies given by
telephone, may be revoked at any time before they are voted by a
written revocation received by the Clerk of your fund, by
properly executing a later-dated proxy or by attending the
meeting and voting in person.
DATE FOR RECEIPT OF SHAREHOLDERS' PROPOSALS FOR THE NEXT ANNUAL
MEETING. It is anticipated that your fund's next annual meeting
of shareholders will be held in July 1997. Shareholder proposals
to be included in your fund's proxy statement for the next annual
meeting must be received by your fund before January 5,
1997 .
ADJOURNMENT. If sufficient votes in favor of any of the
proposals set forth in the Notice of the Meeting are not received
by the time scheduled for the meeting, the persons named as
proxies may propose adjournments of the meeting for a period or
periods of not more than 60 days in the aggregate to permit
further solicitation of proxies with respect to any of such
proposals. Any adjournment will require the affirmative vote of
a majority of the votes cast on the question in person or by
proxy at the session of the meeting to be adjourned. The persons
named as proxies will vote in favor of such adjournment those
proxies which they are entitled to vote in favor of such
proposals. They will vote against any such adjournment those
proxies required to be voted against any of such proposals. Your
fund pays the costs of any additional solicitation and of any
adjourned session. Any proposals for which sufficient favorable
votes have been received by the time of the meeting may be acted
upon and considered final regardless of whether the meeting is
adjourned to permit additional solicitation with respect to any
other proposal.
FINANCIAL INFORMATION. YOUR FUND WILL FURNISH, WITHOUT CHARGE,
TO YOU UPON REQUEST A COPY OF THE FUND'S ANNUAL REPORT FOR
ITS MOST RECENT FISCAL YEAR, AND A COPY OF ITS SEMIANNUAL REPORT
FOR ANY SUBSEQUENT SEMIANNUAL PERIOD. SUCH REQUESTS MAY BE
DIRECTED TO PUTNAM INVESTOR SERVICES, P.O. BOX 41203, PROVIDENCE,
RI 02940-1203 OR 1-800-225-1581.
FURTHER INFORMATION ABOUT YOUR FUND
LIMITATION OF TRUSTEE LIABILITY. The Agreement and Declaration
of Trust of your fund provides that the fund will indemnify its
Trustees and officers against liabilities and expenses incurred
in connection with litigation in which they may be involved
because of their offices with the fund, except if it is
determined in the manner specified in the Agreement and
Declaration of Trust that they have not acted in good faith in
the reasonable belief that their actions were in the best
interests of the fund or that such indemnification would relieve
any officer or Trustee of any liability to the fund or its
shareholders arising by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties.
Your fund, at its expense, provides liability insurance for the
benefit of its Trustees and officers.
AUDIT AND NOMINATING COMMITTEES. The voting members of the Audit
Committee of your fund include only Trustees who are not
"interested persons" of the fund or by reason of any affiliation
with Putnam Investments and its affiliates. The Audit Committee
currently consists of Messrs. Estin (Chairman), Perkins (without
vote), Putnam, III (without vote), Shapiro, Smith (without vote),
and Ms. Kennan. The Nominating Committee consists only of
Trustees who are not "interested persons" of your fund or Putnam
Management. The Nominating Committee currently consists of Dr.
Pounds and Ms. Kennan (Co-chairpersons), Mrs. Baxter, and Messrs.
Estin, Hill, Patterson, Shapiro, and Thorndike.
OFFICERS AND OTHER INFORMATION. In addition to George Putnam and
Lawrence J. Lasser, the officers of your fund are as follows:
<PAGE>
Year first
elected to
Name (age) Office office
- -----------------------------------------------------------------
Charles E. Porter (57) Executive Vice President 1989
Patricia C. Flaherty (49) Senior Vice President 1993
John D. Hughes (60) Senior Vice President
& Treasurer 1987
Gordon H. Silver (48) Vice President 1990
Peter Carman (54) Vice President 1994
Brett C. Browchuk (33) Vice President 1994
Thomas V. Reilly (48) Vice President 1993
Edward H. D'Alelio (43) Vice President 1988
Charles G. Pohl* (35) Vice President 1993
Jennifer E. Leichter* (35) Vice President 1993
William N. Shiebler** (53) Vice President 1991
John R. Verani (56) Vice President 1990
Paul M. O'Neil (42) Vice President 1992
Beverly Marcus (51) Clerk 1987
- -----------------------------------------------------------------
* The fund's portfolio managers
** President of Putnam Mutual Funds
All of the officers of your fund are employees of Putnam
Management or its affiliates. Because of their positions with
Putnam Management or its affiliates or their ownership of stock
of Marsh & McLennan Companies, Inc., the parent corporation of
Putnam Management and Putnam Mutual Funds, Messrs. Putnam, George
Putnam, III, Lasser and Smith (nominees for Trustees of your
fund), as well as the officers of your fund, will benefit from
the management fees, custodian fees, and investor servicing fees
paid or allowed by the fund.
ASSETS AND SHARES OUTSTANDING OF YOUR FUND AS OF MARCH 29, 1996
Net assets: $126,319,347
Common shares outstanding and
authorized to vote 13,217,739 shares
Persons beneficially owning more
than 5% of common shares None<PAGE>
PUTNAMINVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581
<PAGE>
PUTNAMINVESTMENTS
THIS IS YOUR PROXY CARD.
PLEASE VOTE THIS PROXY, SIGN IT BELOW, AND RETURN IT PROMPTLY IN
THE ENVELOPE PROVIDED. YOUR VOTE IS IMPORTANT.
