PUTNAM CAPITAL MANAGER TRUST /MA/, 485BPOS, 1995-04-28

PUTNAM CAPITAL MANAGER TRUST /MA/
485BPOS, 1995-04-28

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As filed with the Securities and Exchange Commission on
April 27 , 1995

Registration No. 33-17486
811-5346
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-1A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
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Pre-Effective Amendment No. / /
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Post-Effective Amendment No. 10 / X /
and ----
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY / X /
ACT OF 1940 ----
----
Amendment No. 11 / X /
(Check appropriate box or boxes) ----
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PUTNAM CAPITAL MANAGER TRUST
(Exact name of registrant as specified in charter)

One Post Office Square, Boston, Massachusetts 02109
(Address of principal executive offices)

Registrant's Telephone Number, including Area Code (617) 292-1000
--------------
It is proposed that this filing will become effective
(check appropriate box)

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/ / immediately upon filing pursuant to paragraph (b)
- ----
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/ X / on May 1, 1995 pursuant to paragraph (b)
- ----
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/ / 60 days after filing pursuant to paragraph (a)(1)
- ----
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/ / on (date) pursuant to paragraph (a)(1)
- ---- <PAGE>
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/ / 75 days after filing pursuant to paragraph (a)(2)
- ----
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/ / 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 CAPITAL MANAGER TRUST
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
-------------------

The Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Rule 24f-2. A Rule
24f-2 notice for the fiscal year ended December 31, 1994 was filed
on February 24 , 1995. <PAGE>
PUTNAM CAPITAL MANAGER TRUST

CROSS REFERENCE SHEET

(as required by Rule 481(a))

Part A

N-1A Item No. Location

1. Cover Page.................. Cover Page

2. Synopsis.................... Omitted

3. Condensed Financial
Information................. Financial highlights; How
performance is shown

4. General Description of
Registrant.................. The Trust; Investment objectives
and policies of the Funds; Common
investment policies and techniques;
Organization and history

5. Management of the Fund...... How the Trust is managed;
Organization and history; About
Putnam Investments, Inc.

5A. Management's Discussion (Contained in the Annual
of Fund Performance......... Report of the Registrant)

6. Capital Stock and Other
Securities.................. Cover Page; Sales and redemptions;
How the Trust values its shares;
How distributions are made; tax
information; Organization and
history

7. Purchase of Securities
Being Offered............... The Trust; Sales and redemptions;
How the Trust values its shares;
Organization and history

8. Redemption or Repurchase.... Cover Page; Sales and redemptions;
How the Trust values its shares;
Organization and history

9. Pending Legal Proceedings... Not Applicable<PAGE>

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.................... Investment Objectives and Policies
of the Funds; Investment
Restrictions of the Trust;
Portfolio Turnover

14. Management of the
Registrant.................. Management of the Trust

15. Control Persons and
Principal Holders of
Securities.................. Management of the Trust

16. Investment Advisory and
Other Services.............. Management of the Trust; Custodian;
Independent Accountants and
Financial Statements

17. Brokerage Allocation........
Management of the Trust

18. Capital Stock and Other
Securities.................. Management of the Trust;
Determination of Net Asset Value;
Suspension of Redemptions;
Shareholder Liability

19. Purchase, Redemption and
Pricing of Securities
Being Offered................ Sales and Redemptions (Part A);
Management of the Trust;
Determination of Net Asset Value;
Suspension of Redemptions

20. Tax Status.................. How distributions are made; tax
information (Part A); Taxes

21. Underwriter................. Management of the Trust<PAGE>

22. Calculation of Performance
Data........................ How performance is shown (Part A);
Investment Performance of the Trust
(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.

PUTNAM CAPITAL MANAGER TRUST

PROSPECTUS - MAY 1, 1995

Putnam Capital Manager Trust (the "Trust") offers shares of
beneficial interest in separate investment portfolios
(collectively , the "Funds") for purchase by separate
accounts of various insurance companies. The Funds, which have
different investment objectives and policies, offered by this
Prospectus are: PCM Asia Pacific Growth Fund, PCM Diversified
Income Fund, PCM Global Asset Allocation Fund, PCM Global Growth
Fund, PCM Growth and Income Fund, PCM High Yield Fund, PCM Money
Market Fund, PCM New Opportunities Fund, PCM U.S. Government and
High Quality Bond Fund, PCM Utilities Growth and Income Fund and
PCM Voyager Fund.

An investment in PCM Money Market Fund is neither insured nor
guaranteed by the U.S. government. There can be no assurance
that PCM Money Market Fund will be able to maintain a stable net
asset value of $1.00 per share.

PCM High Yield Fund invests primarily in, and PCM Diversified
Income Fund may invest significantly in, lower-rated bonds,
commonly known as "junk bonds." Investments of this type are
subject to a greater risk of loss of principal and non-payment of
interest. Investors should carefully assess the risks associated
with an investment in either Fund.

This Prospectus explains concisely information about the Trust
and should be read in conjunction with the Prospectus for the
separate account of the variable annuity or variable life
insurance product that accompanies this Prospectus. Please read
it carefully and keep it for future reference. Investors can
find more detailed information about the Trust in the May 1, 1995
Statement of Additional Information, as amended from time to
time. For a free copy of the Statement, call Putnam Investor
Services at 1-800-521-0538. The Statement has been filed with
the Securities and Exchange Commission and is incorporated into
this Prospectus by reference.

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.

SHARES OF THE FUNDS ARE PRESENTLY AVAILABLE AND ARE BEING
MARKETED EXCLUSIVELY AS A POOLED FUNDING VEHICLE FOR VARIABLE
ANNUITY CONTRACT AND VARIABLE LIFE INSURANCE POLICY SEPARATE
ACCOUNTS OF VARIOUS INSURANCE COMPANIES.<PAGE>

What you need to know

ABOUT THE TRUST 2

Financial highlights 2
The Trust 4
Investment objectives and policies of the Funds 4
Common investment policies and techniques 16
How performance is shown 20
How the Trust is managed 21
Organization and history 23

ABOUT YOUR INVESTMENT 24

Sales and redemptions 24
How the Trust values its shares 24
How distributions are made; tax information 25
Financial information 25

ABOUT PUTNAM INVESTMENTS, INC. 25

APPENDIX 26<PAGE>

About the Trust

FINANCIAL HIGHLIGHTS

The tables on the following pages present per share financial
information for the life of each Fund. This information has been
audited and reported on by the Trust's independent accountants.
The Report of Independent Accountants and financial statements
included in the Trust's Annual Report to shareholders for the
1994 fiscal year are incorporated by reference into this
Prospectus. The Trust's Annual Report, which contains additional
unaudited performance information, will be made available
without charge upon request.

Financial information for PCM Asia Pacific Growth Fund is not
included because the Fund had no operations during the periods
presented below.

<TABLE><CAPTION>
Financial Highlights
Investment Operations
Less
Net Distributions From:
Realized and
Net Unrealized Total from Net Net Realized
Year (Period) Net Asset Value, Investment Gain (Loss) on Investment Investment Gain on
Ended Beginning of Period Income Investments Operations Income Investments

<S> <C> <C> <C> <C> <C> <C>
PCM Voyager Fund
December 31, 1994 $22.41 $.07 $.14 $.21 $(.05) $(.37)
December 31, 1993 19.21 .04 3.50 3.54 (.07) (.27)
December 31, 1992 17.94 .07 1.72 1.79 (.08) (.44)
December 31, 1991(a) 12.58 .11 5.61 5.72 (.12) (.24)
December 31, 1990 13.00 .18 (.45) (.27) (.06) (.09)
December 31, 1989 10.30 .12 3.20 3.32 (.16) (.46)
December 31, 1988*(a) 10.00 .13 .17 .30 - -

PCM Global Growth Fund
December 31, 1994 $13.68 $.13 $(.26) $(.13) $(.05) $(.02)
December 31, 1993 10.48 .08 3.28 3.36 (.16) -
December 31, 1992 10.61 .10 (.14) (.04) (.09) -
December 31, 1991 9.32 .11 1.28 1.39 (.10) -
December 31, 1990** 10.00 .11 (.79) (.68) - -

PCM Growth and Income Fund
December 31, 1994 $17.38 $.50 $(0.48) $.02 $(.38) $(.58)
December 31, 1993 15.93 .38 1.83 2.21 (.39) (.37)
December 31, 1992 15.33 .39 1.04 1.43 (.42) (.41)
December 31, 1991 13.51 .43 2.09 2.52 (.53) (.17)
December 31, 1990 13.41 .55 (.29) .26 (.05) (.11)
December 31, 1989 12.00 .45 2.04 2.49 (.60) (.48)
December 31, 1988*(a) 10.00 .42 1.58 2.00 - -

PCM Global Asset Allocation Fund
December 31, 1994 $14.29 $.35 $(.71) $(.36) $(.29) $(.43)
December 31, 1993 12.92 .30 1.87 2.17 (.55) (.25)
December 31, 1992 12.77 .35 .41 .76 (.42) (.19)
December 31, 1991 11.28 .45 1.64 2.09 (.54) (.06)
December 31, 1990 11.26 .54 (.52) .02 - -
December 31, 1989 10.68 .56 1.10 1.66 (.88) (.15)
December 31, 1988*(a) 10.00 .53 .15 .68 - -

PCM High Yield Fund
December 31, 1994 $12.53 $1.05 $(1.17) $(.12) $(.79) $(.14)
December 31, 1993 11.17 .73 1.37 2.10 (.74) -
December 31, 1992 10.12 1.26 .59 1.85 (.80) -
December 31, 1991 7.91 .85 2.47 3.32 (1.11) -
December 31, 1990 9.15 1.30 (2.20) (.90) (.34) -
December 31, 1989 10.76 1.12 (1.37) (.25) (1.36) -
December 31, 1988*(a) 10.00 1.04(b) (.28) .76 - -

PCM U.S. Government and
High Quality Bond Fund
December 31, 1994 $13.53 $.81 $(1.24) $(.43) $(.66) $(.22)
December 31, 1993 12.85 .63 .78 1.41 (.61) (.12)
December 31, 1992 12.57 .60 .28 .88 (.54) (.06)
December 31, 1991 11.36 .56 1.31 1.87 (.66) -
December 31, 1990 10.82 .71 .08 .79 (.22) (.03)
December 31, 1989 10.28 .62 .78 1.40 (.79) (.07)
December 31, 1988*(a) 10.00 .66 (.38) .28 - -

PCM Money Market Fund
December 31, 1994 $1.00 $.0377 $ - $.0377 $(.0377) $ -
December 31, 1993 1.00 .0276 - .0276 (.0276) -
December 31, 1992 1.00 .0352 - .0352 (.0352) -
December 31, 1991 1.00 .0575 .0001 .0576 (.0575) (.0001)
December 31, 1990 1.00 .0770 - .0770 (.0770) -
December 31, 1989 1.00 .0859 - .0859 (.0859) -
December 31, 1988* 1.00 .0575 - .0575 (.0575) -

PCM Utilities Growth
and Income Fund
December 31, 1994 $12.00 $.60 $(1.44) $(.84) $(.35) $(.12)
December 31, 1993 10.71 .30 1.13 1.43 (.12) (.02)
December 31, 1992*** 10.00 .15(b) .56 .71 - -

PCM Diversified Income Fund
December 31, 1994 $10.23 $.61 $(1.04) $(.43) $(.06) $-
December 31, 1993**** 10.00 .06 .17 .23 - -

PCM New Opportunities Fund
December 31, 1994***** $10.00 $- $.82 $.82 $- $-
</TABLE>
<TABLE>
<CAPTION> Ratio of
Less Total Net Net
Distributions Net Asset Investment Assets, Ratio of Investment
In Excess of From: Value, Return at End of Expenses to Income to
Realized GainPaid-in Total End of Net Asset Period (in Average Net Average Net Portfolio
on InvestmentsCapitalDistributions Period Value(%)(c)thousands) Assets(%) Assets(%) Turnover(%)
<C> <C> <C> <C> <C> <C> <C> <C> <C>
$- $- $(.42) $22.20 1.04 $1,026,972 .71 .40 62.44
- - (.34) 22.41 18.70 675,198 .66 .33 55.85
- - (.52) 19.21 10.36 317,225 .75 .56 48.17
- - (.36) 17.94 46.09 156,741 .81 .78 55.04
- - (.15) 12.58 (2.03) 48,414 .88 1.58 93.65
- - (.62) 13.00 32.38 39,998 .82 1.93 91.82
- - - 10.30 2.98(d) 7,981 1.35(d) 1.44(d) 103.99(d)

$- $- $(.07) $13.48 (0.96) $669,821 .77 1.21 41.55
- - (.16) 13.68 32.40 352,786 .75 1.38 47.00
- - (.09) 10.48 (0.36) 86,854 .85 1.82 59.68
- - (.10) 10.61 15.01 40,183 .99 2.01 48.67
- - - 9.32 (6.80)(d) 13,203 .99(d) 2.35(d) 18.07(d)

$- $- $(.96) $16.44 0.35 $1,907,380 .62 3.64 46.43
- - (.76) 17.38 14.27 1,407,382 .64 3.49 62.63
- - (.83) 15.93 9.75 641,508 .69 3.79 39.58
- - (.70) 15.33 19.05 325,861 .72 4.37 37.94
- - (.16) 13.51 1.96 155,942 .75 5.02 49.39
- - (1.08) 13.41 21.30 100,335 .74 5.73 73.40
- - - 12.00 19.89(d) 26,205 .92(d) 4.08(d) 37.94(d)

$(.02) $- $(.74) $13.19 (2.50) $414,223 .76 3.19 150.21
- - (.80) 14.29 17.48 297,307 .72 3.28 192.48
- - (.61) 12.92 6.29 134,667 .79 3.84 141.87
- - (.60) 12.77 19.02 82,071 .87 4.55 77.31
- - - 11.28 0.18 51,792 .88 5.31 52.97
- (.05) (1.08) 11.26 16.08 40,200 .88 6.16 95.97
- - - 10.68 6.76(d) 26,202 1.17(d) 5.55(d) 183.11(d)

<PAGE>
$(.02) $- $(.95) $11.46 (.94) $327,119 .74 9.79 62.09
- - (.74) 12.53 19.57 291,737 .67 9.88 85.59
- - (.80) 11.17 18.98 118,804 .71 11.53 84.24
- - (1.11) 10.12 44.83 42,823 .92 12.64 104.62
- - (.34) 7.91 (9.98) 18,915 .93 13.81 86.05
- - (1.36) 9.15 (2.65) 27,511 .84 12.59 65.44
- - - 10.76 7.56(d) 19,506 .94(b)(d) 10.99(b)(d) 64.25(d)

$- $- $(.0377) $1.00 3.82 $244,064 .55 3.90 -
- - (.0276) 1.00 2.79 129,329 .42 2.77 -
- - (.0352) 1.00 3.57 105,694 .48 3.49 -
- - (.0576) 1.00 5.92 78,568 .50 5.74 -
- - (.0770) 1.00 7.98 77,892 .53 7.67 -
- - (.0859) 1.00 8.88 24,975 .63 8.62 -
- - (.0575) 1.00 5.84(d) 14,001 .71(d) 6.70(d) -

$(.01) $- $(.48) $10.68 (7.02) $384,169 .68 5.23 84.88
- - (.14) 12.00 13.42 443,281 .69 5.02 50.79
- - - 10.71 7.10(d) 83,522 .64(b)(d) 3.43(b)(d) 19.29(d)

$ - $- $(.06) $9.74 (4.23) $215,935 .80 7.60 165.17
- - - 10.23 2.30(d) 80,449 .28(d) 1.45(d) 40.83(d)

$- $- $- $10.82 8.20(d) $68,592 .47(d)(b) .03(d)(b) 32.77(d)

<PAGE>
(a) Per share net investment income has been determined on the basis of the weighted average number of shares
outstanding during the period.
(b) Reflects an expense limitation in effect during the period. As a result of expense limitations, expenses
of PCM High Yield Fund for the period ended December 31, 1988 reflect a reduction of less than $.01 per
share, expenses of PCM Utilities Growth and Income Fund for the period ended December 31, 1992 reflect
a reduction of less than $.01 per share and expenses of PCM New Opportunities Fund for the period ended
December 31, 1994 reflect a reduction of less than $0.02 per share.
(c) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(d) Not annualized.
* For the period February 1, 1988 (commencement of operations) to December 31, 1988.
** For the period May 1, 1990 (commencement of operations) to December 31, 1990.
*** For the period May 4, 1992 (commencement of operations) to December 31, 1992.
**** For the period September 15, 1993 (commencement of operations) to December 31, 1993.
***** For the period May 2, 1994 (commencement of operations) to December 31, 1994.
</TABLE> <PAGE>
THE TRUST

The Trust is designed to serve as a funding vehicle for insurance
separate accounts associated with variable annuity contracts and
variable life insurance policies. The Trust presently serves as
the funding vehicle for variable annuity contracts and variable
life insurance policies offered by separate accounts of various
insurance companies. You should consult the prospectus issued by
the relevant insurance company for more information about a
separate account. Shares of the Trust are offered to these
separate accounts through Putnam Mutual Funds Corp. ("Putnam
Mutual Funds"), the principal underwriter for the Trust.

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS

Each Fund of the Trust has a different investment objective or
objectives which it pursues through separate investment policies
as described below. The differences in objectives and policies
among the Funds can be expected to affect the return of each Fund
and the degree of market and financial risk to which each Fund is
subject. For more information about the investment strategies
employed by the Funds, see "Common investment policies and
techniques." The investment objectives and policies of each Fund
may, unless otherwise specifically stated, be changed by the
Trustees of the Trust without a vote of the shareholders. As a
matter of policy, the Trustees would not materially change the
investment objective or objectives of a Fund without shareholder
approval. There is no assurance that any Fund will achieve its
objective or objectives.

Additional portfolios may be created from time to time with
different investment objectives and policies for use as funding
vehicles for insurance company separate accounts or for other
insurance products. In addition, the Trustees may, subject to
any necessary regulatory approvals, eliminate any Fund or
divide any Fund into two or more classes of shares with
such special or relative rights and privileges as the
Trustees may determine.

Glossary

The following terms are frequently used in this Prospectus. Many
of these terms are explained in greater detail under "Common
investment policies and techniques."

"Putnam Management" -- Putnam Investment Management, Inc.,
the Trust's investment manager

"S&P" -- Standard & Poor's Corporation

"Moody's" -- Moody's Investors Service, Inc.

"U.S. Government Securities" --debt securities issued or
guaranteed by the U.S. government, by various of
its agencies, or by various instrumentalities
established or sponsored by the U.S. government.
Certain U.S. Government Securities, including U.S.
Treasury bills, notes and bonds, mortgage
participation certificates guaranteed by Ginnie
Mae, and Federal Housing Administration
debentures, are supported by the full faith and
credit of the United States. Other U.S. Government
Securities issued or guaranteed by federal
agencies or government-sponsored enterprises are
not supported by the full faith and credit of the
United States. These securities include
obligations supported by the right of the issuer
to borrow from the U.S. Treasury, such as
obligations of Federal Home Loan Banks, and
obligations supported only by the credit of the
instrumentality, such as Fannie Mae bonds.

<PAGE>
"CMOs" -- collateralized mortgage obligations

"Ginnie Mae" -- Government National Mortgage Association

"Fannie Mae" -- Federal National Mortgage Association

"Freddie Mac"-- Federal Home Loan Mortgage
Corporation

PCM ASIA PACIFIC GROWTH FUND

PCM Asia Pacific Growth Fund's investment objective is to seek
capital appreciation. In seeking capital appreciation, the Fund
will invest primarily in securities of companies located in Asia
and in the Pacific Basin. The Fund's investments will normally
include common stocks, preferred stocks, securities convertible
into common stocks or preferred stocks, and warrants to purchase
common stocks or preferred stocks. The Fund may also invest to a
lesser extent in debt securities and other types of investments
if Putnam Management believes they would help
achieve the Fund's objective. The Fund may also hold a
portion of its assets in cash and money market
instruments.

The Fund may invest in securities of issuers located in any
country in Asia or the Pacific Basin where Putnam Management
believes there is potential for above-average capital
appreciation. Such countries may include, for example,
Australia, Hong Kong, India, Indonesia, Japan, Korea, Malaysia,
New Zealand, the People's Republic of China, the Philippines,
Singapore, Taiwan and Thailand.

It is anticipated that under normal market conditions the Fund
will invest at least 85% of its assets in securities of companies
located in Asia and in the Pacific Basin which Putnam Management
believes have potential for capital appreciation. The Fund will
consider an issuer of securities to be located in Asia or in the
Pacific Basin if it is organized under the laws of a country in
Asia or the Pacific Basin and has a principal office in a country
in Asia or the Pacific Basin, if it derives 50% or more of its
total revenues from business in Asia or the Pacific Basin, or if
its equity securities are traded principally on a securities
exchange in Asia or the Pacific Basin. It is anticipated that
under normal market conditions the Fund will invest at least 65%
of its assets in securities of issuers meeting at least one of
the first two criteria described in the preceding sentence.

Debt securities in which the Fund may invest will generally be
rated at the time of purchase at least Baa by Moody's or
BBB by S&P, or, if unrated , determined by Putnam
Management to be of comparable quality. The Fund will not
invest in debt securities rated less than Baa by Moody's or
BBB by S&P (sometimes referred to as "junk bonds") , or, if
unrated, determined by Putnam Management to be of comparable
quality if, as a result more than 5% of the Fund's assets would
be invested in such securities. The Fund will not necessarily
dispose of a security if its rating is reduced below its rating
at the time of purchase, although Putnam Management will monitor
the investment to determine whether continued investment in the
security will assist in meeting the Fund's investment
objective. Debt securities rated Baa or BBB or lower
have speculative characteristics and adverse economic conditions
may lead to a weakened capacity to pay interest and repay
principal.

For a discussion of the risks associated with foreign
investing, see "Common investment policies and techniques --
Foreign investments." The Fund may engage in defensive
strategies when Putnam Management judges that conditions in the
securities markets make pursuing the Fund's basic investment
strategy inconsistent with the best interests of the Fund's
shareholders. When pursuing such defensive strategies, the Fund
may invest without limit in securities primarily traded in U.S.
markets. See "Common investment policies and techniques" below
for a discussion of these strategies. The Fund may also engage
in foreign currency exchange transactions and in transactions in
futures and options, enter into repurchase agreements, loan its
portfolio securities and purchase securities for future delivery.
See "Common investment policies and techniques" below for a
discussion of these securities and types of transactions and the
risks associated with them.

PCM Asia Pacific Growth Fund will generally be managed in a style
similar to that of Putnam Asia Pacific Growth Fund.

PCM DIVERSIFIED INCOME FUND

PCM Diversified Income Fund seeks high current income consistent
with capital preservation. The Fund pursues its investment
objective by allocating its investments among the following three
sectors of the fixed income securities markets:

* a U.S. Government Sector, consisting primarily of debt
obligations of the U.S. government, its agencies and
instrumentalities;

* a High Yield Sector, consisting of high-yielding, lower-rated,
higher risk U.S. and foreign fixed income securities
(sometimes referred to as "junk bonds") ; and

* an International Sector, consisting of obligations of foreign
governments, their agencies and instrumentalities, and other
fixed income securities denominated in foreign currencies.

Putnam Management believes that diversifying the Fund's
investments among these sectors, as opposed to investing in any
one sector, will better enable the Fund to preserve capital while
pursuing its objective of high current income. Historically, the
markets for U.S. Government Securities, high yielding corporate
fixed income securities, and debt securities of foreign issuers
have tended to behave independently and have at times moved in
opposite directions. For example, U.S. Government Securities
have generally been affected negatively by inflationary concerns
resulting from increased economic activity. High-yield corporate
fixed income securities, on the other hand, have generally
benefitted from increased economic activity due to improvement in
the credit quality of corporate issuers. The reverse has
generally been true during periods of economic decline.
Similarly, U.S. Government Securities have often been negatively
affected by a decline in the value of the dollar against foreign
currencies, while the bonds of foreign issuers held by U.S.
investors have generally benefitted from such decline. Putnam
Management believes that, when financial markets exhibit such a
lack of correlation, a pooling of investments among these markets
may produce greater preservation of capital over the long term
than would be obtained by investing exclusively in any one of the
markets.

Putnam Management will determine the amount of assets to be
allocated to each of the three market sectors in which the Fund
will invest based on its assessment of the returns that can be
achieved from a portfolio which is invested in all three sectors.
In making this determination, Putnam Management will rely in part
on quantitative analytical techniques that measure relative risks
and opportunities of each market sector based on current and
historical market data for each sector, as well as on its own
assessment of economic and market conditions. Putnam Management
will continuously review this allocation of assets and make such
adjustments as it deems appropriate, although there are no fixed
limits on allocations among sectors, including investments in the
High Yield Sector. Because of the importance of sector
diversification to the Fund's investment policies, Putnam
Management expects that a substantial portion of the Fund's
assets will normally be invested in each of the three market
sectors. The Fund's assets allocated to each of these
market sectors will be managed in accordance with particular
investment policies, which are summarized below. The Fund may
engage in defensive strategies when Putnam Management judges that
conditions in the securities markets make pursuing the Fund's
basic investment strategy inconsistent with the best interests of
the Fund's shareholders. When pursuing such defensive
strategies , the Fund may invest without limit in
securities primarily traded in U.S. markets . See "Common
investment policies and techniques " below for a
discussion of these strategies.

The Fund may invest in premium securities, engage in foreign
currency exchange transactions, transactions in futures and
options, enter into repurchase agreements, loan its portfolio
securities and purchase securities for future delivery. See
"Common investment policies and techniques" below for a
discussion of these securities and types of transactions and the
risks associated with them. The Fund may also hold a portion of
its assets in cash and money market instruments.

PCM Diversified Income Fund will generally be managed in a style
similar to that of Putnam Diversified Income Trust .

U.S. Government Sector

The Fund will invest assets allocated to the U.S. Government
Sector primarily in U.S. Government Securities.

In purchasing securities for the U.S. Government Sector, Putnam
Management may take full advantage of the entire range of
maturities of U.S. Government Securities and may adjust the
average maturity of the investments held in the portfolio from
time to time, depending on its assessment of relative yields of
securities of different maturities and its expectations of future
changes in interest rates. Under normal market conditions, the
Fund will invest at least 20% of its net assets in U.S.
Government Securities and at least 65% of the assets allocated to
the U.S. Government Sector will be invested in U.S. Government
Securities.

The Fund may invest assets allocated to the U.S. Government
Sector in a variety of debt securities, including asset-backed
and mortgage-backed securities, such as CMOs , including
certain stripped mortgage-backed securities, that are issued by
private U.S. issuers. For a description of these securities, and
the risks associated with them, see "Common investment policies
and techniques -- Mortgage-backed and asset-backed securities."

With respect to assets allocated to the U.S. Government Sector,
the Fund will only invest in privately issued debt securities
that are rated at the time of purchase at least A by Moody's or
S&P, or in unrated securities that Putnam Management determines
are of comparable quality. The Fund will not necessarily
dispose of a security if its rating is reduced below its
rating at the time of purchase , although Putnam Management
will monitor the investment to determine whether continued
investment in the security will assist in meeting the Fund's
investment objective.

Risk factors. U.S. Government Securities are considered among
the safest of fixed income investments . Because of this added
safety, the yields available from U.S. Government Securities are
generally lower than the yields available from corporate debt
securities , but their values, like those of other debt
securities, will fluctuate with changes in interest rates.
Changes in the value of portfolio securities will not affect
investment income from those securities, but will affect the
Fund's net asset value. A decrease in interest rates will
generally result in an increase in the value of fixed income
securities. Conversely, during periods of rising interest rates,
the values of such securities will generally decline. The
magnitude of these fluctuations will generally be greater for
securities with longer maturities.

High Yield Sector

The Fund will invest assets allocated to the High Yield Sector
primarily in high yielding, lower-rated, higher risk U.S. and
foreign corporate fixed income securities, including debt
securities, convertible securities and preferred stocks. As
discussed below, however, the Fund may invest all or any part of
the High Yield Sector portfolio in higher-rated and unrated fixed
income securities. The Fund will not necessarily invest in the
highest yielding securities available if in Putnam Management's
opinion the differences in yield are not sufficient to justify
the higher risks involved.

The High Yield Sector may invest in any security which is rated,
at the time of purchase, at least Caa as determined by Moody's or
CCC as determined by S&P or in any unrated security which Putnam
Management determines is at least of comparable quality, although
up to 5% of the net assets of the Fund may be invested in
securities rated below such quality, or in unrated securities
which Putnam Management determines are of comparable quality.
Securities rated below Caa by Moody's or CCC by S&P are of poor
standing and may be in default. The Fund will not necessarily
dispose of a security if its rating is reduced below its rating
at the time of purchase, although Putnam Management will monitor
the investment to determine whether continued investment in the
security will assist in meeting the Fund's investment
objective. The rating services' descriptions of these rating
categories, including the speculative characteristics of the
lower categories, are included in the Appendix to this
Prospectus.

The table below shows the percentages of the Fund's assets
invested during fiscal 1994 in securities assigned to the various
rating categories by S&P and in unrated securities determined by
Putnam Management to be of comparable quality.
<PAGE>
Rated securities, Unrated securities of
as a percentage of comparable quality, as a
Rating Fund's assets percentage of Fund's assets
- ------ ------------- --------
"AAA" 27.41% --
"AA" 18.12% --
"A" 21.35% 1.73%
"BBB" 9.52% 1.12%
"BB" 5.30% 0.02%
"B" 6.11% 0.52%
"CCC" 0.89% --
------ -----
Not Rated -- 1.52%
Total 88.70% 4.91%
====== =====

For a description of the risks associated with investments in
fixed income securities, including lower-rated fixed income
securities, see "Common investment policies and techniques --
Lower-rated and other fixed income securities."

The Fund may invest assets allocated to the High Yield Sector
in participations and assignments of fixed and floating rate
loans made by financial institutions to governmental or corporate
borrowers. In addition to the more general investment
considerations applicable to fixed income investments,
participations and assignments involve the risk that the
institution's insolvency could delay or prevent the flow of
payments on the underlying loan to the Fund. The Fund may have
limited rights to enforce the terms of the underlying loan, and
the liquidity of loan participations and assignments may be
limited.

The Fund may also invest assets allocated to the High Yield
Sector in lower-rated securities of foreign corporate and
governmental issuers denominated either in U.S. dollars or in
foreign currencies. For a discussion of the risks associated
with foreign investing, see "Common investment policies and
techniques -- Foreign investments ."

International Sector

The Fund will invest the assets allocated to the International
Sector in debt obligations and other fixed income securities
denominated in non-U.S. currencies. These securities include:

* debt obligations issued or guaranteed by foreign, national,
provincial, state, or other governments with taxing
authority, or by their agencies or instrumentalities;

* debt obligations of supranational entities (described below);
and

* debt obligations and other fixed income securities of foreign
and U.S. corporate issuers.

When investing in the International Sector, the Fund will
purchase only debt securities of issuers whose long-term debt
obligations are rated A or better at the time of purchase by
Moody's or S&P or that are unrated securities
determined by Putnam Management to be of comparable
quality. The Fund will not necessarily dispose of a security if
its rating is reduced below its rating at the time of
purchase , although Putnam Management will monitor the
investment to determine whether continued investment in the
security will assist in meeting the Fund's investment objective.
The Fund may, however, make investments in international debt
securities rated below A with respect to assets allocated to the
High Yield Sector.

In the past, yields available from securities denominated in
foreign currencies have often been higher than those of
securities denominated in U.S. dollars. Although the Fund has
the flexibility to invest in any country where Putnam Management
sees potential for high income, it presently expects to invest
primarily in securities of issuers in industrialized Western
European countries (including Scandinavian countries) and in
Canada, Japan, Australia, and New Zealand. Putnam Management
will consider expected changes in foreign currency exchange rates
in determining the anticipated returns of securities denominated
in foreign currencies.

The obligations of foreign governmental entities, including
supranational issuers, have various kinds of government support.
Obligations of foreign governmental entities include obligations
issued or guaranteed by national, provincial, state or other
governments with taxing power or by their agencies. These
obligations may or may not be supported by the full faith and
credit of a foreign government.

Supranational entities include international organizations
designated or supported by governmental entities to promote
economic reconstruction or development and international banking
institutions and related government agencies. Examples include
the International Bank for Reconstruction and Development (the
World Bank), the European Steel and Coal Community, the Asian
Development Bank, and the Inter-American Development Bank. The
governmental members or "stockholders" usually make initial
capital contributions to the supranational entity and in many
cases are committed to make additional capital contributions if
the supranational entity is unable to repay its borrowing. Each
supranational entity's lending activities are limited to a
percentage of its total capital (including "callable capital"
contributed by members at the entity's call), reserves, and net
income.

For a discussion of the risks associated with foreign
investments, see "Common investment policies and techniques --
Foreign investments ."

PCM GLOBAL ASSET ALLOCATION FUND

The investment objective of PCM Global Asset Allocation Fund is
to seek a high level of long-term total return consistent with
preservation of capital. By seeking total return, the Fund seeks
to increase the value of the shareholder's investment through
both capital appreciation and investment income. "Total return"
includes interest and dividend income, net of expenses, and
realized and unrealized capital gains and losses on securities.
The Fund invests in a wide variety of equity and fixed income
securities both of U.S. and foreign issuers. The Fund's
portfolio may include securities in the following four investment
categories, which in the judgment of Putnam Management represent
large, well differentiated classes of securities with distinctive
investment characteristics:

U.S. Equities
International Equities
U.S. Fixed Income
International Fixed Income

The amount of Fund assets assigned to each investment category
will be reevaluated by Putnam Management at least quarterly based
on Putnam Management's assessment of the relative market
opportunities and risks of each investment category taking into
account various economic and market factors.

The Fund may engage in defensive strategies when Putnam
Management judges that conditions in the securities markets make
pursuing the Fund's basic investment strategy inconsistent with
the best interests of the Fund's shareholders. When pursuing
such defensive strategies, the Fund may invest without limit in
securities primarily traded in U.S. markets. See "Common
investment policies and techniques" below for a discussion of
these strategies. The Fund may invest in premium securities,
engage in foreign currency exchange transactions and transactions
in futures and options, enter into repurchase agreements, loan
its portfolio securities and purchase securities for future
delivery. See "Common investment policies and techniques" below
for a discussion of these securities and types of transactions
and the risks associated with them. The Fund may also hold
a portion of its assets in cash and money market
instruments.

The portion of the Fund's assets invested in each investment
category will be managed as a separate investment portfolio in
accordance with that category's particular investment objectives
and policies, independently of the Fund's overall objective. The
following is a description of the investment objectives and
policies of each investment category:

U.S. Equities. The objective of the U.S. Equities category is to
seek both capital growth and, to a lesser extent, current income
through equity securities . This category's portfolio
will include equity securities selected primarily to provide one
or more of the following factors: growth in value, capital
protection and dependable income. Investments will be made in
companies large or small (including relatively less well-known
companies) whose earnings are believed to be in a relatively
strong growth trend or whose securities are thought to be
undervalued. These companies may present greater opportunity for
capital appreciation, but also may involve greater risk. They
may have limited product lines, markets or financial resources,
or may depend on a limited management group. Their securities
may trade less frequently and in limited volume. As a result,
these securities may fluctuate in value more than securities of
larger, more established companies.

International Equities. The objective of the International
Equities category is to seek capital appreciation. This
category's portfolio will be invested in securities principally
traded in foreign securities markets. These securities will
primarily be common stocks or securities convertible into common
stocks. Investments will be made in companies large or small
(including relatively less well-known companies) whose earnings
are believed to be in a relatively strong growth trend or whose
securities are thought to be undervalued. These companies may
present greater opportunity for capital appreciation, but also
may involve greater risk. They may have limited product
lines, markets or financial resources, or may depend on a limited
management group. Their securities may trade less frequently and
in limited volume. As a result, these securities may fluctuate
in value more than securities of larger, more established
companies. For a discussion of the risks associated with foreign
investments, see "Common investment policies and techniques --
Foreign investments."

U.S. Fixed Income. The objective of the U.S. Fixed Income
category is to seek high current income through a portfolio of
fixed income securities which in the judgment of Putnam
Management does not involve undue risk to principal or income.
The U.S. Fixed Income category may invest in any fixed
income securities Putnam Management considers appropriate,
including U.S. Government Securities , debt securities,
mortgage-backed and asset-backed securities, convertible
securities and preferred stocks of non-governmental issuers. The
U.S. Fixed Income category expects normally to invest
primarily in investment grade securities (rated Baa or higher by
Moody's or BBB or higher by S&P at the time of purchase). For a
more detailed description of security ratings, see the Appendix
to this Prospectus. The U.S. Fixed Income category will not
invest in securities rated lower than Caa as determined by
Moody's and CCC as determined by S&P at the time of purchase.
Securities in those rating categories may be in default and are
considered to be of poor standing. This category may also invest
in unrated securities judged by Putnam Management to be of
comparable quality to those ratings listed above. The Fund will
not necessarily dispose of a security if its rating is reduced
below its rating at the time of purchase , although Putnam
Management will monitor the investment to determine whether
continued investment in the security will assist in meeting the
Fund's investment objective.

Whereas certain U.S. Government Securities in which the Fund
may invest are supported by the full faith and credit of the
United States, other fixed income securities in which the Fund
may invest are subject to varying degrees of risk of default
depending upon, among other factors, the creditworthiness of the
issuer and the ability of the borrower to meet its obligations.
While the credit risks presented by differing types of fixed
income securities vary, the values of all fixed income securities
change as interest rates fluctuate .

For a description of the risks associated with investments in
mortgage-backed and asset-backed securities, see "Common
investment policies and techniques -- Mortgage-backed and asset-
backed securities." For a description of the risks of investing
in fixed income securities, including lower-rated fixed income
securities (commonly known as "junk bonds") , see "Common
investment policies and techniques -- Lower-rated and other fixed
income securities."

International Fixed Income. The investment objective of the
International Fixed Income category is to seek high current
income by investing principally in debt securities denominated in
foreign currencies which are issued by foreign governments and
governmental or supranational agencies. This category may also
invest in other privately issued debt securities,
convertible securities and preferred stocks principally
traded in foreign securities markets. This category will invest
only in securities which, at the time of purchase, are rated at
least A or higher by Moody's or S&P or in unrated securities
judged by Putnam Management to be of comparable quality. The
Fund will not necessarily dispose of a security if its rating is
reduced below its rating at the time of purchase , although
Putnam Management will monitor the investment to determine
whether continued investment in the security will assist in
meeting the Fund's investment objective. For a discussion of
the risks associated with foreign investments, see "Common
investment policies and techniques -- Foreign investments."

General. Putnam Management will adjust the percentage of the
Fund's assets in each investment category from time to time based
upon its market outlook and its analysis of longer-term trends.
The Fund may from time to time invest in all or any one of the
investment categories as Putnam Management may consider
appropriate in response to changing market conditions.

PCM GLOBAL GROWTH FUND

PCM Global Growth Fund seeks capital appreciation. It is
designed for investors seeking potential above-average capital
growth through a globally diversified portfolio of common stocks.
Dividend and interest income is only an incidental consideration.
In seeking capital appreciation, the Fund follows a global
investment strategy of investing primarily in common stocks
traded in securities markets located in a number of foreign
countries and in the United States. The Fund may at times invest
up to 100% of its assets in securities principally traded in
securities markets outside the United States, and will under
normal market conditions invest at least 65% of its assets in at
least three different countries, one of which may be the United
States. The Fund may hold a portion of its assets in cash
and money market instruments.

The Fund will not limit its investments to any particular type of
company. It may invest in companies, large or small, whose
earnings are believed to be in a relatively strong growth trend,
or in companies in which significant further growth is not
anticipated but which are thought to be undervalued by the
market. It may invest in small and relatively less well-known
companies. These companies may present greater
opportunity for capital appreciation, but also may involve
greater risk. They may have limited product lines, markets or
financial resources, or may depend on a limited management group.
Their securities may trade less frequently and in limited volume.
As a result, these securities may fluctuate in value more than
securities of larger, more established companies.

Putnam Management believes that the securities markets of many
nations move relatively independently of one another, because
business cycles and other economic or political events that
influence one country's securities markets may have little effect
on securities markets in other countries. By investing in a
globally diversified portfolio, Putnam Management attempts to
reduce the risks associated with investing in the economy of only
one country. The countries which Putnam Management believes
offer attractive opportunities for investment may change from
time to time.

Foreign investments can involve risks, however, that may not be
present in domestic securities. For a discussion of the risks
associated with foreign investments, see "Common investment
policies and techniques -- Foreign investments ."

The Fund may also engage in foreign currency exchange
transactions and transactions in futures and options, enter
into repurchase agreements, loan its portfolio securities and
purchase securities for future delivery. See "Common investment
policies and techniques" below for a discussion of these
securities and types of transactions and the risks associated
with them. The Fund may engage in defensive strategies when
Putnam Management judges that conditions in the securities
markets make pursuing the Fund's basic investment strategy
inconsistent with the best interests of the Fund's shareholders.
When pursuing such defensive strategies, the Fund may invest
without limit in securities primarily traded in U.S. markets.
See "Common investment policies and techniques" below for a
discussion of these strategies.

PCM Global Growth Fund will generally be managed in a style
similar to that of Putnam Global Growth Fund.

PCM GROWTH AND INCOME FUND

PCM Growth and Income Fund seeks capital growth and current
income as its investment objectives. The Fund invests primarily
in common stocks that offer potential for capital growth, current
income, or both. The Fund may also purchase corporate bonds,
notes and debentures, preferred stocks or convertible securities
(both debt securities and preferred stocks) or U.S. government
securities, if Putnam Management determines that their purchase
would help further the Fund's investment objectives. The types
of securities held by the Fund may vary from time to time in
light of the Fund's investment objectives, changes in interest
rates and economic and other factors. The Fund may engage in
defensive strategies when Putnam Management judges that
conditions in the securities markets make pursuing the Fund's
basic investment strategy inconsistent with the best interest of
the Fund's shareholders. See "Common investment policies and
techniques" below for a discussion of these strategies.

The Fund may invest up to 20% of its assets in securities
principally traded in foreign markets. For a discussion of the
risks associated with foreign investments, see "Common investment
policies and techniques -- Foreign investments ." The Fund
may invest in both higher-rated and lower-rated fixed-income
securities. The risks associated with fixed income securities,
including lower-rated fixed income securities (commonly known
as "junk bonds") , are discussed below under "Common
investment policies and techniques -- Lower-rated and other fixed
income securities."

The Fund may also hold a portion of its assets in cash and
money market instruments. The Fund may also engage in foreign
currency exchange transactions and transactions in futures and
options, enter into repurchase agreements, loan its portfolio
securities and purchase securities for future delivery. See
"Common investment policies and techniques" below for a
discussion of these securities and types of transactions and the
risks associated with them.

PCM Growth and Income Fund will generally be managed in a style
similar to that of The Putnam Fund for Growth and Income.

PCM HIGH YIELD FUND

The primary investment objective of PCM High Yield Fund is to
seek high current income. Capital growth is a secondary
objective when consistent with high current income.

<PAGE>
The Fund seeks high current income by investing primarily in
high-yielding, lower-rated, fixed-income securities (commonly
known as "junk bonds") constituting a portfolio which Putnam
Management believes does not involve undue risk to income or
principal. Normally, at least 80% of the Fund's assets will be
invested in debt securities, convertible securities or preferred
stocks that are consistent with its primary investment objective
of high current income. The Fund's remaining assets may be held
in cash or money market instruments, or invested in common stocks
and other equity securities. The Fund may invest up to 20% of
its assets in foreign securities. For a discussion of the risks
associated with foreign investments, see "Common investment
policies and techniques -- Foreign investments ." The Fund may
also invest in premium securities, engage in foreign currency
exchange transactions , enter into repurchase agreements, loan
its portfolio securities and purchase securities for future
delivery. See "Common investment policies and techniques" below
for a discussion of these securities and types of transactions
and the risks associated with them. The Fund may engage in
defensive strategies when Putnam Management judges that
conditions in the securities markets make pursuing the Fund's
basic investment strategy inconsistent with the best interests of
the Fund's shareholders. See "Common investment policies and
techniques" below for a discussion of these strategies.

The Fund seeks its secondary objective of capital growth, when
consistent with its primary objective of high current income, by
investing in securities which may be expected to appreciate in
value as a result of declines in long-term interest rates or to
favorable developments affecting the business or prospects of the
issuer which may improve the issuer's financial condition and
credit rating. Putnam Management believes that such
opportunities for capital appreciation often exist in the
securities of smaller capitalization companies which have the
potential for significant growth.

The Fund may generally invest in any security which is rated, at
the time of purchase, at least Caa as determined by Moody's or
CCC as determined by S&P, or in any unrated security which
Putnam Management determines is of comparable quality. 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 continued investment in the security will assist in
meeting the Fund's investment objective. Securities in the
rating categories below Baa as determined by Moody's and BBB as
determined by S&P are considered to be of poor standing and
predominantly speculative. The Fund may invest up to 15% of its
assets in securities rated below Caa by Moody's or CCC by S&P,
including securities in the lowest rating category of each rating
agency, or in unrated securities Putnam Management determines are
of comparable quality. Such securities may be in default and are
generally regarded by rating agencies as having extremely poor
prospects of ever attaining any real investment standing. For a
discussion of the risks associated with investments in fixed
income securities, including lower-rated fixed income securities,
see "Common investment policies and techniques -- Lower-rated and
other fixed income securities."

Rated securities, Unrated securities of
as a percentage of comparable quality, as a
Rating Fund's assets percentage of Fund's assets
- ------ ------------- --------
"AAA " -- --
"AA " -- --
"A" -- --
"BBB" 0.52% --
"BB" 20.19% --
"B" 58.18% 7.50%
"CCC" 9.32% --
CC 0.17% --
C -- --
D 0.31% 0.15%
-- -- ----
Total 88.69% 7.65%
====== =====

The Fund may invest in participations and assignments of fixed
and floating rate loans made by financial institutions to
governmental or corporate borrowers. In addition to the more
general investment considerations applicable to fixed income
investments, participations and assignments involve the risk that
the institution's insolvency could delay or prevent the flow of
payments on the underlying loan to the Fund. The Fund may have
limited rights to enforce the terms of the underlying loan, and
the liquidity of loan participations and assignments may be
limited.

PCM High Yield Fund will generally be managed in a style similar
to that of Putnam High Yield Advantage Fund.

PCM MONEY MARKET FUND

PCM Money Market Fund seeks as high a rate of current income as
Putnam Management believes is consistent with preservation of
capital and maintenance of liquidity. It is designed for
investors seeking current income with stability of principal.

<PAGE>
The Fund invests in a portfolio of high-quality money market
instruments. Examples of these instruments include:

* bank certificates of deposit (CDs) : negotiable
certificates issued against funds deposited in a commercial
bank for a definite period of time and earning a specified
return.

* bankers' acceptances: negotiable drafts or bills of
exchange, which have been "accepted" by a bank, meaning, in
effect, that the bank has unconditionally agreed to pay the
face value of the instrument on maturity.

* prime commercial paper: high-grade, short-term obligations
issued by banks, corporations and other issuers.

* corporate obligations: high-grade, short-term corporate
obligations other than prime commercial paper.

* municipal obligations: high-grade, short-term municipal
obligations.

* U.S. Government Securities : marketable securities
issued or guaranteed as to principal and interest by the U.S.
government or by its agencies or instrumentalities.

* repurchase agreements: with respect to U.S. Treasury or U.S.
government agency obligations.

The Fund will invest only in high-quality securities that Putnam
Management believes present minimal credit risk. High-quality
securities are securities rated at the time of acquisition in one
of the two highest categories by at least two nationally
recognized rating services (or, if only one rating service has
rated the security, by that service) or if the security is
unrated, judged to be of equivalent quality by Putnam Management.
The Fund will maintain a dollar-weighted average maturity of 90
days or less and will not invest in securities with remaining
maturities of more than 397 days. The Fund may invest in
variable or floating rate securities which bear interest at rates
subject to periodic adjustment or which provide for periodic
recovery of principal on demand. Under certain conditions, these
securities may be deemed to have remaining maturities equal to
the time remaining until the next interest adjustment date or the
date on which principal can be recovered on demand. The Fund
follows investment and valuation policies designed to maintain a
stable net asset value of $1.00 per share. There is no assurance
that the Fund will be able to maintain a stable net asset value
of $1.00 per share.

The Fund may invest in bank certificates of deposit and bankers'
acceptances issued by banks having deposits in excess of $2
billion (or the foreign currency equivalent) at the close of the
last calendar year. Should the Trustees decide to reduce this
minimum deposit requirement, shareholders will be notified and
this Prospectus supplemented.

Considerations of liquidity and preservation of capital mean that
the Fund may not necessarily invest in money market instruments
paying the highest available yield at a particular time.
Consistent with its investment objective, the Fund will attempt
to maximize yields by portfolio trading and by buying and selling
portfolio investments in anticipation of or in response to
changing economic and money market conditions and trends. The
Fund will also invest to take advantage of what Putnam Management
believes to be temporary disparities in yields of different
segments of the high-grade money market or among particular
instruments within the same segment of the market. These
policies, as well as the relatively short maturity of obligations
purchased by the Fund, may result in frequent changes in the
Fund's portfolio. The Fund does not usually pay brokerage
commissions in connection with the purchase or sale of portfolio
securities. See "Management of the Fund -- Portfolio
Transactions -- Brokerage and research services" in the Statement
of Additional Information for a discussion of underwriters'
commissions and dealers' spreads involved in the purchase and
sale of portfolio securities.

The portfolio of the Fund will be affected by general changes in
interest rates resulting in increases or decreases in the value
of the obligations held by the Fund. The value of the securities
in the Fund's portfolio can be expected to vary inversely to
changes in prevailing interest rates. Withdrawals by
shareholders could require the sale of portfolio investments at a
time when such a sale might not otherwise be desirable.

The Fund may invest without limit in the banking industry when,
in the opinion of Putnam Management, the yield, marketability and
availability of investments meeting the Fund's quality standards
in that industry justify any additional risks associated with the
concentration of the Fund's assets in that industry . The
Fund, however, will invest more than 25% of its assets in the
personal credit institution or business credit institution
industries only when, to Putnam Management's knowledge, the
yields then available on securities issued by companies in such
industries and otherwise suitable for investment by the Fund
exceed the yields then available on securities issued by
companies in the banking industry and otherwise suitable for
investment by the Fund.

The Fund may invest without limit in U.S. dollar-denominated
commercial paper of foreign issuers and in bank certificates of
deposits and bankers' acceptances payable in U.S. dollars and
issued by foreign banks (including U.S. branches of foreign
banks) or by foreign branches of U.S. banks. These investments
subject the Fund to investment risks different from those
associated with domestic investments. For a discussion of the
risks associated with foreign investments, See "Common
investment policies and techniques -- Foreign investments."

The Fund may also lend its portfolio securities. For a
discussion of this strategy and the risks associated with it, see
"Common investment policies and techniques" below.

PCM Money Market Fund will generally be managed in a style
similar to that of Putnam Money Market Fund.

PCM NEW OPPORTUNITIES FUND

PCM New Opportunities Fund seeks long-term capital appreciation.
The Fund seeks its investment objective by investing principally
in common stocks of companies in sectors of the economy which
Putnam Management believes possess above-average long-term growth
potential. The Fund will generally invest in companies which
Putnam Management identifies as offering the best prospects for
long-term growth within a particular sector. Current dividend
income is only an incidental consideration. The Fund invests
primarily in common stocks, but may also purchase convertible
bonds, convertible preferred stocks, warrants, preferred stocks
and debt securities if Putnam Management believes they would help
achieve the Fund's objective of capital appreciation. The
Fund may invest up to 20% of its assets in foreign securities.
For a discussion of the risks associated with foreign investing,
see "Common investment policies and techniques -- Foreign
investments." The Fund may also engage in foreign currency
exchange transactions and transactions in futures and options,
enter into repurchase agreements, loan its portfolio securities
and purchase securities for future delivery. See "Common
investment policies and techniques" below for a discussion of
these securities and types of transactions and the risks
associated with them. The Fund may also hold a portion of
its assets in cash and money market instruments. The
Fund may engage in defensive strategies when Putnam Management
judges that conditions in the securities markets make pursuing
the Fund's basic investment strategy inconsistent with the best
interests of the Fund's shareholders. See "Common investment
policies and techniques" below for a discussion of these
strategies.

The sectors of the economy which offer above-average growth
potential will change over time. At present, Putnam Management
has identified the following sectors of the economy as having an
above-average growth potential over the next three to five years:

Personal Communications - cellular telephone, paging, personal
communication networks;

Media/Entertainment - cable television system operators, cable
television network programmers, film entertainment providers,
theme park operators, casino operators;

Medical Technology/Cost-Containment - home and outpatient care,
medical device companies, biotechnology, health care
information services;

Environmental Services - solid waste disposal, hazardous waste
disposal, remediation services, environmental testing;

<PAGE>
Applied/Advanced Technology - database software, application
software, networking software, computer systems integrators,
information services companies;

Personal Financial Services - specialty insurance companies,
credit card issuers, and other consumer-oriented financial
services companies; and

Value-oriented Consuming - retailers, restaurants, hotel chains
and travel companies able to provide quality products or
services at lower prices or offering greater perceived value
than competitors.

In addition, the Fund may also invest a portion of its assets in
securities of companies that, although not in any of the sectors
described above, are expected to experience above-average growth.

The sectors described above represent Putnam Management's current
judgment of the sectors of the economy which offer the most
attractive growth opportunities. The Fund will not necessarily
be invested in each of the seven market sectors at all times.
Such sectors are likely to change over time and may include a
variety of industries. Subject to the Fund's investment
restrictions, the Fund may invest up to one-half of its assets in
any one particular sector.

The Fund will invest in securities which Putnam Management
believes offer above-average long-term growth opportunities. As
a result of the Fund's long-term investment strategy, it is
possible that the Fund's total return over certain periods may be
less than that of other equity investment vehicles.

<PAGE>
The Fund will normally emphasize investments in particular
economic sectors. Although the Fund will not invest more than 25%
of its assets in any one industry, the Fund's emphasis on
particular sectors of the economy may make the value of the
Fund's shares more susceptible to any single economic, political
or regulatory development than the shares of an investment
company which is more widely diversified. As a result, the value
of the Fund's shares may fluctuate more than the value of shares
of such an investment company.

PCM New Opportunities Fund will generally be managed in a style
similar to that of Putnam New Opportunities Fund.

PCM U.S. GOVERNMENT AND HIGH QUALITY BOND FUND

PCM U.S. Government and High Quality Bond Fund seeks current
income consistent with preservation of capital. The Fund invests
primarily in U.S. Government Securities and in other debt
obligations rated at least A by Moody's or S&P at the time of
investment, or, if not rated, determined by Putnam Management to
be of comparable quality. For a more detailed description of
security ratings, see the Appendix to this Prospectus. The Fund
will not necessarily dispose of a security if its rating is
reduced below its rating at the time of purchase , although
Putnam Management will monitor the investment to determine
whether continued investment in the security will assist in
meeting the Fund's investment objective.

Putnam Management will allocate the Fund's assets between U.S.
Government Securities and other high quality bonds,
depending on its assessment of market conditions and the relative
investment returns available from such securities. The Fund will
not, however, make any investment, if, as a result, less than 25%
of the value of its assets would be invested in U.S. Government
Securities. The Fund may also invest up to 10% of its
assets in foreign securities. For a discussion of the risks
associated with foreign investments, see "Common investment
policies and techniques -- Foreign investments ." The Fund may
also invest in premium securities, engage in foreign currency
exchange transactions and transactions in futures and options,
enter into repurchase agreements, loan its portfolio securities
and purchase securities for future delivery. See "Common
investment policies and techniques" below for a discussion of
these strategies and the risks associated with them. The Fund
may also hold a portion of its assets in cash and money market
instruments. The Fund may engage in defensive strategies when
Putnam Management judges that conditions in the securities
markets make pursuing the Fund's basic investment strategy
inconsistent with the best interests of the Fund's shareholders.
See "Common investment policies and techniques" below for a
discussion of these strategies.

Putnam Management may take full advantage of the entire range of
maturities of U.S. Government Securities and other high quality
bonds and may adjust the average maturity of the Fund's portfolio
from time to time, depending on its assessment of relative yields
on securities of different maturities and expectations of future
changes in interest rates. Thus, at certain times the average
maturity of the portfolio may be relatively short (less
than one year to five years, for example) and at other times may
be relatively long (more than 10 years, for example).

A portion of the securities held by the Fund may consist of high
quality mortgage-backed and asset-backed securities. For a
description of these securities, and the risks associated with
them, see "Common investment policies and techniques -- Mortgage-
backed and asset-backed securities."

U.S. Government Securities and other high quality bonds do not
involve the degree of credit risk associated with investments in
lower quality fixed income securities, although, as a result, the
yields available from U.S. Government Securities and other high
quality bonds are generally lower than the yields available from
many other fixed income securities. Like other fixed income
securities, however, the values of U.S. Government Securities and
other high quality bonds change as interest rates fluctuate.
Fluctuations in the value of the Fund's securities will not
affect interest income on securities already held by the Fund,
but will be reflected in the Fund's net asset value. Since the
magnitude of these fluctuations generally will be greater at
times when the Fund's average maturity is longer, under certain
market conditions the Fund may invest in short-term investments
yielding lower current income rather than investing in higher
yielding longer-term securities.

PCM UTILITIES GROWTH AND INCOME FUND

The investment objective of PCM Utilities Growth and Income Fund
is to seek capital growth and current income. The Fund
concentrates its investments in securities issued by companies in
the public utilities industries.

The Fund will seek its objective by investing under normal
circumstances at least 65% of its total assets in equity and debt
securities of companies in the public utilities industries.
Equity securities in which the Fund may invest include common
stocks, preferred stocks, securities convertible into common
stocks or preferred stocks, and warrants to purchase common or
preferred stocks. Debt securities in which the Fund may invest
will be rated at the time of investment at least Baa by Moody's
or BBB by S&P or will be of comparable quality as determined by
Putnam Management. The Fund may invest in debt and equity
securities of issuers in other industries if Putnam Management
believes they will help achieve the Fund's objective.
Companies in the public utilities industries include companies
engaged in the manufacture, production, generation, transmission,
sale or distribution of electric or gas energy or other types of
energy and companies engaged in telecommunications, including
telephone, telegraph, satellite, microwave and other
communications media (but not companies engaged in public
broadcasting or cable television). Putnam Management deems a
particular company to be in the public utilities industries if at
the time of investment Putnam Management determines that at least
50% of the company's assets, revenues or profits are derived from
one or more of those industries.

The portion of the Fund's assets invested in equity securities
and in debt securities will vary from time to time in light of
the Fund's investment objective, changes in interest rates, and
economic and other factors. Although the Fund expects that in
the near term it will invest substantial portions of its assets
in both equity securities and in debt securities, the Fund may
invest all of its assets in either equity or debt securities.
The Fund may hold a portion of its assets in cash and money
market instruments.

The Fund may invest up to 25% of its assets in securities
principally traded in foreign markets. For a discussion of the
risks associated with foreign investments, see "Common investment
policies and techniques -- Foreign investments." The Fund may
also engage in foreign currency exchange transactions and
transactions in futures and options, enter into repurchase
agreements, loan its portfolio securities and purchase securities
for future delivery. See "Common investment policies and
techniques" below for a discussion of these securities and types
of transactions and the risks associated with them. The Fund may
engage in defensive strategies when Putnam Management judges that
conditions in the securities markets make pursuing the Fund's
basic investment strategy inconsistent with the best interests of
the Fund's shareholders. See "Common investment policies and
techniques" below for a discussion of these strategies.

Since the Fund's investments are concentrated in the
public utilities industries, the value of its shares can
be expected to change in light of factors affecting those
industries, and may fluctuate more widely than the value of
shares of a portfolio that invests in a broader range of
industries. Many utility companies, especially electric, gas and
other energy-related utility companies, have historically been
subject to risks of increase in fuel and other operating costs,
changes in interest rates on borrowings for capital improvement
programs, changes in applicable laws and regulations, changes in
technology which may render existing plants, equipment or
products obsolete, the effects of energy conservation and
operating constraints, and increased costs and delays associated
with compliance with environmental regulations. In particular,
regulatory changes with respect to nuclear and conventionally-
fueled power generating facilities could increase costs or impair
the ability of utility companies to operate such facilities or
obtain adequate return on invested capital. Generally, prices
charged by utilities are regulated in the United States and in
foreign countries with the intention of protecting the public
while ensuring that utility companies earn a return sufficient to
allow them to attract capital in order to grow and
continue to provide appropriate services. There can be no
assurance that such pricing policies or rates of return will
continue in the future.

In recent years, regulatory changes in the United States have
increasingly allowed utility companies to provide services and
products outside their traditional geographic areas and lines of
business, creating new areas of competition within the utilities
industries. This trend toward deregulation and the emergence of
new entrants have caused non-regulated providers of utility
services to become a significant part of the utilities
industries. Putnam Management believes that the emergence of
competition and deregulation will result in certain utility
companies being able to earn more than their traditional
regulated rates of return, while others may be forced to defend
their core business from increased competition and may be less
profitable. Although Putnam Management seeks to take advantage
of favorable investment opportunities that may arise from these
structural changes, there can be no assurance that the Fund will
benefit from any such changes.

Investments in securities rated BBB or Baa have speculative
characteristics, and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity of
the issuer to make principal and interest payments than would be
the case with investments in securities with higher credit
ratings. 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 continued investment in the security would
serve the Fund's investment objective.

The Fund is "non-diversified . " This means that it
may invest its assets in a limited number of issuers. Under the
Internal Revenue Code, the Fund generally may not invest more
than 25% of its assets in obligations of any one issuer other
than U.S. Government Securities and, with respect to 50%
of its total assets, the Fund may not invest more than 5% of its
total assets in the securities of any one issuer (except U.S.
Government Securities). Thus the Fund may invest up to 25% of
its total assets in the securities of each of any two issuers.
Because of the limited number of issuers in the public
utilities industries, the Fund is more likely to invest a higher
percentage of its assets in the securities of a single issuer
than an investment company which invests in a broad range of
industries. This practice involves an increased risk of loss to
the Fund if the issuer is unable to make interest or principal
payments or if the market value of such securities were to
decline.

PCM Utilities Growth and Income Fund will generally be managed in
a style similar to that of Putnam Utilities Growth and Income
Fund. Because that fund is "diversified," however,
its portfolio may be invested in securities of a greater number
of issuers than that of the Fund.

PCM VOYAGER FUND

PCM Voyager Fund seeks capital appreciation. It is designed for
investors willing to assume above-average risk in return for
above-average capital growth potential. The Fund invests
primarily in common stocks which Putnam Management believes have
potential for capital appreciation that is significantly greater
than that of market averages. The Fund does not choose
investments for dividend and interest income. It may also
purchase convertible bonds, convertible preferred stocks,
warrants, preferred stocks and debt securities if Putnam
Management believes they would help achieve the Fund's objective.
The Fund may also hold a portion of its assets in cash and
money market instruments and may invest up to 20% of its
assets in foreign securities. For a discussion of the risks
associated with foreign investments, see "Common investment
policies and techniques -- Foreign investments ." The Fund may
also engage in foreign currency exchange transactions and
transactions in futures and options, enter into repurchase
agreements, loan its portfolio securities and purchase securities
for future delivery. See "Common investment policies and
techniques" below for a discussion of these securities and types
of transactions and the risks associated with them. The Fund may
engage in defensive strategies when Putnam Management judges that
conditions in the securities markets make pursuing the Fund's
basic investment strategy inconsistent with the best interest of
the Fund's shareholders. See "Common investment policies and
techniques" below for a discussion of these strategies.

The Fund generally invests a significant portion of its assets in
the securities of smaller and newer issuers. These small- to
medium-sized companies have a proprietary product or profitable
market niche and the potential to grow very rapidly. Such
companies may present greater opportunities for capital
appreciation because of high potential earnings growth, but may
also involve greater risk. They may have limited product lines,
markets or financial resources, or may depend on a limited
management group. Their securities may trade less frequently and
in limited volume . As a result, these securities may
fluctuate in value more than securities of larger,
more established companies.

The Fund will also invest a portion of its assets in larger
companies where opportunities for above-average capital
appreciation appear favorable.

In seeking its objective, the Fund may borrow money to invest in
additional portfolio securities. This technique, known as
"leverage," increases the Fund's market exposure and risk. When
the Fund has borrowed money for leverage and its investments
increase or decrease in value, the Fund's net asset value will
increase or decrease more than if it had not borrowed money for
this purpose. The interest that the Fund must pay on borrowed
money will reduce its net investment income, and may also either
offset any potential capital gains or increase any losses.

The Fund will not always borrow money for investment. The extent
to which the Fund will borrow money, and the amount it may
borrow, depend on market conditions and interest rates.
Successful use of leverage depends on Putnam Management's ability
to predict market movements correctly.

PCM Voyager Fund will generally be managed in a style similar to
Putnam Voyager Fund.

GENERAL

As indicated above, certain of the Funds are
generally managed in styles similar to other open-end investment
companies which are managed by Putnam Management and whose shares
are generally offered to the public. These other Putnam funds
may, however, employ different investment practices and may
invest in securities different from those in which their
counterpart Funds invest, and consequently will not have
identical portfolios or experience identical investment results.

COMMON INVESTMENT POLICIES AND TECHNIQUES

Defensive strategies

At times, Putnam Management may judge that conditions in the
securities markets make pursuing a Fund's basic investment
strategy inconsistent with the best interests of the Fund's
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
cash or cash equivalents, money-market instruments, short-term
bank obligations, high-rated fixed income securities or preferred
stocks or invest in any other securities Putnam Management
considers consistent with such defensive strategies. It is
impossible to predict when, or for how long, a Fund will use such
alternative strategies.

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 the 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 mark-ups and other transaction costs on the sale of
securities and reinvestment in other securities. Such
transactions may result in realization of taxable capital gains.
Portfolio turnover rates for the life of each Fund (other than
PCM Asia Pacific Growth Fund, which commenced operations after
May 1, 1995) are shown in "Financial highlights." While it is
impossible to predict a Fund's portfolio turnover rate, Putnam
Management, based on its experience, believes that such rate will
not exceed 125% for PCM Asia Pacific Growth Fund.

Investments in premium securities

To the extent described above, certain of the Funds may
invest in securities bearing coupon rates higher than prevailing
market rates. Such "premium" securities are typically purchased
at prices greater than the principal amounts payable on maturity.
A Fund does not amortize the premium paid for such securities in
calculating its net investment income. As a result, the purchase
of such securities provides a Fund a higher level of investment
income distributable to shareholders on a current basis than if
the Fund had purchased securities bearing current market rates of
interest. Because the value of premium securities tends to
approach the principal amount as they approach maturity (or call
price in the case of securities approaching their first call
date), the purchase of such securities will increase a Fund's
risk of capital loss if such securities are held to maturity (or
first call date).

During a period of declining interest rates, many of a Fund's
portfolio investments will likely bear coupon rates which are
higher than current market rates, regardless of whether such
securities were originally purchased at a premium. Such
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 such
"premium" securities tend to approach the principal amount as
they 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 such periods would initially
receive higher distributions (derived from the higher coupon
rates payable on the Fund's investments) than might be available
from alternative investments bearing current market interest
rates, but 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 a Fund's current
dividend rate with the 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."

Foreign investments

Each Fund may invest to the extent described above in securities
principally traded in foreign markets. Each Fund may also
purchase Eurodollar certificates of deposit without limitation.
Since foreign securities are normally denominated and traded in
foreign currencies, the values of a Fund's assets may be affected
favorably or unfavorably by currency exchange rates and exchange
control regulations. There may be less information
publicly available about a foreign company than about a U.S.
company, and foreign companies are not generally subject to
accounting, auditing and financial reporting standards and
practices comparable to those in the United States. The
securities of some foreign companies are less liquid and at times
more volatile than securities of comparable U.S. companies.
Foreign brokerage commissions and other fees are also generally
higher than in the United States. Foreign settlement procedures
and trade regulations may involve certain risks (such as delay in
payment or delivery of securities or in the recovery of a Fund's
assets held abroad) and expenses not present in the settlement of
domestic investments.

In addition, there may be a possibility of nationalization or
expropriation of assets, imposition of currency exchange
controls, confiscatory taxation, political or financial
instability and diplomatic developments which could affect the
value of a Fund's investments in certain foreign countries.
Legal remedies available to investors in certain foreign
countries may be more limited than those available with respect
to investments in the United States or in other foreign
countries. The laws of some foreign countries may limit a Fund's
ability to invest in securities of certain issuers located in
those foreign countries. Special tax considerations apply to
foreign securities.

The risks described above are typically increased to the extent
that a Fund invests in securities traded in lesser-developed and
developing nations, which are sometimes referred to as "emerging
markets."

<PAGE>
A more detailed explanation of foreign investments, and the risks
and special tax considerations associated with them, is included
in the Statement of Additional Information.

Foreign currency exchange transactions

A Fund may engage in transaction hedging to protect against a
change in currency exchange rates between the date on which a
Fund contracts to purchase or sell the security and the
settlement date, or to "lock in" the value of a dividend or
interest payment in a particular currency. For that purpose, a
Fund may purchase or sell a 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.

If conditions warrant, a 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 as a hedge against changes in foreign currency exchange
rates between the trade and settlement dates on particular
transactions and not for speculation. A foreign currency forward
contract is a negotiated agreement to exchange currency at a
future time at a rate or rates that may be higher or lower than
the spot rate. Foreign currency futures contracts are
standardized exchange-traded contracts and have margin
requirements. For transaction hedging purposes, a Fund may also
purchase and sell call and put options on foreign currency
futures contracts and on currencies.

A Fund may engage in position hedging to protect against a
decline in value relative to the U.S. dollar of the currencies in
which its portfolio securities are denominated or quoted (or an
increase in the value of a currency in which securities the Fund
intends to buy are denominated, when the Fund holds cash reserves
and short-term investments). For position hedging purposes, a
Fund may purchase or sell foreign currency futures contracts,
foreign currency forward contracts, and options on foreign
currency futures contracts and on foreign currencies. In
connection with position hedging, a Fund may also purchase or
sell foreign currency on a spot basis.

A 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 a
Fund. Cross hedging transactions by a 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.

For a discussion of the risks associated with options and
futures strategies in connection with a Fund's foreign currency
exchange transactions, see "Risks related to options and futures
strategies."

Options and futures

Futures and options on futures. Each Fund that may invest in
futures and options, as described above, may, to the extent
consistent with their investment objectives and policies,
buy and sell index futures contracts ("index futures") for
hedging purposes. An "index future" is a contract to buy or sell
units of a particular bond or stock index at an agreed price on a
specified future date. Depending on the change in value of the
index between the time when a Fund enters into and terminates an
index futures transaction, the Fund realizes a gain or
loss. A Fund may also, to the extent consistent with its
investment objectives and policies, buy and sell call and put
options on index futures or on stock or bond indices in addition
to or as an alternative to buying or selling index futures or, to
the extent permitted by applicable law, to earn additional
income. In addition, if a Fund's investment policies permit it
to invest in foreign securities, such Fund may invest in futures
and options on foreign securities, to the extent permitted by
applicable law, as a substitute for direct investment in foreign
securities.

To the extent described above, each Fund may also buy and
sell futures contracts and related options with respect to U.S.
Government Securities and options directly on U.S. Government
Securities. Putnam Management believes that, under certain market
conditions, price movements in U.S. Government Securities futures
and related options may correlate closely with securities in
which the Funds may invest and may, as a result, provide hedging
opportunities for the Funds. U.S. Government Securities futures
and related options would be used in a way similar to a Fund's
use of index futures and options. A Fund will only buy or sell
U.S. Government Securities futures and related options when, in
the opinion of Putnam Management, price movements in such futures
and options are expected to correlate closely with price
movements in the securities which are the subject of the hedge.

Options. As described above, certain of the Funds may, to
the extent consistent with their investment objectives and
policies, seek to increase current return by writing
covered call and put options on securities such Funds own
or in which they may invest. A Fund receives a premium
from writing a call or put option, which increases the Fund's
return if the option expires unexercised or is closed out at a
net profit. When a Fund writes a call option, it gives up the
opportunity to profit from any increase in the price of a
security above the exercise price of the option; when it writes a
put option, the Fund takes the risk that it will be required to
purchase a security from the option holder at a price above the
current market price of the security. Each 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. Each Fund
may also, to the extent consistent with its investment objectives
and policies, buy and sell put and call options for hedging
purposes and from time to time buy and sell combinations of put
and call options on the same underlying security to earn
additional income. The aggregate value of the securities
underlying the options may not exceed 25% of the relevant Fund's
assets.

Risks related to options and futures strategies

The use of futures and options involves certain special risks.
Futures and options transactions involve costs and may result in
losses. Certain risks arise because of the possibility of
imperfect correlations between movements in the prices of futures
and options and movements in the prices of the underlying bond or
stock index, securities or currencies or of the securities or
currencies that are the subject of a hedge. The successful use
of the strategies described above further depends on Putnam
Management's ability to forecast market movements correctly.
Other risks arise from a Fund's potential inability to close out
its futures or options positions, and there can be no assurance
that a liquid secondary market will exist for any future or
option at any particular time. Certain provisions of the
Internal Revenue Code and certain regulatory requirements may
limit a Fund's ability to engage in futures and options
transactions.

A more detailed explanation of futures and options transactions,
including the risks associated with them, is included in the
Statement of Additional Information.

Lower-rated and other fixed income securities

As described above, certain of the Funds may invest in
lower-rated fixed income securities (commonly known as "junk
bonds"). Differing yields on fixed income securities of
the same maturity are a function of several factors, including
the relative financial strength of the issuers. Higher yields
are generally available from securities in the lower categories
of recognized rating agencies (Baa or MIG-4 or lower by Moody's
and BBB or SP-3 or lower by S&P) or from unrated securities of
comparable quality. Securities in the rating categories below
Baa as determined by Moody's and BBB as determined by S&P are
considered to be of poor standing and predominantly speculative.
The rating services' descriptions of securities in the lower
rating categories, including their speculative characteristics,
are set forth in the Appendix to this Prospectus.

Securities ratings are based largely on the issuer's historical
financial condition and the rating agencies' investment analysis
at the time of rating. Consequently, the rating assigned to any
particular security is not necessarily a reflection of the
issuer's current financial condition, which may be better or
worse than the rating would indicate. Although Putnam Management
considers security ratings when making investment decisions, it
performs its own investment analysis and does not rely
principally on the ratings assigned by the rating services.
Putnam Management's analysis may include consideration of the
issuer's experience and managerial strength, changing financial
condition, borrowing requirements or debt maturity schedules, and
its responsiveness to changes in business conditions and interest
rates. It also considers relative values based on anticipated
cash flow, interest or dividend coverage, asset coverage and
earning prospects. Because of the greater number of investment
considerations involved in investing in lower-rated securities,
the achievement of a Fund's objectives depends more on Putnam
Management's analytical abilities than would be the case if it
were investing primarily in securities in the higher rating
categories.

At times, a substantial portion of a Fund's assets may be
invested in securities as to which the Fund, by itself or with
other funds and accounts managed by Putnam Management and its
affiliates, holds a major portion or all of such securities.
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 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 a Fund's net asset value. In order to
enforce its rights in the event of a default under such
securities, a 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.

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 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 is generally greater for securities with longer
maturities. However, the yields on such securities are
also generally higher. 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 income derived from such securities, but will
affect a Fund's net asset value.

Investors should carefully consider their ability to assume the
risks of investing in a mutual fund which invests in
lower-rated securities before allocating a portion of their
insurance investment to a Fund that invests in such securities.
The lower ratings of certain securities held by a 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
payments of interest and principal would likely make the values
of securities held by a 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, a Fund may be
unable at times to establish the fair value of such securities.
The rating assigned to a security by Moody's or S&P does not
reflect an assessment of the volatility of the security's market
value or of the liquidity of an investment in the security.

Putnam Management seeks to minimize the risks of investing in
lower-rated securities through careful investment analysis. When
the Fund invests in 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 securities in the higher rating categories.

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, the Fund may not be able to reinvest the proceeds
in securities providing the same investment return as the
securities redeemed.

A Fund may at times invest in so-called "zero-coupon" bonds and
"payment-in-kind" bonds. Zero-coupon bonds are issued at a
significant discount from their principal amount and pay interest
only at maturity rather than at intervals during the life of the
security. 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. The values of zero-coupon bonds and
payment-in-kind bonds are subject to greater fluctuation in
response to changes in market interest rates than bonds which pay
interest in cash currently. Both zero-coupon bonds 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, a Fund is nonetheless required to accrue interest income on
such investments and to distribute such amounts at least annually
to shareholders. Thus, a Fund could be required at times to
liquidate other investments in order to satisfy its dividend
requirements.

Certain investment - grade securities in which a Fund may
invest share some of the risk factors discussed above with
respect to lower-rated securities.

Mortgage-backed and asset-backed securities

As described above, certain of the Funds may invest
in asset-backed and mortgage-backed securities, such as
CMOs, including stripped mortgage-backed securities. CMOs
and other mortgage-backed securities represent
participations in, or are secured by, mortgage loans.
Stripped mortgage-backed securities are usually structured with
two classes that receive different portions of the interest and
principal distributions on a pool of mortgage assets. A Fund may
invest in both the interest-only or "IO" class and the
principal-only or "PO" class. The yield to maturity on an IO
class is extremely sensitive not only to changes in prevailing
interest rates but also to the rate of principal payments
(including prepayments) on the related underlying mortgage
assets, and a rapid rate of principal payments may have a
material adverse effect on a Fund's yield to maturity to the
extent it invests in IOs. If the underlying mortgage assets
experience greater than anticipated prepayments of principal, a
Fund may fail to fully recoup its initial investment in these
securities. Conversely, POs tend to increase in value if
prepayments are greater than anticipated and decline if
prepayments are slower than anticipated. The secondary market for
stripped mortgage-backed securities may be less liquid than that
for other mortgage-backed securities, potentially limiting a
Fund's ability to buy or sell those securities at any particular
time.

Mortgage-backed securities include securities issued or
guaranteed by the U.S. government or one of its agencies or
instrumentalities, such as Ginnie Mae, Fannie Mae or Freddie
Mac ; securities issued by private issuers that represent an
interest in or are collateralized by mortgage-backed securities
issued or guaranteed by the U.S. government or one of its
agencies or instrumentalities; or securities issued by private
issuers that represent an interest in or are collateralized by
mortgage loans or mortgage-backed securities without a government
guarantee but usually having some form of private credit
enhancement.

Asset-backed securities are structured like mortgage-backed
securities, but instead of mortgage loans or interests in
mortgages, the underlying assets may include motor vehicle
installment sales or installment loan contracts, leases of
various types of real and personal property, and receivables from
credit card agreements. The ability of an issuer of asset-backed
securities to enforce its security interest in the underlying
assets may be limited.

Mortgage-backed and asset-backed securities have yield and
maturity characteristics corresponding to the underlying assets.
Thus, unlike traditional debt securities, which may pay a fixed
rate of interest until maturity when the entire principal amount
comes due, payments on certain mortgage-backed and asset-backed
securities include both interest and a partial payment of
principal. In addition to scheduled loan amortization, payments
of principal may result from voluntary prepayment, refinancing or
foreclosure of the underlying mortgage loans or other assets.
Such prepayments significantly shorten the effective maturities
of the securities, especially during periods of declining
interest rates.

Due to their prepayment aspect, mortgage-backed and asset-backed
securities are less effective than other types of securities as a
means of "locking in" attractive long-term interest rates. This
is caused by the need to reinvest prepayments of principal
generally and the possibility of significant unscheduled
prepayments resulting from declines in interest rates. These
prepayments would have to be reinvested at lower rates. As a
result, these securities may have less potential for capital
appreciation during periods of declining interest rates than
other securities of comparable maturities, although they may have
a comparable risk of decline in market value during periods of
rising interest rates. At times, some of the mortgage-backed and
asset-backed securities in which a Fund may invest will have
higher than market interest rates, and will therefore be
purchased at a premium above their par value. Unscheduled
prepayments, which are made at par, will cause a Fund to suffer a
loss equal to any unamortized premium.

CMOs are issued with a number of classes or series which have
different maturities and which may represent interests in the
interest or principal on the underlying collateral or in a
combination thereof. CMOs of different classes are generally
retired in sequence as the underlying mortgage loans in the
mortgage pool are repaid. In the event of sufficient early
prepayments on such mortgages, the class or series of CMOs that
is first to mature generally will be retired prior to its
maturity. Thus, the early retirement of a particular class or
series of CMOs held by the Fund would have the same effect as the
prepayment of mortgages underlying other mortgage-backed
securities.

Securities loans, repurchase agreements and forward commitments

Each Fund may lend portfolio securities amounting to not more
than 25% of its assets to broker-dealers and may enter into
repurchase agreements on up to 25% of its assets. These
transactions must be fully collateralized at all times. Each
Fund (other than PCM Money Market 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 the Fund is delayed or
prevented from recovering the collateral or completing the
transaction.

HOW PERFORMANCE IS SHOWN

Each Fund's investment performance may from time to time be
included in advertisements about that Fund. For Funds other than
PCM Money Market Fund, "yield" is calculated by dividing a Fund's
annualized net investment income per share during a recent 30-day
period by the net asset value per share on the last day of that
period. For this purpose, net investment income is calculated in
accordance with SEC regulations and may differ from a Fund's 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. A Fund's current dividend rate is
based on its net investment income as determined for tax
purposes, which may not reflect amortization in the same manner.
See "Common investment policies and techniques -- Investments in
premium securities." For PCM Money Market Fund, "yield"
represents an annualization of the change in value of an
investment (excluding any capital changes) in the Fund for a
specific seven-day period; "effective yield" compounds that yield
for a year and is, for that reason, greater than the Fund's
yield.

"Total return" for the one-, five- and ten-year periods
( or for the life of a Fund, if shorter ) through the
most recent calendar quarter represents the average annual
compounded rate of return on an investment of $1,000 in such
Fund . Total return may also be presented for other
periods.

All data is based on a Fund's past investment results and does
not predict future performance. Investment performance, which
will vary, is based on many factors, including market conditions,
the composition of a Fund's portfolio, and a Fund's operating
expenses. Investment performance also often reflects the risks
associated with a Fund's investment objective or objectives and
policies. These factors should be considered when comparing a
Fund's investment results to 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.

Performance information presented for the Funds should not be
compared directly with performance information of other insurance
products without taking into account insurance-related charges
and expenses payable with respect to these insurance products.
Insurance related charges and expenses are not reflected in the
Funds' performance information and would reduce an investor's
return under the insurance product.

For performance information through the Funds' most recent fiscal
year, see "Investment Performance of the Trust" in the Statement
of Additional Information.

HOW THE TRUST IS MANAGED

The Trustees of the Trust are responsible for generally
overseeing the conduct of the Trust's business. Subject to such
policies as the Trustees may determine, Putnam Management
furnishes a continuing investment program for the Trust and makes
investment decisions on its behalf. Subject to the control of
the Trustees, Putnam Management also manages the Trust's other
affairs and business.

David K. Thomas, Senior Vice President of Putnam Management and
Vice President of the Trust, has had primary responsibility for
the day-to-day management of PCM Asia Pacific Growth Fund's
portfolio since its inception. Mr. Thomas has been employed by
Putnam Management since January, 1987.

Michael Martino, Managing Director of Putnam Management, D.
William Kohli and Jennifer E. Leichter, each a Senior
Vice President of Putnam Management , and Neil J. Powers
and Mark J. Siegel, each a Vice President of Putnam Management,
each of whom is a Vice President of the Trust , have
had primary responsibility for the day - to - day
management of PCM Diversified Income Fund's portfolio
since 1993 for Ms. Leichter, and 1994 for Messrs. Martino,
Kohli, Powers and Siegel . Ms. Leichter and Mr. Powers
have been employed by Putnam Management since 1987 and 1986,
respectively. Mr. Martino has been employed by Putnam Management
since January, 1994. Prior to January, 1994,
Mr . Martino was employed by Back Bay Advisors in the
positions of Executive Vice President and Chief Investment
Officer from 1992 to 1994, Senior Vice President and Senior
Portfolio Manager from 1990 to 1992 . Mr. Kohli has been
employed by Putnam Management since September, 1994.
Prior to September, 1994, Mr. Kohli was Executive Vice
President , and Co-Director of Global Bond Management and,
prior to October, 1993, Senior Portfolio Manager, at
Franklin Advisors/Templeton Investment Counsel. Mr. Siegel has
been employed by Putnam Management since June, 1993.
Prior to June, 1993, Mr. Siegel was Vice President of
Salomon Brothers International Ltd .

William J. Landes, Managing Director of Putnam Management
, David L. King, John K. Storkerson, D. William
Kohli and Richard M. Frucci, each a Senior Vice President of
Putnam Management , and Christopher A. Ray and
David J. Santos, each a Vice President of the
Trust , have had primary responsibility for the day -
to - day management of PCM Global Asset Allocation
Fund's portfolio since 1993 for Messrs. Landes, King,
Storkerson and Ray, 1994 for Mr. Kohli, and 1995 for Messrs.
Frucci and Santos . Messrs. Landes, King ,
Storkerson , Frucci and Santos have been employed by Putnam
Management since 1985, 1983 , 1979, 1984 and 1986,
respectively. Mr. Kohli has been employed by Putnam
Management since September, 1994. Prior to
September, 1994, Mr. Kohli was Executive Vice
President , and Co-Director of Global Bond Management and,
prior to October, 1993, Senior Portfolio Manager,
at Franklin Advisors/Templeton Investment Counsel. Mr. Ray has
been employed by Putnam Management since December, 1992.
Prior to December, 1992, Mr. Ray was Vice President and
Portfolio Manager at Scudder, Stevens & Clark, Inc., and from
February, 1986 to March, 1992, Mr. Ray was Vice
President of Putnam Management.

John K. Storkerson, Senior Vice President of Putnam Management
and Vice President of the Trust, and Gerald S. Zukowski, Senior
Vice President of Putnam Management and Vice President of the
Trust, have had primary responsibility for the day-to-day
management of PCM Global Growth Fund's portfolio since 1992 and
1993, respectively. Messrs. Storkerson and Zukowski have been
employed by Putnam Management since 1979 and 1989, respectively.

David L. King, Senior Vice President of Putnam Management and
Vice President of the Trust, and Anthony I. Kreisel, Managing
Director of Putnam Management and Vice President of the Trust,
have had primary responsibility for the day-to-day management of
PCM Growth and Income Fund's portfolio since 1993. Messrs. King
and Kreisel have been employed by Putnam Management since 1983
and 1986, respectively.

Rosemary H. Thomsen, Senior Vice President of Putnam Management
and Vice President of the Trust, has had primarily responsibility
for the day-to-day management of PCM High Yield Fund's portfolio
since 1988. Ms. Thomsen has been employed by Putnam Management
since 1986.

Lindsey M. Callen, Vice President of Putnam Management and Vice
President of the Trust, has had primary responsibility for the
day-to-day management of PCM Money Market Fund's portfolio since
1992. Ms. Callen has been employed by Putnam Management since
1984.

Daniel L. Miller, Managing Director of Putnam Management and Vice
President of the Trust, has had primary responsibility for the
day-to-day management of PCM New Opportunities Fund's portfolio
since 1994. Mr. Miller has been employed by Putnam Management
since 1983.

<PAGE>
Kenneth J. Taubes, Senior Vice President of Putnam Management and
Vice President of the Trust, has had primary responsibility for
the day-to-day management of PCM U.S. Government and High Quality
Bond Fund's portfolio since 1993. Mr. Taubes has been employed
by Putnam Management since 1991. Prior to 1991, Mr. Taubes was
Senior Vice President of the Finance Division of U.S. Trust
Company.

Sheldon N. Simon, Senior Vice President of Putnam Management and
Vice President of the Trust and Christopher A. Ray, Vice
President of Putnam Management and Vice President of the Trust,
have had primary responsibility for the day-to-day management
of PCM Utilities Growth and Income Fund's portfolio since 1992
and 1995 . Mr. Simon has been employed by Putnam
Management since 1984. Mr. Ray has been employed by
Putnam Management since December, 1992. Prior to December,
1992, Mr. Ray was Vice President and Portfolio Manager at
Scudder, Stevens & Clark, Inc., and from February, 1986 to March,
1992, Mr. Ray was Vice President of Putnam Management .

Roland W. Gillis, Robert R. Beck and Charles H. Swanberg,
each a Senior Vice President of Putnam Management and
Vice President of the Trust, have had primary responsibility for
the day-to-day management of PCM Voyager Fund's portfolio since
1995, 1995 and 1994 , respectively. Mr.
Gillis has been employed by Putnam Management since March,
1995. Prior to March, 1995, Mr. Gillis was Vice President of
Keystone Custodian Funds, Inc. Messrs. Beck and Swanberg have
been employed by Putnam Management since 1989 and 1984 ,
respectively.

General expenses of the Trust will be allocated among and charged
to the assets of each Fund on a basis that the Trustees deem fair
and equitable, which may be based on the relative assets of each
Fund or the nature of the services performed and relative
applicability to each Fund. Expenses directly charged or
attributable to a Fund will be paid from the assets of that Fund.

For the purpose of determining any such limitation on Putnam
Management's compensation, expenses of the Fund will not reflect
the application of commissions or cash management credits that
may reduce designated Fund expenses.

With Trustee approval, this expense limitation may be terminated
earlier, in which event shareholders would be notified and this
Prospectus would be revised.

Total expenses, including management fees, for the fiscal year
ended December 31, 1994, based on each Fund's average net assets,
were:
Total Management
Expenses Fees

PCM Asia Pacific Growth Fund* 1.20%
0.79%
(reflecting expense limitation)
PCM Diversified Income Fund 0.80% 0.67%
PCM Global Asset Allocation Fund 0.76% 0.66%
PCM Global Growth Fund 0.77% 0.60%
PCM Growth and Income Fund 0.62% 0.57%
PCM High Yield Fund 0.74% 0.66%
PCM Money Market Fund 0.55% 0.42%
PCM New Opportunities Fund** 0.47% 0.45%
(commenced operations on May 1, 1994)
PCM U.S. Government and High
Quality Bond Fund*** 0.67% 0.60%
PCM Utilities Growth and Income Fund 0.68%0.60%
PCM Voyager Fund 0.71% 0.63%

On June 2, 1994, the shareholders of six of the funds approved
new management fees payable to Putnam Management. If the
new rates had been in effect for the entire
year , management fees would have been the
following: PCM Diversified Income Fund, 0.70%; PCM Global Asset
Allocation Fund, 0.70%; PCM Growth and Income Fund, 0.55%; PCM
High Yield Fund. 0.70%; PCM Money Market Fund, 0.45%; and PCM
Voyager Fund, 0.66%.

* PCM Asia Pacific Growth Fund did not commence operations
until after May 1, 1995. These are Putnam Management's
estimates for the Fund's first fiscal year, reflecting the
expense limitation currently in effect. In the absence of
the expense limitation, estimated management fees and total
expenses for the first fiscal year would be 0.80% and 1.21%.

** The total expenses and management fees shown above for PCM
New Opportunities Fund reflect an expense limitation in
effect for the period and are not annualized. In the
absence of the expense limitation in effect for the period,
annualized total expenses and management fees would have
been 1.00% and 0.70%, respectively.

*** On January 6, 1995, the Trustees approved a proposal
to change the fees payable to Putnam Management under the
Management Contract for PCM U.S. Government and High Quality
Bond Fund.

The proposed change is subject to shareholder approval and
will be submitted to shareholders at a meeting scheduled for
July 13, 1995.

Putnam Management places all orders for purchases and sales of
the securities of each Fund. 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, if
permitted by law, sales of shares of the other Putnam funds as a
factor in the selection of broker-dealers.

ORGANIZATION AND HISTORY

Putnam Capital Manager Trust is a Massachusetts business trust
organized on September 24, 1987. A copy of the Agreement and
Declaration of Trust, which is governed by Massachusetts law, is
on file with the Secretary of State of The Commonwealth of
Massachusetts.

The Trust is an open-end, management investment company with an
unlimited number of authorized shares of beneficial interest.
Shares of the Trust may, without shareholder approval, be divided
into two or more series of shares representing separate
investment portfolios, and are currently divided into eleven
series of shares, each representing a separate investment
portfolio which is being offered through separate accounts of
various insurance companies. Each portfolio is managed as a
diversified investment company, except for PCM Utilities Growth
and Income Fund, which is managed as a non-diversified investment
company. Until April 30, 1991, PCM Global Growth Fund was known
as PCM International Equities Fund. Until September 1, 1993, PCM
Global Asset Allocation Fund was known as PCM Multi-Strategy
Fund. Shares vote by individual portfolio on all matters except
(i) when required by the Investment Company Act of 1940, shares
of all portfolios shall be voted in the aggregate, and (ii) when
the Trustees have determined that the matter affects only the
interests of one or more portfolios, only the shareholders of
such portfolio or portfolios shall be entitled to vote.

Shares of the Funds may only be purchased by an insurance
company's separate account. For matters requiring shareholder
approval, you may be able to instruct the insurance company's
separate account how to vote the Fund shares attributable to your
contract or policy. See the Voting Rights section of your
insurance product prospectus.

The Funds' Trustees: George Putnam,* Chairman. President of the
Putnam funds. Chairman and Director of Putnam Management and
Putnam Mutual Funds. Director, Marsh & McLennan Companies, Inc.;
William F. Pounds, Vice Chairman. Professor of Management,
Alfred P. Sloan School of Management, M.I.T.; 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, 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, * Chairman of the
Board and Director of Kmart Corporation and Director of various
corporations, including AT&T 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, M.I.T. ; 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 Trust,
Putnam Management or Putnam Mutual Funds.

About Your Investment

SALES AND REDEMPTIONS

Shares are sold or redeemed at the net asset value per share next
determined after receipt of an order, except that, in the case of
PCM Money Market Fund, purchases will not be effected until the
next determination of net asset value after federal funds have
been made available to the Trust. Orders for purchases or sales
of shares of a Fund must be received by Putnam Mutual Funds
before the close of regular trading on the New York Stock
Exchange in order to receive that day's net asset value. No fee
is charged to a separate account when it redeems Fund shares.

Please check with your insurance company for Funds available
under your variable annuity contract or variable life insurance
policy. Certain Funds may not be available in your state due to
various insurance regulations. Inclusion of a Fund in this
Prospectus that is not available in your state is not to be
considered a solicitation. This Prospectus should be read in
conjunction with the prospectus of the separate account of the
specific insurance product which accompanies this Prospectus.

Each Fund currently does not foresee any disadvantages to
policyowners arising out of the fact that each Fund offers its
shares to separate accounts of various insurance companies to
serve as the investment medium for their variable products.
Nevertheless, the Board of Trustees intends to monitor events in
order to identify any material irreconcilable conflicts which may
possibly arise, and to determine what action, if any, should be
taken in response to such conflicts. If such a conflict were to
occur, one or more insurance companies' separate accounts might
be required to withdraw their investments in one or more Funds
and shares of another Fund may be substituted. This might force
a Fund to sell portfolio securities at disadvantageous prices.
In addition, the Trustees may refuse to sell shares of any Fund
to any separate account or may suspend or terminate the offering
of shares of any Fund if such action is required by law or
regulatory authority or is in the best interests of the
shareholders of the Fund.

Under unusual circumstances, the Trust may suspend repurchases or
postpone payment for up to seven days or longer, as permitted by
federal securities law.

EXCHANGE PRIVILEGE

A shareholder may exchange shares of any Fund in the Trust for
shares of any other Fund in the Trust on the basis of their
respective net asset values. Exchanges may not be made into
portfolios of the Trust not offered by your variable annuity
contract or variable life policy.

HOW THE TRUST VALUES ITS SHARES

The Trust calculates the net asset value of a share of each Fund
by dividing the total value of the assets of the Fund, less
liabilities, by the number of shares of the Fund outstanding.
Shares are valued as of the close of regular trading on the New
York Stock Exchange each day the Exchange is open. Except for
securities held by PCM Money Market Fund, Fund securities for
which market quotations are readily available are stated at
market value. Short-term investments that will mature in 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. The Trust
values the portfolio investments of PCM Money Market Fund at
amortized cost pursuant to Securities and Exchange Commission
Rule 2a-7.

HOW DISTRIBUTIONS ARE MADE; TAX INFORMATION

PCM Money Market Fund will declare a dividend of its net
investment income daily and distribute such dividend monthly.
Each month's distributions will be paid on the first business day
of the next month. Since the net income of PCM Money Market Fund
is declared as a dividend each time it is determined, the net
asset value per share of the Fund remains at $1.00 immediately
after each determination and dividend declaration. Each of the
other Funds will distribute any net investment income and net
realized capital gains at least annually. Both types of
distributions will be made in shares of such Funds unless an
election is made on behalf of a separate account to receive some
or all of the distributions in cash.

Distributions are reinvested without a sales charge, using the
net asset value determined on the ex-dividend date, except that
with respect to PCM Money Market Fund, distributions are
reinvested using the net asset value determined on the day
following the distribution payment date.

Each Fund intends to qualify each year as a "regulated investment
company" for federal income tax purposes and to meet all other
requirements that are necessary for it to be relieved of federal
income taxes on income and gains it distributes to the separate
accounts. For information concerning federal income tax
consequences for the holders of variable annuity contracts and
variable life insurance policies, contract holders should consult
the prospectus of the applicable separate account.

Internal Revenue Service regulations applicable to portfolios
that serve as the funding vehicles for variable annuity and
variable life insurance separate accounts generally require that
those portfolios invest no more than 55% of the value of their
assets in one investment, 70% in two investments, 80% in three
investments and 90% in four investments. Each of the Funds
intends to comply with these requirements.

FINANCIAL INFORMATION

It is expected that owners of the variable annuity contracts and
variable life insurance policies who have contract or policy
values allocated to the Funds will receive an unaudited semi-
annual financial statement and an audited annual financial
statement for such Funds. These reports show the investments
owned by each Fund and provide other relevant information about
the Fund.

About Putnam Investments, Inc.

Putnam Management has been managing mutual funds since 1937.
Putnam Mutual Funds is the principal underwriter of the Trust and
of other Putnam funds. Putnam Fiduciary Trust Company is the
Trust's custodian. Putnam Investor Services, a division of
Putnam Fiduciary Trust Company, is the Trust'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

SECURITIES RATINGS

The following rating services describe rated securities 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 edge." 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 risks appear somewhat larger
than in 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.

<PAGE>
Caa--Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with
respect to principal or interest.

Ca--Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default
or have other marked shortcomings.

C - Bonds which are rated C are the lowest rated class of bonds
and issues so rated can be regarded as having extremely poor
prospects of ever earning any real investment standing.

Standard & Poor's Corporation

Bonds

AAA--Debt rated AAA has the highest rating assigned by Standard &
Poor's. 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 higher-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 in higher-rated categories.

D--Debt rated D is in payment default. The D rating category is
used when interest payments or principal payments are not made on
the date due even if the applicable grace period has not expired,
unless Standard & Poor's believes that such payments will be made
during such grace period. The D rating also will be used on the
filing of a bankruptcy petition if debt service payments are
jeopardized.

<PAGE>
RATINGS OF COMMERCIAL PAPER

Moody's. Moody's Investors Service, Inc. evaluates the salient
features that affect a commercial paper issuer's financial and
competitive position. Its appraisal includes, but is not limited
to, the review of such factors as: quality of management,
industry strengths and risks, vulnerability to business cycles,
competitive position, liquidity measurements, debt structure,
operating trends and access to capital markets. Differing
degrees of weight are applied to these factors as deemed
appropriate for individual situations. Commercial paper issuers
rated "Prime-1" are judged to be of the best quality. Their
short-term debt obligations carry the smallest degree of
investment risk. Margins of support for current indebtedness are
large or stable with cash flow and asset protection well assured.
Current liquidity provides ample coverage of near-term
liabilities and unused alternative financing arrangements are
generally available. While protection elements may change over
the intermediate or long-term, such changes are most unlikely to
impair the fundamentally strong position of short-term
obligations. Issuers in the commercial paper market rated
"Prime-2" are of high quality. Protection for short-term note
holders is issued with liquidity and value of current assets as
well as cash generation in sound relationship to current
indebtedness. They are rated lower than the best commercial
paper issuers because margins of protection may not be as large
or because fluctuations of protective elements over the near or
intermediate term may be of greater amplitude. Temporary
increases in relative short and overall debt load may occur.
Alternate means of financing remain assured. Commercial paper
issuers rated "Prime-3" possess favorable investment attributes
for short-term commitment. Liquidity considerations and cash
generation provide satisfactory support for short-term debt
repayment. While near-term investors are well protected,
elements may be present which suggest improvement or
deterioration in support at some time in the future. Alternative
financing strategies have been outlined. Issuers rated in all
three Prime categories are judged to be investment grade.

Standard & Poor's. Standard & Poor's Corporation describes its
highest ("A") rating for commercial paper as follows, with the
number 1, 2, and 3 being used to denote relative strength within
the "A" classification. Liquidity ratios are adequate to meet
cash requirements. Long-term senior debt rating should be "A" or
better; in some instances "BBB" credits may be allowed if other
factors outweigh the "BBB." The issuer should have access to at
least two additional channels of borrowing. Basic earnings and
cash flow should have an upward trend, with allowances made for
unusual circumstances. Typically, the issuer's industry should
be well-established and the issuer should have a strong position
within its industry. The reliability and quality of management
should be unquestioned.
<PAGE>
Notes

MIG 1/VMIG 1 -- This designation denotes best quality. There is
present strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to the
market for refinancing.

MIG 2/VMIG 2 -- Denotes high quality. Margins of protection are
ample though not as large as in the preceding group.

MIG 3/VMIG 3 -- Denotes favorable quality. All security elements
are accounted for but there is lacking the undeniable strength of
the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less
well established.

MIG 4/VMIG 4 -- Denotes adequate quality. Protection commonly
regarded as required of an investment security is present and,
although not distinctly or predominantly speculative, there is
specific risk.

SG -- Denotes speculative quality. Debt instruments in this
category lack margins of protection.

Standard & Poor's Corporation

SP-1 -- Very strong or strong capacity to pay principal and
interest. Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.

SP-2 -- Satisfactory capacity to pay principal and interest.

SP-3 -- Speculative capacity to pay principal and interest.

PUTNAM CAPITAL MANAGER TRUST

PROSPECTUS - MAY 1, 1995

Putnam Capital Manager Trust (the "Trust") offers shares of
beneficial interest in separate investment portfolios
(collectively , the "Funds") for purchase by separate
accounts of various insurance companies. The Funds, which have
different investment objectives and policies, offered by this
Prospectus are: PCM Diversified Income Fund, PCM Global
Asset Allocation Fund, PCM Global Growth Fund and
PCM U.S. Government and High Quality Bond Fund .

PCM Diversified Income Fund may invest significantly
in lower-rated bonds, commonly known as "junk bonds."
Investments of this type are subject to a greater risk of loss of
principal and non-payment of interest. Investors should
carefully assess the risks associated with an investment in
the Fund.

What you need to know

ABOUT THE TRUST 2

Financial highlights ...................................2
TheTrust .............................................. 4
Investment objectives and policies of the
Funds ........4
Common investment policies and
techniques .............12
How performance is
shown ..............................17
How the Trust is
managed ..............................18
Organization and
history ..............................19

ABOUT YOUR INVESTMENT 20

Sales and
redemptions .................................20
How the Trust values its
shares .......................21
How distributions are made; tax
information ...........21
Financial
information .................................21

ABOUT PUTNAM INVESTMENTS, INC. ........................22

APPENDIX..............................................23<PAGE>

About the Trust

FINANCIAL HIGHLIGHTS

Financial Highlights*
(For a share outstanding throughout the period)

(The tables appear on pages 3a - 3d)
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights

Investment Operations Less
Net Distributions
Realized and From From
Net Unrealized Total from Net Net Realized
Year (Period) Net Asset Value Investment Gain (Loss) on Investment Investment Gain on
Ended Beginning of Period Income Investments Operations Income Investments
<S> <C> <C> <C> <C> <C> <C>
PCM Diversified Income Fund
December 31, 1994 $10.23 $.61 $(1.04) $(.43) $(.06) $-
December 31, 1993*** 10.00 .06 .17 .23 - -

/TABLE
<PAGE>
<TABLE> <CAPTION> Ratio of
Less Total Net Net
Distributions Net Asset Investment Assets, Ratio of Investment
In Excess of From: Value, Return at End of Expenses to Income to
Realized GainPaid-in Total End of Net Asset Period (in Average Net Average Net Portfolio
on InvestmentsCapitalDistributions Period Value(%)(b)thousands) Assets(%) Assets(%) Turnover(%)
<C> <C> <C> <C> <C> <C> <C> <C> <C>
$ - $- $(.06) $9.74 (4.23) $215,935 .80 7.60 165.17
- - - 10.23 2.30(c) 80,449 .28(c) 1.45(c) 40.83(c)

$- $- $(.07) $13.48 (0.96) $669,821 .77 1.21 41.55
- - (.16) 13.68 32.40 352,786 .75 1.38 47.00
- - (.09) 10.48 (.36) 86,854 .85 1.82 59.68
- - (.10) 10.61 15.01 40,183 .99 2.01 48.67
- - - 9.32 (6.80)(c) 13,203 .99(c) 2.35(c) 18.07(c)

$- $- $(.88) $12.22 (3.23) $640,458 .67 6.24 118.34
- - (.73) 13.53 11.28 735,386 .64 6.16 94.01
- - (.60) 12.85 7.49 435,906 .70 6.98 45.82
- - (.66) 12.57 17.28 229,306 .74 7.57 59.29
- - (.25) 11.36 7.51 98,549 .76 8.24 32.70
- - (.86) 10.82 14.06 61,765 .76 8.32 27.81
- - - 10.28 2.78(c) 28,406 .87(c) 7.04(c) 41.41(c)
<PAGE>
(a) Per share net investment income has been determined on the basis of the weighted average number of shares
outstanding during the period.
(b) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) Not annualized.
* For the period February 1, 1988 (commencement of operations) to December 31, 1988.
** For the period May 1, 1990 (commencement of operations) to December 31, 1990.
*** For the period September 15, 1993 (commencement of operations) to December 31, 1993.

</TABLE> <PAGE>
THE TRUST

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS

Glossary

The following terms are frequently used in this Prospectus.
Many of these terms are explained in greater detail under
"Common investment policies and techniques."

"Putnam Management" -- Putnam Investment
Management, Inc., the Trust's
investment manager

"S&P" -- Standard & Poor's
Corporation

"Moody's" -- Moody's Investors
Service, Inc.

"U.S. Government Securities" -- debt securities issued or
guaranteed by the U.S.
government, by various of its
agencies, or by various
instrumentalities established
or sponsored by the U.S.
government. Certain U.S.
Government Securities,
including U.S. Treasury bills,
notes and bonds, mortgage
participation certificates
guaranteed by Ginnie Mae, and
Federal Housing Administration
debentures, are supported by
the full faith and credit of
the United States. Other U.S.
Government Securities issued
or guaranteed by federal
agencies or government-
sponsored enterprises are not
supported by the full faith
and credit of the United
States. These securities
include obligations supported
by the right of the issuer to
borrow from the U.S. Treasury,
such as obligations of Federal
Home Loan Banks, and
obligations supported only by
the credit of the
instrumentality, such as
Fannie Mae bonds.

"CMOs" -- collateralized mortgage
obligations

"Ginnie Mae" -- Government National Mortgage
Association

"Fannie Mae" -- Federal National Mortgage
Association

"Freddie Mac"-- Federal Home Loan Mortgage
Corporation

PCM DIVERSIFIED INCOME FUND

* a U.S. Government Sector, consisting primarily of debt
obligations of the U.S. government, its agencies and
instrumentalities;

* a High Yield Sector, consisting of high-yielding, lower-rated,
higher risk U.S. and foreign fixed income securities
(sometimes referred to as "junk bonds") ; and

<PAGE>
* an International Sector, consisting of obligations of foreign
governments, their agencies and instrumentalities, and other
fixed income securities denominated in foreign currencies.

PCM Diversified Income Fund will generally be managed in a style
similar to that of Putnam Diversified Income Trust .

U.S. Government Sector

The Fund will invest assets allocated to the U.S. Government
Sector primarily in U.S. Government Securities.

High Yield Sector

International Sector

The Fund will invest the assets allocated to the International
Sector in debt obligations and other fixed income securities
denominated in non-U.S. currencies. These securities include:

* debt obligations issued or guaranteed by foreign, national,
provincial, state, or other governments with taxing
authority, or by their agencies or instrumentalities;

* debt obligations of supranational entities (described below);
and

* debt obligations and other fixed income securities of foreign
and U.S. corporate issuers.

When investing in the International Sector, the Fund will
purchase only debt securities of issuers whose long-term debt
obligations are rated A or better at the time of purchase by
Moody's or S&P or that are unrated securities
determined by Putnam Management to be of
comparable quality. The Fund will not necessarily dispose of a
security if its rating is reduced below its rating at the time
of purchase , although Putnam Management will monitor the
investment to determine whether continued investment in the
security will assist in meeting the Fund's investment objective.
The Fund may, however, make investments in international debt
securities rated below A with respect to assets allocated to the
High Yield Sector.

For a discussion of the risks associated with foreign
investments, see "Common investment policies and techniques --
Foreign investments ."

PCM GLOBAL ASSET ALLOCATION FUND

U.S. Equities
International Equities
U.S. Fixed Income
International Fixed Income

The Fund may engage in defensive strategies when Putnam
Management judges that conditions in the securities markets make
pursuing the Fund's basic investment strategy inconsistent with
the best interests of the Fund's shareholders. When pursuing
such defensive strategies, the Fund may invest without limit in
securities primarily traded in U.S. markets. See "Common
investment policies and techniques" below for a discussion of
these strategies. The Fund may invest in premium securities,
engage in foreign currency exchange transactions) and
transactions in futures and options, enter into repurchase
agreements, loan its portfolio securities and purchase securities
for future delivery. See "Common investment policies and
techniques" below for a discussion of these securities and types
of transactions and the risks associated with them. The Fund
may also hold a portion of its assets in cash and money
market instruments.

PCM GLOBAL GROWTH FUND

The Fund may also engage in foreign currency exchange
transactions and transactions in futures and options, enter
into repurchase agreements, loan its portfolio securities and
purchase securities for future delivery. See "Common investment
policies and techniques" below for a discussion of these
securities and types of transactions and the risks associated
with them. The Fund may engage in defensive strategies when
Putnam Management judges that conditions in the securities
markets make pursuing the Fund's basic investment strategy
inconsistent with the best interests of the Fund's shareholders.
In addition, when pursuing such defensive strategies, the Fund
may invest without limit in securities primarily traded in U.S.
markets. See "Common investment policies and techniques" below
for a discussion of these strategies.

PCM Global Growth Fund will generally be managed in a style
similar to that of Putnam Global Growth Fund.

PCM U.S. GOVERNMENT AND HIGH QUALITY BOND FUND

Putnam Management will allocate the Fund's assets between U.S.
Government Securities and in other high quality bonds, depending
on its assessment of market conditions and the relative
investment returns available from such securities. The Fund will
not, however, make any investment, if, as a result, less than 25%
of the value of its assets would be invested in U.S. Government
Securities. The Fund may also invest up to 10% of its
assets in foreign securities. For a discussion of the risks
associated with foreign investments, see "Common investment
policies and techniques -- Foreign investments ." The Fund may
also invest in premium securities, engage in foreign currency
exchange transactions and transactions in futures and options,
enter into repurchase agreements, loan its portfolio securities
and purchase securities for future delivery. See "Common
investment policies and techniques" below for a discussion of
these strategies and the risks associated with them. The Fund
may also hold a portion of its assets in cash and money market
instruments. The Fund may engage in defensive strategies when
Putnam Management judges that conditions in the securities
markets make pursuing the Fund's basic investment strategy
inconsistent with the best interests of the Fund's shareholders.
See "Common investment policies and techniques" below for a
discussion of these strategies.

GENERAL

COMMON INVESTMENT POLICIES AND TECHNIQUES

Defensive strategies

Portfolio turnover

Investments in premium securities

The Funds may invest in securities bearing coupon rates
higher than prevailing market rates. Such "premium" securities
are typically purchased at prices greater than the principal
amounts payable on maturity. A Fund does not amortize the premium
paid for such securities in calculating its net investment
income. As a result, the purchase of such securities provides a
Fund a higher level of investment income distributable to
shareholders on a current basis than if the Fund had purchased
securities bearing current market rates of interest. Because the
value of premium securities tends to approach the principal
amount as they approach maturity (or call price in the case of
securities approaching their first call date), the purchase of
such securities will increase a Fund's risk of capital loss if
such securities are held to maturity (or first call date).

<PAGE>
Foreign investments

A more detailed explanation of foreign investments, and the risks
and special tax considerations associated with them, is included
in the Statement of Additional Information.

Foreign currency exchange transactions

<PAGE>
A Fund may engage in transaction hedging to protect against a
change in currency exchange rates between the date on which a
Fund contracts to purchase or sell the security and the
settlement date, or to "lock in" the value of a dividend or
interest payment in a particular currency. For that purpose, a
Fund may purchase or sell a 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.

For a discussion of the risks associated with options and
futures strategies in connection with a Fund's foreign currency
exchange transactions, see "Risks related to options and futures
strategies."

Options and futures

Futures and options on futures. Each Fund that may invest in
futures and options, as described above, may, to the extent
consistent with their investment objectives and policies,
buy and sell index futures contracts ("index futures") for
hedging purposes. An "index future" is a contract to buy or sell
units of a particular bond or stock index at an agreed price on a
specified future date. Depending on the change in value of the
index between the time when a Fund enters into and terminates an
index future transaction, the Fund realizes a gain or loss. A
Fund may also, to the extent consistent with its investment
objectives and policies, buy and sell call and put options on
index futures or on stock or bond indices in addition to or as an
alternative to buying or selling index futures or, to the extent
permitted by applicable law, to earn additional income. In
addition, if a Fund's investment policies permit it to invest in
foreign securities, such Fund may invest in futures and options
on foreign securities, to the extent permitted by applicable law,
as a substitute for direct investment in foreign securities.

Risks related to options and futures strategies .

A more detailed explanation of futures and options transactions,
including the risks associated with them, is included in the
Statement of Additional Information.

Lower-rated and other fixed income securities

As described above, certain of the Funds may invest in
lower-rated fixed income securities (commonly known as "junk
bonds"). Differing yields on fixed income securities of
the same maturity are a function of several factors, including
the relative financial strength of the issuers. Higher yields
are generally available from securities in the lower categories
of recognized rating agencies (Baa or lower by Moody's
and BBB or lower by S&P) or from unrated securities of
comparable quality. Securities in the rating categories below
Baa as determined by Moody's and BBB as determined by S&P are
considered to be of poor standing and predominantly speculative.
The rating services' descriptions of securities in the lower
rating categories, including their speculative characteristics,
are set forth in the Appendix to this Prospectus.

of these investments. Changes in the value of portfolio
securities generally will not affect income derived from
such securities, but will affect a Fund's net asset value.

Certain investment - grade securities in which a Fund may
invest share some of the risk factors discussed above with
respect to lower-rated securities.

<PAGE>
Mortgage-backed and asset-backed securities

Mortgage-backed and asset-backed securities have yield
and maturity characteristics corresponding to the underlying
assets. Thus, unlike traditional debt securities, which may pay
a fixed rate of interest until maturity when the entire principal
amount comes due, payments on certain mortgage-backed and asset-
backed securities include both interest and a partial payment of
principal. In addition to scheduled loan amortization, payments
of principal may result from voluntary prepayment, refinancing or
foreclosure of the underlying mortgage loans or other assets.
Such prepayments significantly shorten the effective maturities
of the securities, especially during periods of declining
interest rates.

Securities loans, repurchase agreements and forward commitments

Each Fund may lend portfolio securities amounting to not more
than 25% of its assets to broker-dealers and 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 the Fund
is delayed or prevented from recovering the collateral or
completing the transaction.

HOW PERFORMANCE IS SHOWN

Each Fund's investment performance may from time to time be
included in advertisements about that Fund. For Funds ,
"yield" is calculated by dividing a Fund's annualized net
investment income per share during a recent 30-day period by the
net asset value per share on the last day of that period. For
this purpose, net investment income is calculated in accordance
with SEC regulations and may differ from a Fund's 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. A Fund's current dividend rate is based on its net
investment income as determined for tax purposes, which may not
reflect amortization in the same manner. See "Common investment
policies and techniques -- Investments in premium securities."

For performance information through the Funds' most recent fiscal
year, see "Investment Performance of the Trust" in the Statement
of Additional Information.
<PAGE>
HOW THE TRUST IS MANAGED

Michael Martino, Managing Director of Putnam Management, D.
William Kohli and Jennifer E. Leichter, each a Senior Vice
President of Putnam Management , and Neil J. Powers and
Mark J. Siegel, each a Vice President of Putnam Management, each
of whom is a Vice President of the Trust, have had
primary responsibility for the day-to-day management of PCM
Diversified Income Fund's portfolio since 1993 for Ms.
Leichter, and 1994 for Messrs. Martino, Kohli, Powers and
Siegel . Ms. Leichter and Mr. Powers have been employed by
Putnam Management since 1987 and 1986, respectively. Mr. Martino
has been employed by Putnam Management since January,
1994. Prior to January, 1994, Mr . Martino was
employed by Back Bay Advisors in the positions of Executive Vice
President and Chief Investment Officer from 1992 to 1994,
and Senior Vice President and Senior Portfolio Manager
from 1990 to 1992 . Mr. Kohli has been employed by Putnam
Management since September, 1994. Prior to
September, 1994, Mr. Kohli was Executive Vice
President , and Co-Director of Global Bond Management and,
prior to October, 1993, Senior Portfolio Manager, at
Franklin Advisors/Templeton Investment Counsel. Mr. Siegel has
been employed by Putnam Management since June, 1993.
Prior to June, 1993, Mr. Siegel was Vice President of
Salomon Brothers International Ltd .

Kenneth J. Taubes, Senior Vice President of Putnam
Management and Vice President of the Trust, has had primary
responsibility for the day-to-day management of PCM U.S.
Government and High Quality Bond Fund's portfolio since 1993.
Mr. Taubes has been employed by Putnam Management since 1991.
Prior to 1991, Mr. Taubes was Senior Vice President of the
Finance Division of U.S. Trust Company.

Total expenses, including management fees, for the fiscal year
ended December 31, 1994, based on each Fund's average net assets,
were:
Total Management
Expenses Fees
---------- -----------

PCM Diversified Income Fund 0.80% 0.67%
PCM Global Asset Allocation Fund 0.76% 0.66%
PCM Global Growth Fund 0.77% 0.60%
PCM U.S. Government and High
Quality Bond Fund* 0.67% 0.60%

On June 2, 1994, the shareholders of two of the funds approved
new management fees payable to Putnam Management. If the
new rates had been in effect for the entire
year , management fees would have been the
following: PCM Diversified Income Fund, 0.70%; and PCM Global
Asset Allocation Fund, 0.70%;

* On January 6, 1995, the Trustees approved a
proposal to change the fees payable to Putnam Management under
the Management Contract for PCM U.S. Government and High Quality
Bond Fund.

The proposed change is subject to shareholder approval and will
be submitted to shareholders at a meeting scheduled for July 13,
1995.

ORGANIZATION AND HISTORY

The Trust is an open-end, management investment company with an
unlimited number of authorized shares of beneficial interest.
Shares of the Trust may, without shareholder approval, be divided
into two or more series of shares representing separate
investment portfolios, and are currently divided into eleven
series of shares, each representing a separate investment
portfolio which is being offered through separate accounts of
various insurance companies. Each portfolio is managed as a
diversified investment company . Until April 30, 1991, PCM
Global Growth Fund was known as PCM International Equities Fund.
Until September 1, 1993, PCM Global Asset Allocation Fund was
known as PCM Multi-Strategy Fund. Shares vote by individual
portfolio on all matters except (i) when required by the
Investment Company Act of 1940, shares of all portfolios shall be
voted in the aggregate, and (ii) when the Trustees have
determined that the matter affects only the interests of one or
more portfolios, only the shareholders of such portfolio or
portfolios shall be entitled to vote.

About your investment

SALES AND REDEMPTIONS

Funds may, at its expense, provide promotional incentives to
dealers that sell variable insurance products.

Shares are sold or redeemed at the net asset value per share next
determined after receipt of an order . Orders for
purchases or sales of shares of a Fund must be received by Putnam
Mutual Funds before the close of regular trading on the New York
Stock Exchange in order to receive that day's net asset value.
No fee is charged to a separate account when it redeems Fund
shares.

Under unusual circumstances, the Trust may suspend repurchases or
postpone payment for up to seven days or longer, as permitted by
federal securities law.

EXCHANGE PRIVILEGE

HOW THE TRUST VALUES ITS SHARES

The Trust calculates the net asset value of a share of each Fund
by dividing the total value of the assets of the Fund, less
liabilities, by the number of shares of the Fund outstanding.
Shares are valued as of the close of regular trading on the New
York Stock Exchange each day the Exchange is open. Fund
securities for which market quotations are readily available are
stated at market value. Short-term investments that will mature
in 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.

HOW DISTRIBUTIONS ARE MADE; TAX INFORMATION

Each of the Funds will distribute any net
investment income and net realized capital gains at least
annually. Both types of distributions will be made in shares of
such Funds unless an election is made on behalf of a separate
account to receive some or all of the distributions in cash.

Distributions are reinvested without a sales charge, using the
net asset value determined on the ex-dividend date .

FINANCIAL INFORMATION

SECURITIES RATINGS

The following rating services describe rated securities as
follows:

Moody's Investors Service, Inc.

Bonds

B--Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over
any long period of time may be small.
<PAGE>
Caa--Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with
respect to principal or interest.

Ca--Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default
or have other marked shortcomings.

C - Bonds which are rated C are the lowest rated class of bonds
and issues so rated can be regarded as having extremely poor
prospects of ever earning any real investment standing.

Standard & Poor's Corporation

Bonds

AAA--Debt rated AAA has the highest rating assigned by Standard &
Poor's. 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 higher-rated issues only in
small degree.

PUTNAM CAPITAL MANAGER TRUST

PROSPECTUS - MAY 1, 1995

ABOUT THE TRUST

Financial highlights 2
The Trust 6
Investment objectives and policies of the Funds 6
Common investment policies and techniques 13
How performance is shown 22
How the Trust is managed 23
Organization and history 25

ABOUT YOUR INVESTMENT

Sales and redemptions 27
How the Trust values its shares 28
How distributions are made; tax information 28
Financial information 29

ABOUT PUTNAM INVESTMENTS, INC. 29

APPENDIX 30

About the Trust

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>Financial highlights (For a share outstanding throughout the period)

Investment Operations

Net Less
Realized and Distributions From:
Net Unrealized Total from Net Net Realized
Year (Period) Net Asset Value, Investment Gain (Loss) on Investment Investment Gain on
Ended Beginning of Period Income Investments Operations Income Investments
<S> <C> <C> <C> <C> <C> <C>
PCM Voyager Fund
December 31, 1994 $22.41 $.07 $.14 $.21 $(.05) $(.37)
December 31, 1993 19.21 .04 3.50 3.54 (.07) (.27)
December 31, 1992 17.94 .07 1.72 1.79 (.08) (.44)
December 31, 1991 (a) 12.58 .11 5.61 5.72 (.12) (.24)
December 31, 1990 13.00 .18 (.45) (.27) (.06) (.09)
December 31, 1989 10.30 .12 3.20 3.32 (.16) (.46)
December 31, 1988*(a) 10.00 .13 .17 .30 - -
PCM Growth and Income Fund
December 31, 1994 $17.38 $.50 $(0.48) $.02 $(.38) $(.58)
December 31, 1993 15.93 .38 1.83 2.21 (.39) (.37)
December 31, 1992 15.33 .39 1.04 1.43 (.42) (.41)
December 31, 1991 13.51 .43 2.09 2.52 (.53) (.17)
December 31, 1990 13.41 .55 (.29) .26 (.05) (.11)
December 31, 1989 12.00 .45 2.04 2.49 (.60) (.48)
December 31, 1988*(a) 10.00 .42 1.58 2.00 - -
PCM U.S. Government and
High Quality Bond Fund
December 31, 1994 $13.53 $.81 $(1.24) $(.43) $(.66) $(.22)
December 31, 1993 12.85 .63 .78 1.41 (.61) (.12)
December 31, 1992 12.57 .60 .28 .88 (.54) (.06)
December 31, 1991 11.36 .56 1.31 1.87 (.66) -
December 31, 1990 10.82 .71 .08 .79 (.22) (.03)
December 31, 1989 10.28 .62 .78 1.40 (.79) (.07)
December 31, 1988*(a) 10.00 .66 (.38) .28 - -
PCM Money Market Fund
December 31, 1994 $1.00 $.0377 $ - $.0377 $(.0377) $ -
December 31, 1993 1.00 .0276 - .0276 (.0276) -
December 31, 1992 1.00 .0352 - .0352 (.0352) -
December 31, 1991 1.00 .0575 .0001 .0576 (.0575) (.0001)
December 31, 1990 1.00 .0770 - .0770 (.0770) -
December 31, 1989 1.00 .0859 - .0859 (.0859) -
December 31, 1988* 1.00 .0575 - .0575 (.0575) -
</TABLE>
<TABLE>
<CAPTION>

Ratio of
Less Total Net
Distributions Investment Ratio of Investment
From: Net Asset Return at Net Assets, Expenses to Income to
Paid-in Total Value, End Net Asset End of Period Average Net Average Net Portfolio
Capital Distributions of Period Value (%)(b) (in thousands) Assets (%) Assets (%) Turnover (%)
<C> <C> <C> <C> <C> <C> <C> <C>
$ - $(.42) $22.20 1.04 $1,026,972 .71 .40 62.44
- (.34) 22.41 18.70 675,198 .66 .33 55.85
- (.52) 19.21 10.36 317,225 .75 .56 48.17
- (.36) 17.94 46.09 156,741 .81 .78 55.04
- (.15) 12.58 (2.03) 48,414 .88 1.58 93.65
- (.62) 13.00 32.38 39,998 .82 1.93 91.82
- - 10.30 2.98(c) 7,981 1.35(c) 1.44(c) 103.99(c)
$ - $(.96) $16.44 0.35 $1,907,380 .62 3.64 46.43
- (.76) 17.38 14.27 1,407,382 .64 3.49 62.63
- (.83) 15.93 9.75 641,508 .69 3.79 39.58
- (.70) 15.33 19.05 325,861 .72 4.37 37.94
- (.16) 13.51 1.96 155,942 .75 5.02 49.39
- (1.08) 13.41 21.30 100,335 .74 5.73 73.40
- - 12.00 19.89(c) 26,205 .92(c) 4.08(c) 37.94(c)
$ - $(.88) $12.22 (3.23) $640,458 .67 6.24 118.34
- (.73) 13.53 11.28 735,386 .64 6.16 94.01
- (.60) 12.85 7.49 435,906 .70 6.98 45.82
- (.66) 12.57 17.28 229,306 .74 7.57 59.29
- (.25) 11.36 7.51 98,549 .76 8.24 32.70
- (.86) 10.82 14.06 61,765 .76 8.32 27.81
- - 10.28 2.78(c) 28,406 .87(c) 7.04(c) 41.41(c)
$ - $(.0377) $1.00 3.82 $244,064 .55 3.90 -
- (.0276) 1.00 2.79 129,329 .42 2.77 -
- (.0352) 1.00 3.57 105,694 .48 3.49 -
- (.0576) 1.00 5.92 78,568 .50 5.74 -
- (.0770) 1.00 7.98 77,892 .53 7.67 -
- (.0859) 1.00 8.88 24,975 .63 8.62 -
- (.0575) 1.00 5.84(c) 14,001 .71(c) 6.70(c) -
* For the period February 1, 1988 (commencement of operations) to December 31, 1988.
(a) Per share net investment income has been determined on the basis of the weighted average number of shares
outstanding during the period.
(b) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) Not annualized.
</TABLE>
<PAGE>
THE TRUST

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS

Additional portfolios may be created from time to time with
different investment objectives and policies for use as funding
vehicles for insurance company separate accounts or for other
insurance products. In addition, the Trustees may, subject to
any necessary regulatory approvals, eliminate any Fund or
divide any Fund into two or more classes of shares with such
special or relative rights and privileges as the Trustees may
determine.