Please fold at perforation before detaching
- -----------------------------------------------------------------
Proxy for a meeting of shareholders, July 11, 1996, for PUTNAM
HIGH INCOME CONVERTIBLE AND BOND FUND.
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF THE FUND.
The undersigned shareholder hereby appoints George Putnam, Hans
H. Estin, and Robert E. Patterson, and each of them separately,
proxies, with power of substitution, and hereby authorizes them
to represent and to vote, as designated below, at the meeting of
shareholders of Putnam High Income Convertible and Bond Fund on
July 11, 1996, at 2:00 p.m., Boston time, and at any
adjournments thereof, all of the shares of the fund that the
undersigned shareholder would be entitled to vote if personally
present.
PLEASE BE SURE TO SIGN AND DATE THIS PROXY.
Please sign your name exactly as it appears on this card. If you
are a joint owner, each of you should sign. When signing as
executor, administrator, attorney, trustee, or guardian, or as
custodian for a minor, please give your full title as such. If
you are signing for a corporation, please sign the full corporate
name and indicate the signer's office. If you are a partner,
sign in the partnership name.
- -----------------------------------------------------------------
Shareholder sign here Date
- -----------------------------------------------------------------
Co-owner sign here Date
HAS YOUR ADDRESS CHANGED?
Please use this form to notify us of any change in address or
telephone number or to provide us with your comments. Detach
this form from the proxy ballot and return it with your signed
proxy in the enclosed envelope.
Street
- -----------------------------------------------------------------
City
State Zip
- -----------------------------------------------------------------
Telephone
- -----------------------------------------------------------------<PAGE>
DO YOU HAVE ANY COMMENTS?
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
DEAR SHAREHOLDER:
Your vote is important. Please help us to eliminate the expense
of follow-up mailings by signing and returning this proxy as soon
as possible. A postage-paid envelope is enclosed for your
convenience.
THANK YOU!
- -----------------------------------------------------------------
Please fold at perforation before detaching
IF YOU COMPLETE AND SIGN THE PROXY, WE'LL VOTE IT EXACTLY AS YOU
TELL US. IF YOU SIMPLY SIGN THE PROXY, IT WILL BE VOTED FOR
ELECTING TRUSTEES AS SET FORTH IN PROPOSAL 1 AND FOR PROPOSAL 2
AND 3.A.-H. IN THEIR DISCRETION, THE PROXIES WILL ALSO BE
AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS THAT MAY COME BEFORE
THE MEETING.
THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES
AND ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE
PROPOSAL LISTED BELOW:
Please mark your choices / X / in blue or black ink.
1. Proposal to elect Trustees
The nominees for Trustees are: J.A. Baxter, H.H. Estin,
J.A. Hill, E.T. Kennan, L.J. Lasser, R.E. Patterson, D.S.
Perkins, W.F. Pounds, G. Putnam, G. Putnam, III, E.
Shapiro, A.J.C. Smith, W.N. Thorndike.
/ / FOR fixing the number of Trustees and electing all the
nominees (EXCEPT AS MARKED TO THE CONTRARY BELOW.)
TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE
NOMINEES, WRITE THOSE NOMINEES' NAMES BELOW:
----------------------------------------------------------
/ / WITHHOLD authority to vote for all nominees
2. PROPOSAL TO RATIFY FOR AGAINST ABSTAIN
THE SELECTION OF / / / / / /
PRICE WATERHOUSE LLP
AS AUDITORS.
<PAGE>
3.A. PROPOSAL TO AMEND THE / / / / / /
FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION
WITH RESPECT TO
DIVERSIFICATION OF
INVESTMENTS.
3.B . PROPOSAL TO AMEND THE / / / /
/ /
FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION
WITH RESPECT TO
OWNING 10% OF THE SECURITIES
OF A SINGLE ISSUER.
3.C. PROPOSAL TO AMEND THE / / / /
/ /
FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION
WITH RESPECT TO MAKING
LOANS THROUGH REPURCHASE
AGREEMENTS AND SECURITIES
LOANS.
3.D. Proposal to amend the / / / / / /
fund's fundamental
investment restriction
with respect to investments
in real estate.
3.E. PROPOSAL TO AMEND THE / / / / / /
FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION
WITH RESPECT TO CONCENTRATION
OF ITS ASSETS.
3.F. Proposal to eliminate the / / / / / /
fund's fundamental
investment restriction
with respect to
investments in securities
of issuers in which
management of the fund or
Putnam Investment Management,
Inc. owns securities.
3.G . PROPOSAL TO ELIMINATE THE / / / /
/ /
FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION
WITH RESPECT TO MARGIN
TRANSACTIONS.
3.H . PROPOSAL TO ELIMINATE THE / / / /
/ /
FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION
WITH RESPECT TO SHORT
SALES.
3.I . PROPOSAL TO ELIMINATE THE / / / /
/ /
FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION
which limits the fund's
ability to pledge assets.
3.J . PROPOSAL TO ELIMINATE THE / / / /
/ /
FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION
with respect to oil, gas and
mineral leases .
3.K . PROPOSAL TO ELIMINATE THE / / / /
/ /
FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION
WITH RESPECT TO INVESTING
TO GAIN CONTROL OF A
COMPANY'S MANAGEMENT.
Note: If you have questions on any of the proposals, please call
1-800-225-1581.