Glossary

The following terms are frequently used in this Prospectus. Many
of these terms are explained in greater detail under "Common
investment policies and techniques."

"Putnam Management" -- Putnam Investment Management,
Inc., the Trust's investment
manager

"S&P" -- Standard & Poor's Corporation

"Moody's" -- Moody's Investors Service,
Inc.
<PAGE>
"U.S. Government Securities" -- debt securities
issued or guaranteed by the
U.S. government, by
various of its
agencies, or by
various
instrumentalities
established or
sponsored by the
U.S. government.
Certain U.S.
Government
Securities,
including U.S.
Treasury bills,
notes and bonds,
mortgage
participation
certificates
guaranteed by
Ginnie Mae ,
and Federal Housing
Administration
debentures, are
supported by the
full faith and
credit of the United
States. Other U.S.
Government
Securities issued or
guaranteed by
federal agencies or
government-sponsored
enterprises are not
supported by the
full faith and
credit of the United
States. These
securities include
obligations
supported by the
right of the issuer
to borrow from the
U.S. Treasury, such
as obligations of
Federal Home Loan
Banks, and
obligations
supported only by
the credit of the
instrumentality,
such as Fannie
Mae bonds.

"CMOs" -- collateralized mortgage
obligations

"Ginnie Mae" -- Government National Mortgage
Association

"Fannie Mae" -- Federal National Mortgage
Association

"Freddie Mac" -- Federal Home Loan Mortgage
Corporation

PCM GROWTH AND INCOME FUND

The Fund may invest up to 20% of its assets in securities
principally traded in foreign markets. For a discussion of the
risks associated with foreign investments, see "Common investment
policies and techniques -- Foreign investments ." The Fund
may invest in both higher-rated and lower-rated fixed-income
securities. The risks associated with fixed income securities,
including lower-rated fixed - income securities (commonly
known as "junk bonds") , are discussed below under "Common
investment policies and techniques -- Lower-rated and other fixed
income securities."

PCM Growth and Income Fund will generally be managed in a style
similar to that of The Putnam Fund for Growth and Income.

PCM MONEY MARKET FUND

The Fund invests in a portfolio of high-quality money market
instruments. Examples of these instruments include:

* bank certificates of deposit (CDs) : negotiable
certificates issued against funds deposited in a commercial
bank for a definite period of time and earning a specified
return.

* prime commercial paper: high-grade, short-term obligations
issued by banks, corporations and other issuers.

* corporate obligations: high-grade, short-term corporate
obligations other than prime commercial paper.
<PAGE>
* municipal obligations: high-grade, short-term municipal
obligations.

* U.S. Government Securities : marketable securities
issued or guaranteed as to principal and interest by the U.S.
government or by its agencies or instrumentalities.

* repurchase agreements: with respect to U.S. Treasury or U.S.
government agency obligations.

The Fund may also lend its portfolio securities. For a
discussion of this strategy and the risks associated with it, see
"Common investment policies and techniques" below.

PCM Money Market Fund will generally be managed in a style
similar to that of Putnam Money Market Fund.

PCM U.S. GOVERNMENT AND HIGH QUALITY BOND FUND

PCM VOYAGER FUND

PCM Voyager Fund seeks capital appreciation as its investment
objective . It is designed for investors willing to assume
above-average risk in return for above-average capital growth
potential. The Fund invests primarily in common stocks which
Putnam Management believes have potential for capital
appreciation that is significantly greater than that of
the market averages. The Fund does not choose investments
for dividend and interest income. It may also purchase
convertible bonds, convertible preferred stocks, warrants,
preferred stocks and debt securities if Putnam Management
believes they would help achieve the Fund's objective. The Fund
may also hold a portion of its assets in cash and money
market instruments and may invest up to 20% of its assets
in foreign securities. For a discussion of the risks associated
with foreign investments, see "Common investment policies and
techniques -- Foreign investments ." The Fund may also engage
in foreign currency exchange transactions and transactions
in futures and options, enter into repurchase agreements, loan
its portfolio securities and purchase securities for future
delivery. See "Common investment policies and techniques" below
for a discussion of these securities and types of transactions
and the risks associated with them. The Fund may engage in
defensive strategies when Putnam Management judges that
conditions in the securities markets make pursuing the Fund's
basic investment strategy inconsistent with the best interest of
the Fund's shareholders. See "Common investment policies and
techniques" below for a discussion of these strategies.

PCM Voyager Fund will generally be managed in a style similar to
that of Putnam Voyager Fund.

GENERAL

COMMON INVESTMENT POLICIES AND TECHNIQUES

Defensive strategies

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 , the 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 mark-ups and other transaction costs on the
sale of securities and reinvestment in other securities. Such
transactions may result in realization of taxable capital gains.
Portfolio turnover rates for the life of each Fund are
shown in "Financial highlights."

Investments in premium securities

Foreign investments

A more detailed explanation of foreign investments, and the risks
and special tax considerations associated with them, is included
in the Statement of Additional Information.

Foreign currency exchange transactions

To the extent described above, certain of the Funds may
engage in currency exchange transactions to protect against
uncertainty in the level of future exchange rates. Putnam
Management may engage in currency exchange transactions in
connection with the purchase and sale of portfolio securities
("transaction hedging"), and to protect the value of specific
portfolio positions ("position hedging").
<PAGE>
A Fund may engage in transaction hedging to protect against a
change in currency exchange rates between the date on which a
Fund contracts to purchase or sell the security and the
settlement date, or to "lock in" the value of a dividend or
interest payment in a particular currency. For that purpose, a
Fund may purchase or sell a 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.

For a discussion of the risks associated with options and
futures strategies in connection with a Fund's foreign currency
exchange transactions, see "Risks related to options and futures
strategies."

Options and futures

Options. As described above, certain of the Funds may, to
the extent consistent with their investment objectives and
policies, seek to increase its current return by writing covered
call and put options on securities such Funds own or in
which they may invest. A Fund receives a premium from
writing a call or put option, which increases the Fund's return
if the option expires unexercised or is closed out at a net
profit. When a Fund writes a call option, it gives up the
opportunity to profit from any increase in the price of a
security above the exercise price of the option; when it writes a
put option, the Fund takes the risk that it will be required to
purchase a security from the option holder at a price above the
current market price of the security. Each 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. Each Fund
may also, to the extent consistent with its investment objectives
and policies, buy and sell put and call options for hedging
purposes and from time to time buy and sell combinations of put
and call options on the same underlying security to earn
additional income. The aggregate value of the securities
underlying the options may not exceed 25% of the relevant Fund's
assets.

Risks related to options and futures strategies

A more detailed explanation of futures and options transactions,
including the risks associated with them, is included in the
Statement of Additional Information.

Lower-rated and other fixed income securities

Investors should carefully consider their ability to assume the
risks of investing in a mutual fund which invests in
lower-rated securities before allocating a portion of their
insurance investment to a Fund that invests in such securities.
The lower ratings of certain securities held by a 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
payments of interest and principal would likely make the values
of securities held by a 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 or S&P
does not reflect an assessment of the volatility of the
security's market value or of the liquidity of an investment
in the security.

Certain investment - grade securities in which a Fund may
invest share some of the risk factors discussed above with
respect to lower-rated securities.

<PAGE>
Mortgage-backed and asset-backed securities

As described above, certain of the Funds may invest
in asset-backed and mortgage-backed securities, such as
CMOs, including stripped mortgage-backed securities. CMOs
and other mortgage-backed securities represent
participations in, or are secured by, mortgage loans.
Stripped mortgage-backed securities are usually structured with
two classes that receive different portions of the interest and
principal distributions on a pool of mortgage assets. A Fund
which purchases mortgage-backed securities may invest in
both the interest-only or "IO" class and the principal-only or
"PO" class. The yield to maturity on an IO class is extremely
sensitive not only to changes in prevailing interest rates but
also to the rate of principal payments (including prepayments) on
the related underlying mortgage assets, and a rapid rate of
principal payments may have a material adverse effect on
the Fund's yield to maturity to the extent it invests in
IOs. If the underlying mortgage assets experience greater than
anticipated prepayments of principal, the Fund may fail to
fully recoup its initial investment in these securities.
Conversely, POs tend to increase in value if prepayments are
greater than anticipated and decline if prepayments are slower
than anticipated. The secondary market for stripped mortgage-
backed securities may be less liquid than that for other
mortgage-backed securities, potentially limiting the
Fund's ability to buy or sell those securities at any particular
time.

Due to their prepayment aspect, mortgage-backed and asset-backed
securities are less effective than other types of securities as a
means of "locking in" attractive long-term interest rates. This
is caused by the need to reinvest prepayments of principal
generally and the possibility of significant unscheduled
prepayments resulting from declines in interest rates. These
prepayments would have to be reinvested at lower rates. As a
result, these securities may have less potential for capital
appreciation during periods of declining interest rates than
other securities of comparable maturities, although they may have
a comparable risk of decline in market value during periods of
rising interest rates. At times, some of the mortgage-backed and
asset-backed securities in which the Fund may invest will
have higher than market interest rates, and will therefore be
purchased at a premium above their par value. Unscheduled
prepayments, which are made at par, will cause the Fund to
suffer a loss equal to any unamortized premium.

Securities loans, repurchase agreements and forward commitments

HOW PERFORMANCE IS SHOWN

For performance information through the Fund's most recent
fiscal year, see "Investment Performance of the Trust" in the
Statement of Additional Information.
<PAGE>
HOW THE TRUST IS MANAGED

Lindsey M. Callen, Vice President of Putnam Management
and Vice President of the Trust, has had primary responsibility
for the day-to-day management of PCM Money Market Fund's
portfolio since 1992. Ms. Callen has been employed by Putnam
Management since 1984.

Kenneth J. Taubes, Senior Vice President of Putnam Management and
Vice President of the Trust, has had primary responsibility for
the day-to-day management of PCM U.S. Government and High Quality
Bond Fund's portfolio since 1993. Mr. Taubes has been employed
by Putnam Management since 1991. Prior to 1991, Mr. Taubes was
Senior Vice President of the Finance Division of U.S. Trust
Company.

Roland W. Gillis, Robert R. Beck and Charles H. Swanberg, each
a Senior Vice President of Putnam Management and Vice
President of the Trust, have had primary responsibility
for the day-to-day management of PCM Voyager Fund's
portfolio since 1995, 1995 and 1994 , respectively.
Mr. Gillis has been employed by Putnam Management since
March, 1995. Prior to March, 1995, Mr. Gillis was Vice
President of Keystone Custodian Funds, Inc. Messrs. Beck and
Swanberg have been employed by Putnam Management since 1989 and
1984 , respectively.

The Trust, on behalf of the Funds, pays all expenses not assumed
by Putnam Management, including Trustees' fees and auditing,
legal, custodial, investor servicing and shareholder reporting
expenses. The Trust also reimburses Putnam Management for the
compensation and related expenses of certain officers of the
Trust and their staff who provide administrative services to the
Trust. The total reimbursement is determined annually by the
Trustees.
<PAGE>
General expenses of the Trust will be allocated among and charged
to the assets of each Fund on a basis that the Trustees deem fair
and equitable, which may be based on the relative assets of each
Fund or the nature of the services performed and relative
applicability to each Fund. Expenses directly charged or
attributable to a Fund will be paid from the assets of that Fund.

Total expenses, including management fees, for the fiscal year
ended December 31, 1994, based on each Fund's average net assets,
were:
Total Management
Expenses Fees

PCM Growth and Income Fund 0.62% 0.57%
PCM Money Market Fund 0.55% 0.42%
PCM U.S. Government and High
Quality Bond Fund* 0.67% 0.60%
PCM Voyager Fund 0.71% 0.63%

On June 2, 1994, the shareholders of three of the funds
approved new management fees payable to Putnam Management.
If the new rates had been in effect for the entire
year , management fees would have been the
following: PCM Growth and Income Fund, 0.55%; PCM Money Market
Fund, 0.45%; and PCM Voyager Fund, 0.66% .

* On January 6, 1995, the Trustees approved a
proposal to change the fees payable to Putnam Management
under the Management Contract for PCM U.S. Government and
High Quality Bond Fund.

The proposed changes are subject to shareholder
approval and will be submitted to shareholders at a meeting
scheduled for July 13, 1995.

If the proposed change is approved by shareholders,
management fees for PCM U.S. Government and High Quality
Bond Fund would thereafter be paid at the following annual
rates: 0.65% of the first $500 million of average net
assets, 0.55% of the next $500 million, 0.50% of the next
$500 million, 0.45% of the next $5 billion, 0.425%
of the next $5 billion, 0.405% of the next $5 billion, 0.39%
of the next $5 billion, and 0.38% of any excess
thereafter. The proposed change would result in an
increase in the fees payable by the Fund based on its net
assets as of December 31, 1994.
<PAGE>
Putnam Management places all orders for purchases and sales of
the securities of each Fund. 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, if
permitted by law, sales of shares of the other Putnam funds as a
factor in the selection of broker-dealers.

Putnam Management may from time to time make payments out of
its own assets and revenues to insurance companies whose separate
accounts invest in the Trust for assistance with administrative
matters relating to their investments in the Trust.

ORGANIZATION AND HISTORY

Shares vote by individual portfolio on all matters except (i)
when required by the Investment Company Act of 1940, shares of
all portfolios shall be voted in the aggregate, and (ii) when the
Trustees have determined that the matter affects only the
interests of one or more portfolios, only the shareholders of
such portfolio or portfolios shall be entitled to vote.

Each share has one vote, with fractional shares voting
proportionately. Shares of each of the portfolios are freely
transferable, are entitled to dividends as declared by the
Trustees, and, if the portfolio were liquidated, would receive
the net assets of the portfolio. The Trust may suspend the sale
of shares of any portfolio at any time and may refuse any order
to purchase shares. Although the Trust is not required to hold
annual meetings of its shareholders, shareholders holding at
least 10% of the outstanding shares entitled to vote have the
right to call a meeting to elect or remove Trustees, or to take
other actions as provided in the Agreement and Declaration of
Trust.
<PAGE>
Shares of the Funds may only be purchased by an insurance
company's separate account. For matters requiring shareholder
approval, you may be able to instruct the insurance company's
separate account how to vote the Fund shares attributable to your
contract or policy. See the Voting Rights section of your
insurance product prospectus.

The Funds' Trustees: George Putnam,* Chairman. President of the
Putnam funds. Chairman and Director of Putnam Management and
Putnam Mutual Funds. Director, Marsh & McLennan Companies, Inc.;
William F. Pounds, Vice Chairman. Professor of Management,
Alfred P. Sloan School of Management, M.I.T.; 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, 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, * Chairman of the
Board and Director of Kmart Corporation and Director of various
corporations, including AT&T and Time Warner Inc.; George
Putnam, III,* President, New Generation Research, Inc. ; Eli
Shapiro, Alfred P. Sloan Professor or Management, Emeritus,
Alfred P. Sloan School of Management, M.I.T. ; 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, Bridle 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 Trust, Putnam Management or Putnam Mutual Funds.

About your investment

SALES AND REDEMPTIONS

The Trust has an underwriting agreement relating to the Funds
with Putnam Mutual Funds , One Post Office Square, Boston,
Massachusetts 02109. Putnam Mutual Funds presently offers shares
of each Fund of the Trust continuously to separate accounts of
various insurers. The underwriting agreement presently provides
that Putnam Mutual Funds accepts orders for shares at net asset
value and no sales commission or load is charged. Putnam Mutual
Funds may, at its expense, provide promotional incentives to
dealers that sell variable insurance products.
<PAGE>
Shares are sold or redeemed at the net asset value per share next
determined after receipt of an order, except that, in the case of
PCM Money Market Fund, purchases will not be effected until the
next determination of net asset value after federal funds have
been made available to the Trust. Orders for purchases or sales
of shares of a Fund must be received by your insurance
company before the close of regular trading on the New York
Stock Exchange and transmitted promptly the next day in
order to receive that day's net asset value. No fee is charged
to a separate account when it redeems Fund shares.

Each Fund currently does not foresee any disadvantages to
policyowners arising out of the fact that each Fund offers its
shares to separate accounts of various insurance companies to
serve as the investment medium for their variable products.
Nevertheless, the Board of Trustees intends to monitor events in
order to identify any material irreconcilable conflicts which may
possibly arise, and to determine what action, if any, should be
taken in response to such conflicts. If such a conflict were to
occur, one or more insurance companies' separate accounts might
be required to withdraw their investments in one or more Funds
and shares of another Fund may be substituted. This might force
a Fund to sell portfolio securities at disadvantageous prices.
In addition, the Board of Trustees may refuse to sell
shares of any Fund to any separate account or may suspend or
terminate the offering of shares of any Fund if such action is
required by law or regulatory authority or is in the best
interests of the shareholders of the Fund.

Under unusual circumstances, the Trust may suspend repurchases or
postpone payment for up to seven days or longer, as permitted by
federal securities law.

EXCHANGE PRIVILEGE

A shareholder may exchange shares of any Fund for shares
of any other Fund on the basis of their respective net
asset values. Exchanges may not be made into portfolios of the
Trust not offered by your variable annuity contract or variable
life policy.
<PAGE>
HOW THE TRUST VALUES ITS SHARES

HOW DISTRIBUTIONS ARE MADE; TAX INFORMATION

About Putnam Investments, Inc.

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

SECURITIES RATINGS

The following rating services describe rated securities as
follows:

Moody's Investors Service, Inc.

Bonds

Ca--Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default
or have other marked shortcomings.

C - Bonds which are rated C are the lowest rated class of bonds
and issues so rated can be regarded as having extremely poor
prospects of ever earning any real investment standing.

Standard & Poor's Corporation

Bonds

AAA--Debt rated AAA has the highest rating assigned by Standard &
Poor's. 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 higher-rated issues only in
small degree.

RATINGS OF COMMERCIAL PAPER

MIG 2/VMIG 2 -- Denotes high quality. Margins of protection are
ample though not as large as in the preceding group.

SG -- Denotes speculative quality. Debt instruments in this
category lack margins of protection.

Standard & Poor's Corporation

SP-1 -- Very strong or strong capacity to pay principal and
interest. Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.

SP-2 -- Satisfactory capacity to pay principal and interest.

SP-3 -- Speculative capacity to pay principal and interest.

Putnam Capital Manager Trust

PCM Diversified Income Fund

PCM Growth and Income Fund

PCM High Yield Fund

PCM New Opportunities Fund

<PAGE>
PUTNAM CAPITAL MANAGER TRUST

PROSPECTUS - May 1, 1995

Putnam Capital Manager Trust (the "Trust") offers shares of
beneficial interest in separate investment portfolios
(collectively the "Funds") for purchase by separate
accounts of various insurance companies. The Funds, which have
different investment objectives and policies, offered by this
Prospectus are: PCM Diversified Income Fund, PCM
Growth and Income Fund, PCM High Yield Fund, and PCM New
Opportunities Fund .

What you need to know

ABOUT THE TRUST

Financial highlights 2
The Trust 7
Investment objectives and policies of the Funds 7
Common investment policies and techniques 17
How performance is shown 24
How the Trust is managed 25
Organization and history 27

ABOUT YOUR INVESTMENT

Sales and redemptions 28
How the Trust values its shares 29
How distributions are made; tax information 30
Financial information 30

ABOUT PUTNAM INVESTMENTS, INC. 30

APPENDIX 31

About the Trust

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Financial Highlights
PCM Growth and Income Fund
(For a share outstanding throughout the period)

Investment Operations Less
Net Realized and Distributions From:
Net Unrealized Total from Net Net Realized
Year (period) Net Asset Value Investment Gain (Loss) on Investment Investment Gain on
ended Beginning of Period Income Investments Operations Income Investments

<S> <C> <C> <C> <C> <C> <C>
December 31, 1994 $17.38 $.50 $(0.48) $.02 $(.38) $(.58)
December 31, 1993 15.93 .38 1.83 2.21 (.39) (.37)
December 31, 1992 15.33 .39 1.04 1.43 (.42) (.41)
December 31, 1991 13.51 .43 2.09 2.52 (.53) (.17)
December 31, 1990 13.41 .55 (.29) .26 (.05) (.11)
December 31, 1989 12.00 .45 2.04 2.49 (.60) (.48)
December 31, 1988*(a) 10.00 .42 1.58 2.00 - -
</TABLE>
<TABLE> Ratio of
Total Net Net
Net Asset Investment Assets, Ratio of Investment
Value, Return at End of Expenses to Income to
Total End of Net Asset Period (in Average NetAverage Net Portfolio
DistributionsPeriod Value(%)(b) thousands) Assets(%) Assets(%) Turnover(%)
<S> <C> <C> <C> <C> <C> <C>
$(.96) $16.44 0.35 $1,907,380 .62 3.6446.43
(.76) 17.38 14.27 1,407,382 .64 3.4962.63
(.83) 15.93 9.75641,508 .69 3.7939.58
(.70) 15.33 19.05325,861 .72 4.3737.94
(.16) 13.51 1.96155,942 .75 5.0249.39
(1.08) 13.41 21.30100,335 .74 5.7373.40
- 12.00 19.89(c) 26,205 .92(c) 4.08(c) 37.94(c)
* For the period February 1, 1988 (commencement of operations) to December 31, 1988.
(a) Per share net investment income has been determined on the basis of the weighted average number of shares
outstanding during the period.
(b) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c) Not annualized.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
PCM High Yield Fund
(For a share outstanding throughout the period)

Investment Operations
Net Less
Realized and Distributions From:
Net Unrealized Total from Net Net Realized
Year (period) Net Asset Value Investment Gain (Loss) on Investment Investment Gain on
ended Beginning of Period Income Investments Operations Income Investments
<S> <C> <C> <C> <C> <C> <C>
December 31, 1994 $12.53 $1.05 $(1.17) $(.12) $(.79) $(.14)
December 31, 1993 11.17 .73 1.37 2.10 (.74) -
December 31, 1992 10.12 1.26 .59 1.85 (.80) -
December 31, 1991 7.91 .85 2.47 3.32 (1.11) -
December 31, 1990 9.15 1.30 (2.20) (.90) (.34) -
December 31, 1989 10.76 1.12 (1.37) (.25) (1.36) -
December 31, 1988*(a) 10.00 1.04(b) (.28) .76 - -
</TABLE>
<TABLE> Ratio of
Less Total Net Net
Distributions From: Net Asset Investment Assets, Ratio of Investment
In Excess of Value, Return at End of Expenses to Income to
Realized Gain Total End of Net Asset Period (in Average Net Average Net Portfolio
on InvestmentsDistributions Period Value(%)(c)thousands) Assets(%) Assets(%) Turnover(%)
<S> <C> <C> <C> <C> <C> <C> <C>
$(.02) $(.95) $11.46 (.94) $327,119 .74 9.79 62.09
- (.74) 12.53 19.57 291,737 .67 9.88 85.59
- (.80) 11.17 18.98 118,804 .71 11.53 84.24
- (1.11) 10.12 44.83 42,823 .92 12.64 104.62
- (.34) 7.91 (9.98) 18,915 .93 13.81 86.05
- (1.36) 9.15 (2.65) 27,511 .84 12.59 65.44
- - 10.76 7.56(d) 19,506 .94(b)(d) 10.99(b)(d) 64.25(d)
* For the period February 1, 1988 (commencement of operations) to December 31, 1988.
(a)Per share net investment income has been determined on the basis of the weighted average number of shares
outstanding during the period.
(b) Reflects an expense limitation in effect during the period. As a result of expense limitation, expenses of PCM High
Yield Fund for the period ended December 31, 1988 reflect a reduction of less than $.01 per share.
(c) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(d) Not annualized.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
PCM Diversified Income Fund
(For a share outstanding throughout the period)

* For the period September 15, 1993 (commencement of operations) to December 31, 1993.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Not annualized.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
PCM New Opportunities Fund
(For a share outstanding throughout the period)

<S> <C> <C> <C> <C> <C> <C>
$- $10.82 8.20(b) $68,592 .47(b)(c) .03(b)(c) 32.77(b)

* For the period May 2, 1994 (commencement of operations) to December 31, 1994.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Not annualized.
(c) Reflects an expense limitation in effect during the period. As a result of expense limitation, expenses PCM New
Opportunities Fund for the period ended December 31, 1994 reflect a reduction of less than $0.02 per share.
</TABLE> <PAGE>
THE TRUST

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS

Glossary

The following terms are frequently used in this Prospectus.
Many of these terms are explained in greater detail under
"Common investment policies and techniques."

"Putnam Management" -- Putnam Investment
Management, Inc., the Trust's
investment manager

"S&P" -- Standard & Poor's
Corporation

"Moody's" -- Moody's Investors
Service, Inc.

"U.S. Government Securities" -- debt securities issued or
guaranteed by the U.S.
government, by various of its
agencies, or by various
instrumentalities established
or sponsored by the U.S.
government. Certain U.S.
Government Securities,
including U.S. Treasury bills,
notes and bonds, mortgage
participation certificates
guaranteed by Ginnie Mae, and
Federal Housing Administration
debentures, are supported by
the full faith and credit of
the United States. Other U.S.
Government Securities issued
or guaranteed by federal
agencies or government-
sponsored enterprises are not
supported by the full faith
and credit of the United
States. These securities
include obligations supported
by the right of the issuer to
borrow from the U.S. Treasury,
such as obligations of Federal
Home Loan Banks, and
obligations supported only by
the credit of the
instrumentality, such as
Fannie Mae bonds.

"CMOs" -- collateralized mortgage
obligations

"Ginnie Mae" -- Government National Mortgage
Association

"Fannie Mae" -- Federal National Mortgage
Association

"Freddie Mac" -- Federal Home Loan Mortgage
Corporation

PCM DIVERSIFIED INCOME FUND

* a U.S. Government Sector, consisting primarily of debt
obligations of the U.S. government, its agencies and
instrumentalities;

* a High Yield Sector, consisting of high-yielding, lower-rated,
higher risk U.S. and foreign fixed income securities
(sometimes referred to as "junk bonds") ; and
<PAGE>
* an International Sector, consisting of obligations of foreign
governments, their agencies and instrumentalities, and other
fixed income securities denominated in foreign currencies.

PCM Diversified Income Fund will generally be managed in a style
similar to that of Putnam Diversified Income Trust .

U.S. Government Sector

The Fund will invest assets allocated to the U.S. Government
Sector primarily in U.S. Government Securities.

With respect to assets allocated to the U.S. Government Sector,
the Fund will only invest in privately issued debt securities
that are rated at the time of purchase at least A by Moody's or
S&P or in unrated securities that Putnam Management
determines are of comparable quality. The Fund will not
necessarily dispose of a security if its rating is reduced below
its rating at the time of purchase , although Putnam
Management will monitor the investment to determine whether
continued investment in the security will assist in meeting the
Fund's investment objective.

High Yield Sector

The Fund will invest assets allocated to the High Yield Sector
primarily in high yielding, lower-rated, higher risk U.S. and
foreign corporate fixed - income securities, including debt
securities, convertible securities and preferred stocks. As
discussed below, however, the Fund may invest all or any part of
the High Yield Sector portfolio in higher-rated and unrated
fixed - income securities. The Fund will not necessarily
invest in the highest yielding securities available if in Putnam
Management's opinion the differences in yield are not sufficient
to justify the higher risks involved.

Rated securities, Unrated securities of
as a percentage of comparable quality, as a
Rating Fund's assets percentage of Fund's assets
- --------------------------- -- ----------- --------
- -----------------"AAA"27.41% --
--------------------------------------------------------------
- ---
"AA" 18.12 --
- -----------------------------------------------------------------
"A" 21.35 1.73%
- -----------------------------------------------------------------
"BBB" 9.52 1.12
- -----------------------------------------------------------------
"BB" 5.30 0.02
- -----------------------------------------------------------------
"B" 6.11 0.52
- -----------------------------------------------------------------
"CCC" 0.89 --
- -----------------------------------------------------------------
Not Rated -- 1.52
- -----------------------------------------------------------------
Total 88.70% 4.91%
- -----------------------------------------------------------------

International Sector

The Fund will invest the assets allocated to the International
Sector in debt obligations and other fixed income securities
denominated in non-U.S. currencies. These securities include:

* debt obligations issued or guaranteed by foreign, national,
provincial, state, or other governments with taxing
authority, or by their agencies or instrumentalities;

* debt obligations of supranational entities (described below);
and

* debt obligations and other fixed income securities of foreign
and U.S. corporate issuers.

For a discussion of the risks associated with foreign
investments, see "Common investment policies and techniques --
Foreign investments."

PCM GROWTH AND INCOME FUND

PCM HIGH YIELD FUND

The primary investment objective of PCM High Yield Fund is to
seek high current income. Capital growth is a secondary
objective when consistent with high current income.

The Fund seeks high current income by investing primarily in
high-yielding, lower-rated, fixed-income securities (commonly
known as "junk bonds") constituting a portfolio which Putnam
Management believes does not involve undue risk to income or
principal. Normally, at least 80% of the Fund's assets will be
invested in debt securities, convertible securities or preferred
stocks that are consistent with its primary investment objective
of high current income. The Fund's remaining assets may be held
in cash or money market instruments, or invested in common stocks
and other equity securities. The Fund may invest up to 20% of
its assets in foreign securities. For a discussion of the risks
associated with foreign investments, see "Common investment
policies and techniques -- Foreign investments ." The Fund may
also invest in premium securities, engage in foreign currency
exchange transactions , enter into repurchase agreements, loan
its portfolio securities and purchase securities for future
delivery. See "Common investment policies and techniques" below
for a discussion of these securities and types of transactions
and the risks associated with them. The Fund may engage in
defensive strategies when Putnam Management judges that
conditions in the securities markets make pursuing the Fund's
basic investment strategy inconsistent with the best interests of
the Fund's shareholders. See "Common investment policies and
techniques" below for a discussion of these strategies.

Rated securities, Unrated securities of
as a percentage of comparable quality, as a
Rating Fund's assets percentage of Fund's assets
- --------------------------- -- --------- ----------
- -----------------
"AAA" -- --
- -----------------------------------------------------------------
"AA" -- --
- -----------------------------------------------------------------
"A" -- --
- -----------------------------------------------------------------
"BBB" 0.52% --
- -----------------------------------------------------------------
"BB" 20.19% --
- -----------------------------------------------------------------
"B" 58.18% 7.50%
- -----------------------------------------------------------------
"CCC" 9.32% --
- -----------------------------------------------------------------
"CC" 0.17% --
- -----------------------------------------------------------------
"C" -- --
- -----------------------------------------------------------------
"D" 0.31% 0.15%
- -----------------------------------------------------------------
Total 88.69% 7.65%
- -----------------------------------------------------------------

PCM High Yield Fund will generally be managed in a style similar
to that of Putnam High Yield Advantage Fund.

PCM NEW OPPORTUNITIES FUND

Personal Communications - cellular telephone, paging, personal
communication networks;

Media/Entertainment - cable television system operators, cable
television network programmers, film entertainment providers,
theme park operators, casino operators;

Medical Technology/Cost-Containment - home and outpatient care,
medical device companies, biotechnology, health care
information services;

Environmental Services - solid waste disposal, hazardous waste
disposal, remediation services, environmental testing;

Applied/Advanced Technology - database software, application
software, networking software, computer systems integrators,
information services companies;

Personal Financial Services - specialty insurance companies,
credit card issuers, and other consumer-oriented financial
services companies; and

Value-oriented Consuming - retailers, restaurants, hotel chains
and travel companies able to provide quality products or
services at lower prices or offering greater perceived value
than competitors.

In addition, the Fund may also invest a portion of its assets in
securities of companies that, although not in any of the sectors
described above, are expected to experience above-average growth.

The Fund will normally emphasize investments in particular
economic sectors. Although the Fund will not invest more than 25%
of its assets in any one industry, the Fund's emphasis on
particular sectors of the economy may make the value of the
Fund's shares more susceptible to any single economic, political
or regulatory development than the shares of an investment
company which is more widely diversified. As a result, the
value

of the Fund's shares may fluctuate more than the value of
shares of such an investment company.

PCM New Opportunities Fund will generally be managed in a style
similar to that of Putnam New Opportunities Fund.

GENERAL

The Funds are generally managed in styles similar to other
open-end investment companies which are managed by Putnam
Management and whose shares are generally offered to the public.
These other Putnam funds may, however, employ different
investment practices and may invest in securities different from
those in which their counterpart Funds invest, and consequently
will not have identical portfolios or experience identical
investment results.

COMMON INVESTMENT POLICIES AND TECHNIQUES

Defensive strategies

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 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
generally involves some expense to a Fund, including brokerage
commissions or dealer mark-ups and other transaction costs on the
sale of securities and reinvestment in other securities. Such
transactions may result in realization of taxable capital gains.
Portfolio turnover rates for the life of each Fund are
shown in "Financial highlights."
<PAGE>
Investments in premium securities

Foreign investments

A more detailed explanation of foreign investments, and the risks
and special tax considerations associated with them, is included
in the Statement of Additional Information.

Foreign currency exchange transactions

For a discussion of the risks associated with options and
futures strategies in connection with a Fund's foreign currency
exchange transactions, see "Risks related to options and futures
strategies."

Options and futures

Risks related to options and futures strategies

A more detailed explanation of futures and options transactions,
including the risks associated with them, is included in the
Statement of Additional Information.

Lower-rated and other fixed income securities

As described above, certain of the Funds may invest in
lower-rated fixed income securities (commonly known as "junk
bonds"). Differing yields on fixed income securities of
the same maturity are a function of several factors, including
the relative financial strength of the issuers. Higher yields
are generally available from securities in the lower categories
of recognized rating agencies (Baa or lower by Moody's
and BBB or lower by S&P) or from unrated securities of
comparable quality. Securities in the rating categories below
Baa as determined by Moody's and BBB as determined by S&P are
considered to be of poor standing and predominantly speculative.
The rating services' descriptions of securities in the lower
rating categories, including their speculative characteristics,
are set forth in the Appendix to this Prospectus.

Certain investment - grade securities in which a Fund may
invest share some of the risk factors discussed above with
respect to lower-rated securities.

Mortgage-backed and asset-backed securities

As described above, certain of the Funds may invest
in asset-backed and mortgage-backed securities, such as
CMOs, including stripped mortgage-backed securities. CMOs
and other mortgage-backed securities represent
participations in, or are secured by, mortgage loans.
Stripped mortgage-backed securities are usually structured with
two classes that receive different portions of the interest and
principal distributions on a pool of mortgage assets. A Fund
which purchases mortgage-backed securities may invest in
both the interest-only or "IO" class and the principal-only or
"PO" class. The yield to maturity on an IO class is extremely
sensitive not only to changes in prevailing interest rates but
also to the rate of principal payments (including prepayments) on
the related underlying mortgage assets, and a rapid rate of
principal payments may have a material adverse effect on a Fund's
yield to maturity to the extent it invests in IOs. If the
underlying mortgage assets experience greater than anticipated
prepayments of principal, a Fund may fail to fully recoup its
initial investment in these securities. Conversely, POs tend to
increase in value if prepayments are greater than anticipated and
decline if prepayments are slower than anticipated. The secondary
market for stripped mortgage-backed securities may be less liquid
than that for other mortgage-backed securities, potentially
limiting a Fund's ability to buy or sell those securities at any
particular time.

Securities loans, repurchase agreements and forward commitments

Each Fund may lend portfolio securities amounting to not more
than 25% of its assets to broker-dealers and 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 the Fund
is delayed or prevented from recovering the collateral or
completing the transaction.

HOW PERFORMANCE IS SHOWN

Each Fund's investment performance may from time to time be
included in advertisements about that Fund. "Yield " is
calculated by dividing a Fund's annualized net investment income
per share during a recent 30-day period by the net asset value
per share on the last day of that period. For this purpose, net
investment income is calculated in accordance with SEC
regulations and may differ from a Fund's 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. A Fund's current dividend rate is based on its net
investment income as determined for tax purposes, which may not
reflect amortization in the same manner. See "Common investment
policies and techniques -- Investments in premium
securities."

For performance information through the Funds' most recent fiscal
year, see "Investment Performance of the Trust" in the Statement
of Additional Information.

HOW THE TRUST IS MANAGED

Michael Martino, Managing Director of Putnam Management, D.
William Kohli and Jennifer E. Leichter, each a Senior Vice
President of Putnam Management , and Neil J. Powers and
Mark J. Siegel, each a Vice President of Putnam Management, each
of whom is a Vice President of the Trust, have had
primary responsibility for the day-to-day management of PCM
Diversified Income Fund's portfolio since 1993 for Ms.
Leichter, and 1994 for Messrs. Martino, Kohli, Powers and
Siegel . Ms. Leichter and Mr. Powers have been employed by
Putnam Management since 1987 and 1986, respectively. Mr. Martino
has been employed by Putnam Management since January,
1994. Prior to January, 1994, Mr . Martino was
employed by Back Bay Advisors in the positions of Executive Vice
President and Chief Investment Officer from 1992 to 1994,
and Senior Vice President and Senior Portfolio Manager
from 1990 to 1992 . Mr. Kohli has been employed by Putnam
Management since September, 1994. Prior to
September, 1994, Mr. Kohli was Executive Vice
President , and Co-Director of Global Bond Management and,
prior to October, 1993, Senior Portfolio Manager, at
Franklin Advisors/Templeton Investment Counsel. Mr. Siegel has
been employed by Putnam Management since June, 1993.
Prior to June, 1993, Mr. Siegel was Vice President of
Salomon Brothers International Ltd .

Total expenses, including management fees, for the fiscal year
ended December 31, 1994, based on each Fund's average net assets,
were:
Total Management
Expenses Fees

PCM Diversified Income Fund 0.80% 0.67%
PCM Growth and Income Fund 0.62% 0.57%
PCM High Yield Fund 0.74% 0.66%
PCM New Opportunities Fund* 0.47%0.45%
(commenced operations on May 1, 1994)
<PAGE>
* The
total expenses and
management fees
shown above for PCM
New Opportunities Fund
reflect an expense
limitation in effect
for the period and are
not annualized. In
the absence of the
expense limitation in
effect for the period,
annualized total
expenses and
management fees
would have been
1.00% and
0.70%, respectively.

On June 2, 1994, the shareholders of three of the funds
approved new management fees payable to Putnam Management
. If the new rates had been in effect for the
entire year, management fees would have been the
following : PCM Diversified Income Fund, 0.70%; PCM Growth
and Income Fund, 0.55%; and PCM High Yield Fund, 0.70%.

ORGANIZATION AND HISTORY

The Trust is an open-end, management investment company with an
unlimited number of authorized shares of beneficial interest.
Shares of the Trust may, without shareholder approval, be divided
into two or more series of shares representing separate
investment portfolios, and are currently divided into eleven
series of shares, each representing a separate investment
portfolio which is being offered through separate accounts of
various insurance companies. Each portfolio offered by this
Prospectus is managed as a diversified investment
company . Shares vote by individual portfolio on all
matters except (i) when required by the Investment Company Act of
1940, shares of all portfolios shall be voted in the aggregate,
and (ii) when the Trustees have determined that the matter
affects only the interests of one or more portfolios, only the
shareholders of such portfolio or portfolios shall be entitled to
vote.

About your investment

SALES AND REDEMPTIONS

Shares of the Funds offered by this Prospectus are sold or
redeemed at the net asset value per share next determined after
receipt of an order . Orders for purchases or sales of
shares of a Fund must be received by your insurance
company before the close of regular trading on the New York
Stock Exchange and transmitted promptly the next day in
order to receive that day's net asset value. No fee is charged
to a separate account when it redeems Fund shares.

Under unusual circumstances, the Trust may suspend repurchases or
postpone payment for up to seven days or longer, as permitted by
federal securities law.

EXCHANGE PRIVILEGE

HOW THE TRUST VALUES ITS SHARES

The Trust calculates the net asset value of a share of each Fund
by dividing the total value of the assets of the Fund, less
liabilities, by the number of shares of the Fund outstanding.
Shares are valued as of the close of regular trading on the New
York Stock Exchange each day the Exchange is open. Fund
securities for which market quotations are readily available are
stated at market value. Short-term investments that will mature
in 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.
<PAGE>
HOW DISTRIBUTIONS ARE MADE; TAX INFORMATION

Each of the Funds offered by this
Prospectus will distribute any net investment income and net
realized capital gains at least annually. Both types of
distributions will be made in shares of such Funds unless an
election is made on behalf of a separate account to receive some
or all of the distributions in cash.

Distributions are reinvested without a sales charge, using the
net asset value determined on the ex-dividend date .

FINANCIAL INFORMATION

About Putnam Investments, Inc.

SECURITIES RATINGS

The following rating services describe rated securities as
follows:

Moody's Investors Service, Inc.

Bonds

Ca--Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default
or have other marked shortcomings.

C - Bonds which are rated C are the lowest rated class of bonds
and issues so rated can be regarded as having extremely poor
prospects of ever earning any real investment standing.

Standard & Poor's Corporation

Bonds

AAA--Debt rated AAA has the highest rating assigned by Standard &
Poor's. 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 higher-rated issues only in
small degree.

Notes

Putnam Capital Manager Trust

Prospectus - MAY 1, 1995
<PAGE>
Putnam Capital Manager Trust (the "Trust") offers shares of
beneficial interest in separate investment portfolios
(collectively , the "Funds") for purchase by separate
accounts of various insurance companies. The Funds, which have
different investment objectives and policies offered by
this Prospectus are: PCM Asia Pacific Growth Fund, PCM
Diversified Income Fund, PCM Growth and Income
Fund, PCM New Opportunities Fund, PCM Utilities
Growth and Income Fund and PCM Voyager Fund.

This Prospectus explains concisely information about the Trust
and should be read in conjunction with the prospectus for
the separate account of the variable annuity or variable life
insurance product that accompanies this Prospectus. Please read
it carefully and keep it for future reference. Investors can
find more detailed information about the Trust in the May 1, 1995
Statement of Additional Information, as amended from time to
time. For a free copy of the Statement, call Putnam Investor
Services at 1-800-521-0538. The Statement has been filed with
the Securities and Exchange Commission and is incorporated into
this Prospectus by reference.

What you need to know

ABOUT THE TRUST 2

Financial highlights 2
The Trust 4
Investment objectives and policies of the Funds 4
Common investment policies and techniques 14
How performance is shown 20
How the Trust is managed 21
Organization and history 23

ABOUT YOUR INVESTMENT 24

Sales and redemptions 25
How the Trust values its shares 25
How distributions are made; tax information 25
Financial information 25

ABOUT PUTNAM INVESTMENTS, INC. 25

APPENDIX 26

About the Trust

FINANCIAL HIGHLIGHTS

Financial information for PCM Asia Pacific Growth Fund is not
included because the Fund had no operations during the periods
presented below.
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
(For a share outstanding throughout the period)

PCM Utilities Growth
and Income Fund
December 31, 1994 $12.00 $.60 $(1.44) $(.84) $(.35) $(.12)
December 31, 1993 10.71 .30 1.13 1.43 (.12) (.02)
December 31, 1992** 10.00 .15(b) .56 .71 - -

PCM Diversified Income Fund
December 31, 1994 $10.23 $.61 $(1.04) $(.43) $(.06) $-
December 31, 1993*** 10.00 .06 .17 .23 - -

PCM New Opportunities Fund
December 31, 1994**** $10.00 $- $ .82 $.82 $- $-
/TABLE
<PAGE>
<TABLE><CAPTION> Ratio of
Less Total Net Net
Distributions From: Net Asset Investment Assets, Ratio of Investment
In Excess of Value, Return at End of Expenses to Income to
Realized Gain Total End of Net Asset Period (in Average Net Average Net Portfolio
on Investments DistributionsPeriod Value(%)(c) thousands) Assets(%) Assets(%) Turnover(%)
<C> <C> <C> <C> <C> <C> <C> <C>
$- $(.42) $22.20 1.04 $1,026,972 .71 .40 62.44
- (.34) 22.41 18.70 675,198 .66 .33 55.85
- (.52) 19.21 10.36 317,225 .75 .56 48.17
- (.36) 17.94 46.09 156,741 .81 .78 55.04
- (.15) 12.58 (2.03) 48,414 .88 1.58 93.65
- (.62) 13.00 32.38 39,998 .82 1.93 91.82
- - 10.30 2.98(d) 7,981 1.35(d) 1.44(d) 103.99(d)

$- $(.96) $16.44 0.35 $1,907,380 .62 3.64 46.43
- (.76) 17.38 14.27 1,407,382 .64 3.49 62.63
- (.83) 15.93 9.75 641,508 .69 3.79 39.58
- (.70) 15.33 19.05 325,861 .72 4.37 37.94
- (.16) 13.51 1.96 155,942 .75 5.02 49.39
- (1.08) 13.41 21.30 100,335 .74 5.73 73.40
- - 12.00 19.89(d) 26,205 .92(d) 4.08(d) 37.94(d)

$(.01) $(.48) $10.68 (7.02) $384,169 .68 5.23 84.88
- (.14) 12.00 13.42 443,281 .69 5.02 50.79
- - 10.71 7.10(d) 83,522 .64(b)(d) 3.43(b)(d) 19.29(d)

$- $(.06) $9.74 (4.23) $215,935 .80 7.60 165.17
- - 10.23 2.30(d) 80,449 .28(d) 1.45(d) 40.83(d)

$- $- $10.82 8.20(d) $68,592 .47(b)(d) .03(b)(d) 32.77(d)
* For the period February 1, 1988 (commencement of operations) to December 31, 1988.
** For the period May 4, 1992 (commencement of operations) to December 31, 1992.
*** For the period September 15, 1993 (commencement of operations) to December 31, 1993.
**** For the period May 2, 1994 (commencement of operations) to December 31, 1994
(a) Per share net investment income has been determined on the basis of the weighted average number of shares
outstanding during the period.
(b) Reflects an expense limitation in effect during the period. As a result of expense limitations, expenses of
PCM Utilities Growth and Income Fund for the period ended December 31, 1992 reflect a reduction of less than
$.01 per share and expenses of PCM New Opportunities Fund for the period ended December 31, 1994
reflect a reduction of less than $0.02 per share.
(c) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(d) Not annualized.</TABLE> <PAGE>
THE TRUST

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS

Glossary

The following terms are frequently used in this Prospectus. Many
of these terms are explained in greater detail under "Common
investment policies and techniques."

"Putnam Management" -- Putnam Investment Management,
Inc., the Trust's investment
manager

"S&P" -- Standard & Poor's Corporation
<PAGE>
"Moody's" -- Moody's Investors Service,
Inc.

"U.S. Government Securities" -- debt securities issued or
guaranteed by the U.S.
government, by various of its
agencies, or by various
instrumentalities established
or sponsored by the U.S.
government. Certain U.S.
Government Securities,
including U.S. Treasury bills,
notes and bonds, mortgage
participation certificates
guaranteed by Ginnie Mae, and
Federal Housing Administration
debentures, are supported by
the full faith and credit of
the United States. Other U.S.
Government Securities issued
or guaranteed by federal
agencies or government-
sponsored enterprises are not
supported by the full faith
and credit of the United
States. These securities
include obligations supported
by the right of the issuer to
borrow from the U.S. Treasury,
such as obligations of Federal
Home Loan Banks, and
obligations supported only by
the credit of the
instrumentality, such as
Fannie Mae bonds.

"CMOs" -- collateralized mortgage
obligations

"Ginnie Mae" -- Government National Mortgage
Association

"Fannie Mae" -- Federal National Mortgage
Association

"Freddie Mac" -- Federal Home Loan Mortgage
Corporation
<PAGE>
PCM ASIA PACIFIC GROWTH FUND

The Fund will not limit its investments to any particular type of
company. The Fund may invest in companies, large or small, whose
earnings are believed to be in a relatively strong growth trend,
or in companies in which significant further growth is not
anticipated but whose securities are thought to be undervalued.
It may invest in small and relatively less well-known companies.
These companies may present greater opportunities for capital
appreciation, but may also involve greater risk. They may
have limited product lines, markets or financial resources, or
may depend on a limited management group. Their securities may
trade less frequently and in limited volume. As a result, these
securities may fluctuate in value more than securities of larger,
more established companies.
<PAGE>
Debt securities in which the Fund may invest will generally be
rated at the time of purchase at least Baa by Moody's or
BBB by S&P, or, if unrated , determined by Putnam
Management to be of comparable quality. The Fund will not
invest in debt securities rated less than Baa by Moody's or
BBB by S&P (sometimes referred to as "junk bonds") , or, if
unrated, determined by Putnam Management to be of comparable
quality if, as a result , more than 5% of the Fund's assets
would be invested in such securities. The Fund will not
necessarily dispose of a security if its rating is reduced below
its rating at the time of purchase, although Putnam Management
will monitor the investment to determine whether continued
investment in the security will assist in meeting the Fund's
investment objective. Debt securities rated Baa or BBB or
lower have speculative characteristics and adverse economic
conditions may lead to a weakened capacity to pay interest and
repay principal.

PCM Asia Pacific Growth Fund will generally be managed in a style
similar to that of Putnam Asia Pacific Growth Fund.

PCM DIVERSIFIED INCOME FUND

* a U.S. Government Sector, consisting primarily of debt
obligations of the U.S. government, its agencies and
instrumentalities;

* a High Yield Sector, consisting of high-yielding, lower-rated,
higher risk U.S. and foreign fixed income securities
(sometimes referred to as "junk bonds") ; and

* an International Sector, consisting of obligations of foreign
governments, their agencies and instrumentalities, and other
fixed income securities denominated in foreign currencies.

The Fund may invest in premium securities, engage in foreign
currency exchange transactions, transactions in futures and
options, enter into repurchase agreements, loan its portfolio
securities and purchase securities for future delivery. See
"Common investment policies and techniques" below for a
discussion of these securities and types of transactions and the
risks associated with them. The Fund also may hold a portion of
its assets in cash and money market instruments.

PCM Diversified Income Fund will generally be managed in a style
similar to that of Putnam Diversified Income Trust .

U.S. Government Sector

The Fund will invest assets allocated to the U.S. Government
Sector primarily in U.S. Government Securities.

With respect to assets allocated to the U.S. Government Sector,
the Fund will only invest in privately issued debt securities
that are rated at the time of purchase at least A by Moody's or
S&P, or in unrated securities that Putnam Management determines
are of comparable quality. The rating services' descriptions of
these rating categories are included in the Appendix to this
Prospectus. The Fund will not necessarily dispose of a security
if its rating is reduced below its rating at the time of
purchase , although Putnam Management will monitor the
investment to determine whether continued investment in the
security will assist in meeting the Fund's investment objective.

Risk factors. U.S. Government Securities are considered
among the safest of fixed income investments . Because of this
added safety, the yields available from U.S. Government
Securities are generally lower than the yields available from
corporate debt securities , but their values, like those of
other debt securities, will fluctuate with changes in interest
rates. Changes in the value of portfolio securities will not
affect investment income from those securities, but will affect
the Fund's net asset value. A decrease in interest rates will
generally result in an increase in the value of fixed income
securities. Conversely, during periods of rising interest rates,
the values of such securities will generally decline. The
magnitude of these fluctuations will generally be greater for
securities with longer maturities.

High Yield Sector

The Fund will invest assets allocated to the High Yield Sector
primarily in high yielding, lower-rated, higher - risk U.S.
and foreign fixed - income securities, including
debt securities, convertible securities and preferred stocks. As
discussed below, however, the Fund may invest all or any part of
the High Yield Sector portfolio in higher-rated and unrated
fixed - income securities. The Fund will not necessarily
invest in the highest yielding securities available if in Putnam
Management's opinion the differences in yield are not sufficient
to justify the higher risks involved.

Rated securities, Unrated securities of
as a percentage of comparable quality, as a
Rating Fund's assets percentage of Fund's assets
- --------------------------- -- ----------- --------
- -----------------"AAA" 27.41% --%
--------------------------------------------------------------
- ---"AA" 18.12% --%
- -----------------------------------------------------------------
"A" 21.35% 1.73%
- -----------------------------------------------------------------
"BBB" 9.52% 1.12%
- -----------------------------------------------------------------
"BB" 5.30% 0.02%
- -----------------------------------------------------------------
"B" 6.11% 0.52%
- -----------------------------------------------------------------
"CCC" 0.89% --
- -----------------------------------------------------------------
Not Rated -- 1.52%
- -----------------------------------------------------------------
Total 88.70% 4.91%
- -----------------------------------------------------------------

International Sector

The Fund will invest the assets allocated to the International
Sector in debt obligations and other fixed income securities
denominated in non-U.S. currencies. These securities include:

* debt obligations issued or guaranteed by foreign, national,
provincial, state, or other governments with taxing
authority, or by their agencies or instrumentalities;

* debt obligations of supranational entities (described
below); and

* debt obligations and other fixed income securities of
foreign and U.S. corporate issuers.

For a discussion of the risks associated with foreign
investments, see "Common investment policies and techniques --
Foreign investments."

PCM GROWTH AND INCOME FUND

The Fund may invest up to 20% of its assets in securities
principally traded in foreign markets. For a discussion of the
risks associated with foreign investments, see "Common investment
policies and techniques -- Foreign investments ." The
Fund may also hold a portion of its assets in cash or money
market instruments. The Fund may invest in both higher-rated
and lower-rated fixed-income securities. The risks associated
with fixed income securities, including lower-rated fixed income
securities (commonly known as "junk bonds") , are discussed
below under "Common investment policies and techniques -- Lower-
rated and other fixed income securities."

PCM Growth and Income Fund will generally be managed in a style
similar to that of The Putnam Fund for Growth and Income.

PCM NEW OPPORTUNITIES FUND

PCM New Opportunities Fund seeks long-term capital appreciation.
The Fund seeks its investment objective by investing principally
in common stocks of companies in sectors of the economy which
Putnam Management believes possess above-average long-term growth
potential. The Fund will generally invest in companies which
Putnam Management identifies as offering the best prospects for
long-term growth within a particular sector. Current dividend
income is only an incidental consideration. The Fund invests
primarily in common stocks, but may also purchase convertible
bonds, convertible preferred stocks, warrants, preferred stocks
and debt securities if Putnam Management believes they would help
achieve the Fund's objective of capital appreciation. The Fund
may invest up to 20% of its assets in foreign securities. For
a discussion of the risks associated with foreign investing, see
"Common investment policies and techniques -- Foreign
investments." The Fund may also engage in foreign
currency exchange transactions and transactions in futures and
options, enter into repurchase agreements, loan its portfolio
securities and purchase securities for future delivery. See
"Common investment policies and techniques" below for a
discussion of these securities and types of transactions and the
risks associated with them. The Fund may hold a portion of
its assets in cash and money market instruments. The
Fund may engage in defensive strategies when Putnam Management
judges that conditions in the securities markets make pursuing
the Fund's basic investment strategy inconsistent with the best
interests of the Fund's shareholders. See "Common investment
policies and techniques" below for a discussion of these
strategies.

Personal Communications - cellular telephone, paging, personal
communication networks;

Media/Entertainment - cable television system operators, cable
television network programmers, film entertainment providers,
theme park operators, casino operators;
<PAGE>
Medical Technology/Cost-Containment - home and outpatient care,
medical device companies, biotechnology, health care
information services;

Environmental Services - solid waste disposal, hazardous waste
disposal, remediation services, environmental testing;

Applied/Advanced Technology - database software, application
software, networking software, computer systems integrators,
information services companies;

Personal Financial Services - specialty insurance companies,
credit card issuers, and other consumer-oriented financial
services companies; and

Value-oriented Consuming - retailers, restaurants, hotel chains
and travel companies able to provide quality products or
services at lower prices or offering greater perceived value
than competitors.

In addition, the Fund may also invest a portion of its assets in
securities of companies that, although not in any of the sectors
described above, are expected to experience above-average growth.

The Fund seeks to invest in companies that offer above-average
growth prospects in their particular sector of the economy,
without regard to the company's size. Companies in the Fund's
portfolio will range from small, rapidly growing companies to
larger, well-established firms. The securities of small to
medium-sized companies often trade less frequently and in more
limited volume, and may be subject to more abrupt or erratic
price movements, than securities of larger, more established
companies. Such companies may have limited product lines,
markets, or financial resources, or may depend on a limited
management group.
<PAGE>
The Fund will normally emphasize investments in particular
economic sectors. Although the Fund will not invest more than 25%
of its assets in any one industry, the Fund's emphasis on
particular sectors of the economy may make the value of the
Fund's shares more susceptible to any single economic, political
or regulatory development than the shares of an investment
company which is more widely diversified. As a result, the value
of the Fund's shares may fluctuate more than the value of shares
of such an investment company.

PCM New Opportunities Fund will generally be managed in a style
similar to that of Putnam New Opportunities Fund.

PCM UTILITIES GROWTH AND INCOME FUND

The portion of the Fund's assets invested in equity securities
and in debt securities will vary from time to time in light of
the Fund's investment objective, changes in interest rates, and
economic and other factors. Although the Fund expects that in
the near term it will invest substantial portions of its assets
in both equity securities and in debt securities, the Fund may
invest all of its assets in either equity or debt securities.
The Fund may also hold a portion of its assets in cash and money
market instruments.

The Fund will also invest a portion of its assets in larger
companies where opportunities for above-average capital
appreciation appear favorable.

PCM Voyager Fund will generally be managed in a style similar to
that of Putnam Voyager Fund.

GENERAL

COMMON INVESTMENT POLICIES AND TECHNIQUES

Defensive strategies

Portfolio turnover

Investments in premium securities

A more detailed explanation of foreign investments, and the risks
and special tax considerations associated with them, is included
in the Statement of Additional Information.

Foreign currency exchange transactions
<PAGE>
To the extent described above, certain of the Funds may
engage in currency exchange transactions to protect against
uncertainty in the level of future exchange rates. Putnam
Management may engage in currency exchange transactions in
connection with the purchase and sale of portfolio securities
("transaction hedging"), and to protect the value of specific
portfolio positions ("position hedging").

For a discussion of the risks associated with options and
futures strategies in connection with a Fund's foreign currency
exchange transactions, see "Risks related to options and futures
strategies."

Options and futures

Risks related to options and futures strategies

A more detailed explanation of futures and options transactions,
including the risks associated with them, is included in the
Statement of Additional Information.

Lower-rated and other fixed income securities

As described above, certain of the Funds may invest in
lower-rated fixed income securities (commonly known as "junk
bonds"). Differing yields on fixed income securities of
the same maturity are a function of several factors, including
the relative financial strength of the issuers. Higher yields
are generally available from securities in the lower categories
of recognized rating agencies (Baa or lower by Moody's
and BBB or lower by S&P) or from unrated securities of
comparable quality. Securities in the rating categories below
Baa as determined by Moody's and BBB as determined by S&P are
considered to be of poor standing and predominantly speculative.
The rating services' descriptions of securities in the lower
rating categories, including their speculative characteristics,
are set forth in the Appendix to this Prospectus.

Like those of other fixed-income securities, the values of
such 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 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 is generally greater for securities with
longer maturities. However, the yields on such securities
are also generally higher. 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 a Fund's net
asset value.

Certain investment - grade securities in which a Fund may
invest share some of the risk factors discussed above with
respect to lower-rated securities.

Mortgage-backed and asset-backed securities

As described above, certain of the Funds may invest
in asset-backed and mortgage-backed securities, such as
CMOs, including stripped mortgage-backed securities. CMOs
and other mortgage-backed securities represent
participations in, or are secured by, mortgage loans.
Stripped mortgage-backed securities are usually structured with
two classes that receive different portions of the interest and
principal distributions on a pool of mortgage assets. A Fund
which purchases mortgage-backed securities may invest in
both the interest-only or "IO" class and the principal-only or
"PO" class. The yield to maturity on an IO class is extremely
sensitive not only to changes in prevailing interest rates but
also to the rate of principal payments (including prepayments) on
the related underlying mortgage assets, and a rapid rate of
principal payments may have a material adverse effect on a Fund's
yield to maturity to the extent it invests in IOs. If the
underlying mortgage assets experience greater than anticipated
prepayments of principal, the Fund may fail to fully
recoup its initial investment in these securities. Conversely,
POs tend to increase in value if prepayments are greater than
anticipated and decline if prepayments are slower than
anticipated. The secondary market for stripped mortgage-backed
securities may be less liquid than that for other mortgage-backed
securities, potentially limiting the Fund's ability to buy
or sell those securities at any particular time.

Due to their prepayment aspect, mortgage-backed and asset-backed
securities are less effective than other types of securities as a
means of "locking in" attractive long-term interest rates. This
is caused by the need to reinvest prepayments of principal
generally and the possibility of significant unscheduled
prepayments resulting from declines in interest rates. These
prepayments would have to be reinvested at lower rates. As a
result, these securities may have less potential for capital
appreciation during periods of declining interest rates than
other securities of comparable maturities, although they may have
a comparable risk of decline in market value during periods of
rising interest rates. At times, some of the mortgage-backed and
asset-backed securities in which the Fund may invest will
have higher than market interest rates, and will therefore be
purchased at a premium above their par value. Unscheduled
prepayments, which are made at par, will cause a Fund to suffer a
loss equal to any unamortized premium.

Securities loans, repurchase agreements and forward commitments

Each Fund may lend portfolio securities amounting to not more
than 25% of its assets to broker-dealers and 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
the Fund if the other party should default on its
obligation and a Fund is delayed or prevented from
recovering the collateral or completing the transaction.

HOW PERFORMANCE IS SHOWN

Each Fund's investment performance may from time to time be
included in advertisements about that Fund "Yield "
is calculated by dividing a Fund's annualized net investment
income per share during a recent 30-day period by the net asset
value per share on the last day of that period. For this
purpose, net investment income is calculated in accordance with
SEC regulations and may differ from a Fund's 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. A Fund's current dividend rate is based on its net
investment income as determined for tax purposes, which may not
reflect amortization in the same manner. See "Common investment
policies and techniques -- Investments in premium securities."

For performance information through the Funds' most recent fiscal
year, see "Investment Performance of the Trust" in the Statement
of Additional Information.

HOW THE TRUST IS MANAGED

Michael Martino, Managing Director of Putnam Management, D.
William Kohli and Jennifer E. Leichter, each a Senior
Vice President of Putnam Management , and Neil J. Powers
and Mark J. Siegel, each a Vice President of Putnam Management,
each of whom is a Vice President of the Trust , have
had primary responsibility for the day - to - day
management of PCM Diversified Income Fund's portfolio
since 1993 for Ms. Leichter, and 1994 for Messrs. Martino,
Kohli, Powers and Siegel . Ms. Leichter and Mr. Powers
have been employed by Putnam Management since 1987 and 1986,
respectively. Mr. Martino has been employed by Putnam Management
since January, 1994. Prior to January, 1994,
Mr . Martino was employed by Back Bay Advisors in the
positions of Executive Vice President and Chief Investment
Officer from 1992 to 1994, and Senior Vice President and
Senior Portfolio Manager from 1990 to 1992 . Mr. Kohli
has been employed by Putnam Management since September,
1994. Prior to September, 1994, Mr. Kohli was Executive
Vice President , and Co-Director of Global Bond Management
and, prior to October, 1993, Senior Portfolio Manager, at
Franklin Advisors/Templeton Investment Counsel. Mr. Siegel has
been employed by Putnam Management since June, 1993.
Prior to June, 1993, Mr. Siegel was Vice President of
Salomon Brothers International Ltd .
<PAGE>
David L. King, Senior Vice President of Putnam Management and
Vice President of the Trust, and Anthony I. Kreisel, Managing
Director of Putnam Management and Vice President of the Trust,
have had primary responsibility for the day-to-day management of
PCM Growth and Income Fund's portfolio since 1993. Messrs. King
and Kreisel have been employed by Putnam Management since 1983
and 1986, respectively.

Expense limitation. In order to limit PCM Asia Pacific Growth
Fund's expenses during its start-up period, Putnam Management has
agreed to limit its compensation ( and, to the
extent necessary, bear other expenses of the Fund )
through April 30, 1996, to the extent that expenses of the Fund
(exclusive of brokerage, interest, taxes, and deferred
organizational and extraordinary expenses) would
exceed an annual rate of 1.20% of the Fund's average net assets.
For the purpose of determining any such limitation on Putnam
Management's compensation, expenses of the Fund will not reflect
the application of commissions or cash management credits that
may reduce designated Fund expenses. With Trustee approval,
this expense limitation may be terminated earlier, in which event
shareholders would be notified and this Prospectus would be
revised.

Total expenses, including management fees, for the fiscal year
ended December 31, 1994, based on each Fund's average net assets,
were:
Total Management
Expenses Fees

PCM Asia Pacific Growth Fund* 1.20%
0.79%
(reflecting expense limitation)
PCM Diversified Income Fund 0.80% 0.67%
PCM Growth and Income Fund 0.62% 0.57%
PCM New Opportunities Fund** 0.47% 0.45%
(commenced operations on May 1, 1994)
PCM Utilities Growth and Income Fund
0.68% 0.60%
PCM Voyager Fund 0.71% 0.63%

On June 2, 1994, the shareholders of three of the funds
approved new management fees payable to Putnam Management.
If the new rates had been in effect for the entire
year , management fees would have been the
following: PCM Diversified Income Fund, 0.70%; PCM Growth and
Income Fund, 0.55%; and PCM Voyager Fund, 0.66%.

ORGANIZATION AND HISTORY

The Trust is an open-end, management investment company with an
unlimited number of authorized shares of beneficial interest.
Shares of the Trust may, without shareholder approval, be divided
into two or more series of shares representing separate
investment portfolios, and are currently divided into eleven
series of shares, each representing a separate investment
portfolio which is being offered through separate accounts of
various insurance companies. Each portfolio is managed as a
diversified investment company, except for PCM Utilities Growth
and Income Fund, which is managed as a non-diversified investment
company. Shares vote by individual portfolio on all
matters except (i) when required by the Investment Company Act of
1940, shares of all portfolios shall be voted in the aggregate,
and (ii) when the Trustees have determined that the matter
affects only the interests of one or more portfolios, only the
shareholders of such portfolio or portfolios shall be entitled to
vote.

About Your Investment

SALES AND REDEMPTIONS

Shares are sold or redeemed at the net asset value per share next
determined after receipt of an order . Orders for
purchases or sales of shares of a Fund must be received by
your insurance company before the close of regular trading
on the New York Stock Exchange and transmitted promptly the
next day in order to receive that day's net asset value. No
fee is charged to a separate account when it redeems Fund shares.

Under unusual circumstances, the Trust may suspend repurchases or
postpone payment for up to seven days or longer, as permitted by
federal securities law.

EXCHANGE PRIVILEGE

HOW THE TRUST VALUES ITS SHARES

The Trust calculates the net asset value of a share of each Fund
by dividing the total value of the assets of the Fund, less
liabilities, by the number of shares of the Fund outstanding.
Shares are valued as of the close of regular trading on the New
York Stock Exchange each day the Exchange is open. Fund
securities for which market quotations are readily available are
stated at market value. Short-term investments that will mature
in 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.

HOW DISTRIBUTIONS ARE MADE; TAX INFORMATION

Each Fund will distribute any net
investment income and net realized capital gains at least
annually. Both types of distributions will be made in shares of
such Funds unless an election is made on behalf of a separate
account to receive some or all of the distributions in cash.

Distributions are reinvested without a sales charge, using the
net asset value determined on the ex-dividend date .

FINANCIAL INFORMATION

SECURITIES RATINGS

The following rating services describe rated securities as
follows:

Moody's Investors Service, Inc.

Bonds

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.
<PAGE>
B--Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over
any long period of time may be small.

Caa--Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with
respect to principal or interest.

Ca--Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default
or have other marked shortcomings.

C - Bonds which are rated C are the lowest rated class of bonds
and issues so rated can be regarded as having extremely poor
prospects of ever earning any real investment standing.

Standard & Poor's Corporation

Bonds

AAA--Debt rated AAA has the highest rating assigned by Standard &
Poor's. 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 higher-rated issues only in
small degree.

BB, B, CCC, CC, C--Debt rated BB, B, CCC, CC and C 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.
<PAGE>
D--Debt rated D is in payment default. The D rating category is
used when interest payments or principal payments are not made on
the date due even if the applicable grace period has not expired,
unless Standard & Poor's believes that such payments will be made
during such grace period. The D rating also will be used on the
filing of a bankruptcy petition if debt service payments are
jeopardized.

<PAGE>
Putnam Capital Manager Trust
One Post Office Square
Boston, MA 02109

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

Price Waterhouse LLP
160 Federal Street
Boston, MA 02110

PUTNAM CAPITAL MANAGER TRUST

FORM N-1A

PART B

STATEMENT OF ADDITIONAL INFORMATION
May 1, 1995

This Statement of Additional Information is not a Prospectus and
is only authorized for distribution when accompanied or
preceded by the Prospectus of the Trust dated May 1, 1995, as
revised from time to time. This Statement contains
information which may be useful to investors but which is not
included in the Prospectus . If the Trust has more than
one form of current Prospectus, each reference to the Prospectus
in this Statement shall include all the Trust's Prospectuses,
unless otherwise noted. The Statement 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.

The Report of the Trust's independent accountants and the
audited financial statements of the Trust are incorporated by
reference into this Statement .

Table of Contents

DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . B- 2

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS. . . . . . . B- 2

TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . .B- 22

INVESTMENT RESTRICTIONS OF THE TRUST . . . . . . . . . . . .B- 24

MANAGEMENT OF THE TRUST. . . . . . . . . . . . . . . . . . .B- 28

INVESTMENT PERFORMANCE OF THE TRUST. . . . . . . . . . . . .B- 54

DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . .B- 56

SUSPENSION OF REDEMPTIONS. . . . . . . . . . . . . . . . . .B- 59

SHAREHOLDER LIABILITY. . . . . . . . . . . . . . . . . . . .B- 59

CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . . . . .B- 59

INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS . . . . . .B- 60
<PAGE>
PUTNAM CAPITAL MANAGER TRUST
STATEMENT OF ADDITIONAL INFORMATION
DEFINITIONS

The "Trust" -- Putnam Capital Manager Trust.

"Putnam Management" -- Putnam Investment Management,
Inc., the Trust's investment
manager.

"Putnam Mutual Funds" -- Putnam Mutual Funds Corp., the
Trust's principal underwriter.

"Putnam Fiduciary Trust -- Putnam Fiduciary Trust Company,
Company" the Trust's custodian.

"Putnam Investor Services" -- Putnam Investor Services, a
division of Putnam Fiduciary
Trust Company, the Trust's
investor servicing agent.

INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS

The Trust consists of eleven separate investment portfolios (the
"Funds") with separate investment objectives and policies: PCM
Asia Pacific Growth Fund, PCM Diversified Income Fund, PCM Global
Asset Allocation Fund, PCM Global Growth Fund, PCM Growth and
Income Fund, PCM High Yield Fund, PCM Money Market Fund, PCM New
Opportunities Fund, PCM U.S. Government and High Quality Bond
Fund, PCM Utilities Growth and Income Fund, and PCM Voyager Fund.
The investment objectives and policies of the Funds are described
in the Prospectus offering such Funds. This Statement contains,
among other things, the investment restrictions of the Funds. It
also contains information concerning certain investment practices
in which some or all of the Funds may engage. The Prospectus
indicates which practices are applicable to each Fund which it
offers.

Except as described below under "Investment Restrictions of the
Trust," the investment policies described in the Prospectus and
in this Statement are not fundamental, and the Trustees may
change such policies without shareholder approval. As a matter
of policy, the Trustees would not materially change the Funds'
investment objectives without shareholder approval.
<PAGE>
Lower-rated Securities

Each 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 a
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 a Fund more volatile and
could limit a Fund's ability to sell its securities at prices
approximating the values a Fund had placed on such securities.
In the absence of a liquid trading market for securities held by
it, a 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 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 a Fund's assets. Conversely,
during periods of rising interest rates, the value of a 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 income
derived from such 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,
although Putnam Management will monitor the investment to
determine whether its retention will assist in meeting a Fund's
investment objective.

At times, a substantial portion of a 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, a 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 a Fund's net asset value. In order to
enforce its rights in the event of a default under such
securities, a 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 addition, each
Fund's intention to qualify as a "regulated investment company"
under the Internal Revenue Code may limit the extent to which a
Fund may exercise its rights by taking possession of such assets.

A Fund may at times invest without limit in so-called "zero-
coupon" bonds and "payment-in-kind" bonds identified in the
Prospectus, 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. The value of zero-coupon bonds and payment-in-
kind bonds is subject to greater fluctuation in response to
changes in market interest rates than bonds which pay interest
currently in cash. 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, a Fund is
nonetheless required to accrue interest income on such
investments and to distribute such amounts at least annually to
shareholders. Thus, a Fund could be required at times to
liquidate other investments in order to satisfy its dividend
requirements.

Investments in Premium Securities

Unless otherwise specified in the Prospectus or elsewhere in this
Statement of Additional Information, if a Fund may invest in
premium securities, it may do so without limit.

<PAGE>
Securities Loans

Each 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

Each 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 a 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, a
Fund may dispose of a commitment prior to settlement if Putnam
Management deems it appropriate to do so. A Fund may realize
short-term profits or losses upon the sale of forward
commitments.

A 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, that Fund realizes a gain or loss
on the commitment without regard to any unrealized gain or loss
on the underlying security. If a Fund delivers securities under
the commitment, that 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

Each Fund may enter into repurchase agreements up to the limit
specified in the Prospectus. A repurchase agreement is a
contract under which a 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 Trust's present intention to
enter into repurchase agreements only with commercial banks and
registered broker-dealers approved by the Trustees 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 a 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, a 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, a 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.

<PAGE>
Options on Securities

Writing covered options. Each 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 a Fund's investment objectives
and policies. Call options written by a 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.

Each Fund may write only covered options, which means that, so
long as a 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. Each Fund may
write combinations of covered puts and calls on the same
underlying security.

A 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.

A 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 a 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. A 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. A 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 a 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 a 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 a 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, a
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 normal market 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, a 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 a 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,
the Options Clearing Corporation 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 the
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 a 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, a Fund may invest without limit in the
types of futures contracts and related options identified in the
Prospectus unless otherwise specified 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
Commodities 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, the
purchaser 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 a 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, the 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 a 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.

A Fund may elect to close some or all of its futures positions at
any time prior to their delivery date in order to reduce or
eliminate the 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. A 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 futures 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 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, a
Fund may purchase put options or write call options on futures
contracts rather than sell futures contracts. Similarly, a 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.

A Fund will be required to deposit initial margin and variation
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 a Fund is subject to
Putnam Management's ability to predict movements in interest
rates and other factors affecting securities markets. For
example, if a 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 variation
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 a 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 a
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 a 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.

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. A Fund may
enter into stock index futures contracts, debt index futures
contracts, or other index futures contracts appropriate to its <PAGE>
objective. A Fund may also purchase and sell options on index
futures contracts.

For example, the Standard & Poor's 500 Composite 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 a
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 a 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 a Fund for hedging purposes is
also subject to Putnam Management's ability to predict movements
in the market. It is possible that, where a 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 a 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 <PAGE>
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.

<PAGE>
Options on Indices

As an alternative to purchasing call and put options on index
futures, a Fund may purchase 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

A 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 purchase price paid for the warrant.

A Fund will normally use index warrants in a manner similar to
its use of options on securities indices. The risks of a 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, each Fund may invest up to the limit of its
total assets specified in the 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, a Fund may purchase and
sell forward foreign currency contracts. These represent
agreements to purchase or sell specified currencies at specified
dates and prices. A 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 Trust, will be held
by the Trust's custodian or by a subcustodian.

Foreign Currency Transactions

Unless otherwise specified in the Prospectus, a Fund may engage
without limit in currency exchange transactions to protect
against uncertainty in the level of future currency exchange
rates. In addition, a Fund may write covered call and put
options on foreign currencies for the purpose of increasing its
current return.

Generally, a 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.

<PAGE>
A 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.

Cross hedging transactions by a 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.

For transaction hedging purposes, a 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 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, a 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 currencies 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.

<PAGE>
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
securities market movements 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 a 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.

A 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.

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 may
either 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 a 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.

<PAGE>
A 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 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 a
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 a 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 delegation 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
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 Trust. Each 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 to so
qualify and to qualify for the special tax treatment accorded
regulated investment companies and their shareholders, each 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 stocks 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
of its taxable net investment income (exclusive of net capital
gains) and 90% of its net tax-exempt income; and

<PAGE>
(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 a 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 a 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.
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 a 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 fund is exempt from this distribution requirement and excise
tax if at all times during the calendar year each shareholder in
a fund was "a segregated asset account of a life insurance
company held in connection with variable contracts."

Hedging transactions. If a 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 the Fund's distributions. 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.

<PAGE>
Under the 30% of gross income test described above (see "Taxation
of the Trust"), a 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.

Securities issued or purchased at a discount. The Fund's
investment in securities that are treated for tax purposes as
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 amount and expiration date of any
capital loss carryovers available to a Fund are shown in Note 1
(Federal income taxes) to the financial statements
incorporated by reference into this Statement.

With respect to investment income and gains received by a Fund
from sources outside the United States, such income and gains may
be subject to foreign taxes which are withheld at the source.
The effective rate of foreign taxes to which a Fund will be
subject depends on the specific countries in which its assets
will be invested and the extent of the assets invested in each
such country and therefore cannot be determined in advance.

Investment by a 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."

This discussion of federal income tax treatment of the Trust and
its shareholders is based on the law as of the date of this
Statement of Additional Information.

INVESTMENT RESTRICTIONS OF THE TRUST

As fundamental investment restrictions, which may not be changed
as to any Fund without a vote of a majority of the outstanding
voting securities of that Fund, the Trust may not and will not
take any of the following actions with respect to that Fund:

(1) (All Funds except PCM Voyager Fund) Borrow money in
excess of 10% of the value (taken at the lower of cost or current
value) of the Fund's 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.

(PCM Voyager Fund) Borrow more than 50% of the value of its
total assets (excluding borrowings and stock index futures
contracts and call options on stock index futures contracts and
stock indices) less liabilities other than borrowings and stock
index futures contracts and call options on stock index futures
contracts and stock indices.

(2) Pledge, hypothecate, mortgage or otherwise encumber its
assets in excess of 15% of the Fund's 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 other collateral arrangements in
connection with the writing of put or call options and collateral
arrangements with respect to margin for futures contracts and
related options are not considered to be pledges or other
encumbrances.)

(3) 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 related
options.

(4) Make short sales of securities or maintain a short
position for the account of the Fund unless at all times when a
short position is open the Fund 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.

(5) 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.

(6) (All Funds except PCM Asia Pacific Growth Fund, PCM
Diversified Income Fund, PCM New Opportunities Fund and PCM
Utilities Growth and Income Fund) Purchase or sell real estate,
although it may purchase securities which are secured by or
represent interests in real estate.

(PCM Diversified Income Fund) 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.

(PCM Asia Pacific Growth Fund, PCM New Opportunities Fund and PCM
Utilities Growth and Income Fund) 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.

(7) Purchase or sell commodities or commodity contracts,
except that it may purchase or sell futures contracts, options on
futures, forward contracts and options on foreign currencies.

(8) 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 of its portfolio securities with respect
to not more than 25% of its assets.

(9) Invest in securities of any issuer if, to the knowledge
of the Trust, officers and Trustees of the Trust and officers and
directors of Putnam Management who beneficially own more than
0.5% of the securities of that issuer together beneficially own
more than 5%.

(10) (All Funds except PCM Asia Pacific Growth Fund, PCM New
Opportunities Fund and PCM Utilities Growth and Income Fund)
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 U.S.
government securities, or, with respect to 25% of the Fund's
total assets, securities of any foreign government, its agencies
or instrumentalities, securities of supranational entities, and
securities backed by the credit of a governmental entity.

(11) Acquire more than 10% of the voting securities of any
issuer.

(12) Invest more than 25% of the value of its total assets in
any one industry, except that PCM Money Market Fund may invest
more than 25% of its assets in securities of banks and bank
holding companies as a group when in the opinion of Putnam
Management yield differentials make such investments desirable,
and suitable investments are available, and except that PCM
Utilities Growth and Income Fund may invest more than 25% of its
assets in any of the public utilities industries. (U.S.
Government Securities and securities of any foreign government,
its agencies or instrumentalities, securities of supranational
entities, and securities backed by the credit of a governmental
entity are not considered to represent an industry).

(13) (All Funds except PCM Asia Pacific Growth Fund, PCM
Money Market Fund, PCM New Opportunities Fund and PCM Utilities
Growth and Income Fund) Purchase securities the disposition of
which is restricted under federal securities laws, if, as a
result, such investments would exceed 15% of the value of the
Fund's net assets, excluding restricted securities that have been
determined by the Trustees of the Trust (or the person designated
by them to make such determinations) to be readily marketable.

(PCM Money Market Fund) Purchase securities the disposition of
which is restricted under federal securities laws, if, as a
result, such investments would exceed 10% of the value of the
Fund's net assets.

(14) (All Funds except PCM Utilities Growth and Income Fund)
Buy or sell oil, gas or other mineral leases, rights or royalty
contracts.

(PCM Utilities Growth and Income Fund) 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 contacts acquired through the exercise of its rights
as a holder of debt obligations secured thereby.

(15) Make investments for the purpose of gaining control of a
company's management.

(16) Issue any class of securities which is senior to the
Fund's shares of beneficial interest.

It is contrary to each of PCM Asia Pacific Growth Fund's, PCM New
Opportunities Fund's and PCM Utilities Growth and Income Fund's
present policy, which may be changed without shareholder
approval, to purchase securities restricted as to resale
(excluding securities determined by the Trustees or Putnam
Management to be readily marketable), if as a result such
investments would exceed 15% of the Fund's net assets.

It is contrary to the present policy of each of the Funds, which
may be changed without shareholder approval, to invest in
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.

---------------------

In addition, each Fund has agreed that, so long as shares of
beneficial interest in the Fund are registered for offer and sale
in the State of California and such undertaking is required as a
condition to such registration, except as noted below, any Fund
investing in foreign securities will at all times invest in
securities of issuers located in a minimum of five different
foreign countries. However, this minimum is reduced to four
different foreign countries when the Fund's foreign investments
comprise less than 80% of its net assets, to three different
foreign countries when the Fund's foreign investments comprise
less than 60% of its net assets, to two different foreign
countries when the Fund's foreign investments comprise less than
40% of its net assets, and is eliminated when the Fund's foreign
investments comprise less than 20% of its net assets. In
addition, no Fund may invest more than 20% of its net assets in
securities of issuers located in any one foreign country, except
that, to the extent consistent with its investment policies, a
Fund may invest up to 35% of its net assets in securities of
issuers located in any one of the following countries:
Australia, Canada, France, Germany, Japan or the United
Kingdom.
Also, subject to such more restrictive investment restrictions
and policies as a Fund may adopt from time to time, the borrowing
limits for any Fund are (1) 10% of net asset value when borrowing
for any general purpose, and (2) 25% of net asset value when
borrowing as a temporary measure to facilitate redemptions. For
this purpose, a Fund's net asset value shall be the market value
of all investments owned less outstanding liabilities of the
portfolio at the time that any new or additional borrowing is
undertaken.

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 or the
Trust means the affirmative vote of the lesser of (1) more than
50% of the outstanding shares of a Fund or the Trust, as the case
may be, or (2) 67% or more of the shares present at a meeting if
more than 50% of the outstanding shares are represented at the
meeting in person or by proxy.

MANAGEMENT OF THE TRUST

Trustees

*+George Putnam, Chairman and President. Chairman and Director
of Putnam Investment Management, Inc. and Putnam Mutual Funds
Corp. 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 of 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.

<PAGE>
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. Chairman of the Board and
Director, Kmart Corporation. Director of various
corporations, including American Telephone & Telegraph Company,
AON Corp., Cummins Engine Company, Inc., Illinois Power Company,
Inland Steel Industries, Inc. , 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 Data General Corporation,
Bradley Real Estate Inc., Courier Corporation and Providence
Journal Co. Also, Trustee of Massachusetts General Hospital and
Eastern Utilities Associates.

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.

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.

<PAGE>
William N. Shiebler, Vice President. Director and Senior
Managing Director of Putnam Investments, Inc. President, Chief
Operating Officer and Director of Putnam Mutual Funds Corp. 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.

Beverly Marcus, Clerk and Assistant Treasurer. Clerk and
Assistant Treasurer of the Putnam funds.

Katherine Howard, Assistant Treasurer. Assistant Treasurer of
the Putnam funds.

Gary N. Coburn, Vice President. Senior Managing Director of
Putnam Investment Management, Inc. Director, Putnam Investments,
Inc. Vice President of certain of the Putnam funds.

Peter Carman, Vice President. Senior Managing Director of Putnam
Investment Management, Inc. Director, Putnam Investments, Inc.
Vice President of certain of the Putnam funds.

Brett C. Browchuk, Vice President. Managing Director of Putnam
Investment Management, Inc.

Anthony I. Kreisel, Vice President. Managing Director of
Putnam Investment Management, Inc. Vice President, Putnam
Fiduciary Trust Company. Vice President of certain of the Putnam
funds.

William J. Landes, Vice President. Managing Director of Putnam
Investment Management, Inc. Vice President of certain of the
Putnam funds.

Michael Martino , Vice President. Managing Director of
Putnam Investment Management, Inc. Vice President of certain of
the Putnam funds.

Daniel L. Miller , Vice President. Managing
Director of Putnam Investment Management, Inc. Vice
President of certain of the Putnam funds.
<PAGE>
Mark Turner, Vice President. Managing Director of Putnam
Investment Management, Inc. Vice President of certain of the
Putnam funds.

Matthew A. Weatherbie, Vice President. Managing Director of
Putnam Investment Management, Inc. Vice President of certain of
the Putnam funds.

Robert R. Beck , Vice President. Senior Vice President of
Putnam Investment Management, Inc. Vice President of certain of
the Putnam funds.

Richard M. Frucci , Vice President. Senior Vice
President of Putnam Investment Management, Inc.

Roland W. Gillis , Vice President. Senior Vice President
of Putnam Investment Management, Inc. Vice President of certain
of the Putnam funds.

David L. King , Vice President. Senior Vice
President of Putnam Investment Management, Inc. Vice
President of certain of the Putnam funds.

D. William Kohli , Vice President. Senior Vice
President of Putnam Investment Management, Inc. Vice President
of certain of the Putnam funds.

Jennifer Evans Leichter, Vice President. Senior Vice
President of Putnam Investment Management, Inc. Vice
President of certain of the Putnam funds.

Sheldon N. Simon, Vice President. Senior Vice President of
Putnam Investment Management, Inc.

John K. Storkerson, Vice President. Senior Vice President of The
Putnam Advisory Company, Inc. Vice President of certain of the
Putnam funds.

Charles H. Swanberg, Vice President. Senior Vice President of
Putnam Investment Management, Inc. Vice President of certain of
the Putnam funds.

Kenneth J. Taubes, Vice President. Senior Vice President of
Putnam Investment Management, Inc. Vice President of certain of
the Putnam funds.

David K. Thomas, Vice President. Senior Vice President of Putnam
Investment Management, Inc. Vice President of certain of the
Putnam funds.

Rosemary H. Thomsen, Vice President. Senior Vice President of
Putnam Investment Management, Inc. Vice President of certain of
the Putnam funds.

<PAGE>
Gerald S. Zukowski, Vice President. Senior Vice President of
Putnam Investment Management, Inc. Vice President of certain of
the Putnam funds.

Lindsey M. Callen, Vice President. Vice President of Putnam
Investment Management, Inc. Vice President of certain of the
Putnam funds.

Neil J. Powers, Vice President. Vice President of Putnam
Investment Management, Inc. Vice President of certain of the
Putnam funds.

Christopher A. Ray, Vice President. Vice President of Putnam
Investment Management, Inc. Vice President of certain of the
Putnam funds.

David J. Santos , Vice President. Vice
President of Putnam Investment Management , Inc .
Vice President of certain of the Putnam funds .

Mark J. Siegel , Vice President. Vice President of Putnam
Investment Management, Inc. Vice President of certain 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 Trust, 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 Trust and may exercise all of the powers of
the Trustees.

#George Putnam, III is the son of George Putnam.

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. Prior to August 1,
1993, Mr. Carman was Chief Investment Officer, Chairman of the
U.S. Equity Investment Policy Committee and a Director of Sanford
C. Bernstein & Company , Inc. Prior to January,
1994, Mr. Martino was employed by Bay Bank Advisors in the
positions of Executive Vice President and Chief Investment
Officer from 1992 to 1994, and Senior Vice President and Senior
Portfolio Manager from 1990 to 1992. Prior to March, 1995, Mr.
Gillis was Vice President at Keystone Custodian Funds, Inc.
Prior to September, 1994, Mr. Kohli was Executive Vice President
and Co-Director of Global Bond Management and, prior to October,
1993, Senior Portfolio Manager, at Franklin Advisors/Templeton
Investment Counsel. Prior to June, 1991, Mr. Taubes was
Senior Vice President of the Finance Division of U.S. Trust
Company. Prior to January, 1993, Mr. Ray was Vice
President and Portfolio Manager at Scudder, Stevens & Clark,
Inc., and from February, 1986 to March, 1992, Mr. Ray was a Vice
President of Putnam Management.

The Trust pays each Trustee 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 fees paid to each Trustee by the Trust and by all
of the Putnam funds are shown below:<TABLE>
<CAPTION>

Retirement
Year first benefits Total
elected as a Aggregate accrued as compensation
Trustee of the compensation part of Trust's from all
Trustees Putnam Funds from the Trust* expenses Putnam funds**
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jameson A. Baxter 1994 $14,034 $0 $135,850
Hans H. Estin 1972 13,817 0 141,850
John A. Hill 1985 13,823 0 143,850
Elizabeth T. Kennan 1992 13,600 0 141,850
Lawrence J. Lasser 1992 13,817 0 141,850
Robert E. Patterson 1984 14,034 0 144,850
Donald S. Perkins 1982 13,617 0 139,850
William F. Pounds 1971 13,825 0 143,850
George Putnam 1957 13,817 0 141,850
George Putnam, III 1984 13,817 0 141,850
Eli Shapiro*** 1995 N/A 0 N/A
A.J.C. Smith 1986 13,422 0 137,850
W. Nicholas Thorndike 1992 14,034 0 144,850
- ------------------------------------------------------------------------------------------
* Reflects amounts paid by the Trust for its fiscal year ended December 31, 1994.
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 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 1990, which benefits terminated at the
end of 1994.
</TABLE>
The Trust'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 the 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 of the Trust will receive similar benefits upon their
retirement. A Trustee who retired in the most recent calendar
year 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 of the Trust 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 Trust's Trustees, see
"Management of the Trust" in this Statement of Additional
Information.

The Agreement and Declaration of Trust of the Trust provides that
the Trust 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
Trust, except if it is determined in the manner specified in such
Agreement and Declaration of Trust that such Trustees and
officers have not acted in good faith in the reasonable belief
that their actions were in the best interests of the Trust or
that such indemnification would relieve any officer or Trustee of
any liability to the Trust or its shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties. The Trust, at its expense,
provides liability insurance for the benefit of its Trustees and
officers.

Trustees and officers of the Trust who are also officers of
Putnam Management or its affiliates or stockholders of Marsh &
McLennan Companies, Inc. will benefit from the advisory fees,
transfer agency fees and custodian fees and fees paid or allowed
by the Trust. At March 31, 1995 the officers and Trustees
as a group owned no shares of the Trust or any Fund. As of this
date, less than 1% of the value of the accumulation units with
respect to any Fund was attributable to the officers and Trustees
of the Trust, as a group, owning variable annuity contracts or
variable life insurance policies issued by the insurers listed in
the following tables. All of the shares of each of the Funds are
owned by the insurance company separate accounts listed below and
by Putnam Management pursuant to its initial capital contribution
to each Fund during the organization of the Trust and the
subsequent organization of PCM Global Growth Fund, PCM Utilities
Growth and Income Fund, PCM Diversified Income Fund, PCM New
Opportunities Fund and PCM Asia Pacific Growth Fund.

<S> <C> <C>
Percentage of
Issuer and name of shares owned of record
Separate Account Fund as of March 31,1995

Hartford Life
Insurance Company

(a) Putnam Capital Manager Trust
Separate Account

PCM Asia Pacific Growth Fund --

PCM Diversified Income Fund 59.00

PCM Global Asset Allocation Fund 64.37

PCM Global Growth Fund 58.28

PCM Growth and Income Fund 69.75

PCM High Yield Fund 60.93

PCM Money Market Fund 76.14

PCM New Opportunities Fund 57.77

PCM U.S. Government
and High Quality Bond Fund 80.49

PCM Utilities Growth
and Income Fund 64.01

PCM Voyager Fund 66.24
<PAGE>
(b) Separate Account VL I

PCM Asia Pacific Growth Fund --

PCM Diversified Income Fund --

PCM Global Asset Allocation Fund .51

PCM Global Growth Fund .41

PCM Growth and Income Fund .16

PCM High Yield Fund .14

PCM Money Market Fund .13

PCM New Opportunities Fund --

PCM U.S. Government
and High Quality Bond Fund .05

PCM Utilities Growth
and Income Fund .23

PCM Voyager Fund .44
<PAGE>
(b) Putnam Capital
Manager Trust
Variable Life
Separate Account Five

PCM Asia Pacific Growth Fund *

PCM Diversified Income Fund *

PCM Global Asset Allocation Fund *

PCM Global Growth Fund *

PCM Growth and Income Fund *

PCM High Yield Fund *

PCM Money Market Fund .02

PCM New Opportunities Fund *

PCM U.S. Government
and High Quality Bond Fund *

PCM Utilities Growth
and Income Fund *

PCM Voyager Fund *<PAGE>

Percentage of
Issuer and name of shares owned of record
Separate Account Fund as of March 31, 1995

(2) Hartford Life and
Accident Insurance
Company

Putnam Capital
Manager Trust
Separate Account One PCM Asia Pacific Growth Fund --

PCM Diversified Income Fund .16

PCM Global Asset Allocation Fund .29

PCM Global Growth Fund .28

PCM Growth and Income Fund .25

PCM High Yield Fund .19

PCM Money Market Fund .10

PCM New Opportunities Fund .13

PCM U.S. Government
and High Quality Bond Fund .19

PCM Utilities Growth
and Income Fund .25

PCM Voyager Fund .27
<PAGE>
(3) ITT Hartford Life
and Annuity
Insurance Company

(a) Putnam Capital
Manager Trust
Separate Account Two

PCM Asia Pacific Growth Fund --

PCM Diversified Income Fund 38.91

PCM Global Asset Allocation Fund 34.82

PCM Global Growth Fund 41.02

PCM Growth and Income Fund 29.60

PCM High Yield Fund 38.72

PCM Money Market Fund 23.59

PCM New Opportunities Fund 42.05

PCM U.S. Government
and High Quality Bond Fund 19.26

PCM Utilities Growth
and Income Fund 35.00

PCM Voyager Fund 32.19

<PAGE>
(b) Putnam Capital
Manager Trust
Variable Life
Separate Account Five

PCM Asia Pacific Growth Fund --

PCM Diversified Income Fund --

PCM Global Asset Allocation Fund --

PCM Global Growth Fund --

PCM Growth and Income Fund --

PCM High Yield Fund --

PCM Money Market Fund .02

PCM New Opportunities Fund --

PCM U.S. Government
and High Quality Bond Fund --

PCM Utilities Growth
and Income Fund --

PCM Voyager Fund --
<PAGE>
Percentage of
Issuer and name of shares owned of record
Separate Account Fund as of March 31, 1995

(4) Northwestern National
Life Insurance Company

(a) Select Life
PCM Asia Pacific Growth Fund --

PCM Diversified Income Fund *

PCM Growth and Income Fund *

PCM New Opportunities Fund --

PCM Utilities Growth
and Income Fund .05

PCM Voyager Fund .02

(b) Select Life II
Variable Account
PCM Asia Pacific Growth Fund --

PCM Diversified Income Fund .07

PCM Growth and Income Fund .02

PCM New Opportunities Fund --

PCM Utilities Growth
and Income Fund .04

PCM Voyager Fund .14

<PAGE>
(c) Select Life III
Variable Account
PCM Asia Pacific Growth Fund --

PCM Diversified Income Fund .06

PCM Growth and Income Fund .02

PCM New Opportunities Fund --

PCM Utilities Growth
and Income Fund .05

PCM Voyager Fund .14

(d) NWNL Select Annuity II

PCM Asia Pacific Growth Fund --

PCM Diversified Income Fund .06

PCM Growth and Income Fund .02

PCM New Opportunities Fund --

PCM Utilities Growth
and Income Fund .05

PCM Voyager Fund .14

<PAGE>
(e) NWNL Select Annuity III

PCM Asia Pacific Growth Fund --

PCM Diversified Income Fund 1.65

PCM Growth and Income Fund .14

PCM New Opportunities Fund --

PCM Utilities Growth
and Income Fund .30

PCM Voyager Fund .43
<PAGE>
(5) American Enterprise Percentage of
shares
Life Insurance Fund owned of record
as
Company of March 31,
1995

Putnam Capital
Manager Trust
American Enterprise PCM Diversified Income Fund .01
Variable Annuity
Account PCM Growth and Income Fund *

PCM High Yield Fund .01

PCM New Opportunities Fund .02

(6) Investors Life Insurance Percentage of shares
Company of North owned of record as
America of March 31, 1995

Putnam Capital PCM Growth and Income Fund --
Manager Trust
CIGNA Separate PCM Money Market Fund --
Account I
PCM U.S. Government and
High Quality Bond Fund --

PCM Voyager Fund --

*Less than 1/10th of 1%.

The address for the separate accounts listed in (1) through (3) above is: P.O. Box 2099,
Hartford, CT 06140-2999. The address for the separate account listed in (4) above is: 20
Washington Avenue South, Minneapolis, MN 55401. The address for the separate account
listed in (5) above is: 80 S. Eighth Street, Minneapolis, MN 55440 . The address for
the separate account listed in (6) above is: Austin Centre, 701 Brazos Street, Austin, TX
78701.
</TABLE>
Each of the insurance companies issuing the separate accounts
listed above have agreed to vote their shares in proportion to
and in the manner instructed by contract and policy owners. By
virtue of the foregoing, each of these insurance companies, or
any of them together, may be deemed to be a controlling person of
each of the Funds.

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 if such
investor's money were invested 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 $72 billion in assets in over 4.3
million shareholder accounts at March 31, 1995 . An
affiliate, The Putnam Advisory Company, Inc., manages domestic
and foreign institutional accounts and mutual funds, including
the accounts of many Fortune 500 companies. At March 31,
1995, Putnam Management and its affiliates managed over
$101 billion in assets , including over
$16 billion in tax-exempt securities and over $36
billion in retirement plan assets.

The Management Contract

Under a Management Contract between the Trust and Putnam
Management dated October 2, 1987, as supplemented March 2, 1990,
and as further supplemented February 27, 1992, July 9, 1993,
April 5, 1994, June 2, 1994, and April 7 , 1995, subject to
such policies as the Trustees may determine, Putnam Management,
at its expense, furnishes continuously an investment program for
the Funds and makes investment decisions on their behalf.
Subject to the control of the Trustees, Putnam Management also
manages, supervises and conducts the other affairs and business
of the Trust, furnishes office space and equipment, provides
bookkeeping and clerical services (including determination of the
net asset values of the Funds, but excluding shareholder
accounting services) and places all orders for the purchase and
sale of the Trust's portfolio securities. Putnam Management may
place the Trust's 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 Trust and other
clients. In so doing, Putnam Management may cause a Fund to pay
greater brokerage commissions than it might otherwise pay.

<PAGE>
The compensation payable to Putnam Management under the
Management Contract for its investment management services to the
Funds is paid quarterly at the following annual rates of each
Fund's average net assets, as determined at the close of each
business day during the quarter:

Fund Rate

PCM Asia Pacific Growth Fund 0.80% of the first
$500 million of
average net assets,
0.70% of the next
$500 million, 0.65%
of the next $500
million, 0.60% of
the next $5 billion,
0.575% of the next
$5 billion, 0.555%
of the next $5
billion, 0.54% of
the next $5 billion,
and 0.53% of any
excess thereafter

PCM Diversified Income Fund, PCM Global 0.70% of the first
Asset Allocation Fund, PCM High Yield $500 million of
Fund, PCM New Opportunities Fund average net assets,
and PCM Voyager Fund 0.60% of the next
$500 million, 0.55%
of the next $500
million, and 0.50%
of any amount over
$1.5 billion

PCM Growth and Income Fund 0.65% of the first
$500 million of
average net assets,
0.55% of the next
$500 million, 0.50%
of the next $500
million, and 0.45%
of any amount over
$1.5 billion

PCM Global Growth Fund , 0.60% of average
net
PCM U.S. Government and assets
High Quality Bond Fund and
PCM Utilities Growth and Income Fund
<PAGE>
PCM Money Market Fund 0.45% of the first
$500 million of
average net assets,
0.35% of the next
$500 million, 0.30%
of the next $500
million, and 0.25%
of any amount over
$1.5 billion

On January 6, 1995, the Trustees approved a proposal to change
the fees payable to Putnam Management under the Management
Contract for PCM U.S. Government and High Quality Bond Fund.

The proposed change is subject to shareholder approval and will
be submitted to shareholders at a meeting scheduled for July 13,
1995.

If approved at that meeting, management fees for the Fund would
thereafter be paid at the following annual rates: 0.65% of the
first $500 million of average net assets, 0.55% of the next $500
million, 0.50% of the next $500 million, 0.45% of the next $5
billion, 0.425% of the next $5 billion, 0.405% of the next $5
billion, 0.39% of the next $5 billion, and 0.38% of any excess
thereafter. The proposed change would result in an increase in
fees paid by the Fund to Putnam Management based upon the net
assets of the Fund at December 31, 1994.

The Trust pays affiliates of Putnam Management additional amounts
for investor servicing and custody services.

In addition to the fee paid to Putnam Management, the Trust
reimburses Putnam Management for the compensation and related
expenses of certain officers of the Fund and certain persons who
assist them in carrying out the responsibilities of those
offices. During fiscal 1994, the Trust reimbursed Putnam
Management $123,814 in this regard. The Trust may also pay
or reimburse Putnam Management for all or a part of the
compensation and related expenses of one or more other officers
of the Trust and their assistants. Currently the Trust is
reimbursing Putnam Management for the compensation and related
expenses of the Senior Vice President and the Clerk of the Trust.
The aggregate amount of all such payments and
reimbursements is determined annually by the Trustees. Putnam
Management pays all other salaries of officers of the Trust. The
Trust pays all expenses not assumed by Putnam Management
including, without limitation, auditing, legal, custodial,
investor servicing and shareholder reporting expenses. The Trust
pays any cost of typesetting for its prospectuses and any cost of
printing and mailing prospectuses sent to its shareholders.
Putnam Mutual Funds pays the cost of printing and distributing
all other prospectuses.

<PAGE>
The Management Contract provides that Putnam Management shall not
be subject to any liability to the Trust or to any shareholder of
the Trust for any act or omission in the course of or connected
with rendering services to the Trust 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 as to the Trust or as to any Fund
without penalty by vote of the Trustees or the shareholders of
one or more Funds affected, or by Putnam Management, on 30 days'
written notice. It may be amended with respect to a Fund only by
a vote of the shareholders of that 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 as to any Fund only so long as such
continuance is approved at least annually by vote of either the
Trustees or the shareholders of that Fund, and, in either case,
by a majority of the Trustees who are not "interested persons" of
Putnam Management or any Fund. In each of the foregoing cases,
the vote of the shareholders of any Fund is the affirmative vote
of a "majority of the outstanding voting securities" of such Fund
as defined in the Investment Company Act of 1940. The
continuation of the Contract as to all Funds was unanimously
approved by the Trustees, including those Trustees who are not
"interested persons," on January 6, 1995.

Recent Management Fees. For its 1992, 1993 and 1994 fiscal
years, pursuant to the Management Contract, the following Funds
incurred fees to Putnam Management as follows: PCM Voyager Fund,
$1,305,227, $2,770,454 and $5,347,055, respectively; PCM U.S.
Government and High Quality Bond Fund, $1,930,120, $3,574,490 and
$4,062,088, respectively; PCM High Yield Fund, $525,369,
$1,208,791 and $2,098,314, respectively; PCM Growth and Income
Fund, $2,766,719, $5,982,583 and $9,644,524, respectively; PCM
Money Market Fund, $337,547, $370,812 and $960,766, respectively;
PCM Global Asset Allocation Fund, $638,660, $1,167,001 and
$2,501,952, respectively; and PCM Global Growth Fund, $367,414,
$1,000,268 and $3,316,215, respectively. For its 1992 fiscal
period, and 1993 and 1994 fiscal years, pursuant to the
Management Contract, PCM Utilities Growth and Income Fund
incurred fees of $124,486, $1,496,570 and $2,450,006,
respectively, to Putnam Management, reflecting a reduction of
$11,522 in fiscal 1992 due to an expense limitation then in
effect. For its 1993 fiscal period and 1994 fiscal year,
pursuant to the Management Contract, PCM Diversified Income Fund
incurred fees of $56,026 and $1,219,268, respectively, to Putnam
Management. For its 1994 fiscal period, pursuant to the
Management Contract, PCM New Opportunities Fund incurred fees of
$119,511 to Putnam Management , reflecting a reduction of
$49,240 due to an expense limitation then in effect .

<PAGE>
Portfolio Transactions

Investment decisions. Investment decisions for each of the Funds
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 Trust of
negotiated brokerage commissions. Such commissions vary among
different brokers. Also, 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 Trust
usually includes an undisclosed dealer commission or mark-up. In
underwritten offerings, the price paid includes a disclosed,
fixed commission or discount retained by the underwriter or
dealer.

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 and from third
parties with which these broker-dealers have arrangements which
execute portfolio transactions for the clients of such advisers.
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
Funds' portfolio transactions and from third parties with which
those 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 services, 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 Trust), although not all of these services
are necessarily useful and of value in managing the Trust. The
management fee paid by the Trust 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 each Fund and buys and sells
investments for each Fund through a substantial number of brokers
and dealers. In so doing, Putnam Management uses its best
efforts to obtain for each 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 each 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 Securities and Exchange Act
of 1934, as amended ("the 1934 Act"), and by the Management
Contract, Putnam Management may cause a 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 a securities transaction on
stock exchanges and other agency 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 a Fund to pay any such greater
commissions is subject to such policies as the Trustees may adopt
from time to time. Putnam Management does not currently intend
to cause the Trust 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, and accordingly Putnam
Management will use its best efforts to obtain the most favorable
price and execution available with respect to such transactions,
as described above.

<PAGE>
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 a Fund, less any direct expenses approved by the
Trustees, shall be recaptured by the Fund through a reduction of
the fee payable under the Management Contract. Putnam Management
seeks to recapture for each 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 Trust (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 Funds.

During fiscal 1994:

(a) PCM Diversified Income Fund incurred brokerage commissions
aggregating $3,004 on agency transactions and incurred
underwriting commissions aggregating $68,716 on underwritten
transactions.

(b) PCM Global Asset Allocation Fund incurred brokerage
commissions aggregating $818,846 on agency transactions and
incurred underwriting commissions aggregating $57,482 on
underwritten transactions.

(c) PCM Global Growth Fund incurred brokerage commissions
aggregating $1,992,940 on agency transactions and incurred
underwriting commissions aggregating $312,738 on underwritten
transactions.

(d) PCM Growth and Income Fund incurred brokerage commissions
aggregating $2,736,406 on agency transactions and incurred
underwriting commissions aggregating $1,262,331 on underwritten
transactions.

(e) PCM High Yield Fund incurred brokerage commissions
aggregating $4,461 on agency transactions and incurred
underwriting commissions aggregating $235,582 on underwritten
transactions.

(f) PCM Money Market Fund did not incur any brokerage
commissions on agency transactions or underwriting commissions.

<PAGE>
(g) PCM New Opportunities Fund incurred brokerage commissions
aggregating $68,123 on agency transactions and incurred
underwriting commissions aggregating $87,951 on underwritten
transactions.

(h) PCM U.S. Government and High Quality Bond Fund incurred
brokerage commissions aggregating $17,014 on agency transactions
and incurred underwriting commissions aggregating $23,750 on
underwritten transactions.

(i) PCM Utilities Growth and Income Fund incurred brokerage
commissions aggregating $1,069,430 on agency transactions and
incurred underwriting commissions aggregating $469,262 on
underwritten transactions.

(j) PCM Voyager Fund incurred brokerage commissions aggregating
$1,295,494 on agency transactions and incurred
underwriting commissions aggregating $952,522 on underwritten
transactions.

In fiscal 1994, Putnam Management, on behalf of the Trust, placed
agency and underwritten transactions having an approximate
aggregate dollar value of $2,412,829,181 (39.42% of the Trust's
aggregate agency and underwritten transactions, on which
approximately $4,522,282 commissions were paid) with brokers and
dealers to recognize research, statistical and quotation services
Putnam Management considered to be particularly useful to it and
its affiliates. However, many of such transactions were placed
with such brokers and dealers without regard to the furnishing of
such services.

Principal Underwriter

Putnam Mutual Funds is the principal underwriter of shares of the
Trust, which are continuously offered, and shares of the
other continuously offered Putnam funds. Putnam Mutual Funds is
not obligated to sell any specific amount of shares of the Trust
and will purchase shares for resale only against orders for
shares.

Investor Servicing Agent and Custodian

Putnam Investor Services, a division of Putnam Fiduciary Trust
Company ("PFTC"), is the Trust's investor servicing agent
(transfer, plan and dividend disbursing agent), for which it
receives fees which are paid monthly by the Trust as an expense
of all its shareholders. The fee paid to PFTC 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.

The Trust paid $2,139,408 in fees to PFTC for its investor
servicing and custody services during fiscal 1994. The Trust
made no payments to PFTC for out-of-pocket expenses related to
the investor servicing agent's function for the year. For a
description of the custodial services provided by PFTC, see
"Custodian" below.

Putnam Fiduciary Trust Company is also investor servicing agent
for the other Putnam funds and receives fees from each of those
funds for its services.

INVESTMENT PERFORMANCE OF THE TRUST

Standard Performance Measures

Yield and total return data for the Funds may from time to time
be presented in the Prospectus, this Statement and
advertisements. The data is calculated as follows.

Total return for the life of the Funds is determined by
calculating the actual dollar amount of investment return on a
$1,000 investment in a Fund at the beginning of the period, 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 a Fund during that period.

A 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 net asset value of the Fund on the last day of the
base period. The result is annualized on a compounding basis to
determine the Fund's 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 GNMAs, based on
cost). Dividends on equity securities are accrued daily at their
stated dividend rates.

PCM Money Market Fund's yield is computed by determining the
percentage net change, excluding capital changes, in the value of
an investment in one share of the Fund 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). The Fund's
effective yield represents a compounding of the Fund's 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.

At times, Putnam Management may reduce its compensation or assume
expenses of a Fund in order to reduce that Fund's expenses. The
annual per share amount of any such reduction or assumption of
expenses is shown in the table entitled "Financial highlights" in
the Prospectus. Any such waiver or assumption of expenses would
increase that Fund's yield and total return during the period of
the waiver or assumption. All data is based on past performance
and does not predict future results.

PCM Diversified Income Fund's yield for the thirty-day period
ended December 31, 1994 was 7.54%. The Fund's total return for
the one-year period ended December 31, 1994 and for the life of
the Fund through December 31, 1994 was -4.23% and -1.57%,
respectively.

PCM Global Asset Allocation Fund's yield for the thirty-day
period ended December 31, 1994 was 3.04% The Fund's average
annual total return for the one- and five-year periods ended
December 31, 1994 and for the life of the Fund through December
31, 1994 was -2.50%, +7.74% and +8.86% , respectively.

PCM Global Growth Fund's average annual total return for the one-
year period ended December 31, 1994 and for the life of the Fund
through December 31, 1994 was -0.96% and +7.47% ,
respectively.

PCM Growth and Income Fund's yield for the thirty-day period
ended December 31, 1994 was 3.77%. The Fund's average annual
total return for the one- and five-year periods ended December
31, 1994 and for the life of the Fund through December 31, 1994
was +0.35%, +8.84% and +12.25% , respectively.

PCM High Yield Fund's yield for the thirty-day period ended
December 31, 1994 was 10.74%. The Fund's average annual total
return for the one- and five-year periods ended December 31, 1994
and for the life of the Fund through December 31, 1994 was -
0.94%, +12.94% and +9.93% , respectively.

PCM Money Market Fund's yield and effective yield for the seven-
day period ended December 31, 1994 were 5.05% and 5.18%,
respectively.

PCM New Opportunities Fund's total return for the life of the
Fund through December 31, 1994 was +8.20%.

PCM U.S. Government and High Quality Bond Fund's yield for the
thirty-day period ended December 31, 1994 was 7.41%. The Fund's
average annual total return for the one- and five-year periods
ended December 31, 1994 and the life of the Fund through December
31, 1994 was -3.23%, +7.85% and +8.08% ,
respectively.

PCM Utilities Growth and Income Fund's yield for the thirty-day
period ended December 31, 1994 was 4.92%. The Fund's total
return for the one-year period ended December 31, 1994 and for
the life of the Fund through December 31, 1994 was -7.02% and
+4.67 , respectively.

PCM Voyager Fund's average annual total return for the one- and
five-year periods ended December 31, 1994 and the life of the
Fund through December 31, 1994 was +1.04%, +13.63% and
+14.70% , respectively.

Investment operations of all Funds commenced February 1, 1988
(except PCM Global Growth Fund which commenced operations on May
1, 1990, PCM Utilities Growth and Income Fund which commenced
operations on May 4, 1992, PCM Diversified Income Fund which
commenced operations on September 15, 1993, PCM New Opportunities
Fund which commenced operations on May 2, 1994, and PCM Asia
Pacific Growth Fund which commenced operations after May
1 , 1995). The foregoing performance information reflects an
expense limitation applicable to PCM High Yield Fund for the
fiscal 1988 period, PCM Utilities Growth and Income Fund
for the fiscal 1992 period and PCM New Opportunities Fund for
the fiscal 1994 period . Performance information presented
for the Funds should not be compared directly with performance
information of other insurance products without taking into
account insurance-related charges and expenses payable under
their variable annuity contracts. These charges and expenses are
not reflected in the Funds' performance and would reduce an
investor's return under the annuity contract.

DETERMINATION OF NET ASSET VALUE

The Trust values the shares of each Fund daily on each day the
New York Stock Exchange (the "Exchange") is open. Currently, the
New York Stock 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 Trust determines net asset value as of the close
of regular trading on the Exchange, currently 4:00 p.m. However,
equity options held by a Fund are priced as of the close of
trading at 4:10 p.m., and futures on U.S. government securities
and index options held by a Fund are priced as of their close of
trading at 4:15 p.m.

PCM Money Market Fund. The valuation of the Fund's portfolio
instruments at amortized cost is permitted in accordance with
Securities and Exchange Commission Rule 2a-7 and certain
procedures adopted by the Trustees. The amortized cost of an
instrument is determined by valuing it at cost originally and
thereafter amortizing any discount or premium from its face value
at a constant rate until maturity, regardless of the effect of
fluctuating interest rates on the market value of the instrument.
Although the amortized cost method provides certainty in
valuation, it may result at times in determinations of value that
are higher or lower than the price the Fund would receive if the
instruments were sold. Consequently, changes in the market value
of portfolio instruments during periods of rising or falling
interest rates will not normally be reflected either in the
computation of net asset value of the Fund's portfolio or in the
daily computation of net income. Under the procedures adopted by
the Trustees, the Fund must maintain a dollar-weighted average
portfolio maturity of 397 days or less, purchase only instruments
having remaining maturities of 90 days or less and invest in
securities determined by the Trustees to be of high quality with
minimal credit risks. The Trustees have also established
procedures designed to stabilize, to the extent reasonably
possible, the Fund's price per share as computed for the purpose
of distribution, redemption and repurchase at $1.00. These
procedures include review of the Fund's portfolio holdings by the
Trustees, at such intervals as they may deem appropriate, to
determine whether the Fund's net asset value calculated by using
readily available market quotations deviates from $1.00 per
share, and, if so, whether such deviation may result in material
dilution or is otherwise unfair to existing shareholders. In the
event the Trustees determine that such a deviation exists, they
will take such corrective action as they regard as necessary and
appropriate, including the sale of portfolio instruments prior to
maturity to realize capital gains or losses or to shorten average
portfolio maturity; withholding dividends; redemption of shares
in kind; or establishing a net asset value per share by using
readily available market quotations.

Since the net income of the Fund is declared as a dividend each
time it is determined, the net asset value per share of the Fund
remains at $1.00 per share immediately after such determination
and dividend declaration. Any increase in the value of a
shareholder's investment in the Fund representing the
reinvestment of dividend income is reflected by an increase in
the number of shares of the Fund in the shareholder's account on
the first day of the next month (or, if that day is not a
business day, on the next business day). It is expected that the
Fund's net income will be positive each time it is determined.
However, if because of realized losses on sales of portfolio
investments, a sudden rise in interest rates, or for any other
reason the net income of the Fund determined at any time is a
negative amount, the Fund will offset such amount allocable to
each then shareholder's account from dividends accrued during the
month with respect to such account. If at the time of payment of
a dividend (either at the regular monthly dividend payment date,
or, in the case of a shareholder who is withdrawing all or
substantially all of the shares in an account, at the time of
withdrawal), such negative amount exceeds a shareholder's accrued
dividends, the Fund will reduce the number of outstanding shares
by treating the shareholder as having contributed to the capital
of the Fund that number of full and fractional shares which
represent the amount of excess. Each shareholder is deemed to
have agreed to such contribution in these circumstances by his or
her investment in the Fund.

<PAGE>
Other Funds. Each of the other Funds determines net asset value
as follows: 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 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 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 a Fund are
restricted as to resale, Putnam Management determines their fair
value following procedures approved by the Trustees. The
Trustees periodically review such valuations and procedures. 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 Trust'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 Funds' net asset
values. If events materially affecting the values of such
securities occur during such period, then these securities will
be valued at their fair value following procedures approved by
the Trustees.

SUSPENSION OF REDEMPTIONS

The Trust may not suspend the right of redemption and/or postpone
payment for more than seven days unless the New York Stock
Exchange is closed for other than customary weekends or holidays,
or except, 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 Trust 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 the protection of
investors.

SHAREHOLDER LIABILITY

Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of
the Trust. However, the Agreement and Declaration of Trust
disclaims shareholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in
each agreement, obligation, or instrument entered into or
executed by the Trust or the Trustees. The Agreement and
Declaration of Trust provides for indemnification out of a Fund's
property for all loss and expense of any shareholder held
personally liable for the obligations of that Fund. Thus, the
risk of a shareholder's incurring financial loss on account of
shareholder liability is limited to circumstances in which a Fund
would be unable to meet its obligations.

CUSTODIAN

Putnam Fiduciary Trust Company ("PFTC") is the custodian of the
Trust'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
Trust's cash and securities, handling the receipt and delivery of
securities and collecting interest and dividends on the Trust's
investments. PFTC and any subcustodians employed by it have a
lien on the securities of each Fund (to the extent permitted by
the Trust'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 Trust for the
benefit of that Fund. The Trust expects that such advances will
exist only in unusual circumstances. Neither PFTC nor any
subcustodian determines the investment policies of any Fund or
decides which securities a Fund will buy or sell. PFTC pays the
fees and other charges of any subcustodians employed by it. The
Trust may from time to time pay custodial expenses in full or in
part through the placement by Putnam Management of the Trust's
portfolio transactions with the subcustodians or with a third-
party broker having an agreement with the subcustodians. The
Trust pays PFTC an annual fee based on each 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.

INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS

Price Waterhouse LLP are the Trust's independent accountants,
providing audit services, tax return review and other tax
consulting services and assistance and consultation in connection
with the review of various Securities and Exchange Commission
filings. The Report of Independent Accountants and financial
statements included in the Trust's Annual Report for the fiscal
year ended December 31, 1994, filed on February 24,
1995 , are incorporated by reference into this Statement of
Additional Information.

The financial highlights in the Prospectus and the financial
statements incorporated by reference into the Prospectus and the
Statement of Additional Information have been so included and
incorporated in reliance upon the report of the independent
accountants, given on their authority as experts in auditing and
accounting.

PUTNAM CAPITAL MANAGER TRUST

FORM N-lA
PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Index to Financial Statements and Supporting
Schedules:

(1) Financial Statements:

Statements of assets and liabilities --
December 31, 1994 (a) .
Statement of operations -- year ended
Decemebr 31, 1994 (a) .
Statement of changes in net assets --
years ended December 31, 1994 and
December 31, 1993 (a).
Financial highlights (a)(b) .
Notes to financial statements (a) .

(2) Supporting Schedules:

Schedule I - Portfolios of investments
owned - - December 31, 1994 (a).

Schedules II through IX omitted because
the required matter is not present.

- -------------------------
(a) Incorporated by reference into
Parts A and B.
(b) Included in Part A.

(b) Exhibits:

1. Agreement and Declaration of Trust dated
September 24, 1987 -- Exhibit 1.
2. By-Laws, as amended through June 7, 1991 --
Exhibit 2.
3. Not applicable.
4a. Not applicable
4b. Portions of Agreement and Declaration of
Trust Relating to Shareholders' Rights --
Exhibit 3.
4c. Portions of By-Laws Relating to Shareholders'
Rights -- Exhibit 4.<PAGE>
5. Form of Management Contract, dated October 2,
1987, as supplemented March 2, 1990, as
further supplemented February 27, 1992, July
9, 1993, April 5, 1994, June 2, 1994,
April 7, 1995 and July 13 , 1995
-- Exhibit 5 .
6a. Distributor's Contract dated May 6, 1994 --
Exhibit 6 .
6b. Copy of Specimen Dealer Sales Contract --
Exhibit 7.
6c. Copy of Specimen Financial Institution Sales
Contract -- Exhibit 8.
7. Not applicable .
8. Copy of Custodian Agreement with Putnam
Fiduciary Trust Company dated May 3, 1991, as
amended July 13, 1992 -- Exhibit 9.
9. Investor Servicing Agreement, dated June 3,
1991 with Putnam Fiduciary Trust Company --
Exhibit 10 .
10. Opinion of Ropes & Gray, including consent --
Exhibit 11.

11. Not applicable.
12. Not applicable .
13. Investment Letters from The Putnam Management
Company, Inc. to the Registrant -- Exhibit
12.
14. Putnam Basic Plan Document and related Plan
Agreements -- Exhibit 13 .
15. Not applicable.
16. Schedules for performance computations --
Exhibit 14 .
17a. Financial Data Schedule -- PCM Diversified
Income Fund -- Exhibit 15.
17b. Financial Data Schedule -- PCM Global Asset
Allocation Fund -- Exhibit 16.
17c. Financial Data Schedule -- PCM Global Growth
Fund -- Exhibit 17.
17d. Financial Data Schedule -- PCM Growth and
Income Fund -- Exhibit 18.
17e. Financial Data Schedule -- PCM High Yield
Fund -- Exhibit 19.
17f. Financial Data Schedule -- PCM Money Market
Fund -- Exhibit 20.
17g. Financial Data Schedule -- PCM New
Opportunities Fund -- Exhibit 21.
17h. Financial Data Schedule -- PCM U.S.
Government and High Quality Bond Fund --
Exhibit 22.
17i. Financial Data Schedule -- PCM Utilities
Growth and Income Fund -- Exhibit 23.
17j. Financial Data Schedule -- PCM Voyager Fund
-- Exhibit 24.
Item 25. Persons Controlled by or under Common Control with
Registrant

None.

Item 26. Number of Holders of Securities

As of February 28 , 1995 there were 12
shareholders of the Registrant's shares of beneficial interest.

Item 27. Indemnification

The information required by this item is incorporated
by reference from the Registrant's Initial Registration Statement
on Form N-1A.<PAGE>

<PAGE>

TABLE OF CONTENTS

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-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
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
Statement of Additional Information, 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.

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.

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.

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.

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.

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.

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.

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:

(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 OF THE FUND

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 of 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. Chairman of the Board and Director,
Kmart Corporation. Director of various corporations, including
American Telephone & Telegraph Company, AON Corp., Cummins Engine
Company, Inc., Illinois Power Company, Inland Steel Industries,
Inc., 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.

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.

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 Corporate Asset Trust 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 Corporate
Asset Trust, 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 Intermediate Tax Exempt Fund, Putnam Investment-Grade Bond
Fund, Putnam Municipal Income Fund, Putnam OTC Emerging Growth
Fund, Putnam Overseas Growth Fund and Putnam Tax Exempt Income
Fund, 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
Corporate Asset Trust, 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>
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 Registrant's Clerk, Beverly Marcus;
Registrant's investment adviser, Putnam Investment Management,
Inc.; Registrant's principal underwriter, Putnam Mutual Funds
Corp.; Registrant's 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,
custodian and transfer and dividend disbursing agent is One Post
Office Square, Boston, Massachusetts 02109.

Item 31. Management Services

None.

Item 32. Undertakings

The Registrant undertakes to furnish to each person to
whom a prospectus of the Registrant is delivered a copy of the
Registrant's latest annual report to shareholders, upon request
and without charge.

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in
the Prospectuses and Statement of Additional Information
constituting parts of this Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A (File No. 33-17486) (the
"Registration Statement") of our report dated February 15, 1995,
relating to the financial statements and financial highlights
appearing in the December 31, 1994 Annual Report of Putnam
Capital Manager Trust, which financial statements and financial
highlights are also incorporated by reference into the
Registration Statement. 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 Prospectuses.

PRICE WATERHOUSE LLP
Boston, Massachusetts
April 26, 1995
<PAGE>
NOTICE

A copy of the Agreement and Declaration of Trust of
Putnam Capital Manager 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
Registrant by the Trustees of the Registrant as trustees 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 Registrant.
<PAGE>
POWER OF ATTORNEY

We, the undersigned Officers and Trustees of Putnam
Capital Manager Trust, 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, our true and lawful attorneys, with full power to
them and each of them, to sign for us, and in our names and in
the capacities indicated below, the Registration Statement on
Form N-1A of Putnam Capital Manager Trust 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 therewith, with the
Securities and Exchange Commission, granting unto our 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 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 our hands and common seal on the date set forth
below.

Signature Title Date

/s/ George Putnam
- --------------------- Principal Executive April 6, 1995
George Putnam Officer; President
and Chairman of the
Trustees

/s/ John D. Hughes
- --------------------- Principal Financial April 6, 1995
John D. Hughes Officer; Treasurer

/s/ Paul G. Bucuvalas
- --------------------- Principal Accounting
Paul G. Bucuvalas Officer; Assistant April 6, 1995
Treasurer

/s/ Jameson A. Baxter
- --------------------- Trustee April 6, 1995
Jameson A. Baxter

/s/ Hans H. Estin
- --------------------- Trustee April 6, 1995
Hans H. Estin

/s/ John A. Hill
- --------------------- Trustee April 6, 1995
John A. Hill

/s/ Elizabeth T. Kennan
- --------------------- Trustee April 6, 1995
Elizabeth T. Kennan

/s/ Lawrence J. Lasser
- --------------------- Trustee April 6, 1995
Lawrence J. Lasser

/s/ Robert E. Patterson
- --------------------- Trustee April 6, 1995
Robert E. Patterson

/s/ Donald S. Perkins
- --------------------- Trustee April 6, 1995
Donald S. Perkins

/s/ George Putnam, III
- --------------------- Trustee April 6, 1995
George Putnam, III

/s/ A.J.C. Smith
- --------------------- Trustee April 6, 1995
A.J.C. Smith

/s/ W. Nicholas Thorndike
- --------------------- Trustee April 6, 1995
W. Nicholas Thorndike

/s/ William F. Pounds
- --------------------- Trustee April 6, 1995
William F. Pounds
<PAGE>
POWER OF ATTORNEY

I, the undersigned Trustee of Putnam Capital Manager Trust,
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 Capital Manager
Trust 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
therewith, 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 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
- --------------------- Trustee April 19, 1995
Eli Shapiro

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant
certifies 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 April , 1995.

PUTNAM CAPITAL MANAGER TRUST

----------------------------------------
By: Gordon H. Silver, Vice President

Pursuant to the requirements of the Securities Act of
1933, this Amendment has 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; Trustee

John D. Hughes Vice President; Treasurer and
Principal Financial Officer

Paul G. Bucuvalas Assistant Treasurer and Principal
Accounting Officer

Jameson Adkins Baxter Trustee

Hans H. Estin Trustee

John A. Hill Trustee

Elizabeth T. Kennan Trustee

<PAGE>
Signature Title

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
April 27 , 1995

<PAGE>
PUTNAM CAPITAL MANAGER TRUST

AGREEMENT AND DECLARATION OF TRUST

AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts,
this 24th day of September, 1987, by the Trustees hereunder, and
by the holders of shares of beneficial interest to be issued
hereunder as hereinafter provided.

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 Capital
Manager Trust" 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;

(b) "Trustees" refers to the Trustees of the Trust named
herein or elected in accordance with Article IV;

equal proportionate transferable units into which each
series 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 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.

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.

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 represent an
equal proportionate interest in the series with each other Share
of the same series, none having priority or preference over
another. The number of Shares authorized shall be unlimited.
The Trustees may from time to time divide or combine the Shares
of any series into a greater or lesser number without thereby
changing the proportionate beneficial interests in the series.<PAGE>
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
as to the number of Shares of each series 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 instrument. Every
Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof
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<PAGE>
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<PAGE>
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) To allocate assets, liabilities and expenses of the
Trust to a particular series of Shares or to apportion the
same among two or more series, provided that any<PAGE>
liabilities or expenses incurred by a particular series of
Shares shall be payable solely out of the assets 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;

(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
<PAGE>
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.<PAGE>
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
<PAGE>
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. 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 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 by individual series, except (1)
when required by the 1940 Act, Shares shall be voted in the
aggregate and not by individual series; and (2) when the Trustees
have determined that the matter affects only the interests of one
or more series, then only Shareholders of such series 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<PAGE>
exercise and the burden of proving invalidity shall rest on the
challenger. Until Shares are issued, the Trustees may exercise
all rights of Shareholders and may take any action required by
law, this Declaration of Trust or Bylaws to be taken by
Shareholders.

VOTING POWER AND MEETINGS

Section 2. Meetings of Shareholders of any or all series
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 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 each
series entitled to vote at such meeting or of all series if all
series are entitled to vote at such meeting requesting a meeting
to 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 each series 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 shall
be a quorum for the transaction of business 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 shall vote as a series, then thirty percent of the
aggregate number of Shares of that series entitled to vote shall
be necessary to constitute a quorum for the transaction of
business by that series. 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<PAGE>
larger vote is required by any provision of this Declaration of
Trust or the Bylaws, 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 shall vote as
a series, then a majority of the Shares of that series voted on
the matter (or a plurality with respect to the election of a
Trustee) shall decide that matter insofar as that series 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.

ADDITIONAL PROVISIONS

Section 5. The Bylaws may include further provisions of
Shareholders' votes and 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. 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.

Notwithstanding the provisions of the foregoing paragraph,
with respect to any money market series seeking to maintain a
constant net asset value per share, the Trustees shall each year,
or more frequently if they so determine in their sole discretion,
distribute to the Shareholders of such series an amount
approximately equal to the Net Income of such series, and may
from time to time distribute such additional amounts as they may
authorize to the Shareholders of such series. Such Net Income<PAGE>
shall consist of: (i) all interest income (including both
original issue and market discount earned on discount paper
accrued ratably to the date of maturity) accrued on portfolio
investments of such series, (ii) plus or minus realized or
unrealized gains and losses on portfolio investments determined
by valuing the portfolio investments of such series in a manner
consistent with the requirements of the actual and accrued
expenses and liabilities of such series determined in accordance
with good accounting practices. Such Net Income shall be
determined by the Trustees or as they may authorize on each
business day at the times and in the manner provided in the
Bylaws, and all such Net Income, which is a positive amount,
since the last determination of Net Income, shall be declared as
a dividend on Shares of such series. Determinations of Net
Income of any such money market series made by the Trustees, or
as they may authorize, in good faith, shall be binding on all
parties concerned. If, for any reason, the Net Income of such
series determined at any time is a negative amount, each
Shareholder's pro rata share of such negative amount shall
constitute a liability of such Shareholder to the Trust which
shall be paid at such times and in such manner as the Trustees
may from time to time determine out of the accrued dividend
account of such Shareholder, by reducing the number of Shares of
such series in the account of such Shareholder or otherwise. As
a result of such determinations and declarations as a dividend of
the Net Income of such series, the net asset value per Share of
such series is intended to remain at a constant amount
immediately after each such determination and declaration;
subject, however, to the power of the Trustees as provided in
Section I of Article III to divide or combine the Shares of such
series into a greater or lesser number.

Notwithstanding the provisions of the foregoing paragraph
for calculation and distribution of Net Income, the Trustees may,
from time to time and for so long as they may deem appropriate,
for purposes of calculating and distributing income of any such
money market series to the Shareholders of such series divide
Shares of such series into as many classes as they deem
appropriate and pay distributions of differing amounts to each
class of Shares (provided all Shares of the same class receive
equal distributions), provided, that the division of Shares of
any such money market series into classes and the payment of
differing distributions to such classes shall be made in a manner
consistent with the requirements of the 1940 Act, the rules and
regulations thereunder and exemptions therefrom, and provided
further, that except as otherwise specifically authorized by the
Trustees pursuant to this paragraph, the Trustees shall continue
to calculate and distribute Net Income of such series in the
manner provided in the preceding paragraph. <PAGE>
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 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 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 of Shares equal to or in excess of a percentage of the
outstanding Shares of that series 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.<PAGE>
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<PAGE>
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
officeact 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<PAGE>
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,<PAGE>
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 ofTrustee, 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
<PAGE>
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.

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 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
<PAGE>
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 which shall affect the holders of one or more series of
Shares but not the holders of all outstanding series shall be
authorized by vote of the Shareholders holding a majority of the
Shares entitled to vote of each series affected and no vote of
Shareholders of a series 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.

IN WITNESS WHEREOF, each of the undersigned has hereunto
set his/her hand and seal in the City of Boston, Massachusetts
for himself/herself and his/her assigns, as of the day and year
first above written.

/s/George Putnam

-------------------------

George Putnam

/s/Richard M. Cutler

-------------------------

Richard M. Cutler

/s/Alla O'Brien

-----------------------------

Alla O'Brien<PAGE>

THE COMMONWEALTH OF MASSACHUSETTS

Suffolk, ss. Boston, September 24, 1987

Then personally appeared the above named George Putnam,
Richard M. Cutler, and Alla O'Brien and acknowledged the
foregoing instrument to be their free act and deed, before me,

/s/Anne Wahlberg

-----------------------------

Notary Public
My Commission Expires:

<PAGE>
BYLAWS
OF
PUTNAM CAPITAL MANAGER TRUST

ARTICLE 1
AGREEMENT AND DECLARATION OF TRUST AND PRINCIPAL OFFICE

1.1 AGREEMENT AND DECLARATION OF TRUST. These Bylaws shall
be subject to the Agreement and Declaration of Trust, as from
time to time in effect (the "Declaration of Trust"), of the
Massachusetts business trust established by the Declaration of
Trust (the "Trust").

1.2 PRINCIPAL OFFICE OF THE TRUST. The principal office of
the Trust shall be located in Boston, Massachusetts.

ARTICLE 2
MEETINGS OF TRUSTEES

2.1 REGULAR MEETINGS. Regular meetings of the Trustees may
be held without call or notice at such places and at such times
as the Trustees may from time to time determine, provided that
notice of the first regular meeting following any such
determination shall be given to absent Trustees.

2.2 SPECIAL MEETINGS. Special meetings of the Trustees may
be held at any time and at any place designated in the call of
the meeting when called by the Chairman of the Trustees, the
President or the Treasurer or by two or more Trustees, sufficient
notice thereof being given to each Trustee by the Clerk or an
Assistant Clerk or by the officer or the Trustees calling the
meeting.

2.3 NOTICE OF SPECIAL MEETINGS. It shall be sufficient
notice to a Trustee of a special meeting to send notice by mail
at least forty-eight hours or by telegram at least twenty-four
hours before the meeting addressed to the Trustee at his or her
usual or last known business or residence address or to give
notice to him or her in person or by telephone at least twenty-
four hours before the meeting. Notice of a special meeting need
not be given to any Trustee 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 Trustee who attends the
meeting without protesting prior thereto or at its commencement
the lack of notice to him or her. Neither notice of a meeting
nor a waiver of a notice need specify the purposes of the
meeting.

2.4 QUORUM. At any meeting of the Trustees a majority of
the Trustees then in office shall constitute a quorum. Any
meeting may be adjourned from time to time by a majority of the
votes cast upon the question, whether or not a quorum is present,
and the meeting may be held as adjourned without further notice.

2.5 NOTICE OF CERTAIN ACTIONS BY CONSENT. If in accordance
with the provisions of the Declaration of Trust any action is
taken by the Trustees by a written consent of less than all of
the Trustees, then prompt notice of any such action shall be
furnished to each Trustee who did not execute such written
consent, provided that the effectiveness of such action shall not
be impaired by any delay or failure to furnish such notice.

ARTICLE 3
OFFICERS

3.1 ENUMERATION; QUALIFICATION. The officers of the Trust
shall be a Chairman of the Trustees, a President, a Treasurer, a
Clerk and such other officers, if any, as the Trustees from time
to time may in their discretion elect. The Trust may also have
such agents as the Trustees from time to time may in their
discretion appoint. The Chairman of the Trustees and the
President shall be a Trustee and may but need not be a
shareholder; and any other officer may but need not be a Trustee
or a shareholder. Any two or more offices may be held by the
same person. A Trustee may but need not be a shareholder.

3.2 ELECTION. The Chairman of the Trustees, the President,
the Treasurer and the Clerk shall be elected by the Trustees upon
the occurrence of any vacancy in any such office. Other
officers, if any, may be elected or appointed by the Trustees at
any time. Vacancies in any such other office may be filled at
any time.

3.3 TENURE. The Chairman of the Trustees, the President,
the Treasurer and the Clerk shall hold office in each case until
he or she dies, resigns, is removed or becomes disqualified.
Each other officer shall hold office and each agent shall retain
authority at the pleasure of the Trustees.

3.4 POWERS. Subject to the other provisions of these
Bylaws, each officer shall have, in addition to the duties and
powers herein and in the Declaration of Trust set forth, such
duties and powers as are commonly incident to the office occupied
by him or her as if the Trust were organized as a Massachusetts
business corporation and such other duties and powers as the
Trustees may from time to time designate.

3.5 CHAIRMAN; PRESIDENT. Unless the Trustees otherwise
provide, the Chairman of the Trustees or, if there is none or in
the absence of the Chairman of the Trustees, the President shall
preside at all meetings of the shareholders and of the Trustees.
Unless the Trustees otherwise provide, the President shall be the
chief executive officer.
<PAGE>
3.6 TREASURER. Unless the Trustees shall provide
otherwise, the Treasurer shall be the chief financial and
accounting officer of the Trust, and shall, subject to the
provisions of the Declaration of Trust and to any arrangement
made by the Trustees with a custodian, investment adviser or
manager, or transfer, shareholder servicing or similar agent, be
in charge of the valuable papers, books of account and accounting
records of the Trust, and shall have such other duties and powers
as may be designated from time to time by the Trustees or by the
President.

3.7 CLERK. The Clerk shall record all proceedings of the
shareholders and the Trustees in books to be kept therefor, which
books or a copy thereof shall be kept at the principal office of
the Trust. In the absence of the Clerk from any meeting of the
shareholders or Trustees, an Assistant Clerk, or if there be none
or if he or she is absent, a temporary Clerk chosen at such
meeting shall record the proceedings thereof in the aforesaid
books.

3.8 RESIGNATIONS AND REMOVALS. Any Trustee or officer may
resign at any time by written instrument signed by him or her and
delivered to the Chairman of the Trustees, the President or the
Clerk or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some
other time. The Trustees may remove any officer elected by them
with or without cause. Except to the extent expressly provided
in a written agreement with the Trust, no Trustee or officer
resigning and no officer removed shall have any right to any
compensation for any period following his or her resignation or
removal, or any right to damages on account of such removal.

ARTICLE 4
COMMITTEES

4.1 QUORUM; VOTING. A majority of the members of any
Committee of the Trustees shall constitute a quorum for the
transaction of business, and any action of such a Committee may
be taken at a meeting by a vote of a majority of the members
present (a quorum being present) or evidenced by one or more
writings signed by such a majority. Members of a Committee may
participate in a meeting of such Committee by means of a
conference telephone or other communications equipment by means
of which all persons participating in the meeting can hear each
<PAGE>
other at the same time and participation by such means shall
constitute presence in person at a meeting.

ARTICLE 5
REPORTS

5.1 GENERAL. The Trustees and officers shall render
reports at the time and in the manner required by the Declaration
of Trust or any applicable law. Officers and Committees shall
render such additional reports as they may deem desirable or as
may from time to time be required by the Trustees.

ARTICLE 6
FISCAL YEAR

6.1 GENERAL. Except as from time to time otherwise
provided by the Trustees, the initial fiscal year of the Trust
shall end on such date as is determined in advance or in arrears
by the Treasurer, and subsequent fiscal years shall end on such
date in subsequent years.

ARTICLE 7
SEAL

7.1 GENERAL. The seal of the Trust shall consist of a
flat-faced die with the word "Massachusetts", together with the
name of the Trust and the year of its organization cut or
engraved thereon but, unless otherwise required by the Trustees,
the seal shall not be necessary to be placed on and its absence
shall not impair the validity of, any document, instrument or
other paper executed and delivered by or on behalf of the Trust.

ARTICLE 8
EXECUTION OF PAPERS

8.1 GENERAL. Except as the Trustees may generally or in
particular cases authorize the execution thereof in some other
manner, all deeds, leases, contracts, notes and other obligations
made by the Trustees shall be signed by the President, the Vice
Chairman, a Vice President or the Treasurer and need not bear the
seal of the Trust.

ARTICLE 9
ISSUANCE OF SHARES AND SHARE CERTIFICATES

9.1 SALE OF SHARES. Except as otherwise determined by the
Trustees, the Trust will issue and sell for cash or securities
from time to time, full and fractional shares of its shares of
beneficial interest, such shares to be issued and sold at a price
of not less than the par value per share, if any, and not less
than the net asset value per share as from time to time
determined in accordance with the Declaration of Trust and these
Bylaws and, in the case of fractional shares, at a proportionate
reduction in such price. In the case of shares sold for
securities, such securities shall be valued in accordance with
the provisions for determining the value of the assets of the
Trust as stated in the Declaration of Trust and these Bylaws.
The officers of the Trust are severally authorized to take all
such actions as may be necessary or desirable to carry out this
Section 9.1.

9.2 SHARE CERTIFICATES. In lieu of issuing certificates
for shares, the Trustees or the transfer agent may either issue
receipts therefor or may keep accounts upon the books of the
Trust for the record holders of such shares, who shall in either
case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such
certificates and shall be held to have expressly assented and
agreed to the terms hereof.

The Trustees may at any time authorize the issuance of share
certificates. In that event, each shareholder shall be entitled
to a certificate stating the number of shares owned by him, in
such form as shall be prescribed from time to time by the
Trustees. Such certificate shall be signed by the President or a
Vice President and by the Treasurer or an Assistant Treasurer.
Such signatures may be facsimile if the certificate is signed by
a transfer agent or by a registrar. In case any officer who has
signed or whose facsimile signature has been placed on such
certificate shall cease to be such officer before such
certificate is issued, it may be issued by the Trust with the
same effect as if he were such officer at the time of its issue.

9.3 LOSS OF CERTIFICATES. The transfer agent of the Trust,
with the approval of any two officers of the Trust, is authorized
to issue and countersign replacement certificates for the shares
of the Trust which have been lost, stolen or destroyed upon (i)
receipt of an affidavit or affidavits of loss or non-receipt and
of an indemnity agreement executed by the registered holder or
his legal representative and supported by an open penalty surety
bond, said agreement and said bond in all cases to be in form and
content satisfactory to and approved by the President or the
Treasurer, or (ii) receipt of such other documents as may be
approved by the Trustees.

9.4 ISSUANCE OF NEW CERTIFICATE TO PLEDGEE. A pledgee of
shares transferred as collateral security shall be entitled to a
new certificate if the instrument of transfer substantially
describes the debt or duty that is intended to be secured
thereby. Such new certificate shall express on its face that it
is held as collateral security, and the name of the pledgor shall
be stated thereon, who alone shall be liable as a shareholder and
entitled to vote thereon.

9.5 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The
Trustees may at any time discontinue the issuance of share
certificates and may, by written notice to each shareholder,
require the surrender of share certificates to the Trust for
cancellation. Such surrender and cancellation shall not affect
the ownership of shares in the Trust.

ARTICLE 10
PROVISIONS RELATING TO THE CONDUCT OF THE TRUST'S BUSINESS

10.1 CERTAIN DEFINITIONS. When used herein the following
words shall have the following meanings: "Distributor" shall mean
any one or more corporations, firms or associations which have
distributor's or principal underwriter's contracts in effect with
the Trust providing that redeemable shares issued by the Trust
shall be offered and sold by such Distributor. "Manager" shall
mean any corporation, firm or association which may at the time
have an advisory or management contract with the Trust.

10.2 LIMITATIONS ON DEALINGS WITH OFFICERS OR TRUSTEES. The
Trust will not lend any of its assets to the Distributor or
Manager or to any officer or director of the Distributor or
Manager or any officer or Trustee of the Trust, and shall not
permit any officer or Trustee or any officer or director of the
Distributor or Manager to deal for or on behalf of the Trust with
himself or herself as principal or agent, or with any
partnership, association or corporation in which he or she has a
financial interest; provided that the foregoing provisions shall
not prevent (a) officers and Trustees of the Trust or officers
and directors of the Distributor or Manager from buying, holding
or selling shares in the Trust or from being partners, officers
or directors of or otherwise financially interested in the
Distributor or the Manager; (b) purchases or sales of securities
or other property if such transaction is permitted by or is
exempt or exempted from the provisions of the Investment Company
Act of 1940 or any Rule or Regulation thereunder and if such
transaction does not involve any commission or profit to any
security dealer who is, or one or more of whose partners,
shareholders, officers or directors is, an officer or Trustee of
the Trust or an officer or director of the Distributor or
Manager; (c) employment of legal counsel, registrar, transfer
agent, shareholder servicing agent, dividend disbursing agent or
custodian who is, or has a partner, shareholder, officer or
director who is, an officer or Trustee of the Trust or an officer
or director of the Distributor or Manager; (d) sharing
statistical, research, legal and management expenses and office
hire and expenses with any other investment company in which an
officer or Trustee of the Trust or an officer or director of the
Distributor or Manager is an officer or director or otherwise
financially interested.
<PAGE>
10.3 SECURITIES AND CASH OF THE TRUST TO BE HELD BY
CUSTODIAN SUBJECT TO CERTAIN TERMS AND CONDITIONS.

(a) All securities and cash owned by the Trust shall
be held by or deposited with one or more banks or trust
companies having (according to its last published report)
not less than $1,000,000 aggregate capital, surplus and
undivided profits (any such bank or trust company being
hereby designated as "Custodian"), provided such a Custodian
can be found ready and willing to act; subject to such
rules, regulations and orders, if any, as the Securities and
Exchange Commission may adopt, the Trust may, or may permit
any Custodian to, deposit all or any part of the securities
owned by the Trust in a system for the central handling of
securities pursuant to which all securities of any
particular class or series of any issue deposited within the
system may be transferred or pledged by bookkeeeping entry,
without physical delivery. The Custodian may appoint,
subject to the approval of the Trustees, one or more
subcustodians.

(b) The Trust shall enter into a written contract with
each Custodian regarding the powers, duties and compensation
of such Custodian with respect to the cash and securities of
the Trust held by such Custodian. Said contract and all
amendments thereto shall be approved by the Trustees.

(i) in case of such resignation or inability to
serve, use its best efforts to obtain a successor
Custodian;

(ii) require that the cash and securities owned
by the Trust be delivered directly to the successor
Custodian; and

(iii) in the event that no successor Custodian
can be found, submit to the shareholders, before
permitting delivery of the cash and securities owned by
the Trust otherwise than to a successor Custodian, the
question whether the Trust shall be liquidated or shall
function without a Custodian.

10.4 REPORTS TO SHAREHOLDERS. The Trust shall send to each
shareholder of record at least semi-annually a statement of the
condition of the Trust and of the results of its operations,
containing all information required by applicable laws or
regulations.

10.5 DETERMINATION OF NET ASSET VALUE PER SHARE. Net asset
value per share of the Trust (or, if the Trust has more than one
series of shares, of each series of the Trust) shall mean: (i)
the value of all the assets of such series; (ii) less total
liabilities of such series; (iii) divided by the number of shares
of such series outstanding, in each case at the time of each
determination. Except as otherwise determined by the Trustees,
the net asset value per share of the Trust (or of each series)
shall be determined no less frequently than once daily, Monday
through Friday, on days on which the New York Stock Exchange is
open for trading, at such time or times that the Trustees set at
least annually.

In valuing the portfolio investments of the Trust (or of any
series) for determination of net asset value per share of such
series, securities for which market quotations are readily
available shall be valued at prices which, in the opinion of the
Trustees or the person designated by the Trustees to make the
determination, most nearly represent the market value of such
securities, and other securities and assets shall be valued at
their fair value as determined by or pursuant to the direction of
the Trustees, which in the case of debt obligations, commercial
paper and repurchase agreements may, but need not, be on the
basis of yields for securities of comparable maturity, quality
and type, or on the basis of amortized cost. Expenses and
liabilities of the Trust shall be accrued each day. Liabilities
may include such reserves for taxes, estimated accrued expenses
and contingencies as the Trustees or their designates may in
their sole discretion deem fair and reasonable under the
circumstances. No accruals shall be made in respect of taxes on
unrealized appreciation of securities owned unless the Trustees
shall otherwise determine.

ARTICLE 11
SHAREHOLDERS

11.1 MEETINGS. A meeting of the shareholders shall be
called by the Clerk whenever ordered by the Trustees, the
Chairman of the Trustees or requested in writing by the holder or
holders of at least one-tenth of the outstanding shares entitled
to vote at such meeting. If the Clerk, when so ordered or
requested, refuses or neglects for more than two days to call
such meeting, the Trustees, Chairman of the Trustees or the
shareholders so requesting may, in the name of the Clerk, call
the meeting by giving notice thereof in the manner required when
notice is given by the Clerk.

11.2 ACCESS TO SHAREHOLDER LIST. Shareholders of record
may apply to the Trustees for assistance in communicating with
other shareholders for the purpose of calling a meeting in order
to vote upon the question of removal of a Trustee. When ten or
more shareholders of record who have been such for at least six
months preceding the date of application and who hold in the
aggregate shares having a net asset value of at least $25,000 so
apply, the Trustees shall within five business days either:

(i) afford to such applicants access to a list of names and
addresses of all shareholders as recorded on the books of
the Trust; or

(ii) inform such applicants of the approximate number of
shareholders of record and the approximate cost of mailing
material to them, and, within a reasonable time thereafter,
mail, at the applicants' expense, materials submitted by the
applicants, to all such shareholders of record. The
Trustees shall not be obligated to mail materials which they
believe to be misleading or in violation of applicable law.

11.3 RECORD DATES. For the purpose of determining the
shareholders of any series of shares of the Trust who are
entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to receive payment of any dividend
or of any other distribution, the Trustees may from time to time
fix a time, which shall be not more than 90 days before the date
of any meeting of shareholders or more than 60 days before the
date of payment of any dividend or of any other distribution, as
the record date for determining the shareholders of such series
having the right to notice of and to vote at such meeting and any
adjournment thereof or the right to receive such dividend or
distribution, and in such case only shareholders of record on
such record date shall have such right notwithstanding any
transfer of shares on the books of the Trust after the record
date; or without fixing such record date the Trustees may for any
such purposes close the register or transfer books for all or
part of such period.

11.4 PROXIES. The placing of a shareholder's name on a
proxy pursuant to telephone or electronically transmitted
instructions obtained pursuant to procedures reasonably designed
to verify that such instructions have been authorized by such
shareholder shall constitute execution of such proxy by or on
behalf of such shareholder.

ARTICLE 12
AMENDMENTS TO THE BYLAWS

12.1 GENERAL. These Bylaws may be amended or repealed, in
whole or in part, by a majority of the Trustees then in office at
any meeting of the Trustees, or by one or more writings signed by
such a majority.

<PAGE>
(PORTIONS OF AGREEMENT AND DECLARTION OF TRUST OF
PUTNAM CAPITAL MANAGER TRUST
RELATING TO SHAREHOLDERS' RIGHTS)

ARTICLE I
NAME AND DEFINITIONS

(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 of Shares is authorized by the Trustees, the
equal proportionate transferable units into which each
series of Shares shall be divided from time to time;

(d) "Shareholder" means a record owner of Shares;

ARTICLE III
SHARES

DIVISION OF BENEFICIAL INTEREST

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
as to the number of Shares of each series held from time to time
by each Shareholder.

<PAGE>
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 instrument. Every
Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof
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 V
SHAREHOLDERS' VOTING POWERS AND MEETINGS

VOTING POWERS

Section 1. 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 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 by individual series, except (1)
when required by the 1940 Act, Shares shall be voted in the
aggregate and not by individual series; and (2) when the Trustees
have determined that the matter affects only the interests of one
or more series, then only Shareholders of such series 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 are issued, the Trustees may exercise
all rights of Shareholders and may take any action required by
law, this Declaration of Trust or Bylaws to be taken by
Shareholders.

VOTING POWER AND MEETINGS

Section 3. Thirty percent of Shares entitled to vote shall
be a quorum for the transaction of business 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 shall vote as a series, then thirty percent of the
aggregate number of Shares of that series entitled to vote shall
be necessary to constitute a quorum for the transaction of
business by that series. 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, 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 shall vote as
a series, then a majority of the Shares of that series voted on
the matter (or a plurality with respect to the election of a
Trustee) shall decide that matter insofar as that series is
concerned.

ACTION BY WRITTEN CONSENT

ADDITIONAL PROVISIONS

Section 5. The Bylaws may include further provisions of
Shareholders' votes and 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. Such distributions shall be
made in cash or Shares or a combination thereof as determined by
the Trustees. Any such <PAGE>
distribution paid in Shares will be paid
at the net asset value thereof as determined in accordance with the Bylaws.

Notwithstanding the provisions of the foregoing paragraph,
with respect to any money market series seeking to maintain a
constant net asset value per share, the Trustees shall each year,
or more frequently if they so determine in their sole discretion,
distribute to the Shareholders of such series an amount
approximately equal to the Net Income of such series, and may
from time to time distribute such additional amounts as they may
authorize to the Shareholders of such series. Such Net Income
shall consist of: (i) all interest income (including both
original issue and market discount earned on discount paper
accrued ratably to the date of maturity) accrued on portfolio
investments of such series, (ii) plus or minus realized or
unrealized gains and losses on portfolio investments determined
by valuing the portfolio investments of such series in a manner
consistent with the requirements of the actual and accrued
expenses and liabilities of such series determined in accordance
with good accounting practices. Such Net Income shall be
determined by the Trustees or as they may authorize on each
business day at the times and in the manner provided in the
Bylaws, and all such Net Income, which is a positive amount,
since the last determination of Net Income, shall be declared as
a dividend on Shares of such series. Determinations of Net
Income of any such money market series made by the Trustees, or
as they may authorize, in good faith, shall be binding on all
parties concerned. If, for any reason, the Net Income of such
series determined at any time is a negative amount, each
Shareholder's pro rata share of such negative amount shall
constitute a liability of such Shareholder to the Trust which
shall be paid at such times and in such manner as the Trustees
may from time to time determine out of the accrued dividend
account of such Shareholder, by reducing the number of Shares of
such series in the account of such Shareholder or otherwise. As
a result of such determinations and declarations as a dividend of
the Net Income of such series, the net asset value per Share of
such series is intended to remain at a constant amount
immediately after each such determination and declaration;
subject, however, to the power of the Trustees as provided in
Section I of Article III to divide or combine the Shares of such
series into a greater or lesser number.

REDEMPTIONS AND REPURCHASES

REDEMPTIONS AT THE OPTION OF THE TRUST

ARTICLE VIII
INDEMNIFICATION

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

<PAGE>
(PORTIONS OF BYLAWS OF
PUTNAM CAPITAL MANAGER TRUST
RELATING TO SHAREHOLDERS' RIGHTS)

ARTICLE 9
Issuance of Shares and Share Certificates

9.1 Sale of Shares. Except as otherwise determined by the
Trustees, the Trust will issue and sell for cash or securities from
time to time, full and fractional shares of its shares of
beneficial interest, such shares to be issued and sold at a price
of not less than the par value per share, if any, and not less than
the net asset value per share as from time to time determined in
accordance with the Declaration of Trust and these Bylaws and, in
the case of fractional shares, at a proportionate reduction in such
price. In the case of shares sold for securities, such securities
shall be valued in accordance with the provisions for determining
the value of the assets of the Trust as stated in the Declaration
of Trust and these Bylaws. The officers of the Trust are severally
authorized to take all such actions as may be necessary or
desirable to carry out this Section 9.1.

9.2 SHARE CERTIFICATES. In lieu of issuing certificates for
shares, the Trustees or the transfer agent may either issue
receipts therefor or may keep accounts upon the books of the Trust
for the record holders of such shares, who shall in either case be
deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such
certificates and shall be held to have expressly assented and
agreed to the terms hereof.

The Trustees may at any time authorize the issuance of share
certificates. In that event, each shareholder shall be entitled to
a certificate stating the number of shares of each class owned by
him, in such form as shall be prescribed from time to time by the
Trustees. Such certificate shall be signed by the President or a
Vice President and by the Treasurer or an Assistant Treasurer.
Such signatures may be facsimile if the certificate is signed by a
transfer agent or by a registrar. In case any officer who has
signed or whose facsimile signature has been placed on such
certificate shall cease to be such officer before such certificate
is issued, it may be issued by the Trust with the same effect as if
he were such officer at the time of its issue.

9.3 LOSS OF CERTIFICATES. The transfer agent of the Trust,
with the approval of any two officers of the Trust, is authorized
to issue and countersign replacement certificates for the shares of
the Trust which have been lost, stolen or destroyed upon (i)
receipt of an affidavit or affidavits of loss or non-receipt and of
an indemnity agreement executed by the registered holder or his
legal representative and supported by an open penalty surety bond,
said agreement and said bond in all cases to be in form and content
satisfactory to and approved by the President or the Treasurer, or
(ii) receipt of such other documents as may be approved by the
Trustees.

9.4 ISSUANCE OF NEW CERTIFICATE TO PLEDGEE. A pledgee of
shares transferred as collateral security shall be entitled to a
new certificate if the instrument of transfer substantially
describes the debt or duty that is intended to be secured thereby.
Such new certificate shall express on its face that it is held as
collateral security, and the name of the pledgor shall be stated
thereon, who alone shall be liable as a shareholder and entitled to
vote thereon.

9.5 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees
may at any time discontinue the issuance of share certificates and
may, by written notice to each shareholder, require the surrender
of share certificates to the Trust for cancellation. Such
surrender and cancellation shall not affect the ownership of shares
in the Trust.

ARTICLE 10

ARTICLE 11
SHAREHOLDERS

11.1 MEETINGS. A meeting of the shareholders shall be called
by the Clerk whenever ordered by the Trustees, the Chairman of the
Trustees or requested in writing by the holder or holders of at
least one-tenth of the outstanding shares entitled to vote at such
meeting. If the Clerk, when so ordered or requested, refuses or
neglects for more than two days to call such meeting, the Trustees,
Chairman of the Trustees or the shareholders so requesting may, in
the name of the Clerk, call the meeting by giving notice thereof in
the manner required when notice is given by the Clerk.

11.2 ACCESS TO SHAREHOLDER LIST. Shareholders of record may
apply to the Trustees for assistance in communicating with other
shareholders for the purpose of calling a meeting in order to vote
upon the question of removal of a Trustee. When ten or more
shareholders of record who have been such for at least six months
preceding the date of application and who hold in the aggregate
shares having a net asset value of at least $25,000 so apply, the
Trustees shall within five business days either:

(i) afford to such applicants access to a list of
names and addresses of all shareholders as recorded on
the books of the Trust; or

(ii) inform such applicants of the approximate
number of shareholders of record and the approximate cost
of mailing material to them, and, within a reasonable
time thereafter, mail, at the applicants' expense,
materials submitted by the applicants, to all such
shareholders of record. The Trustees shall not be
obligated to mail materials which they believe to be
misleading or in violation of applicable law.

11.3 RECORD DATES. For the purpose of determining the
shareholders of any class or series of shares of the Trust who are
entitled to vote or act at any meeting or any adjournment thereof,
or who are entitled to receive payment of any dividend or of any
other distribution, the Trustees may from time to time fix a time,
which shall be not more than 90 days before the date of any meeting
of shareholders or more than 60 days before the date of payment of
any dividend or of any other distribution, as the record date for
determining the shareholders of such class or series having the
right to notice of and to vote at such meeting and any adjournment
thereof or the right to receive such dividend or distribution, and
in such case only shareholders of record on such record date shall
have such right notwithstanding any transfer of shares on the books
of the Trust after the record date; or without fixing such record
date the Trustees may for any such purposes close the register or
transfer books for all or part of such period.

11.4 PROXIES. The placing of a shareholder's name on a proxy
pursuant to telephone or electronically transmitted instructions
obtained pursuant to procedures reasonably designed to verify that
such instructions have been authorized by such shareholder shall
constitute execution of such proxy by or on behalf of such
shareholder.

<PAGE>
PUTNAM CAPITA L MANAGER TRUST

FORM OF
MANAGEMENT CO NTRACT

Management Contract dated as of October 2, 1987, as supplemented
March 2, 1990, as further supplemented February 27, 1992, as
further supplemented July 9, 1993, as further supplemented April 5,
1994, as further supplemented June 2, 1994, as further supplemented
April 7, 1995, and as further supplemented July 13, 1995, between
Putnam Capital Manager Trust, a Massachusetts business trust (the
"Fund"), and PUTNAM INVESTMENT MANAGEMENT, INC., a Massachusetts
corporation (the "Manager").

WITNESSETH:

That in consideration of the mutual covenants herein contained, it
is agreed as follows:

1. SERVICES TO BE RENDERED BY MANAGER TO FUND.

(a) The Manager, at its expense, will furnish continuously an
investment program for the Fund, will determine what investments
shall be purchased, held, sold or exchanged by the Fund and what
portion, if any, of the assets of the Fund shall be held uninvested
and shall, on behalf of the Fund, make changes in the Fund's
investments. Subject always to the control of the Trustees of the
Fund and except for the functions carried out by the officers and
personnel referred to in Section 1(d), the Manager will also
manage, supervise and conduct the other affairs and business of the
Fund and matters incidental thereto. In the performance of its
duties, the Manager will comply with the provisions of the
Agreement and Declaration of Trust and By-Laws of the Fund and its
stated investment objectives, policies and restrictions, and will
use its best efforts to safeguard and promote the welfare of the
Fund and to comply with other policies which the Trustees may from
time to time determine and shall exercise the same care and
diligence expected of the Trustees.

(b) The Manager, at its expense, except as such expense is paid by
the Fund as provided in Section 1(d), will furnish (1) all
necessary investment and management facilities, including salaries
of personnel, required for it to execute its duties faithfully; (2)
suitable office space for the Fund; and (3) administrative
facilities, including bookkeeping, clerical personnel and equipment
necessary for the efficient conduct of the affairs of the Fund,
including determination of the Fund's net asset value, but
excluding shareholder accounting services. Except as otherwise
provided in Section 1(d), the Manager will pay the compensation, if
any, of the officers of the Fund.

(c) The Manager, at its expense, shall place all orders for the
purchase and sale of portfolio investments for the Fund's account
with brokers or dealers selected by the Manager. In the selection
of such brokers or dealers and the placing of such orders, the
Manager shall use 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 for brokerage
and research services as described below. In using its best
efforts to obtain for the Fund the most favorable price and
execution available, the Manager, bearing in mind the Fund's best
interests at all times, shall consider all factors it deems
relevant, including by way of illustration, price, the size of the
transaction, the nature of the market for the security, 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 or dealer involved and the
quality of service rendered by the broker or dealer in other
transactions. Subject to such policies as the Trustees of the Fund
may determine, the Manager shall not be deemed to have acted
unlawfully or to have breached any duty created by this Contract or
otherwise solely by reason of its having caused the Fund to pay a
broker or dealer that provides brokerage and research services to
the Manager an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction, if the Manager determines in good faith that such
amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Fund and to
other clients of the Manager as to which the Manager exercises
investment discretion. The Manager agrees that in connection with
purchases or sales of portfolio investments for the Fund's account,
neither the Manager nor any officer, director, employee or agent of
the Manager shall act as a principal or receive any commission
other than as provided in Section 3.

(d) The Fund will pay or reimburse the Manager for (i) the
compensation of the Vice Chairman of the Fund and of persons
assisting him in these offices, as determined from time to time by
the Trustees of the Fund, (ii) the compensation in whole or in part
of such other officers of the Fund and persons assisting them as
may be determined from time to time by the Trustees of the Fund,
and (iii) the cost of suitable office space, utilities, support
services and equipment of the Vice Chairman and persons assisting
him and, as determined from time to time by the Trustees of the
Fund, all or a part of such cost attributable to the other officers
and persons assisting them whose compensation is paid in whole or
in part by the Fund. The Fund will pay the fees, if any, of the
Trustees of the Fund.

(e) The Manager shall pay all expenses incurred in connection with
the organization of the Fund and the initial public offering and
sale of its shares of beneficial interest, provided that upon the
issuance and sale of such shares to the public pursuant to the
offering, and only in such event, the Fund shall become liable for,
and to the extent requested reimburse the Manager for, registration
fees payable to the Securities and Exchange Commission and for an
additional amount not exceeding $125,000 as its agreed share of
such expenses.

(f) The Manager shall not be obligated to pay any expenses of or
for the Fund not expressly assumed by the Manager pursuant to this
Section 1 other than as provided in Section 3.

2. OTHER AGREEMENTS, ETC.

It is understood that any of the shareholders, Trustees, officers
and employees of the Fund may be a shareholder, director, officer
or employee of, or be otherwise interested in, the Manager, and in
any person controlled by or under common control with the Manager,
and that the Manager and any person controlled by or under common
control with the Manager may have an interest in the Fund. It is
also understood that the Manager and any person controlled by or
under common control with the Manager have and may have advisory,
management, service or other contracts with other organizations and
persons, and may have other interests and business.

3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.

The Fund will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the
expenses borne by the Manager pursuant to paragraphs (a), (b), (c)
and (e) of Section 1, a fee, computed and paid quarterly at the
following annual rates applicable to the average net asset value of
each Series of the Fund (a "Series") of:

PCM Asia Pacific Growth Fund:

(a) 0.80% of the first $500 million of average net assets;
(b) 0.70% of the next $500 million;
(c) 0.65% of the next $500 million;
(d) 0.60% of the next $5 billion;
(e) 0.575% of the next $5 billion;
(f) 0.555% of the next $5 billion;
(g) 0.54% of the next $5 billion; and
(h) 0.53% of any excess thereafter.

PCM New Opportunities Fund, PCM Diversified Income Fund, PCM Global
Asset Allocation Fund, PCM High Yield Fund and PCM Voyager Fund:

(a) 0.70% of the first $500 million of average net assets;
(b) 0.60% of the next $500 million;
(c) 0.55% of the next $500 million; and
(d) 0.50% of any excess over $1.5 billion of such average net
asset value.
<PAGE>
PCM Growth and Income Fund:

(a) 0.65% of the first $500 million of average net assets;
(b) 0.55% of the next $500 million;
(c) 0.50% of the next $500 million; and
(d) 0.45% of any excess over $1.5 billion of such average net
asset value.

PCM U.S. Government and High Quality Bond Fund:

(a) 0.65% of the first $500 million of average net assets;
(b) 0.55% of the next $500 million;
(c) 0.50% of the next $500 million;
(d) 0.45% of the next $5 billion;
(e) 0.425% of the next $5 billion;
(f) 0.405% of the next $5 billion;
(g) 0.39% of the next $5 billion; and
(h) 0.38% of any excess thereafter.

PCM Money Market Fund:

(a) 0.45% of the first $500 million of average net assets;
(b) 0.35% of the next $500 million;
(c) 0.30% of the next $500 million; and
(d) 0.25% of any excess over $1.5 billion of such average net
asset value.

PCM Global Growth Fund and PCM Utilities Growth & Income Fund:
0.60%.

Such fees computed with respect to the net asset value of each
Series shall be paid from the assets of such Series. Such average
net asset value of each Series of the Fund shall be determined by
taking an average of all of the determinations of such net asset
value during such quarter at the close of business on each business
day during such quarter while this Contract is in effect. Such fee
shall be payable for each month within 30 days after the end of
such quarter.

The fees payable by the Fund to the Manager pursuant to this
Section 3 with respect to any Series of the Fund shall be reduced
by any commissions, fees, brokerage or similar payments received by
the Manager or any affiliated person of the Manager in connection
with the purchase and sale of portfolio investments of such Series,
less any direct expenses approved by the Trustees incurred by the
Manager or any affiliated person of the Manager in connection with
obtaining such payments.

In the event that expenses of any Series of the Fund for any fiscal
year should exceed the expense limitation on investment company
expenses imposed by any statute or regulatory authority of any
jurisdiction in which shares of that Series are qualified for offer
or sale, the compensation due the Manager for such fiscal year
shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses of any Series of
the Fund exceed any expense limitation which the Manager may, by
written notice to the Fund, voluntarily declare to be effective
subject to such terms and conditions as the Manager may prescribe
in such notice, the compensation due the Manager shall be reduced,
and, if necessary, the Manager shall assume expenses of the Series
to the extent required by the terms and conditions of such expense
limitation.

If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.

4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS
CONTRACT.

This Contract shall automatically terminate, without the payment of
any penalty, in the event of its assignment; and this Contract
shall not be amended as to any Series of the Fund unless such
amendment be approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the Series, and by the vote,
cast in person at a meeting called for the purpose of voting on
such approval, of a majority of the Trustees of the Fund who are
not interested persons of the Fund or of the Manager.

5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.

This Contract shall become effective upon its execution, and shall
remain in full force and effect as to each Series continuously
thereafter (unless terminated automatically as set forth in Section
4) until terminated as follows:

(a) Either party hereto may at any time terminate this Contract as
to any Series or as to the Fund by not more than sixty days' nor
less than thirty days' written notice delivered or mailed by
registered mail, postage prepaid, to the other party, or

(b) If (i) the Trustees of the Fund or the shareholders by the
affirmative vote of a majority of the outstanding shares of the
Series, and (ii) a majority of the Trustees of the Fund who are not
interested persons of the Fund or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such
approval, do not specifically approve at least annually the
continuance of this Contract, then this Contract shall
automatically terminate as to such Series at the close of business
on

January 31, 1989 in the case of PCM Global Growth Fund,

January 31, 1994 in the case of PCM Utilities Growth and Income
Fund,

January 31, 1995 in the case of PCM Diversified Income Fund,

January 31, 1996 in the case of PCM Global Asset Allocation
Fund, PCM Growth and Income Fund, PCM High Yield Fund, PCM
Money Market Fund, PCM New Opportunities Fund and PCM Voyager
Fund, and

the second anniversary of its execution with respect to any
other Series,

or the expiration of one year from the effective date of the last
such continuance, whichever is later; provided, however, that if
the continuance of this Contract is submitted to the shareholders
of a Series for their approval and such shareholders fail to
approve such continuance of this Contract as provided herein, the
Manager may continue to serve hereunder in a manner consistent with
the Investment Company Act of 1940 and the Rules and Regulations
thereunder.

Action by the Fund under (a) above may be taken either (i) by vote
of a majority of its Trustees, or (ii) by the affirmative vote of
a majority of the outstanding shares of one or more Series
affected.

Termination of this Contract pursuant to this Section 5 will be
without the payment of any penalty.

6. CERTAIN DEFINITIONS

For the purposes of this Contract, the "affirmative vote of a
majority of the outstanding shares" means the affirmative vote, at
a duly called and held meeting of shareholders, (a) of the holders
of 67% or more of the shares of the Fund or the Series, as the case
may be, present (in person or by proxy) and entitled to vote at
such meeting, if the holders of more than 50% of the outstanding
shares of the Fund or the Series, as the case may be, entitled to
vote at such meeting are present in person or by proxy, or (b) of
the holders of more than 50% of the outstanding shares of the Fund,
or the Series, as the case may be, entitled to vote at such
meeting, whichever is less.

For the purposes of this Contract, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their
respective meanings defined in the Investment Company Act of 1940
and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange
Commission under said Act; the term "specifically approve at least
annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the Rules and Regulations
thereunder; and the term "brokerage and research services" shall
have the meaning given in the Securities Exchange Act of 1934 and
the Rules and Regulations thereunder.

7. NON-LIABILITY OF MANAGER

In the absence of willful misfeasance, bad faith or gross
negligence on the part of the Manager, or reckless disregard of its
obligations and duties hereunder, the Manager 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 hereunder.

8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS

A copy of the Agreement and Declaration of Trust of the Fund 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 Fund as Trustees and not
individually and that the obligations of or arising out of this
instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of
the Fund.

IN WITNESS WHEREOF, PUTNAM CAPITAL MANAGER TRUST and PUTNAM
INVESTMENT MANAGEMENT, INC. have each caused this instrument to be
signed in duplicate in its behalf by its President or a Vice
President thereunto duly authorized, all as of the day and year
first above written.

PUTNAM CAPITAL MANAGER TRUST

By: _______________________________

PUTNAM INVESTMENT MANAGEMENT, INC.

By: _______________________________

<PAGE>
PUTNAM CAPITAL MANAGER TRUST
DISTRIBUTOR'S CONTRACT

Distributor's Contract dated May 6, 1994, by and between
PUTNAM CAPITAL MANAGER TRUST, a Massachusetts business trust (the
"Trust"), and PUTNAM MUTUAL FUNDS CORP., a Massachusetts
corporation ("Putnam").

WHEREAS, the Trust and Putnam are desirous of entering into
this agreement to provide for the distribution by Putnam of shares
of the various portfolio series of the Trust (each a "Fund");

NOW, THEREFORE, in consideration of the mutual agreements
contained in the Terms and Conditions of Distributor's Contract
attached to and forming a part of this Contract (the "Terms and
Conditions"), the Trust hereby appoints Putnam as a distributor of
shares of the Trust, and Putnam hereby accepts such appointment,
all as set forth in the Terms and Conditions.

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 or shareholders
individually but are binding only upon the assets and property of
the relevant Fund.

IN WITNESS WHEREOF, PUTNAM CAPITAL MANAGER TRUST and PUTNAM
MUTUAL FUNDS CORP. have each caused this Distributor's Contract to
be signed in duplicate in its behalf, all as of the day and year
first above written.

PUTNAM CAPITAL MANAGER TRUST

/s/ Charles E. Porter
By: -----------------------------
Executive Vice President

PUTNAM MUTUAL FUNDS CORP.

/s/ William N. Shiebler
By: -----------------------------
President<PAGE>

TERMS AND CONDITIONS
OF
DISTRIBUTOR'S CONTRACT

1. RESERVATION OF RIGHT NOT TO SELL. The Trust reserves the
right to refuse at any time or times to sell hereunder any shares
of beneficial interest ("shares") of a Fund for any reason deemed
adequate by it.

2. PAYMENTS TO PUTNAM. In connection with the distribution of
shares of a Fund, Putnam will be entitled to receive: (a) payments
pursuant to any Distribution Plan and Agreement from time to time
in effect between the Trust and Putnam with respect to such Fund or
any particular class of shares of such Fund, (b) any contingent
deferred sales charges applicable to the redemption of shares of
such Fund or of any particular class of shares of such Fund,
determined in the manner set forth in the then current Prospectus
and Statement of Additional Information of such Fund and (c)
subject to the provisions of Section 3 below, any front-end sales
charges applicable to the sale of shares of such Fund or of any
particular class of shares of such Fund, less any applicable dealer
discount.

3. SALES OF SHARES TO PUTNAM AND SALES BY PUTNAM. Putnam will
have the right, as principal, to sell shares of a Fund to
investment dealers against orders therefor (a) at the public
offering price (calculated as described below) less a discount
determined by Putnam, which discount shall not exceed the amount of
the sales charge referred to below, or (b) at net asset value.
Upon receipt of an order to purchase shares from an investment
dealer with whom Putnam has a Sales Contract, Putnam will promptly
purchase shares from the relevant Fund to fill such order. The
public offering price of a class of shares of a Fund shall be the
net asset value of such shares then in effect, plus any applicable
front-end sales charge determined in the manner set forth in the
then current Prospectus and Statement of Additional Information of
the Fund or as permitted by the Investment Company Act of 1940, as
amended, and the Rules and Regulations of the Securities and
Exchange Commission promulgated thereunder. In no event shall the
public offering price exceed 1000/915ths of such net asset value,
and in no event shall any applicable sales charge exceed 8 1/2% of
the public offering price. The net asset value of the shares shall
be determined in the manner provided in the Agreement and
Declaration of Trust of the Trust as then amended and when
determined shall be applicable to transactions as provided for in
the then current Prospectus and Statement of Additional Information
of the relevant Fund.

Putnam will also have the right, as principal, to purchase
shares from a Fund at their net asset value and to sell such shares
to the public against orders therefor at the public offering price
or at net asset value.

Putnam will also have the right, as principal, to sell shares
at their net asset value and not subject to a contingent deferred
sales charge to such persons as may be approved by the Trustees of
the Trust, all such sales to comply with the provisions of the
Investment Company Act of 1940, as amended, and the Rules and
Regulations of the Securities and Exchange Commission promulgated
thereunder.

Putnam will also have the right, as agent for the Trust, to
sell shares at the public offering price or at net asset value to
such persons and upon such conditions as the Trustees of the Trust
may from time to time determine.

On every sale the Trust shall receive the applicable net asset
value of the shares. Putnam will reimburse the Trust for any
increased issue tax paid on account of sales charges. Upon receipt
of registration instructions in proper form and payment for shares,
Putnam will transmit such instructions to the Trust or its agent
for registration of the shares purchased.

4. SALES OF SHARES BY THE TRUST. The Trust reserves the right to
issue shares at any time directly to its shareholders as a stock
dividend or stock split and to sell shares to its shareholders or
to other persons approved by Putnam at not less than net asset
value.

5. REPURCHASE OF SHARES. Putnam will act as agent for the Trust
in connection with the repurchase of shares by the Trust upon the
terms and conditions set forth in the then current Prospectus and
Statement of Additional Information of the relevant Fund.

6. BASIS OF PURCHASES AND SALES OF SHARES. Putnam will use its
best efforts to place shares sold by it on an investment basis.
Putnam does not agree to sell any specific number of shares.
Shares will be sold by Putnam only against orders therefor. Putnam
will not purchase shares from anyone other than the Trust or a Fund
except in accordance with Section 5, and will not take "long" or
"short" positions in shares contrary to the Agreement and
Declaration of Trust of the Trust.

7. RULES OF NASD, ETC. Putnam will conform to the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
and the sale of securities laws of any jurisdiction in which it
sells, directly or indirectly, any shares. Putnam also agrees to
furnish to the Trust sufficient copies of any agreements or plans
it intends to use in connection with any sales of shares in
adequate time for the Trust to file and clear them with the proper
authorities before they are put in use, and not to use them until
so filed and cleared.

8. PUTNAM INDEPENDENT CONTRACTOR. Putnam shall be an independent
contractor and neither Putnam nor any of its officers or employees
as such is or shall be an employee of the Trust. Putnam is
responsible for its own conduct and the employment, control and
conduct of its agents and employees and for injury to such agents
or employees or to others through its agents or employees. Putnam
assumes full responsibility for its agents and employees under
applicable statutes and agrees to pay all employer taxes
thereunder.

Putnam will maintain at its own expense insurance against
public liability in such an amount as the Trustees of the Trust may
from time to time reasonably request.

9. EXPENSES. Putnam will pay all expenses of qualifying shares
for sale under the so-called "Blue Sky" laws of any state (except
expenses of any action by the Trust relating to its Agreement and
Declaration of Trust or other matters in which the Trust has a
direct concern), and expenses of preparing, printing and
distributing advertising and sales literature (apart from expenses
of registering shares under the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, and the
preparation and printing of Prospectuses and Statements of
Additional Information and reports as required by said Acts and the
direct expenses of the issue of shares, except that Putnam will pay
the cost of the preparation and printing of Prospectuses and
Statements of Additional Information and shareholders' reports used
by it and by others in the sale of shares to the extent such cost
is not paid by others).

10. INDEMNIFICATION OF TRUST. Putnam agrees to indemnify and
hold harmless the Trust and each person who has been, is, or may
hereafter be a Trustee of the Trust against expenses reasonably
incurred by any of them in connection with any claim or in
connection with any action, suit or proceeding to which any of them
may be a party, which arises out of or is alleged to arise out of
any misrepresentation or omission to state a material fact, or out
of any alleged misrepresentation or omission to state a material
fact, on the part of Putnam or any agent or employee of Putnam or
any other person for whose acts Putnam is responsible or is alleged
to be responsible unless such misrepresentation or omission was
made in reliance upon written information furnished by the Trust.
Putnam also agrees likewise to indemnify and hold harmless the
Trust and each such person in connection with any claim or in
connection with any action, suit or proceeding which arises out of
or is alleged to arise out of Putnam's (or an affiliate of
Putnam's) failure to exercise reasonable care and diligence with
respect to its services rendered in connection with investment,
reinvestment, automatic withdrawal and other plans for shares. The
term "expenses" includes amounts paid in satisfaction of judgments
or in settlements which are made with Putnam's consent. The
foregoing rights of indemnification shall be in addition to any
other rights to which the Trust or a Trustee may be entitled as a
matter of law.

11. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS
CONTRACT. This Contract shall automatically terminate, without the
payment of any penalty, in the event of its assignment. This
Contract may be amended only if such amendment be approved either
by action of the Trustees of the Trust or at a meeting of the
shareholders of the relevant Fund by the affirmative vote of a
majority of the outstanding shares of such Fund, and by a majority
of the Trustees of the Trust who are not interested persons of the
Trust or of Putnam by vote cast in person at a meeting called for
the purpose of voting on such approval.

12. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT. This
Contract shall take effect upon the date first above written and
shall remain in full force and effect continuously (unless
terminated automatically as set forth in Section 11) until
terminated with respect to a particular Fund:

(a) Either by the Trust or Putnam by not more than
sixty (60) days' nor less than ten (10) days' written
notice delivered or mailed by registered mail, postage
prepaid, to the other party; or

(b) If the continuance of this Contract after
January 31, 1995 is not specifically approved at least
annually by the Trustees of the Trust or the
shareholders of the relevant Fund by the affirmative
vote of a majority of the outstanding shares of such
Fund, and by a majority of the Trustees of the Trust
who are not interested persons of the Trust or of
Putnam by vote cast in person at a meeting called for
the purpose of voting on such approval.

Action by the Trust under (a) above may be taken either (i) by
vote of its Trustees or (ii) by the affirmative vote of a majority
of the outstanding shares of the relevant Fund. The requirement
under (b) above that continuance of this Contract be "specifically
approved at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940, as amended, and
the Rules and Regulations thereunder.

Termination of this Contract pursuant to this Section 12 shall
be without the payment of any penalty.

13. CERTAIN DEFINITIONS. For the purposes of this Contract,
the "affirmative vote of a majority of the outstanding shares of a
Fund" means the affirmative vote, at a duly called and held meeting
of shareholders of such Fund, (a) of the holders of 67% or more of
the shares of such Fund present (in person or by proxy) and
entitled to vote at such meeting, if the holders of more than 50%
of the outstanding shares of such Fund entitled to vote at such
meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of such Fund entitled to
vote at such meeting, whichever is less.

For the purposes of this Contract, the terms "interested
person" and "assignment" shall have the meanings defined in the
Investment Company Act of 1940, as amended, subject, however, to
such exemptions as may be granted by the Securities and Exchange
Commission under said Act.
<PAGE>
<PAGE>
DEALER SALES CONTRACT

Between: PUTNAM MUTUAL FUNDS CORP. and
General Distributor of
The Putnam Family of Mutual Funds
P.O. Box 2701
Boston, MA 02208

As general distributor of The Putnam Family of Mutual Funds (the
"Funds"), we agree to sell you shares of beneficial interest issued
by the Funds (the "Shares"), subject to any limitations imposed by
any of the Funds and to confirmation by us in each instance of such
sales. By your acceptance hereof, you agree to all of the
following terms and conditions:

1. OFFERING PRICE AND FEES

The public offering price at which you may offer the Shares is
the net asset value thereof, as computed from time to time, plus
any applicable sales charge described in the then-current
Prospectus of the applicable Fund. As compensation for each sale
of Shares made by you, you will be allowed the dealer discount,
if any, on such Shares described in the then-current Prospectus
of the Fund whose Shares are sold. We reserve the right to
revise the dealer discount referred to herein upon ten days'
written notice to you. We will furnish you upon request with the
public offering prices for the Shares, and you agree to quote
such prices in connection with any Shares offered by you for
sale. Your attention is specifically called to the fact that
each sale is always made subject to confirmation by us at the
public offering price next computed after receipt of the order.
There is no sales charge or dealer discount to dealers on the
reinvestment of dividends and distributions.

In addition to the dealer discount, if any, allowed pursuant to
the foregoing provisions of this Section 1, we may, at our
expense, provide additional promotional incentives or payments to
dealers. If non-cash concessions are provided, each dealer
earning such a concession may elect to receive an amount in cash
equivalent to the cost of providing such concessions. Notice of
the availability of concessions will be given to you by us. All
dealer discounts, promotional incentives, payments and
concessions will be made by us in accordance with National
Association of Securities Dealers, Inc. ("NASD") guidelines and
rules.
<PAGE>
2. MANNER OF OFFERING,
SELLING AND PURCHASING SHARES

We have delivered to you a copy of each Fund's current Prospectus
and will provide you with such number of copies of each Fund's
Prospectus, Statement of Additional Information and shareholder
reports and of supplementary sales materials prepared by us, as
you may reasonably request. You will offer and sell the Shares
only in accordance with the terms and conditions of the current
Prospectus and Statement of Additional Information of the
applicable Fund. Neither you nor any other person is authorized
to give any information or to make any representations other than
those contained in such Prospectuses, Statements of Additional
Information and shareholder reports or in such supplementary
sales materials. You agree that you will not use any other
offering materials for the Funds without our written consent.

You hereby agree (i) to exercise your best efforts to find
purchasers for the Shares of the Funds, (ii) to furnish to each
person to whom any sale is made a copy of the then-current
Prospectus of the applicable fund, (iii) to transmit to us
promptly upon receipt any and all orders received by you, and
(iv) to pay to us the offering price, less any dealer discount to
which you are entitled, within five (5) business days of our
confirmation of your order, or such shorter time as may be
required by law. If such payment is not received within said
time period, we reserve the right, without prior notice, to
cancel the sale, or at our option to return the Shares to the
issuer for redemption or repurchase. In the latter case, we
shall have the right to hold you responsible for any loss
resulting to us. Should payment be made by check on your local
bank, liquidation of Shares may be delayed pending clearance of
your check. You agree to issue confirmations promptly for all
accepted purchase orders for accounts held in street name. You
shall make all sales subject to our confirmation. All orders are
subject to acceptance or rejection by us in our sole discretion,
and by the Funds in their sole discretion. The procedure stated
herein relating to the pricing and handling of orders shall be
subject to instructions which we may forward to you from time to
time.

3. COMPLIANCE WITH LAW

You hereby represent that you are registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended, and are
licensed and qualified as a broker-dealer or otherwise authorized
to offer and sell the Shares under the laws of each jurisdiction
in which the Shares will be offered and sold by you. You further
confirm that you are a member in good standing of the NASD and
agree to maintain such membership in good standing or, in the
alternative, you are a foreign dealer not eligible for membership
in the NASD.

You agree that in selling Shares you will comply with all
applicable laws, rules and regulations, including the applicable
provisions of the Securities Act of 1933, as amended, the
applicable rules and regulations of the NASD, and the applicable
rules and regulations of any jurisdiction in which you sell,
directly or indirectly, any Shares. You agree not to offer for
sale or sell the Shares in any jurisdiction in which the Shares are
not qualified for sale or in which you are not qualified as a
broker-dealer.

4. RELATIONSHIP WITH DEALERS

In offering and selling Shares under this Contract, you shall be
acting as principal and nothing herein shall be construed to
constitute you or any of your agents, employees or
representatives as our agent or employee, or as an agent or
employee of the Funds. As general distributor of the Funds, we
shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the
distribution of the Shares. We shall not be under any obligation
to you, except for obligations expressly assumed by us in this
Contract.

5. TERMINATION

Either party hereto may terminate this Contract, without cause,
upon ten days' written notice to the other party. We may
terminate this Contract for cause upon the violation by you of
any of the provisions hereof, such termination to become
effective on the date such notice of termination is mailed to
you. This Contract shall terminate automatically if either Party
ceases to be a member of the NASD.

6. ASSIGNABILITY

This Contract is not assignable or transferable, except that we
may assign or transfer this Contract to any successor which
becomes general distributor of the Funds.

7. GOVERNING LAW

This Contract and the rights and obligations of the parties
hereunder shall be governed by and construed under the laws of
The Commonwealth of Massachusetts.
<PAGE>
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for
that purpose, whereupon this letter shall constitute a binding
agreement between us.

Very truly yours,

PUTNAM MUTUAL FUNDS CORP.

By:
------------------------------
William N. Shiebler, President
and Chief Executive Officer

We accept and agree to the foregoing Contract as of the date set
forth below.

Dealer

----------------------------

By: ----------------------------
Authorized Signature, Title

----------------------------

----------------------------
Address

Dated ----------------------------

Please return the signed Putnam copy to Putnam Mutual Funds Corp.,
P.O. Box 2701, Boston, MA 02208

<PAGE>
FINANCIAL INSTITUTION SALES CONTRACT

Between: and

PUTNAM MUTUAL FUNDS CORP.
General Distributor of
The Putnam Family of Mutual Funds
P. O. Box 2701
Boston, MA 02208

As general distributor of The Putnam Family of Mutual Funds (the
"Funds"), we agree that you will make available to your customers,
under an agency relationship with your customers, shares of
beneficial interest issued by the Funds (the "Shares"), subject to
any limitations imposed by any of the Funds and to confirmation by
us of each transaction. By your acceptance hereof, you agree to
all of the following terms and conditions:

1. OFFERING PRICES AND FEES

The public offering price at which you may make the Shares
available to your customers is the net asset value thereof, as
computed from time to time, plus any applicable sales charge
described in the then-current Prospectus of the applicable Fund.
In the case of purchases by you, as agent for your customers, of
Shares sold with a sales charge, you shall receive an agency
commission consisting of a portion of the public offering price,
determined on the same basis as the "dealer discount" described
in the then-current Prospectus of the Fund, and such other
compensation to dealers as may be described therein, which shall
be payable to you at the same time and on the same basis as the
same is paid to such dealers, consistent with applicable law,
rules and regulations. In determining the amount of any agency
commission payable to you hereunder, we reserve the right to
exclude any purchases for any accounts which we reasonably
determine are not made in accordance with the terms of the
applicable Fund Prospectus and the provisions of this Contract.
We reserve the right to revise the agency commission referred to
herein upon ten days' written notice to you. We will furnish you
upon request with the public offering prices for the Shares, and
you agree to quote such prices in connection with any Shares made
available by you as agent for your customers. Your attention is
specifically called to the fact that each purchase of Shares by
your customers is always made subject to confirmation by us at
the public offering price next computed after receipt of the
order. There is no sales charge or agency commission to you on
the reinvestment of dividends and distributions.
<PAGE>
2. MANNER OF MAKING SHARES AVAILABLE FOR PURCHASE

We will, upon request, deliver to you a copy of each Fund's then-
current Prospectus and will provide you with such number of
copies of each Fund's then-current Prospectus, Statement of
Additional Information and shareholder reports and of
supplementary sales materials prepared by us, as you may
reasonably request. It shall be your obligation to ensure that
all such information and materials are distributed to your
customers who own Shares, in accordance with securities and/or
banking law and regulations and any other applicable regulations.
Neither you nor any other person is authorized to give any
information or to make any representations other than those
contained in such Prospectuses, Statements of Additional
Information and shareholder reports or in such supplementary
sales materials. You shall not furnish or cause to be furnished
to any person, display or publish any information or materials
relating to any Fund (including, without limitation, promotional
materials and sales literature, advertisements, press releases,
announcements, statements, posters, signs or other similar
material), except such information and materials as may be
furnished to you by us or the Fund, and such other information
and materials as may be approved in writing by us.

You hereby agree:

(i) to not purchase any Shares as agent for any customer,
unless you deliver or cause to be delivered to such customer,
at or prior to the time of such purchase, a copy of the then-
current Prospectus of the applicable Fund unless such customer
has acknowledged receipt of the Prospectus of such Fund. You
hereby represent that you understand your obligation to
deliver a prospectus to customers who purchase Shares pursuant
to federal securities laws and you have taken all necessary
steps to comply with such prospectus delivery requirements;

(ii) to transmit to us promptly upon receipt any and all
orders received by you, it being understood that no
conditional orders will be accepted;

(iii) to obtain from each customer for whom you act as agent
for the purchase of Shares any taxpayer identification number
certification and backup withholding information required
under the Internal Revenue Code of 1986, as amended from time
to time (the "Code"), and the regulations promulgated
thereunder, or other sections of the Code which may become
applicable, and to provide us or our designee with timely
written notice of any failure to obtain such taxpayer
identification number certification or information in order to
enable the implementation of any required backup withholding
in accordance with the Code and the regulations thereunder;
and

(iv) to pay to us the offering price, less any agency
commission to which you are entitled, within five (5) business
days of our confirmation of your customer's order, or such
shorter time as may be required by law. You may, subject to
our approval, remit the total public offering price to us, and
we will return to you your agency commission. If such payment
is not received within said time period, we reserve the right,
without prior notice, to cancel the sale, or at our option to
return the Shares to the issuer for redemption or repurchase.
In the latter case, we shall have the right to hold you
responsible for any loss resulting to us. Should payment be
made by local bank check, liquidation of Shares may be delayed
pending clearance of your check.

Unless otherwise mutually agreed in writing or except as provided
below, each transaction placed by you shall be promptly confirmed
by us in writing to you, and shall be confirmed to the customer
promptly upon receipt by us of instructions from you as to such
customer. In the case of a purchase order by customer's
application, each transaction shall be promptly confirmed in
writing directly to the customer and a copy of each confirmation
shall be sent simultaneously to you. We reserve the right, at our
discretion and without notice, to suspend the sale of Shares or
withdraw entirely the sale of Shares of any or all of the Funds.
All orders are subject to acceptance or rejection by us in our sole
discretion, and by the Funds in their sole discretion. The
procedure stated herein relating to the pricing and handling of
orders shall be subject to instructions which we may forward to you
from time to time.

3. COMPLIANCE WITH LAW

You hereby represent that you are either (1) a "bank" as defined
in Section 3(a)(6) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and at the time of each transaction
in shares of the Funds, are not required to register as a broker-
dealer under the Exchange Act or regulations thereunder; or (2)
registered as a broker-dealer under the Exchange Act, a member in
good standing of the National Association of Securities Dealers,
Inc. ("NASD") and affiliated with a bank.

(a) If you are a bank, not required to register as a broker-dealer
under the Exchange Act: You further represent and warrant to us
that with respect to any sales in the United States, you will use
your best efforts to ensure that any purchase of Shares by your
customers constitutes a suitable investment for such customers.
You shall not effect any transaction in, or induce any purchase or
sale of, any Shares by means of any manipulative, deceptive or
other fraudulent device or contrivance, and shall otherwise deal
equitably and fairly with your customers with respect to
transactions in Shares of a Fund.

(b) If you are a NASD member broker-dealer affiliated with a bank
and registered under the Exchange Act: You further represent and
warrant to us that with respect to any sales in the United States,
you agree to abide by all of the applicable laws, rules and
regulations including applicable provisions of the Securities Act
of 1933, as amended, and the applicable rules and regulations of
the NASD, including, without limitation, its Rules of Fair
Practice, and the applicable rules and regulations of any
jurisdiction in which you make Shares available for sale to your
customers. You agree not to make available for sale to your
customers the Shares in any jurisdiction in which the Shares are
not qualified for sale or in which you are not qualified as a
broker-dealer. We shall have no obligation or responsibility as to
your right to make Shares of any Funds available to your customers
in any jurisdiction. You agree to notify us immediately in the
event of (i) your expulsion or suspension from the NASD or your
becoming subject to any enforcement action by the Securities and
Exchange Commission, NASD, or any other self-regulatory
organization, or (ii) your violation of any applicable federal or
state law, rule or regulation including, but not limited to, those
of the SEC, NASD or other self-regulatory organization, arising out
of or in connection with this Agreement, or which may otherwise
affect in any material way your ability to act in accordance with
the terms of this Contract.

You shall not make Shares of any Fund available to your customers,
including your fiduciary customers, except in compliance with all
federal and state laws and rules and regulations of regulatory
agencies or authorities applicable to you, or any of your
affiliates engaging in such activity, which may affect your
business practices. You confirm that you are not in violation of
any banking law or regulations as to which you are subject.

4. RELATIONSHIP WITH CUSTOMER

With respect to any and all transactions in the Shares of any
Fund pursuant to this Contract, it is understood and agreed in
each case that: (a) you shall be acting solely as agent for the
account of your customer; (b) each transaction shall be initiated
solely upon the order of your customer; (c) we shall execute
transactions only upon receiving instructions from you acting as
agent for your customer or upon receiving instructions directly
from your customer; (d) as between you and your customer, your
customer will have full beneficial ownership of all Shares; (e)
each transaction shall be for the account of your customer and
not for your account; and (f) unless otherwise agreed in writing
we will serve as a clearing broker for you on a fully disclosed
basis, and you shall serve as the introducing agent for your
customers' accounts. Subject to the foregoing, however, and
except for Shares sold subject to a contingent deferred sales
charge, you may maintain record ownership of such customers' Shares
in an account registered in your name or the name of your nominee,
for the benefit of such customers. With respect to Shares sold
subject to a contingent deferred sales charge, you agree not to
hold shares of such Funds in an account registered in your name or
in the name of your nominee for the benefit of certain of your
customers. You understand that such Shares must be held in a
separate account for each shareholder of such Funds. Each
transaction shall be without recourse to you provided that you act
in accordance with the terms of this Agreement. You represent and
warrant to us that you will have full right, power and authority to
effect transactions (including, without limitation, any purchases
and redemptions) in Shares on behalf of all customer accounts
provided by you.

5. RELATIONSHIP WITH FINANCIAL INSTITUTION

Neither this Contract nor the performance of the services of the
respective parties hereunder shall be considered to constitute an
exclusive arrangement, or to create a partnership, association or
joint venture between you and us. In making available Shares of
the Funds under this Contract, nothing herein shall be construed
to constitute you or any of your agents, employees or
representatives as our agent or employee, or as an agent or
employee of the Funds, and you shall not make any representations
to the contrary. As general distributor of the Funds, we shall
have full authority to take such action as we may deem advisable
in respect of all matters pertaining to the distribution of the
Shares. We shall not be under any obligation to you, except for
obligations expressly assumed by us in this Contract.

6. TERMINATION

Either party hereto may terminate this Contract, without cause,
upon ten days' written notice to the other party. We may
terminate this Contract for cause upon the violation by you of
any of the provisions hereof, such termination to become
effective on the date such notice of termination is mailed to
you. If you are registered as a broker-dealer and affiliated
with a bank, this Contract shall terminate automatically if
either Party ceases to be a member of the NASD.

7. ASSIGNABILITY

This Contract is not assignable or transferable, except that we
may assign or transfer this Contract to any successor which
becomes general distributor of the Funds.
<PAGE>
8. MISCELLANEOUS

(a) All communications mailed to us should be sent to the above
address. Any notice to you shall be duly given if mailed or
delivered to you at the address specified by you below.

(b) This Contract constitutes the entire agreement and
understanding between the parties and supercedes any and all prior
agreements between the parties.

(c) This Contract and the rights and obligations of the parties
hereunder shall be governed by and construed under the laws of The
Commonwealth of Massachusetts.

Very truly yours,

PUTNAM MUTUAL FUNDS CORP.

By: ------------------------------
William N. Shiebler, President
and Chief Executive Officer

We accept and agree to the foregoing Contract as of the date
set forth below.

Financial Institution: ---------------------------

By: ----------------------------
Authorized Signature, Title

----------------------------

----------------------------
Address

Dated: ----------------------------

Please return the signed Putnam copy of this sales Contract to
Putnam Mutual Funds Corp., P. O. Box 2701, Boston, MA 02208.

CUSTODIAN AGREEMENT

AGREEMENT made as of the 3rd day of May, 1991, as amended
July 13, 1992, between each of the Putnam Funds listed in
Schedule A, each of such Funds acting on its own behalf
separately from all the other Funds and not jointly or jointly
and severally with any of the other Funds (each of the Funds
being hereinafter referred to as the "Fund"), and Putnam
Fiduciary Trust Company (the "Custodian").

WHEREAS, the Custodian represents to the Fund that it is
eligible to serve as a custodian for a management investment
company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), and

WHEREAS, the Fund wishes to appoint the Custodian as the
Fund's custodian.

NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:

1. APPOINTMENT OF CUSTODIAN. The Fund hereby employs and
appoints the Custodian as custodian of its assets for the term
and subject to the provisions of this Agreement. At the
direction of the Custodian, the Fund agrees to deliver to the
Sub-Custodians appointed pursuant to Section 2 below (the "Sub-
Custodians") securities, funds and other property owned by it.
The Custodian shall have no responsibility or liability for or on
account of securities, funds or other property not so delivered
to the Sub-Custodians. Upon request, the Fund shall deliver to
the Custodian or to such Sub-Custodians as the Custodian may
direct such proxies, powers of attorney or other instruments as
may be reasonably necessary or desirable in connection with the
performance by the Custodian or any Sub-Custodian of their
respective obligations under this Agreement or any applicable
Sub-Custodian Agreement.

2. APPOINTMENT OF SUB-CUSTODIANS. The Custodian may at any
time and from time to time appoint, at its own cost and expense,
as a Sub-Custodian for the Fund any bank or trust company which
meets the requirements of the 1940 Act and the rules and
regulations thereunder to act as a custodian, provided that the
Fund shall have approved in writing any such bank or trust
company and the Custodian gives prompt written notice to the Fund
of any such appointment. The agreement between the Custodian and
any Sub-Custodian shall be substantially in the form of the Sub-
Custodian agreement attached hereto as Exhibit 1 (the "Sub-
Custodian Agreement") unless otherwise approved by the Fund,
provided, however, that the agreement between the Custodian and
any Sub-Custodian appointed primarily for the purpose of holding
foreign securities of the Fund shall be substantially in the form
of the Sub-Custodian Agreement attached hereto as Exhibit 1(A)
(the "Foreign Sub-Custodian Agreement"; the "Sub-Custodian
Agreement" and the "Foreign Sub-Custodian Agreement" are herein
referred to collectively and each individually as the "Sub-
Custodian Agreement"). All Sub-Custodians shall be subject to
the instructions of the Custodian and not the Fund. The
Custodian may, at any time in its discretion, remove any bank or
trust company which has been appointed as a Sub-Custodian but
shall in such case promptly notify the Fund in writing of any
such action. Securities, funds and other property of the Fund
delivered pursuant to this Agreement shall be held exclusively by
Sub-Custodians appointed pursuant to the provisions of this
Section 2.

The Sub-Custodians which the Fund has approved to date are
set forth in Schedule B hereto. Schedule B shall be amended from
time to time as Sub-Custodians are changed, added or deleted. The
Fund shall be responsible for informing the Custodian
sufficiently in advance of a proposed investment which is to be
held at a location not listed on Schedule B, in order that there
shall be sufficient time for the Custodian to put the appropriate
arrangements in place with such Sub-Custodian pursuant to such
Sub-Custodian Agreement.

With respect to the securities, funds or other property held
by a Sub-Custodian, the Custodian shall be liable to the Fund if
and only to the extent that such Sub-Custodian is liable to the
Custodian. The Custodian shall nevertheless be liable to the
Fund for its own negligence in transmitting any instructions
received by it from the Fund and for its own negligence in
connection with the delivery of any securities, funds or other
property of the Fund to any such Sub-Custodian.

In the event that any Sub-Custodian appointed pursuant to
the provisions of this Section 2 fails to perform any of its
obligations under the terms and conditions of the applicable Sub-
Custodian Agreement, the Custodian shall use its best efforts to
cause such Sub-Custodian to perform such obligations. In the
event that the Custodian is unable to cause such Sub-Custodian to
perform fully its obligations thereunder, the Custodian shall
forthwith terminate such Sub-Custodian and, if necessary or
desirable, appoint another Sub-Custodian in accordance with the
provisions of this Section 2. The Custodian may with the
approval of the Fund commence any legal or equitable action which
it believes is necessary or appropriate in connection with the
failure by a Sub-Custodian to perform its obligations under the
applicable Sub-Custodian Agreement. Provided the Custodian shall
not have been negligent with respect to any such matter, such
action shall be at the expense of the Fund. The Custodian shall
keep the Fund fully informed regarding such action and the Fund
may at any time upon notice to the Custodian elect to take
responsibility for prosecuting such action. In such event the
Fund shall have the right to enforce and shall be subrogated to
the Custodian's rights against any such Sub-Custodian for loss or
damage caused the Fund by such Sub-Custodian.

At the written request of the Fund, the Custodian will
terminate any Sub-Custodian appointed pursuant to the provisions
of this Section 2 in accordance with the termination provisions
of the applicable Sub-Custodian Agreement. The Custodian will
not amend any Sub-Custodian Agreement in any material manner
except upon the prior written approval of the Fund and shall in
any case give prompt written notice to the Fund of any amendment
to the Sub-Custodian Agreement.

3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND
HELD BY SUB-CUSTODIANS.

3.1 HOLDING SECURITIES - The Custodian shall cause one or
more Sub-Custodians to hold and, by book-entry or otherwise,
identify as belonging to the Fund all non-cash property delivered
to such Sub-Custodian.

3.2 DELIVERY OF SECURITIES - The Custodian shall cause Sub-
Custodians holding securities of the Fund to release and deliver
securities owned by the Fund held by the Sub-Custodian or in a
Securities System account of the Sub-Custodian only upon receipt
of Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, and only in the following
cases:

3.2.1 Upon sale of such securities for the account
of the Fund and receipt of payment therefor;
PROVIDED, HOWEVER, that a Sub-Custodian may
release and deliver securities prior to the
receipt of payment therefor if (i) in the
Sub-Custodian's judgment, (A) release and
delivery prior to payment is required by the
terms of the instrument evidencing the
security or (B) release and delivery prior
to payment is the prevailing method of
settling securities transactions between
institutional investors in the applicable
market and (ii) release and delivery prior
to payment is in accordance with generally
accepted trade practice and with any
applicable governmental regulations and the
rules of Securities Systems or other
securities depositories and clearing
<PAGE>
agencies in the applicable market. The
Custodian agrees, upon request, to advise
the Fund of all pending transactions in
which release and delivery will be made
prior to the receipt of payment therefor;

3.2.2 Upon the receipt of payment in connection
with any repurchase agreement related to
such securities entered into by the Fund;

3.2.3 In the case of a sale effected through a
Securities System, in accordance with the
provisions of Section 3.12 hereof;

3.2.4 To the depository agent in connection with
tender or other similar offers for portfolio
securities of the Fund; provided that, in
any such case, the cash or other
consideration is thereafter to be delivered
to the Sub-Custodian;

3.2.5 To the issuer thereof or its agent, when
such securities are called, redeemed,
retired or otherwise become payable;
provided that, in any such case, the cash or
other consideration is to be delivered to
the Sub-Custodian;

3.2.6 To the issuer thereof, or its agent for
transfer into the name of the Fund or into
the name of any nominee or nominees of the
Sub-Custodian or into the name or nominee
name of any agent appointed pursuant to
Section 3.11 or any other name permitted
pursuant to Section 3.3; or for exchange for
a different number of bonds, certificates or
other evidence representing the same
aggregate face amount or number of units;
provided that, in any such case, the new
securities are to be delivered to the Sub-
Custodian;

3.2.7 Upon the sale of such securities for the
account of the Fund, to the broker or its
clearing agent, against a receipt, for
examination in accordance with "street
delivery" custom; provided that in any such
case, the Sub-Custodian shall have no
<PAGE>
responsibility or liability for any loss
arising from the delivery of such securities
prior to receiving payment for such
securities except as may arise from the Sub-
Custodian's own negligence or willful
misconduct;

3.2.8 For exchange or conversion pursuant to any
plan of merger, consolidation,
recapitalization, reorganization or
readjustment of the securities of the issuer
of such securities, or pursuant to
provisions for conversion contained in such
securities, or pursuant to any deposit
agreement; provided that, in any such case,
the new securities and cash, if any, are to
be delivered to the Sub-Custodian;

3.2.9 In the case of warrants, rights or similar
securities, the surrender thereof in the
exercise of such warrants, rights or similar
securities or the surrender of interim
receipts or temporary securities for
definitive securities; provided that, in any
such case, the new securities and cash, if
any, are to be delivered to the Sub-
Custodian;

3.2.10 For delivery in connection with any loans of
securities made by the Fund, but only
against receipt of adequate collateral as
agreed upon from time to time by the
Custodian and the Fund, which may be in the
form of cash or obligations issued by the
United States government, its agencies or
instrumentalities; except that in connection
with any loan of securities held in a
Securities System for which collateral is to
credited to the Sub-Custodian's account in
another Securities System, the Sub-Custodian
will not be held liable or responsible for
delivery of the securities prior to the
receipt of such collateral.

3.2.11 For delivery as security in connection with
any borrowings by the Fund requiring a
pledge of assets by the Fund, but only
against receipt of amounts borrowed;

3.2.12 Upon receipt of instructions from the
transfer agent ("Transfer Agent") for the
Fund, for delivery to such Transfer Agent or
to the shareholders of the Fund in
connection with distributions in kind, as
may be described from time to time in the
Fund's Declaration of Trust and currently
effective registration statement, if any, in
satisfaction of requests by Fund
shareholders for repurchase or redemption;

3.2.13 For delivery to another Sub-Custodian of the
Fund; and

3.2.14 For any other proper corporate purpose, but
only upon receipt of, in addition to Proper
Instructions, a certified copy of a
resolution of the Trustees or of the
Executive Committee of the Fund signed by an
officer of the Fund and certified by its
Clerk or an Assistant Clerk, specifying the
securities to be delivered, setting forth
the purpose for which such delivery is to be
made, declaring such purposes to be proper
corporate purposes, and naming the person or
persons to whom delivery of such securities
shall be made.

3.3 REGISTRATION OF SECURITIES. Securities of the
Fund held by the Sub-Custodians hereunder (other than bearer
securities) shall be registered in the name of the Fund or
in the name of any nominee of the Fund or of any nominee of
the Sub-Custodians or any 17f-5 Sub-Custodian or Foreign
Depository (as each of those terms is defined in the Foreign
Sub-Custodian Agreement, which nominee shall be assigned
exclusively to the Fund, unless the Fund has authorized in
writing the appointment of a nominee to be used in common
with other registered investment companies having the same
investment adviser as the Fund, or in the name or nominee
name of any agent appointed pursuant to Section 3.12.
Notwithstanding the foregoing, a Sub-Custodian, agent, 17f-5
Sub-Custodian or Foreign Depository may hold securities of
the Fund in a nominee name which is used for its other
clients provided that such name is not used by the Sub-
Custodian, agent, 17f-5 Sub-Custodian or Foreign Depository
for its own securities and that securities of the Fund are,
by book-entry or otherwise, at all times identified as
belonging to the Fund and distinguished from other
securities held for other clients using the same nominee
name. In addition, and notwithstanding the foregoing, a
Sub-Custodian or agent thereof or 17f-5 Sub-Custodian or
Foreign Depository may hold securities of the Fund in its
own name if such registration is the prevailing method in
the applicable market by which custodians register
securities of institutional clients and provided that
securities of the Fund are, by book-entry or otherwise, at
all times identified as belonging to the Fund and
distinguished from other securities held for other clients
or for the Sub-Custodian or agent thereof or 17f-5 Sub-
Custodian or Foreign Depository. All securities accepted by
a Sub-Custodian under the terms of a Sub-Custodian Agreement
shall be in good delivery form.

3.4 BANK ACCOUNTS. The Custodian shall cause one or
more Sub-Custodians to open and maintain a separate bank account
or accounts in the name of the Fund or the Custodian, subject
only to draft or order by the Sub-Custodian acting pursuant to
the terms of a Sub-Custodian Contract or by the Custodian acting
pursuant to this Agreement, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by
it from or for the account of the Fund, other than cash
maintained by the Fund in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of
1940. Funds held by the Sub-Custodian for the Fund may be
deposited by it to its credit as sub-custodian or to the
Custodian's credit as custodian in the Banking Department of the
Sub-Custodian or in such other banks or trust companies as it may
in its discretion deem necessary or desirable; provided, however,
that every such bank or trust company shall be qualified to act
as a custodian under the Investment Company Act of 1940 and that
each such bank or trust company and the funds to be deposited
with each such bank or trust company shall be approved by vote of
a majority of the Trustees of the Fund. Such funds shall be
deposited by the Sub-Custodian or the Custodian in its capacity
as sub-custodian or custodian, respectively, and shall be
withdrawable by the Sub-Custodian or the Custodian only in that
capacity. The Sub-Custodian shall be liable for actual losses
incurred by the Fund attributable to any failure on the part of
the Sub-Custodian to report accurate cash availability
information with respect to the Fund's or the Custodian's bank
accounts maintained by the Sub-Custodian or any of its agents.

3.5 PAYMENTS FOR SHARES. The Custodian shall cause one or
more Sub-Custodians to deposit into the Fund's account amounts
received from the Transfer Agent of the Fund for shares of the
Fund issued by the Fund and sold by its distributor. The
Custodian will provide timely notification to the Fund of any
receipt by the Sub-Custodian from the Transfer Agent of payments
for shares of the Fund.

3.6 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement
between the Fund and the Custodian, the Custodian shall cause one
or more Sub-Custodians, upon the receipt of Proper Instructions,
to make federal funds available to the Fund as of specified times
agreed upon from time to time by the Fund and the Custodian with
respect to amounts received by the Sub-Custodians for the
purchase of shares of the Fund.

3.7 COLLECTION OF INCOME. The Custodian shall cause one or
more Sub-Custodians to collect on a timely basis all income and
other payments with respect to registered securities held
hereunder, including securities held in a Securities System, to
which the Fund shall be entitled either by law or pursuant to
custom in the securities business, and shall collect on a timely
basis all income and other payments with respect to bearer
securities if, on the date of payment by the issuer, such
securities are held by the Sub-Custodian or agent thereof and
shall credit such income, as collected, to the Fund's account.
Without limiting the generality of the foregoing, the Custodian
shall cause the Sub-Custodian to detach and present for payment
all coupons and other income items requiring presentation as and
when they become due and shall collect interest when due on
securities held under the applicable Sub-Custodian Agreement.
Arranging for the collection of income due the Fund on securities
loaned pursuant to the provisions of Section 3.2.10 shall be the
responsibility of the Fund. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the
Fund with such information or data as may be necessary to assist
the Fund in arranging for the timely delivery to the Sub-
Custodian of the income to which the Fund is properly entitled.

3.8 PAYMENT OF FUND MONIES. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, the Custodian shall cause one or more
Sub-Custodians to pay out monies of the Fund in the following
cases only:

3.8.1 Upon the purchase of securities for the
account of the Fund but only (a) against the
delivery of such securities to the Sub-
Custodian (or any bank, banking firm or
trust company doing business in the United
States or abroad which is qualified under
the Investment Company Act of 1940, as
amended, to act as a custodian and has been
designated by the Sub-Custodian as its agent
for this purpose) or any 17f-5 Sub-Custodian
or any Foreign Depository registered in the
name of the Fund or in the name of a nominee
of the Sub-Custodian referred to in Section
3.3 hereof or in proper form for transfer;
PROVIDED, HOWEVER, that the Sub-Custodian
may cause monies of the Fund to be paid out
prior to delivery of such securities if (i)
in the Sub-Custodian's judgment, (A) payment
prior to delivery is required by the terms
of the instrument evidencing the security or
(B) payment prior to delivery is the
prevailing method of settling securities
transactions between institutional investors
in the applicable market and (ii) payment
prior to delivery is in accordance with
generally accepted trade practice and with
any applicable governmental regulations and
the rules of Securities Systems or other
securities depositories and clearing
agencies in the applicable market; the
Custodian agrees, upon request, to advise
the Fund of all pending transactions in
which payment will be made prior to the
receipt of securities in accordance with the
provision to the foregoing sentence; (b) in
the case of a purchase effected through a
Securities System, in accordance with the
conditions set forth in Section 3.13 hereof;
or (c)(i) in the case of a repurchase
agreement entered into between the Fund and
the Sub-Custodian, another bank, or a
broker-dealer against delivery of the
securities either in certificate form or
through an entry crediting the Sub-
Custodian's account at the Federal Reserve
Bank with such securities or (ii) in the
case of a repurchase agreement entered into
between the Fund and the Sub-Custodian,
against delivery of a receipt evidencing
purchase by the Fund of Securities owned by
the Sub-Custodian along with written
evidence of the agreement by the Sub-
Custodian to repurchase such securities from
the Fund; or (d) for transfer to a time
deposit account of the Fund in any bank,
whether domestic or foreign, which transfer
may be effected prior to receipt of a
confirmation of the deposit from the
applicable bank or a financial intermediary;

3.8.2 In connection with conversion, exchange or
surrender of securities owned by the Fund as
set forth in Section 3.2 hereof;

3.8.3 For the redemption or repurchase of Shares
issued by the Fund as set forth in Section
3.10 hereof;

3.8.4 For the payment of any expense or liability
incurred by the Fund, including but not
limited to the following payments for the
account of the Fund: interest, taxes,
management, accounting, transfer agent and
legal fees, including the Custodian's fee;
and operating expenses of the Fund whether
or not such expenses are to be in whole or
part capitalized or treated as deferred
expenses;

3.8.5 For the payment of any dividends or other
distributions declared to shareholders of
the Fund;

3.8.6 For transfer to another Sub-Custodian of the
Fund;

3.8.7 For any other proper purpose, but only upon
receipt of, in addition to Proper
Instructions, a certified copy of a
resolution of the Trustees or of the
Executive Committee of the Fund signed by an
officer of the Fund and certified by its
Clerk or an Assistant Clerk, specifying the
amount of such payment, setting forth the
purpose for which such payment is to be
made, declaring such purpose to be a proper
purpose, and naming the person or persons to
whom such payments is to be made.

3.9 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF
SECURITIES PURCHASED. Except as otherwise provided in this
Agreement, in any and every case where payment for purchase of
securities for the account of the Fund is made by a Sub-Custodian
in advance of receipt of the securities purchased in the absence
of specific written instructions from the Fund to so pay in
advance, the Custodian shall cause the Sub-Custodian to be
absolutely liable to the Fund in the event any loss results to
the Fund from the payment by the Sub-Custodian in advance of
delivery of such securities.

3.10 PAYMENTS FOR REPURCHASE OR REDEMPTIONS OF SHARES OF
THE FUND. From such funds as may be available, the Custodian
shall, upon receipt Proper Instructions, cause one or more Sub-
Custodians to make funds available for payment to a shareholder
who has delivered to the Transfer Agent a request for redemption
or repurchase of shares of the Fund. In connection with the
redemption or repurchase of shares of the Fund, the Custodian is
authorized, upon receipt of Proper Instructions, to cause one or
more Sub-Custodian, to wire funds to or through a commercial bank
designated by the redeeming shareholder. In connection with the
redemption or repurchase of Shares of the Fund, the Custodian,
upon receipt of Proper Instructions, shall cause one or more Sub-
Custodians to honor checks drawn on the Sub-Custodian by a
shareholder when presented to the Sub-Custodian in accordance
with such procedures and controls as are mutually agreed upon
from time to time among the Fund, the Custodian and the Sub-
Custodian.

3.11 APPOINTMENT OF AGENTS. The Custodian may permit
any Sub-Custodian at any time or times in its discretion to
appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company
Act of 1940, as amended, to act as a custodian, as its agent to
carry out such of the provisions of this Section 3 as the Sub-
Custodian may from time to time direct; provided, however, that
the appointment of any agent shall not relieve the Custodian or
any Sub-Custodian of its responsibilities or liabilities
hereunder and provided that any such agent shall have been
approved by vote of the Trustees of the Fund. The Custodian may
also permit any Sub-Custodian to which foreign securities of the
Fund have been delivered to direct such securities to be held by
17f-5 Sub-Custodians and to use the facilities of Foreign
Depositories, as those terms are defined in the Foreign Sub-
Custodian Agreement, in accordance with the terms of the Foreign
Sub-Custodian Agreement.

The agents which the Fund and the Custodian have approved to
date are set forth in Schedule B hereto. Schedule B shall be
amended from time to time as agents are changed, added or
deleted. The Fund shall be responsible for informing the
Custodian, and the Custodian shall be responsible for informing
the appropriate Sub-Custodian, sufficiently in advance of a
proposed investment which is to be held at a location not listed
on Schedule B, in order that there shall be sufficient time for
the Sub-Custodian to complete the appropriate contractual and
technical arrangements with such agent. Any Sub-Custodian
Agreement shall provide that the engagement by the Sub-Custodian
of one or more agents shall not relieve the Sub-Custodian of its
responsibilities or liabilities thereunder.

3.12 DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS. The
Custodian may permit any Sub-Custodian to deposit and/or maintain
securities owned by the Fund in a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the
Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies,
collectively referred to herein as "Securities System" in
accordance with applicable rules and regulations (including Rule
17f-4 of the 1940 Act) and subject to the following provisions:

3.12.1 The Sub-Custodian may, either directly or
through one or more agents, keep securities
of the Fund in a Securities System provided
that such securities are represented in an
account ("Account") of the Sub-Custodian in
the Securities System which shall not
include any assets of the Sub-Custodian
other than assets held as a fiduciary,
custodian or otherwise for customers;

3.12.2 The records of the Sub-Custodian with
respect to securities of the Fund which are
maintained in a Securities System shall
identify by book-entry those securities
belonging to the Fund;

3.12.3 The Sub-Custodian shall pay for securities
purchased for the account of the Fund upon
(i) receipt of advice from the Securities
System that such securities have been
transferred to the Account, and (ii) the
making of an entry on the records of the
Sub-Custodian to reflect such payment and
transfer for the account of the Fund. The
Sub-Custodian shall transfer securities sold
for the account of the Fund upon (i) receipt
of advice from the Securities System that
payment for such securities has been
transferred to the Account, and (ii) the
making of an entry on the records of the
Sub-Custodian to reflect such transfer and
payment for the account of the Fund. Copies
of all advices from the Securities System of
transfers of securities for the account of
the Fund shall identify the Fund, be
maintained for the Fund by the Sub-Custodian
or such an agent and be provided to the Fund
at its request. The Sub-Custodian shall
furnish the Fund confirmation of each
transfer to or from the account of the Fund
in the form of a written advice or notice
and shall furnish to the Fund copies of
daily transaction sheets reflecting each
day's transactions in the Securities System
for the account of the Fund on the next
business day;

3.12.4 The Sub-Custodian shall provide the Fund
with any report obtained by the Sub-
Custodian on the Securities System's
accounting system, internal accounting
controls and procedures for safeguarding
securities deposited in the Securities
System;

3.12.5 The Sub-Custodian shall utilize only such
Securities Systems as are approved by the
Board of Trustees of the Fund, and included
on a list maintained by the Custodian;
<PAGE>
3.12.6 Anything to the contrary in this Agreement
notwithstanding, the Sub-Custodian shall be
liable to the Fund for any loss or damage to
the Fund resulting from use of the
Securities System by reason of any
negligence, misfeasance or misconduct of the
Sub-Custodian or any of its agents or of any
of its or their employees or from failure of
the Sub-Custodian or any such agent to
enforce effectively such rights as it may
have against the Securities System; at the
election of the Fund, it shall be entitled
to be subrogated to the rights of the Sub-
Custodian with respect to any claim against
the Securities System or any other person
which the Sub-Custodian may have as a
consequence of any such loss or damage if
and to the extent that the Fund has not been
made whole for any such loss or damage.

3.12A DEPOSITARY RECEIPTS. Only upon receipt of Proper
Instructions, the Sub-Custodian shall instruct a 17f-5 Sub-
Custodian or an agent of the Sub-Custodian appointed pursuant to
the applicable Foreign Sub-Custodian Agreement (an "Agent") to
surrender securities to the depositary used by an issuer of
American Depositary Receipts or International Depositary Receipts
(hereinafter collectively referred to as "ADRs") for such
securities against a written receipt therefor adequately
describing such securities and written evidence satisfactory to
the 17f-5 Sub-Custodian or Agent that the depositary has
acknowledged receipt of instructions to issue with respect to
such securities ADRs in the name of the Sub-Custodian, or a
nominee of the Sub-Custodian, for delivery to the Sub-Custodian.

Only upon receipt of Proper Instructions, the Sub-Custodian
shall surrender ADRs to the issuer thereof against a written
receipt therefor adequately describing the ADRs surrendered and
written evidence satisfactory to the Sub-Custodian that the
issuer of the ADRs has acknowledged receipt of instructions to
cause its depository to deliver the securities underlying such
ADRs to a 17f-5 Sub-Custodian or an Agent.

3.12BFOREIGN EXCHANGE TRANSACTIONS AND FUTURES
CONTRACTS. Only upon receipt of Proper Instructions, the Sub-
Custodian shall enter into foreign exchange contracts or options
to purchase and sell foreign currencies for spot and future
delivery on behalf and for the account of the Fund or shall enter
into futures contracts or options on futures contracts. Such
transactions may be undertaken by the Sub-Custodian with such
banking institutions, including the Sub-Custodian and 17f-5 Sub-
Custodian(s) appointed pursuant to the applicable Foreign Sub-
Custodian Agreement, as principals, as approved and authorized by
the Fund. Foreign exchange contracts, futures contracts and
options, other than those executed with the Sub-Custodian, shall
for all purposes of this Agreement be deemed to be portfolio
securities of the Fund.

3.12COPTION TRANSACTIONS. Only upon receipt of Proper
Instructions, the Sub-Custodian shall enter into option
transactions in accordance with the provisions of any agreement
among the Fund, the Custodian and/or the Sub-Custodian and a
broker-dealer.

3.13 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The
Custodian shall cause one or more Sub-Custodians as may be
appropriate to execute ownership and other certificates and
affidavits for all federal and state tax purposes in connection
with receipt of income or other payments with respect to
securities of the Fund held by the Sub-Custodian and in
connection with transfers of securities.

3.14 PROXIES. The Custodian shall, with respect to the
securities held by the Sub-Custodians, cause to be promptly
executed by the registered holder of such securities, if the
securities are registered other than in the name of the Fund or a
nominee of the fund, all proxies, without indication of the
manner in which such proxies are to be voted, and shall promptly
deliver to the Fund such proxies, all proxy soliciting materials
and all notices relating to such securities.

3.15 COMMUNICATIONS RELATING TO FUND PORTFOLIO
SECURITIES. The Custodian shall cause the Sub-Custodians to
transmit promptly to the Custodian, and the Custodian shall
transmit promptly to the Fund, all written information
(including, without limitation, pendency of calls and maturities
of securities and expirations of rights in connection therewith)
received by the Sub-Custodian from issuers of the securities
being held for the account of the Fund. With respect to tender
or exchange offers, the Custodian shall cause the Sub-Custodian
to transmit promptly to the Fund, all written information
received by the Sub-Custodian from issuers of the securities
whose tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer. If the Fund desires
to take action with respect to any tender offer, exchange offer
or any other similar transaction, the Fund shall notify the
Custodian of the action the Fund desires such Sub-Custodian to
take, provided, however, neither the Custodian nor the Sub-
Custodian shall be liable to the Fund for the failure to take any
such action unless such instructions are received by the
Custodian at least four business days prior to the date on which
the Sub-Custodian is to take such action or, in the case of
foreign securities, such longer period as shall have been agreed
upon in writing by the Custodian and the Sub-Custodian.

3.16 PROPER INSTRUCTIONS. Proper Instructions as used
throughout this Agreement means a writing signed or initialed by
one or more person or persons who are authorized by the Trustees
of the Fund and the Custodian. Each such writing shall set forth
the specific transaction or type of transaction involved,
including a specific statement of the purpose for which such
action is requested. Oral instructions will be considered Proper
Instructions if the Custodian or Sub-Custodian, as the case may
be, reasonably believes them to have been given by a person
authorized to give such instructions with respect to the
transaction involved. All oral instructions shall be confirmed
in writing. Proper Instructions also include communications
effected directly between electro-mechanical or electronic
devices provided that the Trustees have approved such procedures.
Notwithstanding the foregoing, no Trustee, officer, employee or
agent of the Fund shall be permitted access to any securities or
similar investments of the Fund deposited with any Sub-Custodian
or any agent of any Sub-Custodian for any reason except in
accordance with the provisions of Rule 17f-2 under the 1940 Act.

3.17 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The
Custodian may in its discretion, and may permit one or more Sub-
Custodians in their discretion, without express authority from
the Fund to:

3.17.1 make payments to itself or others for minor
expenses of handling securities or other
similar items relating to its duties under
this Agreement, or in the case of a Sub-
Custodian, under the applicable Sub-
Custodian Agreement, provided that all such
payments shall be accounted for to the Fund;

3.17.2 surrender securities in temporary form for
securities in definitive form;

3.17.3 endorse for collection, in the name of the
Fund, checks, drafts and other negotiable
instruments; and

3.17.4 in general, attend to all non-discretionary
details in connection with the sale,
exchange, substitution, purchase, transfer
and other dealings with the securities and
property of the Fund except as otherwise
directed by the Trustees of the Fund.

3.18 EVIDENCE OF AUTHORITY. The Custodian shall be
protected in acting upon any instructions, notice, request,
consent, certificate or other instrument or paper believed by it
to be genuine and to have been properly executed by or on behalf
of the Fund.

3.19 INVESTMENT LIMITATIONS. In performing its duties
generally, and more particularly in connection with the purchase,
sale and exchange of securities made by or for the Fund, the
Custodian may assume, unless and until notified in writing to the
contrary, that Proper Instructions received by it are not in
conflict with or in any way contrary to any provisions of the
Fund's Declaration of Trust or By-Laws (or comparable documents)
or votes or proceedings of the shareholders or Trustees of the
Fund. The Custodian shall in no event be liable to the Fund and
shall be indemnified by the Fund for any violation of any
investment limitations to which the Fund is subject or other
limitations with respect to the Fund's powers to expend funds,
encumber securities, borrow or take similar actions affecting its
portfolio.

4. PERFORMANCE STANDARDS. The Custodian shall use its best
efforts to perform its duties hereunder in accordance with the
standards set forth in Schedule C hereto. Schedule C may be
amended from time to time as agreed to by the Custodian and the
Trustees of the Fund.

5. RECORDS. The Custodian shall create and maintain all
records relating to the Custodian's activities and obligations
under this Agreement and cause all Sub-Custodians to create and
maintain all records relating to the Sub-Custodian's activities
and obligations under the appropriate Sub-Custodian Agreement in
such manner as will meet the obligations of the Fund under the
1940 Act, with particular attention to Sections 17(f) and 31
thereof and Rules 17f-2, 31a-1 and 31a-2 thereunder, applicable
federal and state tax laws, and any other law or administrative
rules or procedures which may be applicable to the Fund. All
such records shall be the property of the Fund and shall at all
times during the regular business hours of the Custodian or
during the regular business hours of the Sub-Custodian, as the
case may be, be open for inspection by duly authorized officers,
employees or agents of the Custodian and Fund and employees and
agents of the Securities and Exchange Commission. At the Fund's
request, the Custodian shall supply the Fund and cause one or
more Sub-Custodians to supply the Custodian with a tabulation of
securities owned by the Fund and held under this Agreement. When
requested to do so by the Fund and for such compensation as shall
be agreed upon, the Custodian shall include and cause one or more
Sub-Custodians to include certificate numbers in such
tabulations.

6. OPINION AND REPORTS OF FUND'S INDEPENDENT ACCOUNTANTS. The
Custodian shall take all reasonable actions, as the Fund may from
time to time request, to furnish such information with respect to
its activities hereunder as the Fund's independent public
accountants may request in connection with the accountant's
verification of the Fund's securities and similar investments as
required by Rule 17f-2 under the 1940 Act, the preparation of the
Fund's registration statement and amendments thereto, the Fund's
reports to the Securities and Exchange Commission, and with
respect to any other requirements of such Commission.

The Custodian shall also direct any Sub-Custodian to take
all reasonable actions, as the Fund may from time to time
request, to furnish such information with respect to its
activities under the applicable Sub-Custodian Agreement as the
Fund's independent public accountant may request in connection
with the accountant's verification of the Fund's securities and
similar investments as required by Rule 17f-2 under the 1940 Act,
the preparation of the Fund's registration statement and
amendments thereto, the Fund's reports to the Securities and
Exchange Commission, and with respect to any other requirements
of such Commission.

7. REPORTS OF CUSTODIAN'S AND SUB-CUSTODIANS' INDEPENDENT
ACCOUNTANTS. The Custodian shall provide the Fund, at such times
as the Fund may reasonably require, with reports by its
independent public accountant on its accounting system, internal
accounting controls and procedures for safeguarding securities,
including securities deposited and/or maintained in Securities
Systems, relating to services provided by the Custodian under
this Agreement. The Custodian shall also cause one or more of
the Sub-Custodians to provide the Fund, at such time as the Fund
may reasonably require, with reports by independent public
accountants on their accounting systems, internal accounting
controls and procedures for safeguarding securities, including
securities deposited and/or maintained in Securities Systems,
relating to services provided by those Sub-Custodians under their
respective Sub-Custody Agreements. Such reports, which shall be
of sufficient scope and in sufficient detail as may reasonably be
required by the Fund, shall provide reasonable assurance that any
material inadequacies would be disclosed by such examinations,
and, if there is no such inadequacies, shall so state.

8. COMPENSATION. The Custodian shall be entitled to reasonable
compensation for its services and expenses as custodian, as
agreed upon from time to time between the Fund and the Custodian.
Such expenses shall not include, however, the fees paid by the
Custodian to any Sub-Custodian.

9. RESPONSIBILITY OF CUSTODIAN. The Custodian shall exercise
reasonable care and diligence in carrying out the provisions of
this Agreement and shall not be liable to the Fund for any action
taken or omitted by it in good faith without negligence. So long
as and to the extent that it is in the exercise of reasonable
care, neither the Custodian nor any Sub-Custodian shall be
responsible for the title, validity or genuineness of any
property or evidence of title thereto received by it or delivered
by it pursuant to this Agreement and shall be held harmless in
acting upon any notice, request, consent, certificate or other
instrument reasonably believed by it to be genuine and, if in
writing, reasonably believed by it to be signed by the proper
party or parties. It shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Fund) on all
matters, and shall be without liability for any action reasonably
taken or omitted pursuant to such advice. Notwithstanding the
foregoing, the responsibility of the Custodian or a Sub-Custodian
with respect to redemptions effected by check shall be in
accordance with a separate Agreement entered into between the
Custodian and the Fund. It is also understood that the Custodian
shall not be liable for any loss resulting from a Sovereign Risk.
A "Sovereign Risk" shall mean nationalization, expropriation,
devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de
facto or de jure; or enactment, promulgation, imposition or
enforcement by any such governmental authority of currency
restrictions, exchange controls, taxes, levies or other charges
affecting the Fund's property; or acts of war, terrorism,
insurrection or revolution; or any other similar act or event
beyond the Custodian's control.

If the Fund requires the Custodian which in turn may require
a Sub-Custodian to take any action with respect to securities,
which action involves the payment of money or which action may,
in the opinion of the Custodian or the Sub-Custodian result in
the Custodian or its nominee or a Sub-Custodian or its nominee
being liable for the payment of money or incurring liability of
some other form, the Fund, as a prerequisite to requiring the
Custodian or the Custodian requiring any Sub-Custodian to take
such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.

The Fund agrees to indemnify and hold harmless the Custodian
and its nominee from and against all taxes, charges, expenses,
assessments, claims and liabilities (including counsel fees)
incurred or assessed against it or its nominee or any Sub-
Custodian or its nominee in connection with the performance of
this Agreement, or any Sub-Custodian Agreement except, as to the
Custodian, such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct,
and as to a Sub-Custodian, such as may arise from such Sub-
Custodian's or its nominee's own negligent action, negligent
failure to act or willful misconduct. The negligent action,
negligent failure to act or willful misconduct of the Custodian
shall not diminish the Fund's obligation to indemnify the
Custodian in the amount, but only in the amount, of any indemnity
required to be paid to a Sub-Custodian under its Sub-Custodian
Agreement. The Custodian may assign this indemnity from the Fund
directly to, and for the benefit of, any Sub-Custodian. The
Custodian is authorized, and may authorize any Sub-Custodian, to
charge any account of the Fund for such items and such fees. To
secure any such authorized charges and any advances of cash or
securities made by the Custodian or any Sub-Custodian to or for
the benefit of the Fund for any purpose which results in the Fund
incurring an overdraft at the end of any business day or for
extraordinary or emergency purposes during any business day, the
Fund (except a Fund specified in Schedule D to this Agreement)
hereby grants to the Custodian a security interest in and pledges
to the Custodian securities up to a maximum of 10% of the value
of the Fund's net assets for the purpose of securing payment of
any such advances and hereby authorizes the Custodian on behalf
of the Fund to grant to any Sub-Custodian a security interest in
and pledge of securities held for the Fund (including those which
may be held in a Securities System) up to a maximum of 10% of the
value of the net assets held by such Sub-Custodian. The specific
securities subject to such security interest may be designated in
writing from time to time by the Fund or its investment adviser.
In the absence of any designation of securities subject to such
security interest, the Custodian or the Sub-Custodian, as the
case may be, may designate securities held by it. Should the
Fund fail to repay promptly any authorized charges or advances of
cash or securities, the Custodian or the Sub-Custodian shall be
entitled to use such available cash and to dispose of pledged
securities and property as is necessary to repay any such
authorized charges or advances and to exercise its rights as a
secured party under the U.C.C. The Fund agrees that a Sub-
Custodian shall have the right to proceed directly against the
Fund and not solely as subrogee to the Custodian with respect to
any indemnity hereunder assigned to a Sub-Custodian, and in that
regard, the Fund agrees that it shall not assert against any Sub-
Custodian proceeding against it any defense or right of set-off
the Fund may have against the Custodian arising out of the
negligent action, negligent failure to act or willful misconduct
of the Custodian, and hereby waives all rights it may have to
object to the right of a Sub-Custodian to maintain an action
against it.

10. SUCCESSOR CUSTODIAN. If a successor custodian shall be
appointed by the Trustees of the Fund, the Custodian shall, upon
termination, cause to be delivered to such successor custodian,
duly endorsed and in the form for transfer, all securities, funds
and other properties then held by the Sub-Custodians and all
instruments held by the Sub-Custodians relative thereto and cause
the transfer to an account of the successor custodian all of the
Fund's securities held in any Securities System.

If no such successor custodian shall be appointed, the
Custodian shall, in like manner, upon receipt of a certified copy
of a vote of the Trustees of the Fund, cause to be delivered at
the office of the Custodian and transfer such securities, funds
and other properties in accordance with such vote.

In the event that no written order designating a successor
custodian or certified copy of a vote of the Trustees shall have
been delivered to the Custodian on or before the date when such
termination shall become effective, then the Custodian shall have
the right to deliver to a bank or trust company, which meets the
requirements of the 1940 Act and the rules and regulations
thereunder, such securities, funds and other properties.
Thereafter, such bank or trust company shall be the successor of
the Custodian under this Agreement.

In the event that such securities, funds and other
properties remain in the possession of the Custodian or any Sub-
Custodian after the date of termination hereof owing to failure
of the Fund to procure the certified copy of the vote referred to
or of the Trustees to appoint a successor custodian, the
Custodian shall be entitled to fair compensation for its services
during such period as the Sub-Custodians retain possession of
such securities, funds and other properties and the provisions of
this Agreement relating to the duties and obligations of the
Custodian shall remain in full force and effect.

11. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT. This Agreement
shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided,
may be amended at any time by mutual agreement of the parties
hereto and may be terminated by either party by an instrument in
writing delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than thirty (30) days
after the date of such delivery or mailing; provided either party
may at any time immediately terminate this Agreement in the event
of the appointment of a conservator or receiver for the other
party or upon the happening of a like event at the direction of
an appropriate regulatory agency or court of competent
jurisdiction. No provision of this Agreement may be amended or
terminated except by a statement in writing signed by the party
against which enforcement of the amendment or termination is
sought.

Upon termination of the Agreement, the Fund shall pay to the
Custodian such compensation as may be due as of the date of such
termination and shall likewise reimburse the Custodian and
through the Custodian any Sub-Custodian for its costs, expenses
and disbursements.

12. INTERPRETATION. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to
the subject matter hereof. In connection with the operation of
this Agreement, the Custodian and the Fund may from time to time
agree in writing on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their
joint opinion be consistent with the general tenor of this
Agreement. No interpretive or additional provisions made as
provided in the preceding sentence shall be deemed to be an
amendment of this Agreement.

13. GOVERNING LAW. This instrument is executed and delivered in
The Commonwealth of Massachusetts and shall be governed by and
construed according to the internal laws of said Commonwealth,
without regard to principles of conflicts of law.

14. NOTICES. Notices and other writings delivered or mailed
postage prepaid to the Fund addressed to the Fund attention: John
Hughes, or to such other person or address as the Fund may have
designated to the Custodian in writing, or to the Custodian at
One Post Office Square, Boston, Massachusetts 02109 attention:
George Crane, or to such other address as the Custodian may have
designated to the Fund in writing, shall be deemed to have been
properly delivered or given hereunder to the respective
addressee.

15. BINDING OBLIGATION. This Agreement shall be binding on and
shall inure to the benefit of the Fund and the Custodian and
their respective successors and assigns, provided that neither
party hereto may assign this Agreement or any of its rights or
obligations hereunder without the prior written consent of the
other party.

16. DECLARATION OF TRUST. A copy of the Declaration of Trust of
each of the Funds is on file with the Secretary of The
Commonwealth of Massachusetts and notice is hereby given that
this instrument is executed on behalf of the Trustees of each of
the Funds as Trustees and not individually and that the
obligations of this instrument are not binding on any of the
Trustees or officers or shareholders individually, but are
binding only on the assets and property of each Fund with respect
to its obligations hereunder.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf as of the day
and year first above written.

THE PUTNAM FUNDS LISTED
IN SCHEDULE A

By ----------------------------
Vice President and Treasurer

PUTNAM FIDUCIARY TRUST COMPANY

By ----------------------------
President

Putnam Investments, Inc. ("Putnam"), the sole owner of the
Custodian, agrees that Putnam shall be the primary obligor with
respect to compensation due the Sub-Custodians pursuant to the
Sub-Custodian Agreements in connection with the Sub-Custodians'
performance of their responsibilities thereunder and agrees to
take all actions necessary and appropriate to assure that the
Sub-Custodians shall be compensated in the amounts and on the
schedules agreed to by the Custodian and the Sub-Custodians
pursuant to those Agreements.

PUTNAM INVESTMENTS, INC.

By ------------------------------

<PAGE>

EXHIBIT 1

MASTER SUB-CUSTODIAN AGREEMENT

AGREEMENT made this day of , 199 , between
Putnam Fiduciary Trust Company, a Massachusetts-chartered trust
company (the "Custodian"), and , a
(the "Sub-Custodian").

WHEREAS, the Sub-Custodian represents to the Custodian that
it is eligible to serve as a custodian for a management
investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"), and

WHEREAS, the Custodian has entered into a Custodian
Agreement between it and each of the Putnam Funds listed in
Schedule A, each of such Funds acting on its own behalf
separately from all the other Funds and not jointly or jointly
and severally with any of the other Funds (each of the Funds
being hereinafter referred to as the "Fund"), and

WHEREAS, the Custodian and the Fund desire to utilize sub-
custodians for the purpose of holding cash and securities of the
Fund, and

WHEREAS, the Custodian wishes to appoint the Sub-Custodian
as the Fund's Sub-Custodian,

NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:

1. APPOINTMENT OF CUSTODIAN. The Custodian hereby employs
and appoints the Sub-Custodian as a Sub-Custodian for the Fund
for the term and subject to the provisions of this Agreement.
Upon request, the Custodian shall deliver to the Sub-Custodian
such proxies, powers of attorney or other instruments as may be
reasonably necessary or desirable in connection with the
performance by the Sub-Custodian of its obligations under this
Agreement on behalf of the Fund.

2. DUTIES OF THE SUB-CUSTODIAN WITH RESPECT TO PROPERTY OF
THE FUND HELD BY IT. The Custodian may from time to time deposit
securities or cash owned by the Fund with the Sub-Custodian. The
Sub-Custodian shall have no responsibility or liability for or on
account of securities, funds or other property of the Fund not so
delivered to it. The Sub-Custodian shall hold and dispose of the
securities hereafter held by or deposited with the Sub-Custodian
as follows:

2.1 HOLDING SECURITIES. The Sub-Custodian shall hold and
physically segregate for the account of the Fund all non-cash
property, including all securities owned by the Funds, other than
securities which are maintained pursuant to Section 2.13 in a
Securities System. All such securities are to be held or
disposed of for, and subject at all times to the instructions of,
the Custodian pursuant to the terms of this Agreement. The Sub-
Custodian shall maintain adequate records identifying the
securities as being held by it as Sub-Custodian of the Fund.

2.2 DELIVERY OF SECURITIES. The Sub-Custodian shall
release and deliver securities of the Fund held by it hereunder
(or in a Securities System account of the Sub-Custodian) only
upon receipt of Proper Instructions (as defined in Section 2.17),
which may be continuing instructions when deemed appropriate by
the parties, and only in the following cases:

1) Upon sale of such securities for the account of
the Fund and receipt of payment therefor;

2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered into by
the Fund;

3) In the case of a sale effected through a
Securities System, in accordance with the provisions of Section
2.13 hereof;

4) To the depository agent in connection with tender
or other similar offers for portfolio securities of the Fund;

5) To the issuer thereof or its agent when such
securities are called, redeemed, retired or otherwise become
payable; provided that, in any such case, the cash or other
consideration is to be delivered to the Sub-Custodian;

6) To the issuer thereof, or its agent, for transfer
into the name of the Fund or into the name of any nominee or
nominees of the Sub-Custodian or into the name or nominee name of
any agent appointed pursuant to Section 2.12; or for exchange for
a different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
provided that, in any such case, the new securities are to be
delivered to the Sub-Custodian;

7) Upon the sale of such securities for the account
of the Fund, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street delivery"
custom; provided that, in any such case, the Sub-Custodian shall
have no responsibility or liability for any loss arising from the
<PAGE>
delivery of such securities prior to receiving payment for such
securities except as may arise from the Sub-Custodian's own
negligence or willful misconduct;

8) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such securities,
or pursuant to provisions for conversion contained in such
securities, or pursuant to any deposit agreement; provided that,
in any such case, the new securities and cash, if any, are to be
delivered to the Sub-Custodian;

9) In the case of warrants, rights or similar
securities, the surrender thereof in the exercise of such
warrants, rights or similar securities or the surrender of
interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new securities
and cash, if any, are to be delivered to the Sub-Custodian;

10) For delivery in connection with any loans of
securities made by the Fund, but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian and
the Sub-Custodian, which may be in the form of cash or
obligations issued by the United States government, its agencies
or instrumentalities;

11) For delivery as security in connection with any
borrowings by the Fund requiring a pledge of assets by the Fund,
but only against receipt of amounts borrowed;

12) Upon receipt of instructions from the transfer
agent for the Fund (the "Transfer Agent"), for delivery to such
Transfer Agent or to the shareholders of the Fund in connection
with distributions in kind, as may be described from time to time
in the Fund's Declaration of Trust and currently effective
registration statement, if any, in satisfaction of requests by
shareholders for repurchase or redemption;

13) For delivery to another Sub-Custodian of the Fund;
and

14) For any other proper purpose, but only upon
receipt of, in addition to Proper Instructions, a certified copy
of a resolution of the Trustees or of the Executive Committee of
the Fund signed by an officer of the Fund and certified by its
Clerk or an Assistant Clerk, specifying the securities to be
delivered, setting forth the purpose for which such delivery is
to be made, declaring such purposes to be proper corporate
purposes, and naming the person or persons to whom delivery of
such securities is to be made.
<PAGE>
2.3 REGISTRATION OF SECURITIES. Securities of the Fund
held by the Sub-Custodian hereunder (other than bearer
securities) shall be registered in the name of the Fund or in the
name of any nominee of the Fund or of any nominee of the Sub-
Custodian, which nominee shall be assigned exclusively to the
Fund, unless the Fund has authorized in writing the appointment
of a nominee to be used in common with other registered
investment companies having the same investment adviser as the
Fund, or in the name or nominee name of any agent appointed
pursuant to Section 2.12. Notwithstanding the foregoing, a Sub-
Custodian or agent thereof may hold securities of the Fund in a
nominee name which is used for its other clients provided such
name is not used by the Sub-Custodian or agent for its own
securities and that securities of the Fund are physically
segregated at all times from other securities held for other
clients using the same nominee name. All securities accepted by
the Sub-Custodian under the terms of this Agreement shall be in
"street name" or other good delivery form.

2.4 BANK ACCOUNTS. The Sub-Custodian shall open and
maintain a separate bank account or accounts in the name of the
Fund, subject only to draft or order by the Sub-Custodian acting
pursuant to the terms of this Agreement, and shall hold in such
account or accounts, subject to the provisions hereof, all cash
received for the account of the Funds, other than cash maintained
by the Fund in a bank account established and used in accordance
with Rule 17f-3 under the 1940 Act. Funds held by the Sub-
Custodian for the Fund shall be deposited by it to its credit as
Sub-Custodian of the Fund in the Banking Department of the Sub-
Custodian or other banks. Such funds shall be deposited by the
Sub-Custodian in its capacity as Sub-Custodian and shall be
withdrawable by the Sub-Custodian only in that capacity. The
Sub-Custodian shall be liable for losses incurred by the Fund
attributable to any failure on the part of the Sub-Custodian to
report accurate cash availability information with respect to the
Fund's bank accounts maintained by the Sub-Custodian or any of
its agents, provided that such liability shall be determined
solely on a cost-of-funds basis.

2.5 PAYMENTS FOR SHARES. The Sub-Custodian shall receive
from any distributor of the Fund's shares or from the Transfer
Agent of the Fund and deposit into the Fund's account such
payments as are received for shares of the Fund issued or sold
from time to time by the Fund. The Sub-Custodian will provide
timely notification to the Custodian, and the Transfer Agent of
any receipt by it of payments for shares of the Fund.

2.6 INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS. Upon
mutual agreement between the Custodian and the Sub-Custodian, the
Sub-Custodian shall, upon the receipt of Proper Instructions,

1) invest in such instruments as may be set forth in
such instructions on the same day as received all federal funds
received after a time agreed upon between the Sub-Custodian and
the Custodian; and

2) make federal funds available to the Fund as of
specified times agreed upon from time to time by the Custodian
and the Sub-Custodian in the amount of checks, when cleared
within the Federal Reserve System, received in payment for shares
of the Fund which are deposited into the Fund's account or
accounts.

2.7 COLLECTION OF INCOME. The Sub-Custodian shall collect
on a timely basis all income and other payments with respect to
registered securities held hereunder to which the Fund shall be
entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and
other payments with respect to bearer securities if, on the date
of payment by the issuer, such securities are held hereunder and
shall credit such income, as collected, to the Fund's account.
Without limiting the generality of the foregoing, the Sub-
Custodian shall detach and present for payment all coupons and
other income items requiring presentation as and when they become
due and shall collect interest when due on securities held
hereunder. Arranging for the collection of income due the Fund
on securities loaned pursuant to the provisions of Section
2.2(10) shall be the responsibility of the Custodian. The Sub-
Custodian will have no duty or responsibility in connection
therewith, other than to provide the Custodian with such
information or data as may be necessary to assist the Custodian
in arranging for the timely delivery to the Sub-Custodian of the
income to which the Fund is properly entitled.

2.8 PAYMENT OF FUND MONIES. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, the Sub-Custodian shall cause monies
of a Fund to be paid out in the following cases only:

2) In connection with conversion, exchange or
surrender of securities owned by the Fund as set forth in Section
2.2 hereof;

3) For the redemption or repurchase of shares issued
by the Fund as set forth in Section 2.10 hereof;

4) For the payment of any expense or liability
incurred by the Fund, including but not limited to the following
payments for the account of the Fund: interest, taxes,
management, accounting, custodian and Sub-Custodian, transfer
agent and legal fees, including the Custodian's fee; and
operating expenses of the Fund whether or not such expenses are
to be in whole or part capitalized or treated as deferred
expenses;

5) For the payment of any dividends declared pursuant
to the governing documents of the Fund;

6) For transfer to another Sub-Custodian of the Fund;
and

7) For any other proper purpose, but only upon
receipt of, in addition to Proper Instructions, a certified copy
of a resolution of the Trustees or of the Executive Committee of
the Fund signed by an officer of the Fund and certified by its
Clerk or an Assistant Clerk, specifying the amount of such
payment, setting forth the purpose for which such payment is to
be made, declaring such purpose to be a proper purpose, and
naming the person or persons to whom such payment is to be made.

2.9 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF
SECURITIES PURCHASED. In any and every case where payment for
purchase of securities for the account of a Fund is made by the
Sub-Custodian in advance of receipt of the securities purchased
in the absence of specific written instructions from the
Custodian to so pay in advance, the Sub-Custodian shall be
absolutely liable to the Fund and the Custodian in the event any
loss results to the Fund or the Custodian from the failure of the
Sub-Custodian to make such payment against delivery of such
securities, except that in the case of repurchase agreements
entered into by the Fund with a bank which is a member of the
Federal Reserve System, the Sub-Custodian may transfer funds to
the account of such bank prior to the receipt of written evidence
that the securities subject to such a repurchase agreement have
been transferred by book-entry into a segregated non-proprietary
account of the Sub-Custodian maintained with any Federal Reserve
Bank or of the safe-keeping receipt, provided that such
securities have in fact been so transferred by book-entry.

2.10 PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES
OF THE FUND. From such funds as may be available for the purpose
but subject to the limitations of the Declaration of Trust and
By-Laws and any applicable votes of the Trustees of the Fund
pursuant thereto, the Sub-Custodian shall, upon receipt of
instructions from the Custodian, make funds available for payment
to shareholders of the Fund who have delivered to the Transfer
Agent a request for redemption or repurchase of their shares. In
connection with the redemption or repurchase of shares of the
Fund, the Sub-Custodian, upon receipt of Proper Instructions, is
authorized to wire funds to or through a commercial bank
designated by the redeeming shareholders. In connection with the
redemption or repurchase of shares of the Fund, the Sub-
Custodian, upon receipt of Proper Instructions, shall honor
checks drawn on the Sub-Custodian by a shareholder, when
presented to the Sub-Custodian in accordance with such procedures
and controls as are mutually agreed upon from time to time among
the Fund, the Custodian and the Sub-Custodian.

2.11 VARIANCES. The Sub-Custodian may accept
securities or cash delivered in settlement of trades
notwithstanding variances between the amount of securities or
cash so delivered and the amount specified in the instructions
furnished to it by the Custodian, provided that the variance in
any particular transaction does not exceed (i) $25 in the case of
transactions of $1,000,000 or less, and (ii) $50 in the case of
transactions exceeding $1,000,000. The Sub-Custodian shall
maintain a record of any such variances and notify the Custodian
of such variances in periodic transaction reports submitted to
the Custodian. The Sub-Custodian will not advise any party with
whom the Fund effects securities transactions of the existence of
these variance provisions without the consent of the Fund and the
Custodian.

2.12 APPOINTMENT OF AGENTS. Without limiting its own
responsibility for its obligations assumed hereunder, the Sub-
Custodian may at any time and from time to time engage, at its
own cost and expense, as an agent to act for the Fund on the Sub-
Custodian's behalf with respect to any such obligations any bank
or trust company which meets the requirements of the 1940 Act,
and the rules and regulations thereunder, to perform services
delegated to the Sub-Custodian hereunder, provided that the Fund
shall have approved in writing any such bank or trust company and
the Sub-Custodian shall give prompt written notice to the
Custodian and the Fund of any such engagement. All agents of the
Sub-Custodian shall be subject to the instructions of the Sub-
Custodian and not the Custodian. The Sub-Custodian may, at any
time in its discretion, and shall at the Custodian's direction,
remove any bank or trust company which has been appointed as an
agent, and shall in either case promptly notify the Custodian and
the Fund in writing of the completion of any such action.

The agents which the Fund has approved to date are set forth
in Schedule B hereto. Schedule B shall be amended from time to
time as approved agents are changed, added or deleted. The
Custodian shall be responsible for informing the Sub-Custodian
sufficiently in advance of a proposed investment which is to be
held at a location not listed on Schedule B, in order that there
shall be sufficient time for the Fund to give the approval
required by the preceding paragraph and for the Sub-Custodian to
complete the appropriate contractual and technical arrangements
with such agent. The engagement by the Sub-Custodian of one or
more agents to carry out such of the provisions of this Section 2
shall not relieve the Sub-Custodian of its responsibilities or
liabilities hereunder.

2.13 DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS. The
Sub-Custodian may deposit and/or maintain securities owned by the
Fund in a clearing agency registered with the Securities and
Exchange Commission under Section 17A of the Securities Exchange
Act of 1934, which acts as a securities depository, or in the
book-entry system authorized by the U.S. Department of the
Treasury (collectively referred to herein as "Securities System")
in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations
(including Rule 17f-4 of the 1940 Act), and subject to the
following provisions:

1) The Sub-Custodian may keep securities of the Fund
in a Securities System provided that such securities are
represented in an account ("Account") of the Sub-Custodian in the
Securities System which shall not include any assets other than
assets held as a fiduciary, custodian or otherwise for customers;

2) The records of the Sub-Custodian with respect to
securities of the Fund which are maintained in a Securities
System shall identify by book-entry those securities belonging to
the Fund;

3) The Sub-Custodian shall pay for securities
purchased for the account of the Fund upon (i) receipt of advice
from the Securities System that such securities have been
transferred to the Account, and (ii) the making of an entry on
the records of the Sub-Custodian to reflect such payment and
transfer for the account of the Fund. The Sub-Custodian shall
transfer securities sold for the account of the Fund upon (a)
receipt of advice from the Securities System that payment for
such securities has been transferred to the Account, and (b) the
making of an entry on the records of the Sub-Custodian to reflect
such transfer and payment for the account of the Fund. Copies of
all advices from the Securities System of transfers of securities
for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Sub-Custodian and be provided to
the Fund or the Custodian at the Custodian's request. The Sub-
Custodian shall furnish the Custodian confirmation of each
transfer to or from the account of the Fund in the form of a
written advice or notice and shall furnish to the Custodian
copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of the Fund
on the next business day;

4) The Sub-Custodian shall provide the Custodian with
any report obtained by the Sub-Custodian on the Securities
System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the
Securities System;

5) The Sub-Custodian shall have received the initial
or annual certificate, as the case may be, required by Section
2.10 hereof;

6) Anything to the contrary in this Agreement
notwithstanding, the Sub-Custodian shall be liable to the Fund
and the Custodian for any loss or damage to the Fund or the
Custodian resulting from use of the Securities System by reason
of any negligence, misfeasance or misconduct of the Sub-Custodian
or any of its agents or of any of its or their employees or from
failure of the Sub-Custodian or any such agent to enforce
effectively such rights as it may have against the Securities
System; at the election of the Custodian, it shall be entitled to
be subrogated to the rights of the Sub-Custodian with respect to
any claim against the Securities System or any other person which
the Sub-Custodian may have as a consequence of any such loss or
damage if and to the extent that the Fund and the Custodian have
not been made whole for any such loss or damage.

2.14 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Sub-
Custodian shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in connection
with receipt of income or other payments with respect to
securities held by it hereunder and in connection with transfers
of securities.

2.15 PROXIES. The Sub-Custodian shall, with respect to
the securities held hereunder, cause to be promptly executed by
the registered holder of such securities, if the securities are
registered otherwise than in the name of a Fund, all proxies,
without indication of the manner in which such proxies are to be
voted, and shall promptly deliver to the Custodian such proxies,
all proxy soliciting materials and all notices relating to such
securities.

2.16 COMMUNICATIONS RELATING TO FUND PORTFOLIO
SECURITIES. The Sub-Custodian shall transmit promptly to the
Custodian all written information (including, without limitation,
pendency of calls and maturities of securities and expirations of
rights in connection therewith) received by the Sub-Custodian
from issuers of the securities being held for the account of the
Fund. With respect to tender or exchange offers, the Sub-
Custodian shall transmit promptly to the Custodian all written
information received by the Sub-Custodian from issuers of the
securities whose tender or exchange is sought and from the party
(or his agents) making the tender or exchange offer. If the Fund
desires to take action with respect to any tender offer, exchange
offer or any other similar transactions, the Custodian shall
notify the Sub-Custodian of the action the Fund desires the Sub-
Custodian to take; provided, however, that the Sub-Custodian
shall not be liable to the Fund or the Custodian for the failure
to take any such action unless such instructions are received by
the Sub-Custodian at least two business days prior to the date on
which the Sub-Custodian is to take such action.

2.17 PROPER INSTRUCTIONS. Proper Instructions as used
throughout this Agreement means a writing signed or initialed by
one or more persons who are authorized by the Trustees of the
Fund and by vote of the Board of Directors of the Custodian.
Each such writing shall set forth the specific transaction or
type of transaction involved, including a specific statement of
the purpose for which such action is requested. Oral
instructions will be considered Proper Instructions if the Sub-
Custodian reasonably believes them to have been given by a person
authorized to give such instructions with respect to the
transaction involved. The Custodian shall cause all oral
instructions to be confirmed in writing. Upon receipt of a
certificate of the Clerk or an Assistant Clerk as to the
authorization by the Trustees of the Funds accompanied by a
detailed description of procedures approved by the Trustees,
Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices, provided that
the Trustees, the Custodian and the Sub-Custodian are satisfied
that such procedures afford adequate safeguards for the Fund's
assets. Notwithstanding the foregoing, no Trustee, officer,
employee or agent of the Fund shall be permitted access to any
securities or similar investments of the Fund deposited with the
Sub-Custodian or any agent for any reason except in accordance
with the provisions of Rule 17f-2 under the 1940 Act.

2.18 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The
Sub-Custodian may in its discretion, without express authority
from the Custodian:

1) make payments to itself or others for minor
expenses of handling securities or other similar items relating
to its duties under this Agreement, provided that all such
payments shall be accounted for to the Fund and the Custodian;

2) surrender securities in temporary form for
securities in definitive form;

3) endorse for collection, in the name of the Fund,
checks, drafts and other negotiable instruments; and

4) in general, attend to all non-discretionary
details in connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the securities and
property of the Fund held by the Sub-Custodian hereunder except
as otherwise directed by the Custodian or the Trustees of the
Fund.

2.19 EVIDENCE OF AUTHORITY. The Sub-Custodian shall be
protected in acting upon any instruction, notice, request,
consent, certificate or other instrument or paper reasonably
believed by it to be genuine and to have been properly executed
by or on behalf of the Fund or the Custodian as custodian of the
Fund. The Sub-Custodian may receive and accept a certified copy
of a vote of the Trustees of the Fund or the Board of Directors
of the Custodian, as conclusive evidence (a) of the authority of
any person to act in accordance with such vote or (b) of any
determination or of any action by the Trustees pursuant to the
Declaration of Trust and By-Laws and the Board of Directors of
the Custodian, as the case may be as described in such vote, and
such vote may be considered as in full force and effect until
receipt by the Sub-Custodian of written notice to the contrary.

3. PERFORMANCE STANDARDS; PROTECTION OF THE FUND. The
Sub-Custodian shall use its best efforts to perform its duties
hereunder in accordance with the standards set forth in Schedule
C hereto. Schedule C may be amended from time to time as agreed
to by the Custodian and the Trustees of the Fund.

4. RECORDS. The Sub-Custodian shall cooperate with and
supply necessary information to the entity or entities appointed
by the Trustees of the Fund to keep the books of account of the
Funds or, if directed in writing to do so by the Custodian, shall
itself keep such books of account. The Sub-Custodian shall
create and maintain all records relating to its activities and
obligations under this Agreement in such manner as will meet the
obligations of the Custodian under its Custodian Agreement with
the Fund under the 1940 Act, with particular attention to
Sections 17(f) and 31 thereof and Rules 17f-2, 31a-1 and 31a-2
thereunder, applicable federal and state tax laws, and any other
law or administrative rules or procedures which may be applicable
to the Fund or the Custodian. All such records shall be the
property of the Fund and shall at all times during the regular
business hours of the Sub-Custodian be open for inspection by
duly authorized officers, employees or agents of the Custodian
and the Fund and employees and agents of the Securities and
Exchange Commission. The Sub-Custodian shall, at the Custodian's
request, supply the Custodian with a tabulation of securities
owned by the Fund and held under this Agreement and shall, when
requested to do so by the Custodian and for such compensation as
shall be agreed upon between the Custodian and Sub-Custodian,
include certificate numbers in such tabulations.

5. OPINION AND REPORTS OF THE FUND'S INDEPENDENT
ACCOUNTANTS. The Sub-Custodian shall take all reasonable
actions, as the Custodian may from time to time request, to
obtain from year to year favorable opinions from the Fund's
independent public accountants with respect to its activities
hereunder in connection with the preparation of the Fund's
registration statements and amendments thereto, the Fund's
reports to the Securities and Exchange Commission and with
respect to any other requirements of such Commission.

6. REPORTS OF SUB-CUSTODIAN'S INDEPENDENT ACCOUNTANTS.
The Sub-Custodian shall provide the Custodian, at such times as
the Custodian may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, including
securities deposited and/or maintained in a Securities System,
relating to the services provided by the Sub-Custodian under this
Agreement; such reports, which shall be of sufficient scope and
in sufficient detail as may reasonably be required by the
Custodian, shall provide reasonable assurance that any material
inadequacies would be disclosed by such examination, and, if
there are no such inadequacies, shall so state.

7. COMPENSATION. The Sub-Custodian shall be entitled to
reasonable compensation for its services and expenses as Sub-
Custodian, as agreed upon from time to time between the Custodian
and the Sub-Custodian.

8. RESPONSIBILITY OF SUB-CUSTODIAN. The Sub-Custodian
shall exercise reasonable care and diligence in carrying out the
provisions of this Agreement and shall not be liable to the Fund
or the Custodian for any action taken or omitted by it in good
faith without negligence. So long as and to the extent that it
is in the exercise of reasonable care, the Sub-Custodian shall
not be responsible for the title, validity or genuineness of any
property or evidence of title thereto received by it or delivered
by it pursuant to this Agreement and shall be held harmless in
acting upon any notice, request, consent, certificate or other
instrument reasonably believed by it to be genuine and to be
signed by the proper party or parties. It shall be entitled to
rely on and may act upon advice of counsel (who may be counsel
for the Fund) on all matters, and shall be without liability for
any action reasonably taken or omitted pursuant to such advice.
Notwithstanding the foregoing, the responsibility of the Sub-
Custodian with respect to redemptions effected by check shall be
in accordance with a separate agreement entered into between the
Custodian and the Sub-Custodian.

The Sub-Custodian shall protect the Fund and the Custodian
from direct losses to the Fund resulting from any act or failure
to act of the Sub-Custodian in violation of its duties hereunder
or of law and shall maintain customary errors and omissions and
fidelity insurance policies in an amount not less than $25
million to cover losses to the Fund resulting from any such act
or failure to act.

If the Custodian requires the Sub-Custodian to take any
action with respect to securities, which action involves the
payment of money or which action may, in the opinion of the Sub-
Custodian, result in the Sub-Custodian's being liable for the
payment of money or incurring liability of some other form, the
Custodian, as a prerequisite to requiring the Sub-Custodian to
take such action, shall provide indemnity to the Sub-Custodian in
an amount and form satisfactory to it.

The Custodian agrees to indemnify and hold harmless the Sub-
Custodian from and against all taxes, charges, expenses,
assessments, claims and liabilities (including counsel fees)
incurred or assessed against it or its nominee in connection with
the performance of this Agreement, except such as may arise from
its own negligent action, negligent failure to act or willful
misconduct. To secure any such authorized charges and any
advances of cash or securities made by the Sub-Custodian to or
for the benefit of the Fund for any purpose which results in the
Fund's incurring an overdraft at the end of any business day or
for extraordinary or emergency purposes during any business day,
the Custodian on behalf of the Fund, unless prohibited from doing
so by one or more of the Fund's fundamental investment
restrictions, hereby represents that it has obtained from the
Fund authorization to apply available cash in any account
maintained by the Sub-Custodian on behalf of the Fund and a
security interest in and pledge to it of securities held for the
Fund by the Sub-Custodian, in an amount not to exceed the amount
not prohibited by such restrictions, for the purposes of securing
payment of any such advances, and that the Fund has agreed, from
time to time, to designate in writing, or to cause its investment
adviser to designate in writing, the specific securities subject
to such security interest and pledge. The Custodian hereby
assigns the benefits of such security interest and pledge to the
Sub-Custodian, and agrees that, should the Fund or the Custodian
fail to repay promptly any advances of cash or securities, the
Sub-Custodian shall be entitled to use such available cash and to
dispose of such pledged securities as is necessary to repay any
such advances.

9. SUCCESSOR SUB-CUSTODIAN. If a successor Sub-Custodian
shall be appointed by the Custodian, the Sub-Custodian shall,
upon termination, cause to be delivered to such successor Sub-
Custodian, duly endorsed and in the form for transfer, all
securities then held by it, shall cause the transfer to an
account of the successor Sub-Custodian all of the Fund's
securities held in a Securities System and shall cause to be
delivered to such successor Sub-Custodian all funds and other
property held by it or any of its agents.

If no such successor Sub-Custodian shall be appointed, the
Sub-Custodian shall, in like manner, upon receipt of a certified
copy of a vote of the Trustees of the Fund, cause to be delivered
at the office of the Sub-Custodian and transfer such securities,
funds and other properties in accordance with such vote.

In the event that no written order designating a successor
Sub-Custodian or certified copy of a vote of the Trustees shall
have been delivered to the Sub-Custodian on or before the date
when such termination shall become effective, then the Sub-
Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the 1940 Act, doing
business in Boston, Massachusetts, of its own selection, having
an aggregate capital, surplus, and undivided profits, as shown by
its last published report, of not less than $25,000,000, all
securities, funds and other properties held by the Sub-Custodian
and its agents and all instruments held by the Sub-Custodian and
its agents relative thereto and all other property held by it and
its agents under this Agreement and to cause to be transferred to
an account of such successor Sub-Custodian all of the Fund's
securities held in any Securities System. Thereafter, such bank
or trust company shall be the successor of the Sub-Custodian
under this Agreement.

In the event that securities, funds and other properties
remain in the possession of the Sub-Custodian after the date of
termination hereof owing to failure of the Custodian to obtain
the certified copy of vote referred to or of the Trustees to
appoint a successor Sub-Custodian, the Sub-Custodian shall be
entitled to fair compensation for its services during such period
as the Sub-Custodian retains possession of such securities, funds
and other properties and the provisions of this Agreement
relating to the duties and obligations of the Sub-Custodian shall
remain in full force and effect.

Upon termination, the Sub-Custodian shall, upon receipt of a
certified copy of a vote of the Trustees of the Fund, cause to be
delivered to any other Sub-Custodian designated in such vote such
assets, securities and other property of the Fund as are
designated in such vote, or pursuant to Proper Instructions,
cause such assets, securities and other property of the Fund as
are designated by the Custodian to be delivered to one or more of
the sub-custodians designated on Schedule D hereto, as from time
to time amended.

10. EFFECTIVE PERIOD; TERMINATION AND AMENDMENT. This
Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the
parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid, to
the other party, such termination to take effect not sooner than
thirty (30) days after the date of mailing; provided, however,
that the Sub-Custodian shall not act under Section 2.13 hereof in
the absence of receipt of an initial certificate of the Clerk or
an Assistant Clerk that the Trustees of the Fund have approved
the initial use of a particular Securities System and the receipt
of an annual certificate of the Clerk or an Assistant Clerk that
the Trustees have reviewed the use by the Fund of such Securities
System, as required in each case by Rule 17f-4 under the
Investment Company Act of 1940; and provided, further, however,
that the Custodian shall not amend or terminate this Agreement in
contravention of any applicable federal or state regulations or
any provision of the Declarations of Trust or By-Laws of the
Fund; and provided, further, that the Custodian may at any time,
by action of its Board of Directors, or the Trustees of the Fund,
as the case may be, immediately terminate this Agreement in the
event of the appointment of a conservator or receiver for the
Sub-Custodian by the Comptroller of the Currency or upon the
happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction.

11. AMENDMENT AND INTERPRETATION. This Agreement
constitutes the entire understanding and agreement of the parties
hereto with respect to the subject matter hereof. No provision
of this Agreement may be amended or terminated except by a
statement in writing signed by the party against which
enforcement of the amendment or termination is sought.

In connection with the operation of this Agreement, the Sub-
Custodian and the Custodian may from time to time agree in
writing on such provisions interpretive of or in addition to the
provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. No
interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this
Agreement.

12. GOVERNING LAW. This Agreement is executed and
delivered in The Commonwealth of Massachusetts and shall be
governed by and construed according to the laws of said
Commonwealth.

13. NOTICES. Notices and other writings delivered or
mailed postage prepaid to the Custodian addressed to the
Custodian attention: , or to such other person or
address as the Custodian may have designated to the Sub-Custodian
in writing, or to the Sub-Custodian at , or to such
other address as the Sub-Custodian may have designated to the
Custodian in writing, shall be deemed to have been properly
delivered or given hereunder to the respective addressee.

14. BINDING OBLIGATION. This Agreement shall be binding on
and shall inure to the benefit of the Custodian and the Sub-
Custodian and their respective successors and assigns, provided
that neither party hereto may assign this Agreement or any of its
rights or obligations hereunder without the prior written consent
of the other party.

15. PRIOR AGREEMENTS. This Agreement supersedes and
terminates, as of the date hereof, all prior contracts between
the Fund or the Custodian and the Sub-Custodian relating to the
custody of the Fund's assets.

16. DECLARATION OF TRUST. A copy of the Agreement and
Declaration of Trust of the Fund is on file with the Secretary of
The Commonwealth of Massachusetts, and notice is hereby given
that the obligations of or arising out of this instrument are not
binding upon any of the Trustees or beneficiaries individually
but binding only upon the assets and property of the Funds.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf by its duly
authorized representative and its seal to be hereunder affixed as
of the day of , 199 .

PUTNAM FIDUCIARY TRUST COMPANY

By ---------------------------
(SUB-CUSTODIAN)

By ---------------------------

<PAGE>
EXHIBIT 1(A)

MASTER FOREIGN SUB-CUSTODIAN AGREEMENT

AGREEMENT made this day of , 199 , between
Putnam Fiduciary Trust Company, a Massachusetts-chartered trust
company (the "Custodian"), and ,
(the "Sub-Custodian").

WHEREAS, the Custodian has entered into a Custodian
Agreement between it and each of the Putnam Funds listed in
Schedule A to this Agreement, each of such Funds acting on its
own behalf separately from all the other Funds and not jointly or
jointly and severally with any of the other Funds (each of the
Funds being hereinafter referred to as the "Fund"), and

WHEREAS, the Custodian and the Fund desire to utilize
sub-custodians for the purpose of holding cash and securities of
the Fund, and

WHEREAS, the Custodian wishes to appoint the Sub-Custodian
as the Fund's Sub-Custodian,

NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:

1. APPOINTMENT OF SUB-CUSTODIAN. The Custodian hereby
employs and appoints the Sub-Custodian as a sub-custodian for
safekeeping of securities and other assets of the Fund for the
term and subject to the provisions of this Agreement. Upon
request, the Custodian shall deliver to the Sub-Custodian such
proxies, powers of attorney or other instruments as may be
reasonably necessary or desirable in connection with the
performance by the Sub-Custodian of its obligations under this
Agreement on behalf of the Fund.

2. DUTIES OF THE SUB-CUSTODIAN WITH RESPECT TO PROPERTY OF
THE FUND HELD BY IT. The Custodian may from time to time deposit
or direct the deposit of securities or cash owned by the Fund
with the Sub-Custodian. The Sub-Custodian shall have no
responsibility or liability for or on account of securities,
funds or other property of the Fund not so delivered to it.
Except for securities and funds held by 17f-5 Sub-Custodians (as
defined in Section 2.11(b)) the Sub-Custodian shall hold and
dispose of the securities or cash hereafter held by or deposited
with the Sub-Custodian as follows:

2.1. HOLDING SECURITIES. The Sub-Custodian shall hold
and, by book-entry or otherwise, identify as belonging to the
Fund all non-cash property which has been delivered to the
Sub-Custodian. All such securities are to be held or disposed of
for, and subject at all times to the instructions of, the
Custodian pursuant to the terms of this Agreement. The
Sub-Custodian shall maintain adequate records identifying the
securities as being held by it as sub-custodian of the Fund.

2.2. DELIVERY OF SECURITIES. The Sub-Custodian shall
release and deliver securities of the Fund held by it hereunder
(or in a Securities System account of the Sub-Custodian) only
upon receipt of Proper Instructions (as defined in Section 2.19),
which may be continuing instructions when deemed appropriate by
the parties, and only in the following cases:

1) Upon sale of such securities for the account
of the Fund and receipt of payment therefor, provided, however,
that the Sub-Custodian may release and deliver securities prior
to the receipt of payment therefor if (i) in the Sub-Custodian's
judgment, (A) release and delivery prior to payment is required
by the terms of the instrument evidencing the security or (B)
release and delivery prior to payment is the prevailing method of
settling securities transactions between institutional investors
in the applicable market and (ii) release and delivery prior to
payment is in accordance with generally accepted trade practice
and with any applicable governmental regulations and the rules of
Securities Systems or other securities depositories and clearing
agencies in the applicable market. The Sub-Custodian agrees,
upon request, to advise the Custodian of all pending transactions
in which release and delivery will be made prior to the receipt
of payment therefor;

2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered into by
the Fund;

3) In the case of a sale effected through a Securities
System, in accordance with the provisions of Section 2.12 hereof;

4) To the depository agent in connection with tender
or other similar offers for such securities; provided that, in any
such case, the cash or other consideration is thereafter to be
delivered to the Sub-Custodian;

6) To the issuer thereof, or its agent, for
transfer into the name of the Fund or into the name of any nominee
or nominees of the Sub-Custodian or into the name or nominee name
of any agent appointed pursuant to Section 2.11 or any other name
permitted pursuant to Section 2.3; or for exchange for a different
number of bonds, certificates or other evidence representing the
same aggregate face amount or number of units; provided that, in
any such case, the new securities are thereafter to be delivered
to the Sub-Custodian;

7) Upon the sale of such securities for the
account of the Fund, to the broker or its clearing agent, against
a receipt, for examination in accordance with "street delivery"
custom; provided that, in any such case, the Sub-Custodian shall
have no responsibility or liability for any loss arising from the
delivery of such securities prior to receiving payment for such
securities except as may arise from the Sub-Custodian's own
negligence or willful misconduct;

8) For exchange or conversion pursuant to any plan
of merger, consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such securities,
or pursuant to provisions for conversion contained in such
securities, or pursuant to any deposit agreement; provided that,
in any such case, the new securities and cash, if any, thereafter
are to be delivered to the Sub-Custodian;

9) In the case of warrants, rights or similar
securities, the surrender thereof in the exercise of such
warrants, rights or similar securities or the surrender of interim
receipts or temporary securities for definitive securities;
provided that, in any such case, the now securities and cash, if
any, are thereafter to be delivered to the Sub-Custodian;

10) For delivery in connection with any loans of
securities made by the Fund, but only against receipt of
collateral the adequacy and timing of receipt of which shall be as
agreed upon from time to time in writing by the Custodian and the
Sub-Custodian, which may be in the form of cash or obligations
issued by the United States government, its agencies or
instrumentalities;

11) For delivery as security in connection with
any borrowings by the Fund requiring a pledge of assets by the
Fund, but only against receipt of amounts borrowed;

13) For delivery to the Custodian or another
sub-custodian of the Fund; and

2.3. REGISTRATION OF SECURITIES. Securities of the
Fund held by the Sub-Custodian hereunder (other than bearer
securities) shall be registered in the name of the Fund or in the
name of any nominee of the Fund or of any nominee of the
Sub-Custodian or any 17f-5 Sub-Custodian or Foreign Depository (as
each of those terms is defined in Section 2.11(b)), which nominee
shall be assigned exclusively to the Fund, unless the Fund has
authorized in writing the appointment of a nominee to be used in
common with other registered investment companies having the same
investment adviser as the Fund, or in the name or nominee name of
any agent appointed pursuant to Section 2.11(a). Notwithstanding
the foregoing, the Sub-Custodian or agent thereof or any 17f-5
Sub-Custodian or Foreign Depository may hold securities of the
Fund in a nominee name which is used for its other clients
provided that such name is not used by the Sub-Custodian, agent,
17f-5 Sub-Custodian or Foreign Depository for its own securities
and that securities of the Fund are, by book-entry or otherwise,
at all times identified as belonging to the Fund and distinguished
from other securities held for other clients using the same
nominee name. In addition, and notwithstanding the foregoing, the
Sub-Custodian or agent thereof or 17f-5 Sub-Custodian or Foreign
Depository may hold securities of the Fund in its own name if such
registration is the prevailing method in the applicable market by
which custodians register securities of institutional clients and
provided that securities of the Fund are, by book-entry or
otherwise, at all times identified as belonging to the Fund and
distinguished from other securities held for other clients or for
the Sub-Custodian or agent thereof or 17f-5 Sub-Custodian or
Foreign Depository. All securities accepted by the Sub-Custodian
under the terms of this Agreement shall be in good delivery form.

2.4. BANK ACCOUNTS. The Sub-Custodian shall open and
maintain a separate bank account or accounts in the name of the
Fund or of the Custodian for the benefit of the Fund, subject only
to draft or order by the Sub-Custodian acting pursuant to the
terms of this Agreement or by the Custodian acting pursuant to the
Custodian Agreement, and shall hold in such account or accounts,
subject to the provisions hereof, to the Sub-Custodian's credit as
sub-custodian of the Fund or the Custodian's credit as custodian
for the Fund, cash received for the account of the Fund other than
cash maintained by the Fund in a bank account established and used
in accordance with Rule 17f-3 under the 1940 Act or cash held as
deposits with 17f-5 Sub-Custodians in accordance with the
following paragraph. The responsibilities of the Sub-Custodian
for cash, including foreign currency, of the Fund accepted on the
Sub-Custodian's books as a deposit shall be that of a U.S. bank
for a similar deposit.

The Sub-Custodian may open a bank account on the books of a
17f-5 Sub-Custodian in the name of the Fund or of the Sub-
Custodian as a sub-custodian for the Fund, and may deposit cash,
including foreign currency, of the Fund in such account, and such
funds shall be withdrawable only pursuant to draft or order of the
Sub-Custodian. The records for such account will be maintained by
the Sub-Custodian but such account shall not constitute a deposit
liability of the Sub-Custodian. The responsibilities of the Sub-
Custodian for deposits maintained in such account shall be the
same as and no greater than the Sub-Custodian's responsibility in
respect of other portfolio securities of the Fund.

The Sub-Custodian shall be liable for actual losses incurred
by the Fund attributable to any failure on the part of the Sub-
Custodian to report accurate cash availability information with
respect to the bank accounts referred to in this Section 2.4.

2.5. PAYMENTS FOR SHARES. The Sub-Custodian shall
maintain custody of amounts received from the Transfer Agent of
the Fund for shares of the Fund issued by the Fund and sold by its
distributor and deposit such amounts into the Fund's account. The
Sub-Custodian will provide timely notification to the Custodian
and the Transfer Agent of any receipt by it of payments for shares
of the Fund.

2.6. AVAILABILITY OF FEDERAL FUNDS. Upon mutual
agreement between the Custodian and the Sub-Custodian, the
Sub-Custodian shall, upon the receipt of Proper Instructions, make
federal funds available to the Custodian for the account of the
Fund as of specified times agreed upon from time to time by the
Custodian and the Sub-Custodian with respect to amounts received
by the Sub-Custodian for the purchase of shares of the Fund.

2.7. COLLECTION OF INCOME. The Sub-Custodian shall
collect on a timely basis all income and other payments with
respect to registered securities held hereunder, including
securities held in a Securities System, to which the Fund shall be
entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and other
payments with respect to bearer securities if, on the date of
payment by the issuer, such securities are held hereunder and
shall credit such income, as collected, to the Fund's account.
Without limiting the generality of the foregoing, the
Sub-Custodian shall detach and present for payment all coupons and
other income items requiring presentation as and when they become
due and shall collect interest when due on securities held
hereunder. Arranging for the collection of income due the Fund on
securities loaned pursuant to the provisions of Section 2.2(10)
shall be the responsibility of the Custodian. The Sub-Custodian
will have no duty or responsibility in connection therewith, other
than to provide the Custodian with such information or data as may
be necessary to assist the Custodian in arranging for the timely
delivery to the Sub-Custodian of the income to which the Fund is
properly entitled.

2.8. PAYMENT OF FUND MONIES. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, the Sub-Custodian shall cause monies
of the Fund to be paid out in the following cases only:

1) Upon the purchase of securities for the account
of the Fund but only (a) against the delivery of such securities
to the Sub-Custodian (or any bank, banking firm or trust company
doing business in the United States or abroad which is qualified
under the 1940 Act, as amended, to act as a custodian and has been
designated by the Sub-Custodian as its agent for this purpose) or
any 17f-5 Sub-Custodian or any Foreign Depository (as each of
those terms is defined in Section 2.11(b)) registered in the name
of the Fund or in the name of a nominee referred to in Section 2.3
hereof or in proper form for transfer, provided, however, that the
Sub-Custodian may cause monies of the Fund to be paid out prior to
delivery of such securities if (i) in the Sub-Custodian's
judgment, (A) payment prior to delivery is required by the terms
of the instrument evidencing the security or (B) payment prior to
delivery is the prevailing method of settling securities
transactions between institutional investors in the applicable
market and (ii) payment prior to delivery is in accordance with
generally accepted trade practice and with any applicable
governmental regulations and the rules of Securities Systems or
other securities depositories and clearing agencies in the
applicable market. The Sub-Custodian agrees, upon request, to
advise the Custodian of all pending transactions in which payment
will be made prior to the receipt of securities in accordance with
the proviso to the foregoing sentence; (b) in the case of a
purchase effected through a Securities System, in accordance with
the conditions set forth in Section 2.12 hereof; or (c) (i) in the
case of a repurchase agreement entered into between the Fund and
the Sub-Custodian, another bank or a broker-dealer, against
delivery of the securities either in certificate form or through
an entry crediting the Sub-Custodian's or its agent's
non-proprietary account at any Federal Reserve Bank with such
securities or (ii) in the case of a repurchase agreement entered
into between the Fund and the Sub-Custodian, against delivery of a
receipt evidencing purchase by the Fund of securities owned by the
Sub-Custodian along with written evidence of the agreement by the
Sub-Custodian to repurchase such securities from the Fund; or (d)
for transfer to a time deposit account of the Fund in any bank,
whether domestic or foreign, which transfer may be effected prior
to receipt of a confirmation of the deposit from the applicable
bank or a financial intermediary;

2) In connection with conversion, exchange or
surrender or tender or exercise of securities owned by the Fund as
set forth in Section 2.2 hereof;

3) For the redemption or repurchase of shares
issued by the Fund as set forth in Section 2.10 hereof;

4) For the payment of any expense or liability
incurred by the Fund, including but not limited to the following
payments for the account of the Fund: interest, taxes, management,
accounting, custodian and sub-custodian, transfer agent and legal
fees, including the Custodian's fee; and operating expenses of the
Fund whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;

5) For the payment of any dividends or other
distributions declared to shareholders of the Fund;

6) For transfer to the Custodian or another
sub-custodian of the Fund; and

7) For any other proper purpose, but only upon
receipt of, in addition to Proper Instructions, a certified copy
of a resolution of the Trustees or of the Executive Committee of
the Fund signed by an officer of the Fund and certified by its
Clerk or Assistant Clerk, specifying the amount of such payment,
setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and naming the
person or persons to whom such payment is to be made.

2.9. LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF
SECURITIES PURCHASED. Except as otherwise provided in this
Agreement, in any and every case where payment for purchase of
securities for the account of the Fund is made by the
Sub-Custodian in advance of receipt of the securities purchased in
the absence of Proper Instructions from the Custodian to so pay in
advance, the Sub-Custodian shall be absolutely liable to the Fund
and the Custodian in the event any loss results to the Fund or the
Custodian from the payment by the Sub-Custodian in advance of
delivery of such securities.

2.10. PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES
OF THE FUND. From such funds as may be available, the
Sub-custodian shall, upon receipt of Proper Instructions, make
funds available for payment to a shareholder of the Fund who has
delivered to the Transfer Agent a request for redemption or
repurchase of shares of the Fund. In connection with the
redemption or repurchase of shares of the Fund, the Sub-Custodian,
upon receipt of Proper Instructions, is authorized to wire funds
to or through a commercial bank designated by the redeeming
shareholder. In connection with the redemption or repurchase of
shares of the Fund, the Sub-Custodian, upon receipt of Proper
Instructions, shall honor checks drawn on the Sub-Custodian by a
shareholder, when presented to the Sub-Custodian in accordance
with such procedures and controls as are mutually agreed upon from
time to time among the Fund, the Custodian and the Sub-Custodian.

2.11. APPOINTMENT OF AGENTS AND SUB-CUSTODIANS PURSUANT
TO RULE 17F-5.

(a) Agents. Without limiting its own responsibility
for its obligations assumed hereunder, the Sub-Custodian may at
any time and from time to time engage, at its own cost and
expense, as an agent to act for the Fund on the Sub-Custodian's
behalf with respect to any such obligations any bank or trust
company which meets the requirements of the 1940 Act, and the
rules and regulations thereunder, to perform services delegated to
the Sub-Custodian hereunder, provided that the Fund and the
Custodian shall have approved in writing any such bank or trust
company. All agents of the Sub-Custodian shall be subject to the
instructions of the Sub-Custodian and not the Custodian. The Sub-
Custodian may, at any time in its discretion, and shall at the
Custodian's direction, remove any bank or trust company which has
been appointed as an agent, and shall in either case promptly
notify the Custodian and the Fund in writing of the completion of
any such action.

The agents which the Fund has approved to date are set forth
in Schedule B hereto. Schedule B shall be amended from time to
time as approved agents are changed, added or deleted. The
Custodian shall be responsible for informing the Sub-Custodian
sufficiently in advance of a proposed investment which is to be
held at a location not listed on Schedule B, in order that there
shall be sufficient time for the Fund to give the approval
required by the preceding paragraph and for the Sub-Custodian to
complete the appropriate contractual and technical arrangements
with such agent. The engagement by the Sub-Custodian of one or
more agents shall not relieve the Sub-Custodian of its
responsibilities or liabilities hereunder.

(b) 17f-5 Sub-Custodians. Securities, funds and other
property of the Fund may be held by sub-custodians appointed
pursuant to the provisions of this Section 2.11 (each, a "17f-5
Sub-Custodian"). The Sub-Custodian may, at any time and from time
to time, appoint any bank or trust company (that meets the
requirements of a custodian or a foreign custodian under the
Investment Company Act of 1940 and the rules and regulations
thereunder, including without limitation Rule 17f-5 thereunder, or
that has received an order of the Securities and Exchange
Commission ("SEC") exempting it from any of such requirements that
it does not meet) to act as a 17f-5 Sub-Custodian for the Fund,
provided that the Fund shall have approved in writing (1) any such
bank or trust company and the sub-custodian agreement to be
entered into between such bank or trust company and the Sub-
Custodian, and (2) the 17f-5 Sub-Custodian's offices or branches
at which the 17f-5 Sub-Custodian is authorized to hold securities,
cash and other property of the Fund. Upon such approval by the
Fund, the Sub-Custodian is authorized on behalf of the Fund to
notify each 17f-5 Sub-Custodian of its appointment as such. The
Sub-Custodian may, at any time in its discretion, remove any bank
or trust company that has been appointed as a 17f-5 Sub-Custodian.

Those 17f-5 Sub-Custodians and their offices or branches
which the Fund has approved to date are set forth on Schedule C
hereto. Such Schedule C shall be amended from time to time as
17f-5 Sub-Custodians, branches or offices are changed, added or
deleted. The Custodian shall be responsible for informing the
Sub-Custodian sufficiently in advance of a proposed investment
which is to be held at a location not listed on Schedule C, in
order that there shall be sufficient time for the Fund to give the
approval required by the preceding paragraph and for the Sub-
Custodian to put the appropriate arrangements in place with such
17f-5 Sub-Custodian pursuant to such sub-custodian agreement.

With respect to the securities and funds held by a 17f-5 Sub-
Custodian, either directly or indirectly, including demand and
interest bearing deposits, currencies or other deposits and
foreign exchange contracts, the Sub-Custodian shall be liable to
the Custodian and the Fund if and only to the extent that such
17f-5 Sub-Custodian is liable to the Sub-Custodian and the Sub-
Custodian recovers under the applicable sub-custodian agreement,
provided, however, that the foregoing limitation shall not apply
if such 17f-5 Sub-Custodian's liability to the Sub-Custodian is
limited because the applicable sub-custodian agreement does not
contain provisions substantially similar to the provisions of
Section 2 (but not including Section 2.12) of this Agreement. The
Sub-Custodian shall also be liable to the Custodian and the Fund
for its own negligence in transmitting any instructions received
by it from the Fund or the Custodian and for its own negligence in
connection with the delivery of any securities or funds held by it
to any such 17f-5 Sub-Custodian.

The Custodian or the Fund may authorize the Sub-Custodian or
one or more of the 17f-5 Sub-Custodians to use the facilities of
one or more foreign securities depositories or clearing agencies
(each, a "Foreign Depository") that is permitted to be used by
registered investment companies by a Rule or Rules of the SEC or
that has received an order of the SEC exempting it from any of
such requirements that it does not meet. The records of the Sub-
Custodian or a 17f-5 Sub-Custodian employing a Foreign Depository
or clearing agency shall identify those securities belonging to
the Fund which are maintained in such a Foreign Depository. The
engagement by the Sub-Custodian of one or more Foreign
Depositories shall not relieve the Sub-Custodian of its
responsibilities or liabilities hereunder. The Foreign
Depositories which the Fund has approved to date are set forth in
Schedule C hereto. Schedule C shall be amended from time to time
as approved Foreign Depositories are changed, added or deleted.
The Custodian shall be responsible for informing the Sub-Custodian
sufficiently in advance of a proposed investment which is to be
held at a location not listed on Schedule C, in order that there
shall be sufficient time for the Fund to give the approval
required by the preceding paragraph and for the Sub-Custodian to
complete the appropriate contractual and technical arrangements
with such Foreign Depository.

In the event that any 17f-5 Sub-Custodian appointed pursuant
to the provisions of this Section 2.11 fails to perform any of its
obligations under the terms and conditions of the applicable sub-
custodian agreement, the Sub-Custodian shall use its best efforts
to cause such 17f-5 Sub-Custodian to perform such obligations. In
the event that the Sub-Custodian is unable to cause such 17f-5
Sub-Custodian to perform fully its obligations thereunder, the
Sub-Custodian shall forthwith upon the Custodian's request
terminate such 17f-5 Sub-Custodian as a sub-custodian for the Fund
and, if necessary or desirable, appoint another 17f-5 Sub-
Custodian in accordance with the provisions of this Section 2.11.
At the election of the Custodian, it shall have the right to
enforce and shall be subrogated to the Sub-Custodian's rights
against any such 17f-5 Sub-Custodian for loss or damage caused the
Fund by such 17f-5 Sub-Custodian.

At the written request of the Fund, the Sub-Custodian will
terminate as a sub-custodian for the Fund any 17f-5 Sub-Custodian
appointed pursuant to the provisions of this Section 2.11 in
accordance with the termination provisions under the applicable
sub-custodian agreement. The Sub-Custodian will not amend any
sub-custodian agreement or agree to change or permit any changes
thereunder except upon the prior written approval of the Fund.

In the event the Sub-Custodian makes any payment to a 17f-5
Sub-Custodian under the indemnification provisions of any sub-
custodian agreement, no more than thirty days after written notice
to the Custodian of the Sub-Custodian's having made such payment,
the Custodian will reimburse the Sub-Custodian the amount of such
payment except in respect of any negligence or misconduct of the
Sub-Custodian.

2.12. DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS.
The Sub-Custodian may deposit and/or maintain securities owned by
the Fund in a clearing agency registered with the Securities and
Exchange Commission under Section 17A of the Securities Exchange
Act of 1934, which acts as a securities depository, or in the
book-entry system authorized by the U.S. Department of the
Treasury or by a federal agency (collectively referred to herein
as "Securities System") in accordance with applicable rules and
regulations (including Rule 17f-4 of the 1940 Act), and subject to
the following provisions:

1) The Sub-Custodian may, either directly or
through one or more agents, keep securities of the Fund in a
Securities System provided that such securities are represented in
an account ("Account") of the Sub-Custodian or such an agent in
the Securities System which shall not include any assets other
than assets held as a fiduciary, custodian or otherwise for
customers;

2) The records of the Sub-Custodian with respect
to securities of the Fund which are maintained in a Securities
System shall identify by book-entry those securities belonging to
the Fund;

3) The Sub-Custodian shall pay for securities
purchased for the account of the Fund upon (i) receipt of advice
from the Securities System that such securities have been
transferred to the Account, and (ii) the making of an entry on the
records of the Sub-Custodian to reflect such payment and transfer
for the account of the Fund. The Sub-Custodian shall transfer
securities sold for the account of the Fund upon (i) receipt of
advice from the Securities System that payment for such securities
has been transferred to the Account, and (ii) the making of an
entry on the records of the Sub-Custodian to reflect such transfer
and payment for the account of the Fund. Copies of all advices
from the Securities System of transfers of securities for the
account of the Fund shall identify the Fund, be maintained for the
Fund by the Sub-Custodian or such an agent and be provided to the
Fund or the Custodian at the Custodian's request. The
Sub-Custodian shall furnish the Custodian confirmation of each
transfer to or from the account of the Fund in the form of a
written advice or notice and shall furnish to the Custodian copies
of daily transaction statements reflecting each day's transactions
in the Securities System for the account of the Fund on the next
business day;

4) The Sub-Custodian shall provide the Custodian
with any report obtained by the Sub-Custodian on the Securities
System's accounting system, internal accounting controls and
procedures for safeguarding securities deposited in the Securities
System;

5) The Sub-Custodian shall utilize only such
Securities Systems as are set forth in a list provided by the
Custodian of Securities Systems approved for use by the Board of
Trustees of the Fund, which list will be amended from time to time
by the Custodian as may be necessary to reflect any subsequent
action taken by the Trustees of the Fund;

6) Anything to the contrary in this Agreement
notwithstanding, the Sub-Custodian shall be liable to the Fund and
the Custodian for any loss or damage to the Fund or the Custodian
resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Sub-Custodian or any
of its agents or of any of its or their employees or from failure
of the Sub-Custodian or any such agent or employee to enforce
effectively such rights as it may have against the Securities
System. At the election of the Custodian, it shall be entitled to
be subrogated to the rights of the Sub-Custodian with respect to
any claim against the Securities System or any other person which
the Sub-Custodian may have as a consequence of any such loss or
damage if and to the extent that the Fund and the Custodian have
not been made whole for any such loss or damage.

2.13. DEPOSITARY RECEIPTS. Only upon receipt of Proper
Instructions, the Sub-Custodian shall instruct a 17f-5 Sub-
Custodian appointed pursuant to Section 2.11(b) hereof or an agent
of the Sub-Custodian appointed pursuant to Section 2.11(a) hereof
(an "Agent") to surrender securities to the depositary used by an
issuer of American Depositary Receipts or International Depositary
Receipts (hereinafter collectively referred to as "ADRs") for such
securities against a written receipt therefor adequately
describing such securities and written evidence satisfactory to
the 17f-5 Sub-Custodian or Agent that the depositary has
acknowledged receipt of instructions to issue with respect to such
securities ADRs in the name of the Sub-Custodian, or a nominee of
the Sub-Custodian, for delivery to the Sub-Custodian in Boston,
Massachusetts, or at such other place as the Sub-Custodian may
from time to time designate.

Only upon receipt of Proper Instructions, the Sub-Custodian
shall surrender ADRs to the issuer thereof against a written
receipt therefor adequately describing the ADRs surrendered and
written evidence satisfactory to the Sub-Custodian that the issuer
of the ADRs has acknowledged receipt of instructions to cause its
depository to deliver the securities underlying such ADRs to a
17f-5 Sub-Custodian or an Agent.

2.14. FOREIGN EXCHANGE TRANSACTIONS AND FUTURES
CONTRACTS. Only upon receipt of Proper Instructions, the Sub-
Custodian shall enter into foreign exchange contracts or options
to purchase and sell foreign currencies for spot and future
delivery on behalf and for the account of the Fund or shall enter
into futures contracts or options on futures contracts. Such
transactions may be undertaken by the Sub-Custodian with such
banking institutions, including the Sub-Custodian and 17f-5 Sub-
Custodian(s) appointed pursuant to Section 2.11(b), as principals,
as approved and authorized by the Fund. In connection with such
transaction, the Sub-Custodian is authorized to make free outgoing
payments of cash in the form of U.S. Dollars or foreign currency
without receiving confirmation of a foreign exchange contract,
futures contract or option thereon or confirmation that the
countervalue currency completing the foreign exchange contract or
futures contract has been delivered or received or that the option
has been delivered or received. Foreign exchange contracts,
futures contracts and options, other than those executed with the
Sub-Custodian as principal, shall for all purposes of this
Agreement be deemed to be portfolio securities of the Fund.

2.15. OPTION TRANSACTIONS. Only upon receipt of Proper
Instructions, the Sub-Custodian shall enter into option
transactions in accordance with the provisions of any agreement
among the Fund, the Custodian, and/or the Sub-Custodian and a
broker-dealer.

2.16. OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The
Sub-Custodian shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in connection
with receipt of income or other payments with respect to
securities held by it hereunder and in connection with transfers
of securities.

2.17. PROXIES. The Sub-Custodian shall, with respect
to the securities held hereunder, cause to be promptly executed by
the registered holder of such securities, if the securities are
registered other than in the name of the Fund, all proxies that
are received by the Sub-Custodian, without indication of the
manner in which such proxies are to be voted, and shall promptly
deliver to the Custodian such proxies, all proxy soliciting
materials and all notices relating to such securities.

2.18. COMMUNICATIONS RELATING TO FUND PORTFOLIO
SECURITIES. The Sub-Custodian shall transmit promptly to the
Custodian all written information (including, without limitation,
pendency of calls and maturities of securities and expirations of
rights in connection therewith) received by the Sub-Custodian from
issuers of the securities being held for the account of the Fund.
With respect to tender or exchange offers, the Sub-Custodian shall
transmit promptly to the Custodian all written information
received by the Sub-Custodian from issuers of the securities whose
tender or exchange is sought and from the party (or his agents)
making the tender or exchange offer. If the Fund desires to take
action with respect to any tender offer, exchange offer or any
other similar transactions, the Custodian shall notify the
Sub-Custodian of the action the Fund desires the Sub-Custodian to
take; provided, however, that the Sub-Custodian shall not be
liable to the Fund or the Custodian for the failure to take any
such action unless Proper Instructions are received by the
Sub-Custodian at least two business days prior to the date on
which the Sub-Custodian is to take such action, or in the case of
foreign securities, such longer periods as shall have been agreed
upon in writing by the Custodian and the Sub-Custodian, which may
be in the form of written operating procedures or standards.

2.19. PROPER INSTRUCTIONS. Proper Instructions as used
throughout this Agreement means a writing signed or initialed by
one or more persons who are authorized by the Trustees of the Fund
and by the Custodian. Each such writing shall set forth the
specific transaction or type of transaction involved. Oral
instructions will be considered Proper Instructions if the
Sub-Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the
transaction involved. The Custodian shall cause all oral
instructions to be confirmed in writing. Proper Instructions
shall also include communications effected directly between the
Custodian and Sub-Custodian by electro-mechanical or electronic
devices, provided that the Custodian and the Sub-Custodian have
approved such procedures. Notwithstanding the foregoing, no
Trustee, officer, employee or agent of the Fund
shall be permitted access to any securities or similar investments
of the Fund deposited with the Sub-Custodian or any agent for any
reason except in accordance with the provisions of Rule 17f-2
under the 1940 Act.

2.20. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The
Sub-Custodian may in its discretion, without express authority
from the Custodian:

1) make payments to itself or others for minor
expenses of handling securities or other similar items relating to
its duties under this Agreement, provided that all such payments
shall be accounted for to the Custodian;

2) surrender securities in temporary form for
securities in definitive form;

3) endorse for collection, in the name of the
Fund, checks, drafts and other negotiable instruments; and

2.21. EVIDENCE OF AUTHORITY. The Sub-Custodian shall
be protected in acting upon any instruction, notice, request,
consent, certificate or other instrument or paper reasonably
believed by it to be genuine and to have been properly executed by
or on behalf of the Fund or the Custodian as custodian of the
Fund.

2.22. PERFORMANCE STANDARDS. The Sub-Custodian shall
use its best efforts to perform its duties hereunder in accordance
with such standards as are agreed upon from time to time by the
Custodian and the Sub-Custodian.

3. RECORDS. The Sub-Custodian shall cooperate with and
supply necessary information to the entity or entities appointed
by the Trustees of the Fund to keep the books of account of the
Fund or, if directed in writing to do so by the Custodian, shall
itself keep such books of account. The Sub-Custodian shall create
and maintain all records relating to its activities and
obligations under this Agreement in such manner as will meet the
obligations of the Fund under the 1940 Act, with particular
attention to Sections 17(f) and 31 thereof and Rules 17f-2, 31a-1
and 31a-2 thereunder; the Sub-Custodian shall also create and
maintain such records as are required by applicable federal and
state tax laws, and any other law or administrative rules or
procedures which may be applicable to the Fund or the Custodian,
such laws, rules or procedures to be specified by the Custodian
from time to time. All such records shall be the property of the
Fund and shall at all times during the regular business hours of
the Sub-Custodian be open for inspection by duly authorized
officers, employees or agents of the Custodian and the Fund and
employees and agents of the Securities and Exchange Commission.
The Sub-Custodian shall, at the Custodian's request, supply the
Custodian with a tabulation of securities owned by the Fund and
held under this Agreement and shall, when requested to do so by
the Custodian and for such compensation as shall be agreed upon
between the Custodian and Sub-Custodian, include certificate
numbers in such tabulations.

4. Opinion and Reports of the Fund's Independent Accountant.
The Sub-Custodian shall take all reasonable actions, as the
Custodian may from time to time request, to furnish such
information with respect to its activities hereunder as the Fund's
independent public accountant may request in connection with the
accountant's verification of the Fund's securities and similar
investments as required by Rule 17f-2 under the 1940 Act, the
preparation of the Fund's registration statement and amendments
thereto, the Fund's reports to the Securities and Exchange
Commission and with respect to any other requirements of such
Commission.

5. Reports of Sub-Custodian's Independent Accountant. The
Sub-Custodian shall provide the Custodian, at such times as the
Custodian may reasonably require, with reports by an independent
public accountant on the accounting system, internal accounting
controls and procedures for safeguarding securities, including
securities deposited and/or maintained in a Securities System,
relating to the services provided by the Sub-Custodian under this
Agreement; such reports, which shall be of sufficient scope and in
sufficient detail as may reasonably be required by the Custodian,
shall provide reasonable assurance that any material inadequacies
would be disclosed by such examination, and if there are no such
inadequacies, shall so state.

6. Compensation. The Sub-Custodian shall be entitled to
reasonable compensation for its services and expenses as
sub-custodian, as agreed upon from time to time between the
Custodian and the Sub-Custodian.

7. Responsibility of Sub-Custodian. The Sub-Custodian shall
exercise reasonable care and diligence in carrying out the
provisions of this Agreement and shall not be liable to the Fund
or the Custodian for any action taken or omitted by it in good
faith without negligence or willful misconduct. So long as and to
the extent that it is in the exercise of reasonable care, the
Sub-Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received
by it or delivered by it pursuant to this Agreement and shall be
held harmless in acting upon any notice, request, consent,
certificate or other instrument reasonably believed by it to be
genuine and, if in writing, reasonably believed to be signed by
the proper party or parties. It shall be entitled to rely on and
may act upon advice of counsel (who may be counsel for the Fund)
on all matters and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
Notwithstanding the foregoing, the responsibility of the
Sub-Custodian with respect to redemptions effected by check shall
be in accordance with a separate agreement entered into between
the Custodian and the Sub-Custodian. It is also understood that
the Sub-Custodian shall not be liable for any loss resulting from
a Sovereign Risk. A "Sovereign Risk" shall mean nationalization,
expropriation, devaluation, revaluation, confiscation, seizure,
cancellation, destruction or similar action by any governmental
authority, de facto or de jure; or enactment, promulgation,
imposition or enforcement by any such governmental authority of
currency restrictions, exchange controls, taxes, levies or other
charges affecting the Fund's property; or acts of war, terrorism,
insurrection or revolution; or any other similar act or event
beyond the Sub-Custodian's control.

The Sub-Custodian shall protect the Fund and the Custodian
from losses to the Fund resulting from any act or failure to act
of the Sub-Custodian in violation of its duties hereunder or of
any law applicable to the Sub-Custodian's duties hereunder.

If the Custodian requires the Sub-Custodian to take any
action with respect to securities, which action involves the
payment of money or which action may, in the opinion of the
Sub-Custodian, result in the Sub-Custodian's being liable for the
payment of money or incurring liability of some other form, the
Custodian, as a prerequisite to requiring the Sub-Custodian to
take such action, shall provide indemnity to the Sub-Custodian in
an amount and form satisfactory to the Sub-Custodian.

The Custodian agrees to indemnify and hold harmless the
Sub-Custodian from and against all taxes, charges, expenses,
assessments, claims and liabilities (including counsel fees)
(collectively, "Authorized Charges") incurred or assessed against
it or its nominee in connection with the performance of this
Agreement, except such as may arise from its own negligent action,
negligent failure to act or willful misconduct. The Sub-Custodian
is authorized to charge any account of the Fund for such items and
such fees. To secure any such Authorized Charges and any advances
of cash or securities made by the Sub-Custodian to or for the
benefit of the Fund for any purpose which results in the Fund's
incurring an overdraft at the end of any business day or for
extraordinary or emergency purposes during any business day, the
Custodian on behalf of the Fund hereby represents that it has
obtained from the Fund authorization to apply available cash in
any account maintained by the Sub-Custodian on behalf of the Fund
and a security interest in and pledge to the Sub-Custodian of
securities of the Fund held by the Sub-Custodian (including those
which may be held in a Securities System) up to a maximum of 10%
of the value of the net assets held by the Sub-Custodian for the
purposes of securing payment of any Authorized Charges and any
advances of cash or securities, and that the Fund has agreed, from
time to time, to designate in writing, or to cause its investment
adviser to, or permit the Custodian to, designate in writing, the
securities subject to such security interest and pledge with such
specificity and detail as the Sub-Custodian may reasonably request
(and in the absence of such designation to permit the Sub-
Custodian so to designate securities). The Custodian hereby
grants on behalf of the Fund a security interest and pledge to the
Sub-Custodian, as aforesaid, in securities and available cash, as
security for any Authorized Charges and any advances of cash or
securities and agrees that, should the Fund or the Custodian fail
to repay promptly any Authorized Charges and any advances of cash
or securities, the Sub-Custodian shall be entitled to use such
available cash and to dispose of such pledged securities as is
necessary to repay any such Authorized Charges or any advances of
cash or securities and to exercise the rights of a secured party
under the Uniform Commercial Code.

The Custodian agrees not to amend the third paragraph of
Section 9 of the Custodian Agreement unless it provides the Sub-
Custodian with at least thirty (30) days' prior written notice of
the substance of any proposed amendments, provided that the
foregoing shall not be construed to in any way to provide that the
Sub-Custodian's consent shall be required to make such an
amendment effective or that the Sub-Custodian's failure to give
such consent shall in any way affect its obligations under this
Agreement.

8. SUCCESSOR SUB-CUSTODIAN. If a successor sub-custodian
shall be appointed by the Custodian, the Sub-Custodian shall, upon
termination and upon receipt of Proper Instructions, cause to be
delivered to such successor sub-custodian, duly endorsed and in
the form for transfer, all securities, funds and other property of
the Fund then held by it and all instruments held by the
Sub-Custodian related thereto and cause the transfer to an account
of the successor sub-custodian all of the Fund's securities held
in any Securities Systems.

If no such successor sub-custodian shall be appointed, the
Sub-Custodian shall, in like manner, upon receipt of a certified
copy of a vote of the Trustees of the Fund, cause to be
transferred such securities, funds and other property in
accordance with such vote.

In the event that no written order designating a successor
sub-custodian or certified copy of a vote of the Trustees shall
have been delivered to the Sub-Custodian on or before the date
when such termination shall become effective, then the Sub-
Custodian shall have the right to deliver to a bank or trust
company, which meets the requirements of the 1940 Act and the
rules and regulations thereunder, all securities, funds and other
properties of the Fund. Thereafter, such bank or trust company
shall be the successor of the Sub-Custodian under this Agreement.

In the event that securities, funds and other property remain
in the possession of the Sub-Custodian after the date of
termination hereof owing to failure of the Custodian to obtain a
certified copy of the Trustees appointing a successor sub-
custodian, the Sub-Custodian shall be entitled to fair
compensation for its services during such period as the Sub-
Custodian retains possession of such securities, funds and other
property and the provisions of this Agreement relating to the
duties and obligations of the Sub-Custodian shall remain in full
force and affect.

9. EFFECTIVE PERIOD; TERMINATION AND AMENDMENT. This
Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the
parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid, to the
other party, such termination to take effect not sooner than
thirty (30) days after the date of mailing; provided, that either
party may at any time immediately terminate this Agreement in the
event of the appointment of a conservator or receiver for the
other party or upon the happening of a like event at the direction
of an appropriate regulatory agency or court of competent
jurisdiction. No provision of this Agreement may be amended or
terminated except by a statement in writing signed by the party
against which enforcement of the amendment or termination is
sought.

Upon termination of this Agreement, the Custodian shall pay
to the Sub-Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the
Sub-Custodian for its reimbursable costs, expenses and
disbursements. The provisions of Section 7, including, until any
Authorized Charges and any advances of cash or securities referred
to therein are repaid, all liens and security interests created
pursuant thereto, and all rights to indemnification, shall survive
any termination of this Agreement.

10. INTERPRETATION. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to
the subject matter hereof. In connection with the operation of
this Agreement, the Sub-Custodian and the Custodian may from time
to time agree in writing on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint
opinion be consistent with the general tenor of this Agreement.
No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this
Agreement.

11. GOVERNING LAW. This Agreement is executed and delivered
in The Commonwealth of Massachusetts and shall be governed by and
construed according to the internal laws of said Commonwealth,
without regard to principles of conflicts of law.

12. NOTICES. Notices and other writings delivered or mailed
postage prepaid to the Custodian addressed to the Custodian
attention: George H. Crane, Senior Vice President, The Putnam
Companies, 99 High Street, Boston, MA 02109 or to such other
person or address as the Custodian may have designated to the Sub-
Custodian in writing, or to the Sub-Custodian attention:

or to such other address as the SubCustodian may have designated
to the Custodian in writing, shall be deemed to have been properly
delivered or given hereunder to the respective addressee.

13. BINDING OBLIGATION. This Agreement shall be binding on
and shall inure to the benefit of the Custodian and the Sub-
Custodian and their respective successors and assigns, provided
that neither party hereto may assign this Agreement or any of its
rights or obligations hereunder without the prior written consent
of the other party.

14. PRIOR AGREEMENTS. This Agreement supersedes and
terminates, as of the date hereof, all prior contracts between the
Fund or the Custodian and the Sub-Custodian relating to the
custody of the Fund's assets.

15. DECLARATION OF TRUST. A copy of the Declaration of
Trust of the Fund is on file with the Secretary of The
Commonwealth of Massachusetts, and notice is hereby given that the
obligations of or arising out of this instrument are not binding
upon any of the Trustees or beneficiaries individually but binding
only upon the assets and property of the Fund.

IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf by its duly
authorized representative and its seal to be hereunder affixed as
of the day of , 199 .

PUTNAM FIDUCIARY TRUST COMPANY

By--------------------------------

Name:
Title:

(Sub-Custodian)

By---------------------------------

Name:
Title:

The Sub-Custodian and Putnam Investments, Inc. ("Putnam"),
the sole owner of the Custodian, agree that Putnam shall be the
primary obligor with respect to compensation due the Sub-Custodian
pursuant to Section 6 of this Agreement in connection with the
Sub-Custodian's performance of its responsibilities hereunder.
The Custodian and Putnam agree to take all actions necessary and
appropriate to assure that the Sub-Custodian shall be compensated
<PAGE>
in the amounts and on the schedule agreed to by the Custodian and
the Sub-Custodian pursuant to Section 6.

PUTNAM INVESTMENTS, INC.

By:-------------------------------

Name:
Title:

PUTNAM FIDUCIARY TRUST COMPANY

By:--------------------------------

Name:
Title:

(Sub-Custodian)

By:----------------------------------

Name:
Title:

S:\shared\boiler\newfunds\pre-eff\NF-27d.rev

<PAGE>
INVESTOR SERVICING AGREEMENT

AGREEMENT made as of the 3rd day of June, 1991, between
each of the Putnam Funds listed in Appendix A hereto (as the same
may from time to time be amended to add one or more additional
Putnam Funds or to delete one or more of such Funds), each of
such Funds acting severally on its own behalf and not jointly
with any of such other Funds (each of such Funds being
hereinafter referred to as the "Fund"), and The Putnam Management
Company, Inc. (the "Manager"), a Delaware corporation, and Putnam
Fiduciary Trust Company (the "Agent"), a Massachusetts trust
company.

W I T N E S S E T H:

WHEREAS, the Fund is an investment company registered
under the Investment Company Act of 1940; and

WHEREAS, the Fund desires to engage the Manager and the
Agent to provide all services required by the Fund in connection
with the establishment, maintenance and recording of shareholder
accounts, including without limitation all related tax and other
reporting requirements, and the implementation of investment and
redemption arrangements offered in connection with the sale of
the Fund's shares; and

WHEREAS, the Agent, an affiliate of the Manager, is
willing to provide such services on the terms and subject to the
conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and the
mutual covenants set forth herein, the parties hereto agree as
follows:

1. APPOINTMENT.

The Fund hereby appoints the Agent as its "Investor
Servicing Agent" on the terms and conditions set forth herein. In
such capacity the Agent shall act as transfer, distribution
disbursing and redemption agent for the Fund and shall act as agent
for the shareholders of the Fund in connection with the various
shareholder investment and/or redemption plans from time to time
made available to shareholders. The Agent hereby accepts such
appointment and agrees to perform the respective duties and
functions of such offices in accordance with the terms of this
agreement and in a manner generally consistent with the practices
and standards customarily followed by other high quality investor
servicing agents for registered investment companies.
<PAGE>
Notwithstanding such appointment, however, the parties agree
that the Manager may, upon thirty (30) days prior written notice to
the Fund, assume such appointment and perform such duties and
functions itself. Pending any such assumption, however, the
Manager hereby guarantees the performance of the Agent hereunder
and shall be fully responsible to the Fund, financially and
otherwise, for the performance by the Agent of its agreements
contained herein.

2. GENERAL AUTHORITY AND DUTIES.

By its acceptance of the foregoing appointment, the Agent
shall be responsible for performing all functions and duties which,
in the reasonable judgment of the Fund, are necessary or desirable
in connection with the establishment, maintenance and recording of
the Fund's shareholder accounts and the conduct of its relations
with shareholders with respect to their accounts. Without limiting
the generality of the foregoing, the Agent shall be responsible:

(a) as transfer agent, for performing all functions
customarily performed by transfer agents for registered
investment companies, including without limitation all
functions necessary or desirable to establish and maintain
accounts evidencing the ownership of securities issued by the
Fund and, to the extent applicable, the issuance of
certificates representing such securities, the recording of
all transactions pertaining to such accounts, and effecting
the issuance and redemption of securities issued by the Fund;

(b) as distribution disbursing agent, for performing all
functions customarily performed by distribution disbursing
agents for registered investment companies, including without
limitation all functions necessary or desirable to effect the
payment to shareholders of distributions declared from time to
time by the Trustees of the Fund;

(c) as redemption agent for the Fund, for performing all
functions necessary or desirable to effect the redemption of
securities issued by the Fund and payment of the proceeds
thereof; and

(d) as agent for shareholders of the Fund, performing
all functions necessary or desirable to maintain all plans or
arrangements from time to time made available to shareholders
to facilitate the purchase or redemption of securities issued
by the Fund.

In performing its duties hereunder, in addition to the
provisions set forth herein, the Agent shall comply with the terms
of the Declaration of Trust, the Bylaws and the current Prospectus
and Statement of Additional Information of the Fund, and with the
terms of votes adopted from time to time by the Trustees and
shareholders of the Fund, relating to the subject matters of this
Agreement, all as the same may be amended from time to time.

3. STANDARD OF SERVICE; COMPLIANCE WITH LAWS.

The Agent will use its best efforts to provide high quality
services to the Fund's shareholders and in so doing will seek to
take advantage of such innovations and technological improvements
as may be appropriate or desirable with a view to improving the
quality and, where possible, reducing the cost of its services to
the Fund. In performing its duties hereunder, the Agent shall
comply with the provisions of all applicable laws and regulations
and shall comply with the requirements of any governmental
authority, having jurisdiction over the Agent or the Fund with
respect to the duties of the Agent hereunder.

4. COMPENSATION.

The Fund shall pay to the Agent, for its services rendered
and its costs incurred in connection with the performance of its
duties hereunder, such compensation and reimbursements as may from
time to time be approved by vote of the Trustees of the Fund.

5. DUTY OF CARE; INDEMNIFICATION.

The Agent will at all times act in good faith and exercise
reasonable care in performing its duties hereunder. The Agent will
not be liable or responsible for delays of errors resulting from
circumstances beyond its control, including acts of civil or
military authorities, national emergencies, labor difficulties,
fire, mechanical breakdown beyond its control, flood or
catastrophe, acts of God, insurrection, war, riots or failure
beyond its control of transportation, communication or power
supply.

The Agent may rely on certifications of the Clerk, the
President, the Vice Chairman, the Executive Vice President, the
Senior Vice President or the Treasurer of the Fund as to any action
taken by the shareholders or trustees of the Fund, and upon
instructions not inconsistent with this Agreement received from the
President, Vice Chairman, the Executive Vice President, the Senior
Vice President or the Treasurer of the Fund. If any officer of the
Fund shall no longer be vested with authority to sign for the Fund,
written notice thereof shall forthwith be given to the Agent by the
Fund and, until receipt of such notice by it, the Agent shall be
entitled to recognize and act in good faith upon certificates or
other instruments bearing the signatures or facsimile signatures of
such officers. The Agent may request advice of counsel for the
Fund, at the expense of the Fund, with respect to the performance
of its duties hereunder.

The Fund will indemnify and hold the Agent harmless from any
and all losses, claims, damages, liabilities and expenses
(including reasonable fees and expenses of counsel) arising out of
(i) any action taken by the Agent in good faith consistent with the
exercise of reasonable care in accordance with such certifications,
instructions or advice, (ii) any action taken by the Agent in good
faith consistent with the exercise of reasonable care in reliance
upon any instrument or certificate for securities believed by it
(a) to be genuine, and (b) to be executed by any person or persons
authorized to execute the same; PROVIDED, HOWEVER, that the Agent
shall not be so indemnified in the event of its failure to obtain
a proper signature guarantee to the extent the same is required by
the Declaration of Trust, Bylaws, current Prospectus or Statement
of Additional Information of the Fund or a vote of the Trustees of
the Fund, and such requirement has not been waived by vote of the
Trustees of the Fund, or (iii) any other action taken by the Agent
in good faith consistent with the exercise of reasonable care in
connection with the performance of its duties hereunder.

In the event that the Agent proposes to assert the right to
be indemnified under this Section 5 in connection with any action,
suit or proceeding against it, the Agent shall promptly after
receipt of notice of commencement of such action, suit or
proceeding notify the Fund of the same, enclosing a copy of all
papers served. In such event, the Fund shall be entitled to
participate in such action, suit or proceeding, and, to the extent
that it shall wish, to assume the defense thereof, and after notice
from the Fund to the Agent of its election so to assume the defense
thereof the Fund shall not be liable to the Agent for any legal or
other expenses. The parties shall cooperate with each other in the
defense of any such action, suit or proceeding. In no event shall
the Fund be liable for any settlement of any action or claim
effected without its consent.

6. MAINTENANCE OF RECORDS.

The Agent will maintain and preserve all records relating to
its duties under this Agreement in compliance with the requirements
of applicable statutes, rules and regulations, including, without
limitation, Rule 31a-1 under the Investment Company Act of 1940.
Such records shall be the property of the Fund and shall at all
times be available for inspection and use by the officers and
agents of the Fund. The Agent shall furnish to the Fund such
information pertaining to the shareholder accounts of the Fund and
the performance of its duties hereunder as the Fund may from time
to time request. The Agent shall notify the Fund promptly of any
request or demand by any third party to inspect the records of the
Fund maintained by it and will act upon the instructions of the
Fund in permitting or refusing such inspection.

7. FUND ACCOUNTS.

All moneys of the Fund from time to time made available for
the payment of distributions to shareholders or redemptions of
shares, or otherwise coming into the possession or control of the
Agent or its officers, shall be deposited and held in one or more
accounts maintained by the Agent solely for the benefit of the
Funds.

8. INSURANCE.

The Agent will at all times maintain in effect insurance
coverage, including, without limitation, Errors and Omissions,
Fidelity Bond and Electronic Data Processing coverages, at levels
of coverage consistent with those customarily maintained by other
high quality investor servicing agents for registered investment
companies and with such policies as the Trustees of the Fund may
from time to time adopt.

9. EMPLOYEES.

The Agent shall be responsible for the employment, control
and conduct of its agents and employees and for injury to such
agents or employees or to others caused by such agents or
employees. The Agent shall assume full responsibility for its
agents and employees under applicable statutes and agrees to pay
all applicable employer taxes thereunder with respect to such
agents and employees, and such agents and employees shall in no
event be considered to be agents or employees of the Fund.

10. TERMINATION.

This Agreement shall continue indefinitely until terminated
by not less than ninety (90) days prior written notice given by the
Fund to the Agent, or by not less than six months prior written
notice given by the Agent to the Fund.

In the event that in connection with any such termination a
successor to any of the Agent's duties or responsibilities
hereunder is designated by the Fund by written notice to the Agent,
the Agent will cooperate fully in the transfer of such duties and
responsibilities, including provision for assistance by the Agent's
personnel in the establishment of books, records and other data by
such successor. The Fund will reimburse the Agent for all expenses
incurred by the Agent in connection with such transfer.

11. MISCELLANEOUS.

This Agreement shall be construed and enforced in accordance
with and governed by the laws of The Commonwealth of Massachusetts.

The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the
provisions of this Agreement or otherwise affect their construction
or effect. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but
all of which taken together shall constitute one and the same
instrument.

A copy of the Declaration of Trust (including any amendments
thereto) of the Fund is on file with the Secretary of The
Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Fund as
Trustees and not individually and that the obligations of or
arising out of this instrument are not binding upon any of the
Trustees or officers or shareholders individually, but binding only
upon the assets and property of the Fund.

IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized officers as of the date and
year first above written.

THE PUTNAM FUNDS, listed on Appendix A

/s/Charles E. Porter
By -----------------------------------
Charles E. Porter
Executive Vice President

PUTNAM FIDUCIARY TRUST COMPANY

/s/John R. Verani
By -----------------------------------
John R. Verani
President

THE PUTNAM MANAGEMENT COMPANY, INC.

/s/Gordon H. Silver
By -----------------------------------
Gordon H. Silver
Senior Managing Director<PAGE>
APPENDIX A

The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
Putnam Investors Fund
Putnam Income Fund
Putnam Global Growth Fund
Putnam Vista Fund
Putnam Voyager Fund
Putnam Convertible Income-Growth Trust
Putnam Money Market Fund
Putnam Tax Exempt Income Fund
Putnam High Yield Trust
Putnam Health Sciences Trust
Putnam OTC Emerging Growth Fund
Putnam Corporate Asset Trust
Putnam U.S. Government Income Trust
Putnam American Government Income Fund
Putnam Natural Resources Fund
Putnam Tax-Free Income Trust
Putnam High Yield Advantage Fund
Putnam Federal Income Trust
Putnam Massachusetts Tax Exempt Income Fund II
Putnam Global Governmental Income Trust
Putnam Michigan Tax Exempt Income Fund II
Putnam Minnesota Tax Exempt Income Fund II
Putnam Ohio Tax Exempt Income Fund II
Putnam Adjustable Rate U.S. Government Fund
Putnam Tax Exempt Money Market Fund
Putnam New York Tax Exempt Money Market Fund
Putnam Capital Manager Trust
Putnam Diversified Income Trust
Putnam Dividend Growth Fund
Putnam Municipal Income Fund
Putnam Pennsylvania Tax Exempt Income Fund
Putnam New Jersey Tax Exempt Income Fund
Putnam Europe Growth Fund
Putnam New Opportunities Fund
Putnam Florida Tax Exempt Income Fund
Putnam Utilities Growth and Income Fund
Putnam New York Tax Exempt Opportunities Fund
Putnam Overseas Growth Fund
Putnam Asia Pacific Growth Fund
Putnam Arizona Tax Exempt Income Fund
Putnam Equity Income Fund
Putnam Managed Income Trust
Putnam Research Analysts Fund
Putnam Balanced Government Fund
Putnam Growth Fund
<PAGE>

APPENDIX A CONTINUED

Putnam Capital Appreciation Fund
Putnam Capital Growth and Income Fund
Putnam Asset Allocation Funds
Putnam California Tax Exempt Income Trust
Putnam California Tax Exempt Money Fund
Putnam Intermediate Tax Exempt Fund
Putnam New York Tax Exempt Income Trust
Putnam Diversified Equity Trust
Putnam Short-Term Investment-Grade Bond Fund
Putnam Growth and Income Fund II
Putnam Investment Funds

Dated: January 6, 1995

<PAGE>
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110-2624
(617) 951-7000
TELECOPIER: (617) 951-7050

February 27, 1991

PCM High Yield 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 833,998 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 CAPITAL MANAGER TRUST -2- February 27, 1991

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. 4 to your Registration Statement No.
33-17486.

Very truly yours,

/s/ Ropes & Gray

Ropes & Gray
<PAGE>
December 18, 1987

Putnam Capital Manager Trust
One Post Office Square
Boston, MA 02109

Gentlemen:

In connection with your sale to us today of 1,666.70 shares of
beneficial interest (the "Shares") in Putnam Capital Manager Trust
- PCM Growth and 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, we will reimburse the Fund for its 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 above written.

Very truly yours,

THE PUTNAM MANAGEMENT COMPANY, INC.

/s/ Lawrence J. Lasser
By: _____________________________
Lawrence J. Lasser, President
<PAGE>
December 18, 1987

Putnam Capital Manager Trust
One Post Office Square
Boston, MA 02109

Gentlemen:

In connection with your sale to us today of 1,666.70 shares of
beneficial interest (the "Shares") in Putnam Capital Manager Trust
- PCM High Yield 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.

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 above written.

Very truly yours,

THE PUTNAM MANAGEMENT COMPANY, INC.

/s/ Lawrence J. Lasser
By: _____________________________
Lawrence J. Lasser, President
<PAGE>
December 18, 1987

Putnam Capital Manager Trust
One Post Office Square
Boston, MA 02109

Gentlemen:

In connection with your sale to us today of 16,667 shares of
beneficial interest (the "Shares") in Putnam Capital Manager Trust
- PCM Money Market 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.

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 above written.

Very truly yours,

THE PUTNAM MANAGEMENT COMPANY, INC.

/s/ Lawrence J. Lasser
By: _____________________________
Lawrence J. Lasser, President
<PAGE>
December 18, 1987

Putnam Capital Manager Trust
One Post Office Square
Boston, MA 02109

Gentlemen:

In connection with your sale to us today of 1,666.70 shares of
beneficial interest (the "Shares") in Putnam Capital Manager Trust
- PCM Multi-Strategy 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.

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 above written.

Very truly yours,

THE PUTNAM MANAGEMENT COMPANY, INC.

/s/ Lawrence J. Lasser
By: _____________________________
Lawrence J. Lasser, President
<PAGE>
December 18, 1987

Putnam Capital Manager Trust
One Post Office Square
Boston, MA 02109

Gentlemen:

In connection with your sale to us today of 1,666.70 shares of
beneficial interest (the "Shares") in Putnam Capital Manager Trust
- PCM U.S. Government & High Quality Bond 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.

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 above written.

Very truly yours,

THE PUTNAM MANAGEMENT COMPANY, INC.

/s/ Lawrence J. Lasser
By: _____________________________
Lawrence J. Lasser, President
<PAGE>
December 18, 1987

Putnam Capital Manager Trust
One Post Office Square
Boston, MA 02109

Gentlemen:

In connection with your sale to us today of 1,666.50 shares of
beneficial interest (the "Shares") in Putnam Capital Manager Trust
- PCM Voyager 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.

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 above written.

Very truly yours,

THE PUTNAM MANAGEMENT COMPANY, INC.

/s/ Lawrence J. Lasser
By: _____________________________
Lawrence J. Lasser, President
<PAGE>
April 30, 1990

Putnam Capital Manager Trust
One Post Office Square
Boston, MA 02109

Gentlemen:

In connection with your sale to us today of 100 shares of
beneficial interest (the "Shares") in Putnam Capital Manager Trust
- PCM International Equities 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.

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 above written.

Very truly yours,

THE PUTNAM MANAGEMENT COMPANY, INC.

/s/ Lawrence J. Lasser
By: _____________________________
Lawrence J. Lasser, President
<PAGE>
April 30, 1992

Putnam Capital Manager Trust
One Post Office Square
Boston, MA 02109

Gentlemen:

In connection with your sale to us today of 100 shares of
beneficial interest (the "Shares") in Putnam Capital Manager Trust
- PCM Utilities Growth and 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.

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 above written.

Very truly yours,

THE PUTNAM MANAGEMENT COMPANY, INC.

/s/ Lawrence J. Lasser
By: _____________________________
Lawrence J. Lasser, President
<PAGE>
September 14, 1993

Putnam Capital Manager Trust
One Post Office Square
Boston, MA 02109

Gentlemen:

In connection with your sale to us today of 100 shares of
beneficial interest (the "Shares") in Putnam Capital Manager Trust
- PCM Diversified 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.

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 above written.

Very truly yours,

THE PUTNAM MANAGEMENT COMPANY, INC.

/s/ Lawrence J. Lasser
By: _____________________________
Lawrence J. Lasser, President
<PAGE>
April 30, 1994

Putnam Capital Manager Trust
One Post Office Square
Boston, MA 02109

Gentlemen:

In connection with your sale to us today of 100 shares of
beneficial interest (the "Shares") in Putnam Capital Manager Trust
- PCM New Opportunities 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.

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 above written.

Very truly yours,

THE PUTNAM MANAGEMENT COMPANY, INC.

/s/ Lawrence J. Lasser
By: _____________________________
Lawrence J. Lasser, President
<PAGE>
April 10, 1995

Putnam Capital Manager Trust - PCM Asia Pacific Growth Fund
One Post Office Square
Boston, MA 02109

Gentlemen:

In connection with your sale to us today of 100 shares of
beneficial interest (the "Shares") in Putnam Capital Manager Trust
- PCM Asia Pacific Growth 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.

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 above written.

Very truly yours,

THE PUTNAM MANAGEMENT COMPANY, INC.

/s/ Steven E. Asher
By: _____________________________
Steven E. Asher
Senior Vice President and
Senior Counsel
Putnam Investments, Inc.

Putnam
Retirement
Plans:
Basic Plan
Document

Putnam Standard Profit
Sharing Plan - "Keogh"

Putnam Standard Profit
Sharing and 401 (k) Plan

Putnam Standard Money
Purchase Pension Plan - "Keogh"

Putnam Variable Profit Sharing
and 401 (k) Plan

Putnam Variable Money
Purchase Pension Plan

Boston London Tokyo
<PAGE>
Contents I. Putnam Basic Plan Document

Article I: Introduction 2
Article II: Definitions 2
Article III: Participation 6
Article IV: Contributions 7
Article V: Cash or Deferred Arrangement
under Section 401(k) (CODA) 9
Article VI: Limitations on Allocations 15
Article VII: Eligibility for Distribution of Benefits 17
Article VIII: Vesting 18
Article IX: Payment of Benefits 19
Article X: Joint and Survivor Annuity
Requirements 20
Article XI: Minimum Distribution Requirements 22
Article XII: Withdrawals and Loans 25
Article XIII: Trust Fund and Investments 26
Article XIV: Insurance Policies 27
Article XV: Top-Heavy Plans 28
Article XVI: Administration of the Plan 30
Article XVII: Trustee and Insurance Trustee 31
Article XVIII: Amendment 33
Article XIX: Termination of Plan and Trust 34
Article XX: Transfers from Other Qualified
Plans; Mergers 35
Article XXI: Miscellaneous 35

II. IRS Opinion Letters

The Putnam Standard Profit sharing and
401(k) Plan Opinion Letter 38

The Putnam Standard Money Purchase
Pension Plan Opinion Letter 39

The Putnam Variable Profit Sharing and
401 (k) Plan Opinion Letter 40

Putnam Variable Money Purchase Pension
Plan Opinion Letter 41
<PAGE>
I. Putnam Basic Plan Document

Article I: Introduction 2

Article II: Definitions 2

Article III: Participation 6

Article IV: Contributions 7

Article V: Cash or Deferred Arrangement
under Section 401 (k) (CODA) 9

Article VI: Limitations on Allocations 15

Article VII: Eligibility for Distribution of Benefits 17

Article VIII: Vesting 18

Article IX: Payment of Benefits 19

Article X: Joint and Survivor Annuity
Requirements 20

Article XI: Minimum Distribution Requirements 22

Article XII: Withdrawals and Loans 25

Article XIII: Trust Fund and Investments 26

Article XIV: Insurance Policies 27

Article XV: Top-Heavy Plans 28

Article XVI: Administration of the Plan 30

Article XVII: Trustee and Insurance Trustee 31

Article XVIII: Amendment 33

Article XIX: Termination of Plan and Trust 34

Article XX: Transfers from Other Qualified
Plans; Mergers 35

Article XXI: Miscellaneous 35
<PAGE>
The Putnam Basic Plan Document

ARTICLE 1:
Introduction

By executing the Plan Agreement, the Employer has established a
retirement plan (the "Plan") according to the terms and
conditions of the Plan Agreement and this Putnam Basic Plan
Document, for the purpose of providing a retirement fund for the
benefit of Participants and Beneficiaries.

ARTICLE II:
Definitions

The terms defined in Sections 2.1 through 2.50 appear generally
throughout the document. Sections 2.51 through 2.63 and Article
V contain definitions of terms used only in a CODA or in a
Variable Plan which permits nondeductible Participant
Contributions pursuant to Section 5.9 and Section 10.4 contains
additional definitions related to distributions from the Plan.
Articles VI and XI contain additional definitions of terms used
only in those Articles.

2.1 Account means any of, and Accounts means all of, a
Participant's Employer contribution Account, Participant
Contribution Account, Rollover Account, and if the Plan contains
a CODA, the accounts maintained for the Participant pursuant to
Article V.

2.2 Affiliated Employer, for purposes of the Plan other than
Article VI, means the Employer and a trade or business, whether
or not incorporated, which is any of the following:

(a) A member of a group of controlled corporations (within the
meaning of Section 414(b) of the Code) which includes the
Employer; or

(b) A trade or business under common control (within the meaning
of Section 414(c) of the Code) with the Employer; or

(c) A member of an affiliated service group (within the meaning
of Section 414(m) of the Code) which includes the Employer; or

(d) An entity otherwise required to be aggregated with the
Employer pursuant to Section 414(o) of the Code.

In determining an Employee's service for vesting and for
eligibility to participate in the Plan, all employment with
Affiliated Employers will be treated as employment by the
Employer.
<PAGE>
In a Variable Plan, in addition to the Employer, any Affiliated
Employer may adopt the Plan for the benefit of its Employees by
executing a Plan Agreement.

For purposes of Article VI only, the definitions in paragraphs
(a) and (b) of this Section 2.2 shall be modified by adding at
the conclusion of the parenthetical phrase in each such paragraph
the words "as modified by Section 415(h) of the Code."

2.3 Authorized Leave of Absence means a leave of absence from
employment granted in writing by an Affiliated Employer.
Authorized Leave of Absence shall be granted on account of
military service for any period during which an Employee's right
to re-employment is guaranteed by law, and for such other reasons
and periods as an Affiliated Employer shall consider proper,
provided that Employees in similar situations shall be similarly
treated.

2.4 Base Contribution Percentage means the percentage so
specified in the Plan Agreement.

2.5 Beneficiary means a person entitled to receive benefits under
the Plan upon the death of a Participant, in accordance with
Section 7.2 and Articles 10 and 11.

2.6 CODA means a cash or deferred arrangement that meets the
requirements of Section 401(k) of the Code, adopted as part of a
profit sharing plan.

2.7 Code means the Internal Revenue Code of 1986, as amended.

2.8 Compensation means all of an Employee's compensation
determined in accordance with the definition elected by the
Employer in the Plan Agreement. For purposes of that election,
"Form W-2 earnings" means "wages" as defined in Section 3401(a)
of the Code in connection with income tax withholding at the
source, and all other compensation paid to the Employee by the
Employer in the course of its trade or business, for which the
Employer is required to furnish the Employee with a written
statement under sections 6041(d), 6051(a)(3), and 6052 of the
Code, determined without regard to exclusions based on the nature
or location of the employment or the services performed (such as
the exception for agricultural labor in section 3401(a)(2) of the
Code).

2.9 Date of Employment means the first date on which an Employee
performs an Hour of Service; or, in the case of an Employee who
has incurred one or more One-Year Eligibility Breaks and who is
treated as a new Employee under the rules of Section 3.3, the
first date on which he performs an Hour of Service after his
return to employment.
<PAGE>
2.10 Deductible Employee Contribution Account means an account
maintained on the books of the Plan on behalf of a Participant,
in which are recorded amounts contributed by him to the Plan on a
tax-deductible basis under prior law, and the income, expenses,
gains and losses thereon.

2.11 Disabled means unable to engage in any substantial gainful
activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or
which has lasted or can be expected to last for a continuous
period of not less than 12 months. The permanence and degree of
such impairment shall be supported by medical evidence.

2.12 Earned Income means a Self-Employed Individual's net
earnings from self-employment in the trade or business with
respect to which the Plan is established, excluding items not
included in gross income and the deductions allocable such items,
and reduced by (i) contributions by the Employer to qualified
plans, to the extent deductible under Section 404 of the Code,
and (ii) the deduction allowed to the Employer under Section
164(f) of the Code for taxable years beginning after December 31,
1989.

2.13 Earnings, effective for all Plan Years beginning after
December 31, 1988, means the first $200,000 (as adjusted by the
Secretary of the Treasury at the same time and in the same manner
as under Section 415(d) of the Code) of the sum of the
Compensation and the Earned Income received by an Employee during
a Plan Year. In determining the Earnings of a Participant, the
rules of Section 414(q)(6) of the Code shall apply, except that
in applying those rules the term "family" shall include only the
Participant's spouse and the Participant's lineal descendants who
have not reached age 19 by the last day of the Plan Year. If, as
a result of the application of such rules the adjusted $200,000
limitation is exceeded, then (except for purposes of determining
the portion of compensation up to the Integration Level), the
limitation shall be prorated among the affected individuals in
proportion to each such individual's compensation as determined
under this section prior to the application of this limitation.

In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1, 1994,
the annual compensation of each Employee taken into account under
the Plan shall not exceed the OBRA '93 annual compensation limit.
The OBRA '93 annual compensation limit is $150,000, as adjusted
by the Commissioner for increases in the cost of living in
accordance with section 401(a)(17)(B) of the Internal Revenue
Code. The cost-of-living adjustment in effect for a calendar
year applies to any period, not exceeding 12 months, over which
compensation is determined (determination period) beginning in
such calendar year. if a determination period consists of fewer
than 12 months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which
is 12.

For plan years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under section 401(a)(17)
of the Code shall mean the OBRA '93 annual compensation limit set
forth in this provision.

If compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the
current Plan Year, the compensation for that prior determination
period is subject to the OBRA '93 annual compensation limit for
that prior determination period. For this purpose, for
determination periods beginning before the first day of the first
Plan Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.

2.14 Effective Date means the date so designated in the Plan
Agreement. If the Plan Agreement indicates that the Employer is
adopting the Plan as an amendment of an existing plan, the
provisions of the existing plan apply to all events preceding the
Effective Date, except as to specific provisions of the Plan
which set forth a retroactive effective date in accordance with
Section 1140 of the Tax Reform Act of 1986.

2.15 Eligibility Period means a period of 12 consecutive months
beginning on an Employee's most recent Date of Employment or any
anniversary thereof, in which he is credited with at least 1,000
Hours of Service; provided that if the Employer has elected in
the Plan Agreement to establish a number less than 1,000 as the
requisite for crediting an Eligibility Period, that number shall
be substituted for 1,000, and provided further that in the case
of an Employee in a seasonal industry (as defined under
regulations prescribed by the Secretary of Labor) in which the
customary extent of employment during a calendar year is fewer
than 1,000 Hours of Service, the number specified in any
regulations prescribed by the Secretary of Labor dealing with
years of service shall be substituted for 1,000.

2.16 Employee means a common law Employee of an Affiliated
Employer; in the case of an Affiliated Employer which is a sole
proprietorship, the sole proprietor thereof; in the case of an
Affiliated Employer which is a partnership, a partner thereof;
and a Leased Employee of an Affiliated Employer. The term
"Employee" includes an individual on Authorized Leave of Absence,
a Self-employed Individual and an Owner-Employee.

2.17 Employer means the Employer named in the Plan Agreement and
any successor to all or the major portion of its assets or
business which assumes the obligations of the Employer under the
Plan Agreement.
<PAGE>
2.18 Employer Contribution Account means an account maintained on
the books of the Plan on behalf of a Participant, in which are
recorded the amounts allocated for his benefit from contributions
by the Employer (other than contributions pursuant to Article 5),
Forfeitures by former Participants (if the Plan provides for
reallocation of Forfeitures), amounts reapplied under Section
6.1(d), and the income, expenses, gains and losses incurred
thereon.

2.19 ERISA means the Employee Retirement Income Security Act of
1974, as amended.

2.20 Excess Earnings means a Participant's Earnings in excess of
the Integration Level of the Plan.

2.21 Forfeiture means a nonvested amount forfeited by a former
Participant in a Variable Plan, pursuant to Section 8.3; or an
amount forfeited by a former Participant or Beneficiary who
cannot be located, pursuant to Section 9.5; or a Qualified
Matching Contribution or Employer Matching Contribution forfeited
pursuant to Section 5.8.

2.22 Hour of Service means each hour described in paragraphs (a),
(b), (c), (d) or (e) below, subject to paragraphs (f) and (g)
below.

(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for an Affiliated
Employer. These hours shall be credited to the Employee for the
computation period or periods in which the duties are performed.

(b) Each hour for which an Employee is paid, or entitled to
payment, by an Affiliated Employer on account of a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty or leave of absence. No more than 501 Hours of
Service shall be credited under this paragraph for any single
continuous period of absence (whether or not such period occurs
in a single computation period) unless the Employee's absence in
not an Authorized Leave of Absence. Hours under this paragraph
shall be calculated and credited pursuant to Section 2530.200b-2
of the Department of Labor Regulations, which are incorporated
herein by this reference.

(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by an Affiliated
Employer. The same Hours of Service shall not be credited under
both paragraph (a) or paragraph (b), as the case may be, and
under this paragraph (c); and no more than 501 Hours of Service
shall be credited under this paragraph (c) with respect to
payments of back pay, to the extent that such pay is agreed to or
awarded for a period of time described in paragraph (b) during
which the Employee did not perform or would not have performed
any duties. These hours shall be credited to the Employee for
the computation period or periods to which the award or agreement
pertains rather than the computation period in which the award,
agreement or payment is made.

(d) Each hour during an Authorized leave of Absence. Such hours
shall be credited at the rate of a customary full work week for
an Employee.

(e) Solely for purposes of determining whether a One-Year Vesting
Break or a One-Year Eligibility Break has occurred, each hour
which otherwise would have been credited to an Employee but for
an absence from work by reason of: the pregnancy of the Employee,
the birth of a child of the Employee, the placement of a child
with the Employee in connection with the adoption of the child by
the Employee, or caring for a child for a period beginning
immediately after its birth or placement. If the Plan
Administrator cannot determine the fours which would normally
have been credited during such an absence, the Employee shall be
credited with eight Hours of Service for each day of absence. No
more than 501 Hours of Service shall be credited under this
paragraph by reason of any pregnancy or placement. Hours
credited under this paragraph shall be treated as Hours of
Service only in the Plan Year or Eligibility Period or both, as
the case may be, in which the absence from work begins, if
necessary to prevent the Participant's incurring a One-Year
Vesting Break or One-Year Eligibility Break in that Period, or,
if not, in the period immediately following that in which the
absence begins. The Employee must timely furnish to the Employer
information reasonably required to establish (i) that an absence
from work is for a reason specified above, and (ii) the number of
days for which the absence continued.

(f) Hours of Service shall be determined on the basis of actual
hours for which an Employee is paid or entitled to payment, or as
otherwise specified in the Plan Agreement.

(g) If the Employer maintains the plan of a predecessor employer,
service for the predecessor Employer shall be treated as service
for the Employer.

2.23 Insurance Trustee means the person named in the Plan
Agreement as Insurance Trustee, and any successor thereto.

2.24 Integration Level means the Earnings amount selected by the
Employer in the Plan Agreement.

2.25 Investment Company means an open-end registered investment
company for which Putnam Financial Services, Inc., or its
affiliate acts a principal underwriter, or for which The Putnam
Management Company, Inc., or its affiliate serves as an
investment adviser; provided that its prospectus offers its
shares under the Plan.

2.26 Investment Company Shares means shares issued by an
Investment Company.

2.27 Investment Products means any of the investment products
specified by the Employer in accordance with Section 13.2, fro
the group of those products sponsored, underwritten or managed by
Putnam as shall be made available by Putnam under the Plan, and
such other products as shall be accepted in writing by Putnam for
availability under the Plan. The term "Investment Products" does
not include any Policy selected pursuant to Article XIV.

2.28 Leased Employee means any person (other than an Employee of
the recipient) who pursuant to an agreement between the recipient
and any other person ("leasing organization") has performed
services for the recipient (or for the recipient and related
persons determined in accordance with Section 414(n)(6) of the
Code) on a substantially full-time basis for a period of at least
one year, and such services are of a type historically performed
by Employees in the business field of the recipient Employer.
The compensation of a Leased Employee for purposes of the Plan
means the Compensation (as defined in Section 2.8) of the Leased
Employee attributable to services performed for the recipient
Employer. Contributions or benefits provided to a leased
Employee by the leasing organization which are attributable to
services performed for the recipient Employer shall be treated as
provided by the recipient Employer. Provided that leased
Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce, a leased Employee
shall not be considered an Employee of the recipient if he is
covered by a money purchase pension plan providing; (1) a
nonintegrated Employer contribution rate of at least 10 percent
of compensation (as defined in Section 415(c)(3) of the Code, but
including amounts contributed pursuant to a salary reduction
agreement which are excludable from the Employee's gross income
under Section 125, Section 402(a)(8), Section 402(h) or Section
403(b) of the Code), (2) immediate participation, and (3) full
and immediate vesting.

2.29 One-Year Eligibility Break means an Eligibility Period
during which an individual is not credited with more than 500
Hours of Service; provided, however, that in the case of an
Employee in a seasonal industry, there shall be substituted for
500 the number of Hours of Service specified in any regulations
of the Secretary of Labor dealing with breaks in service, and
provided further that if the Employer has elected in the Plan
Agreement to establish a number less than 500 as the requisite
Hours of Service for crediting an Eligibility Period, that number
shall be substituted for 500.

2.30 One-Year Vesting Break means a Plan Year during which an
individual is not credited with more than 500 Hours of Service;
provided, however, that in the case of an Employee in a seasonal
industry, there shall be substituted for the 500 the number of
Hours of Service specified in any regulations for the Secretary
of Labor dealing with breaks in service, and provided further
that if the Employer has elected in the Plan Agreement to
establish a number less than 500 as the requisite Hours of
Service for crediting a Year of Service, that number shall be
substituted for 500.

2.31 Owner-Employee means the sole proprietor of an Affiliated
Employer that is a sole proprietorship, or a partner owning more
than 10 percent of either the capital or profits interest of an
Affiliated Employer that is a partnership.

2.32 Participant means each Employee who has met the requirements
for participation in Article III.

2.33 Participant Contribution Account means an account maintained
on the books of the plan, in which are recorded non deductible
contributions by a Participant in accordance with Section 4.2(e)
or a similar provision in effect under the Plan or a predecessor
plan for periods before the first Plan Year beginning after
December 31, 1986, and any income, expenses, gains or losses
incurred thereon.

2.34 Plan means the form of defined contribution retirement plan
and trust agreement adopted by the Employer, consisting of the
Plan Agreement and the Putnam Basic Plan Document as set forth
herein, together with any and all amendments and supplements
thereto.

2.35 Plan Administrator means the Employer or its appointee
pursuant to Section 16.1.

2.36 Plan Agreement means the separate agreement entered into
between the Employer and the Trustee (and the Insurance Trustee,
if any) and accepted by Putnam, under which the Employer adopts
the Plan and selects among its optional provisions.

2.37 Plan Year means the period of 12 consecutive months
specified by the Employer in the Plan Agreement; provided that if
the Effective Date is not the first day of the Employer's taxable
year, the initial Plan Year shall begin on the Effective Date and
end on the last day of the Employer's taxable year.

2.38 Policy means an ordinary life insurance, term insurance,
retirement income or endowment policy or an individual or group
annuity contract issued by a life insurance company in connection
with the Plan, or an interest therein. An ordinary life
insurance policy within the meaning of this definition provides
non-decreasing death benefits and non-increasing premiums.

2.39 Putnam means Putnam Financial Services, Inc., or a company
affiliated with it which Putnam Financial Services, Inc. has
designated as its agent to perform specified actions or
procedures in connection with the prototype Plan.

2.40 Qualified Participant means (i) in a Standard Plan, any
Participant who is an active Employee on the last day of the Plan
Year in question or who is credited with more than 500 Hours of
Service during the Plan Year in question or whose Retirement or
death occurred during the Plan Year in question; and (ii) in a
Variable Plan, any Participant who meets the requirements
specified by the Employer in the Plan Agreement. If the Plan is
not adopted to replace an existing plan, this Section 2.40 is
effective on the Effective Date. If the Plan replaces an
existing plan, this Section 2.40 is effective on the first day of
the first Plan Year that begins after December 31, 1988, or if
later, on the Effective Date, and the provision of the existing
plan that this Section 2.40 replaces shall continue to apply
until that time.

2.41 Recordkeeper means the person or entity designated by the
Employer in the Plan Agreement to perform the duties described in
Section 16.4, and any successor thereto.

2.42 Retirement means ceasing to be an Employee in accordance
with Section 7.1.

2.43 Rollover Account means an account established for an
Employee who makes a rollover contribution to the Plan pursuant
to Section 4.5.

2.44 Self-Employed Individual means an individual whose personal
services are a material income-producing factor in the trade or
business for which the Plan is established, and who has Earned
Income for the taxable year from that trade or business, or would
have Earned Income but for the fact that the trade or Business
had no net profits for the taxable year.

2.45 Shareholder-Employee means any officer or Employee of an
electing small business corporation, within the meaning of
Section 1362 of the Code, who on any day during a taxable year of
the Employer owns (or is considered as owning under Section
318(a)(1) of the Code) more than 5% of the outstanding stock of
the Employer.

2.46 Social Security Wage Base means the maximum amount
considered as wages under Section 3121(a)(1) of the Code as in
effect on the first day of the Plan Year.

2.47 Standard Plan means a Plan adopted by execution of a Putnam
Standard Profit Sharing Plan Agreement #001 (including such a
Plan with a CODA) or a Putnam Standard Money Purchase Pension
Plan Agreement #002.

2.48 Trust and Trust Fund means the trust fund established under
Section 13.1.
<PAGE>
2.49 Trustee means the person, or the entity with trustee powers,
named in the Plan Agreement as trustee, and any successor
thereto.

2.50 Valuation Date means (i) for a Standard Plan, each business
day, and (ii) for a Variable Plan, the last day of each Plan
Year, and such other dates as the Employer may designate by
written agreement with the Recordkeeper.

2.51 Variable Plan means a Plan adopted by execution of a Putnam
Variable Profit Sharing Plan Agreement #003 or a Putnam Variable
Money Purchase Pension Plan Agreement #004.

2.52 Year of Service means a Plan Year in which an Employee is
credited with at least 1,000 Hours of Service; provided, however,
that if the Employer has elected in the Plan Agreement to
establish a number less than 1,000 as the requisite for crediting
a Year of Service, that number shall be substituted for 1,000,
and provided further that in the case of an Employee in a
seasonal industry (as defined under regulations prescribed by the
Secretary of Labor) in which the customary extent of employment
during a calendar year is fewer than 1,000 Hours of Service, the
number specified in any regulations prescribed by the Secretary
of Labor dealing with years of service shall be substituted for
1,000. An Employee's Years of Service shall include service
credited prior to the Effective Date under any predecessor plan.
If the initial Plan Year is shorter than 12 months, each Employee
who is credited with at least 1,000 Hours of Service in the
12-month period ending on the last day of the initial Plan Year
shall be credited with a Year of Service with respect to the
initial Plan Year.

(a) Service in any Plan Year (or comparable period prior to the
Effective Date) completed before the Employee reached age 18;

(b) Service completed during a period in which the Employer did
not maintain the Plan or any predecessor plan (as defined under
regulations prescribed by the Secretary of the Treasury).

The following definitions apply only to cash or deferred
arrangements under Section 401(k)(CODA) and to Variable Plans
which permits nondeductible Participant contributions pursuant to
Section 5.9:

2.53 Deferral Agreement means an Employee's agreement to make one
or more Elective Deferrals in accordance with Section 5.2.

2.54 Elective Deferral means any contribution made to the Plan by
the Employer at the election of a Participant, in lieu of cash
compensation, including contributions made pursuant to a Deferral
Agreement or other deferral mechanism.
<PAGE>
2.55 Elective Deferral Account means an account maintained on the
books of the Plan, in which are recorded a Participant's Elective
Deferrals and the income, expenses, gains and losses incurred
thereon.

2.56 Employer Matching contribution means a contribution made by
the Employer (i) to the Plan pursuant to Section 5.,8 or (ii) to
another defined contribution plan on account of a Participant's
"elective deferrals" or "employee contributions," as those terms
are defined in Section 401(m)(4) of the Code.

2.57 Employer Matching Account means an account maintained on the
books of the Plan, in which are recorded the Employer Matching
Contributions made on behalf of a Participant and the income,
expenses, gains and losses incurred thereon.

2.58 Highly Compensated Employee means any highly compensated
active Employee or highly compensated former Employee, as defined
in this Section 2.58. For this purpose, the "determination year"
shall be the Plan Year, and the "look-back year" shall be the
12-month period immediately preceding the determination year;
provided, however, that in a Variable Plan for which the Plan
Year is the calendar year, the current Plan Year shall be both
the "determination year" and the "look-back year" if the Employer
so elects in the Plan Agreement.

A highly compensated active Employee includes any Employee who
performs service for the Employer during the determination year
and who during the look-back year: (i) received compensation from
the Employer in excess of $75,000 (as adjusted pursuant to
Section 415(d) of the Code); (ii) received compensation from the
Employer in excess of $50,000 (as adjusted pursuant to Section
415(d) of the Code) and was a member of the top-paid group for
such year; or (iii) was an officer of the Employer and received
compensation during such year that is greater than 50 percent of
the dollar limitation in effect under Section 415(b)(1)(A) of the
Code. The term also includes (i) Employees who are both
described in the preceding sentence if the term "determination
year" is substituted for the term "look-back year," and among the
100 Employees who received the most compensation from the
Employer during the determination year; and (ii) Employees who
are 5 percent owners at any time during the look-back year or
determination year. If no officer has satisfied the compensation
requirement of (iii) above during either a year or a look-back
year, the highest paid officer for such year shall be treated as
a Highly Compensated Employee.

A highly compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) before
the determination year, performed no service for the Employer
during the determination year, and was a highly compensated
active Employee for either the year of separation from service or
any determination year ending on or after the Employee's 55th
birthday.

If during a determination year or look-back year an Employee is a
family member of either a 5 percent owner who is an active or
former Employee, or a Highly Compensated Employee who is one of
the 10 most highly paid Highly Compensated Employees ranked on
the basis of compensation paid by the Employer during the year,
then the family member and the 5 percent owner or top-ten Highly
Compensated Employee shall be treated as a single Employee
receiving compensation and plan contributions or benefits equal
to the sum of the compensation and contributions or benefits of
the family member and the 5 percent owner or top-ten highly
compensated Employee. For purposes of this Section 2.58, family
members include the spouse, lineal ascendants and descendants of
the Employee or former Employee and the spouses of such lineal
ascendants and descendants.

The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the compensation that
is considered, will be made in accordance with Section 414(q) of
the Code and the regulations thereunder.

2.59 Non-Highly Compensated Employee means an Employee who is not
a Highly Compensated Employee.

2.60 Qualified Matching Contribution means a contribution made by
the Employer that: (i) is allocated in proportion to a
Participant's Elective Deferrals or Participant Contributions, as
specified by the Employer in the Plan Agreement; (ii) is fully
vested at all times, and (iii) is distributable only in
accordance with Section 5.13.

2.61 Qualified Matching Account means an account maintained on
the books of the Plan, in which are recorded the Qualified
Matching Contributions on behalf of a Participant and the income,
expense, gain and loss attributable thereto.

2.62 Qualified Nonelective Contribution means a contribution
(other than an Employer Matching contribution or Qualified
Matching Contribution) made by the Employer, that: (i) a
Participant may no elect to receive in cash until it is
distributed from the plan; (ii) is fully vested at all times; and
(iii) is distributable only in accordance with Section 5.13.

2.63 Qualified Nonelective Contribution Account means an account
maintained on the books of the Plan, in which are recorded the
Qualified Nonelective Contributions on behalf of a Participant
and the income, expense, gain and loss attributable thereto.
<PAGE>
ARTICLE III:
Participation

3.1 Initial Participation. An Employee shall become a
Participant in the Plan as of the first day of the month in which
he first satisfies the age and service requirements specified by
the Employer in the Plan Agreement, or as of the Effective Date,
whichever is later; provided, however, that:

(a) If the Plan is adopted as an amendment of a predecessor plan
of the Employer, every Employee who was participating under the
predecessor plan when it was so amended shall become a
Participant in the Plan as of the Effective Date, whether or not
he has satisfied the age and service requirements specified in
the Plan Agreement; and

(b) Unless the Employer specifies otherwise in the Plan
Agreement, any individual who is (i) a nonresident alien
receiving no earned income from an Affiliated Employer which
constitutes income from sources within the United States, or (ii)
included in a unit of Employees covered by a collective
bargaining agreement between the Employer and Employee
representatives if retirement benefits were the subject of good
faith bargaining (unless the collective bargaining agreement
specifically provides for coverage by the Plan or involves as an
employee representative an organization more than one-half of
whose members are Employees who are owners, officers or
executives of the Employer) shall not participate in the Plan;
and

(c) If the Plan is a Variable Plan and is not adopted as an
amendment of a predecessor plan of the Employer, all Employees on
the Effective Date shall become Participants on the Effective
Date; if the Employer so elects in the Plan Agreement; and

(d) If the Plan is a Variable Plan, (i) only Employees in the
eligible classes specified by the Employer in the Plan Agreement
shall participate in the Plan; and (ii) eligible Employees will
begin participation on the entry date specified in the Plan
Agreement.

Notwithstanding paragraphs (c) and (d), the Plan must comply with
the coverage and participation rules of Sections 410(b) and
401(a)(26) of the Code and the regulations thereunder.

3.2 Special Participation Rule. With respect to a Standard Plan,
or a Variable Plan in which the Employer has specified full and
immediate vesting in the Plan Agreement, and Employee who incurs
a One-Year Eligibility Break before completing the number of
Eligibility Periods required under Section 3.1 shall not
thereafter be credited with any Eligibility Period completed
before the One-Year Eligibility Break.
<PAGE>
3.3 Resumed Participation. A former Employee who incurs a
One-Year Eligibility Break after having become a Participant
shall participate in the Plan as of the date on which he again
become an Employee, if (i) his Employer Contribution Account of
Employer Matching Account had become partially or fully vested
before he incurred a One-Year Vesting Break, or (ii) he incurred
fewer than five consecutive One-Year Eligibility Breaks. In any
other case, when he again becomes an Employee he shall be treated
as a new Employee under Section 3.1.

3.4 Changes in Classification (Variable Plans Only). If a
Participant in a Variable Plan ceases to be a member of a
classification of Employees eligible to participate in the Plan,
but does not incur a One-Year Eligibility Break, he will continue
to b e credited with Eligibility Periods while he remains an
Employee, and he will resume participation as of the date on
which he again becomes a member of a classification of Employees
eligible to participate in the Plan. If such a Participant
incurs a One-Year Eligibility Break, Section 3.3 will apply.

3.5 Benefits for Owner-Employees. If the Plan provides
contributions or benefits for one or more Owner-Employees who
control both the trade or business with respect to which the Plan
is established and one or more other trades or businesses, the
Plan and plans established with respect to such other trades or
businesses must, when looked at as a single plan, satisfy
Sections 401(a) and (d) of the Code with respect to the Employees
of this and all such other trades or businesses. If the Plan
provides contributions or benefits for one or more Owner
Employees who control one or more other trades or businesses, the
Employees of each such other trade or business must be included
in a plan which satisfies Sections 401(a) and (d) of the Code and
which provides contributions and benefits not less favorable
than those provided for such Owner-Employees under the Plan. If
an individual is covered as an Owner-Employee under the plans of
two or more trades or businesses which he does not control and
such individual controls a trade or business, then the
contributions or benefits of the Employees under the plan of the
trade or business which he does control must be as favorable as
those provided for him under the most favorable plan of the trade
or business which he does not control. For purposes of this
Section 3.5, an Owner-Employee, or two or more Owner-Employees,
shall be considered to control a trade or business if such
Owner-Employee, or such two or more Owner-Employees together:

(a) own the entire interest in an unincorporated trade or
business, or

(b) in the case of a partnership, own more than 50 percent of
either the capital interest or the profits interest in such
partnership.

For purposes of the preceding sentence, an Owner-Employee or two
or more Owner-Employees shall be treated as owning any interest
in a partnership which is owned, directly or indirectly, by a
partnership which such Owner-Employees are considered to control
within the meaning of the preceding sentence.

ARTICLE IV:
Contributions

4.1 Provisions Applicable to All Plans.

(a) Payment and Crediting of Employer Contributions. the
Employer shall pay to the order of the Trustee the aggregate
contribution to the Trust Fund (other than the premium payments
on any Policy) for each Plan Year. Each contribution shall be
accompanied by written instructions from the Employer, in the
manner prescribed by Putnam. Neither the Trustee nor Putnam
shall be under any duty to inquire into the correctness of the
amount or the timing of any contribution, or to collect any
amount if the Employer fails to make a contribution as provided
in the Plan.

(b) Responsibility for Premium Payments. Contributions to be
applied to the payment of the premiums on any Policy shall be
paid by the Employer directly to the insurer in cash. In
determining the amount of any premium due under any Policy with
respect to any Participant, the Employer and the Insurance
Trustee may rely conclusively upon information furnished by the
provider of the Policy. For purposes of Sections 4.2(a), 4.3(a)
and Article 5, all Employer contributions used to pay premiums on
Policies shall be treated as contributions made to the
appropriate Participant's Employer contribution Account. If the
Employer omits any premium payment or makes any mistake
concerning a premium payment, neither the Employer nor the
Insurance Trustee shall have any liability in excess of the
premium to be paid.

(c) Time for Payment. The aggregate of all contributions with
respect to a Plan Year shall be transferred in accordance with
paragraphs (a) and (b) no later than the due date (including
extensions) for filing the Employer's federal income tax return
for that Plan Year.

(d) Limitations on Allocations. All allocations shall be subject
to the limitations in Article 6.

(e) Establishments of Accounts. the employer will establish and
maintain (or cause to be established and maintained) for each
Participant individual accounts adequate to disclose his interest
in the Trust Fund, including such of the following separate
accounts as shall apply to the Participant: Deductible Employee
Contribution Account, Employer Contribution Account, Participant
Contribution Account, and rollover Account; and in a Plan with a
CODA, Elective Deferral Account, Qualified Nonelective Account,
Qualified Matching Account and Employer Matching Account. The
maintenance of such accounts shall be only for recordkeeping
purposes, and the assets of separate accounts shall not be
required to be segregated for purposes of investment.

(f) Restoration of Accounts (Variable Plans Only).
Notwithstanding any other provision of the Pan, for any Plan Year
in which it is necessary to restore any portion of a
Participant's Account pursuant to Section 8.3(b) or 9.5, to the
extent that the amount of Forfeitures available is insufficient
to accomplish such restoration, the Employer shall contribute the
amount necessary to eliminate the insufficiency, regardless or
whether the contribution is currently deductible by the Employer
under Section 404 of the Code. Forfeitures shall be considered
available for allocation pursuant to Sections 4.2, 4.3, and 5.8
in a Plan Year only after all necessary restoration of Accounts
has been accomplished.

4.2 Provisions Applicable Only to Profit Sharing Plans.

(a) Amount of Annual Contribution. The Employer will contribute
for each Plan Year an amount determined accordance with the
formula specified by the Employer in the Plan Agreement, less any
amount reapplied for the Plan Year under Section 6.1(d), not to
exceed the amount deductible under Section 404 of the Code. In a
Variable Plan, if the Employer so elects in the Plan Agreement,
the amount of Forfeitures occurring a Plan Year shall be applied
to reduce the Employer's contribution by a like amount, and such
Forfeitures shall be treated as a portion of the Employer
contribution for purposes of paragraphs (b) and (c).

(b) Allocation of Contributions: General Rule. As of the last
day of each Plan Year, the Employer's contribution (and any
amounts reapplied under Section 6.1(d) for the Plan Year shall be
allocated among the Employer Contribution Accounts of Qualified
Participants in proportion to their Earnings. This general rule
does not apply to a Plan that is integrated with Social Security
or to allocations in a CODA.

(c) Plans Integrated with Social Security. If the Employer
elects in the Plan Agreement an allocation formula integrated
with Social Security, Employer contributions (and any amounts
reapplied under Section 6.1(d)) shall be allocated as of the last
day of the Plan Year, as follows:

(1) Top-Heavy Integration Formula. If the Plan is required to
provide a minimum allocation for the Plan Year pursuant to the
Top-Heavy Plan rules of Article 15, or if the Employer has
specified in the Plan Agreement that this paragraph (1) will
apply whether or not the Plan is Top-Heavy, then:

(a) First, among the Employer Contribution Accounts of all
Qualified Participants, in the ratio that each Qualified
Participant's Earnings bears to all Qualified Participants'
Earnings. The total amount allocated in this manner shall be
equal to 3% of all Qualified Participants' Earnings (or, if less,
the entire amount to be allocated).

(b) Next, among the Employer Contribution Accounts of all
Qualified Participants who have Excess Earnings, in the ration
that each Qualified Participant's Excess Earnings bears to all
Qualified Participants' Excess Earnings (or, if less, the entire
amount remaining to be allocated).

(c) Next, among the Employer Contribution Accounts of all
Qualified Participants, in the ratio that the sum of each
Qualified Participant's Earnings and Excess Earnings bears to the
sum of all Qualified Participants; Earnings and Excess Earnings.
the total amount allocated in this manner shall not exceed the
lesser of (i) the sum of all Participants' Earnings and Excess
Earnings multiplied by the Top-Heavy Maximum Disparity Percentage
determined under subparagraph (1)(E), or (ii) the entire amount
remaining to be allocated.

(d) Finally, any mount remaining shall be allocated among he
Employer Contribution Accounts of all Qualified Participants in
the ratio that each Qualified Participant's Earnings bears to all
Qualified Participants' Earnings.

(e) The Top-Heavy Maximum Disparity Percentage shall be the
lesser of (i) 2.7% or (ii) the applicable percentage from Table A
on page 9.

If the Plan's Integration Level is equal to the Social Security
Wage Base, the Top-Heavy Maximum Disparity Percentage is 2.7%.

(2) Non-Top-Heavy Integration Formula. If the Plan is not
required to provide a minimum allocation for the Plan Year
pursuant to the Top-Heavy Plan rules of Article 15, and the
Employer has not specified in the Plan Agreement that paragraph
(1) will apply whether or not the Plan is Top-Heavy, then:

(a) An amount equal to (i) the Maximum Disparity Percentage
determined under subparagraph (2)(C) multiplied by the sum of all
Qualified Participants' Earnings and Excess Earnings, or (ii) if
less, the entire amount to be allocated, shall be allocated among
the Employer contribution Amounts of all Participants in the
ratio that the sum of each Qualified Participant's Earnings and
Excess Earnings bears to the sum of all Qualified Participants'
Earnings and Excess Earnings.

(b) Any amount remaining after the allocation in paragraph (2)(A)
shall be allocated among the Employer contribution Accounts of
all Qualified Participants in the ratio that each Qualified
Participant's Earnings bears to all Qualified Participants'
Earnings.

(c) the Maximum Disparity percentage shall be the lesser of (i)
5.7% or (ii) the applicable percentage from Table B on page 9.

If the Plan's Integration Level is equal to the Social Security
Wage Base, the Maximum Disparity Percentage is 5.7%.

(3) In this Section 4.2, Earnings means Earnings as defined in
Section 2.13.

(d) Allocation of Forfeitures. Forfeitures shall be allocated
among the Employer Contribution Amounts of all Qualified
Participants in accordance with paragraph (b) or (c), whichever
applies to Employer contributions. Forfeitures may b allocated
pursuant to paragraphs (c)(1)(B), (c)(1)(C) and (c)(2)(A) only to
the extent that the limitation described therein has not been
fully utilized by the allocation of Employer contributions and
amounts reapplied under Section 6.1(d).

(e) Participant Contributions. Except in the case of a Variable
Plan in which the Employer has provided in the Plan Agreement for
nondeductible Participant contributions, the Plan will accept no
such contributions for any Plan Year beginning after the Plan
Year in which the Employer adopts this Plan. Nevertheless, a
Participant Contribution Account shall be maintained in any Plan
which accepted nondeductible Participant contributions for any
Plan Year beginning after December 31, 1986, and such
contributions, together with any matching contributions (as
defined in Section 401(m)(4) of the Code), shall be limited so as
to meet the nondiscrimination test of Section 401(m) of the Code.
Rules applicable to Participant contributions to a Variable Plan
in Plan Years beginning after the adoption of this Plan are set
froth in Section 5.9. All Participant Contribution Accounts will
be fully vested at all times.

4.3 Provisions Applicable Only to Money Purchase Pension Plans.

(a) Amount of Annual Contributions. The Employer will contribute
for each Plan Year an amount described in paragraph (b) or (c)
below, whichever is applicable, less any amounts reapplied for
the Plan Year under Section 6.1(d), not to exceed the amount
deductible under Section 404(c) of the Code. In a Variable Plan,
if the Employer so elects in the Plan Agreement, the amount of
Forfeitures occurring in a Plan year shall be applied to reduce
the Employer's contribution by a like amount, and such
Forfeitures shall be treated as a portion of the Employer
contribution for purposes of paragraphs (b) and (c).

(b) Allocation of Contributions: General Rule. The Employer
shall contribute an amount equal to the product of the Earnings
of all Qualified Participants and the Base Contribution
Percentage, and the contribution shall be allocated as of the
last day of the Plan Year among the Employer Contribution
Accounts of all Qualified Participants in the ratio that the
Earnings of each Qualified Participant bears to the Earnings of
all Qualified Participants. This general rule does not apply to
a plan that is integrated with Social Security.

(c) Plans Integrated with Social Security. If the Employer has
elected in the Plan Agreement to integrate the Plan with Social
Security, the Employer shall contribute an amount equal to the
sum of the following amounts, and the contribution shall be
allocated as of the last day of the Plan Year as follows:

(1) To the Employer Contribution Account of each Qualified
Participant, an amount equal to the product of the Base
Contribution Percentage and his Earnings, and

(2) To the Employer Contribution Account of each Qualified
Participant who has Excess Earnings, the product of his Excess
Earnings, and the lesser of (i) the Base Contribution Percentage
or (ii) the Money Purchase Maximum Disparity Percentage
determined under paragraph (d).

(3) The Base Contribution Percentage shall be no less than three
percent in either of the following circumstances: (i) any Plan
Year of a Standard Plan for which the Plan Agreement does not
specify that the Employer will perform annual Top-Heavy testing,,
or (ii) any Plan Year in which the plan is required to provide a
minimum allocation for the Plan Year pursuant to the Top-Heavy
Plan rules of Article 15.

(d) The Money Purchase Maximum Disparity Percentage is equal to
the lesser of (i) 5.7% or (ii) the applicable percentage from
Table C on this page.

If the Plan's Integration level is equal to the Social Security
Wage Base, the Money Purchase Maximum Disparity Percentage is
5.7%.

(e) In this Section 4.3, Earnings means Earnings as defined in
Section 2.13.

(f) Separate Allocation of Forfeitures. If the Employer has not
elected in the Plan Agreement to use Forfeitures to reduce the
amount of its contributions, Forfeitures shall be allocated among
the Employer Contribution Accounts of all Qualified Participants
in proportion to their earnings.

4.4 Paired Plans. An Employer may adopt as paired pans Putnam
Standard Profit Sharing Plan (Plan Agreement #001) and Putnam
Standard Money Purchase Pension Plan (Plan Agreement #002). Only
one of the two paired plans may be integrated with Social
Security. In any Plan Year in which Putnam Standard paired plans
are top-heavy, each non-key employee who is eligible to
participate in both plans will have allocated to his Account in
the Putnam Standard Money Purchase Pension Plan a minimum
contribution that meets the requirements of Section 12.3.

4.5 Rollover Contributions. An Employee in an eligible class may
contribute at any time cash or other property (which is not a
collectible within the meaning of Section 408(m) of the Code)
acceptable to the Trustee representing qualified rollover amounts
under Sections 402,403, or 408 of the code. Amounts so
contributed shall be credited to a Rollover Account for the
Participant.

4.6 No Deductible Employee contributions. The Plan Administrator
shall not accept deductible employee contributions for a taxable
year beginning after December 31, 1986. In the event that the
Plan is adopted as an amendment of a plan which previously
accepted such contributions for any Participant, the Employer
will establish and maintain (or cause to be established and
maintained) a separate account in which shall be recorded the
amount of such contributions and the income, expenses, gains and
losses incurred thereon. Such an account shall be nonforfeitable
at all times and shall in no event be used to pay premiums on any
life insurance policy. Subject to Article 10, Joint and Survivor
Annuity Requirements, the Participant may withdraw any part of
such an account at any time upon written request to the Plan
Administrator.

Table A
If the Plan s Integration Level is more than:
$0
The greater of $10,000 or 20% of the Social Security Wage Base
80% of the Social Security Wage Base

But not more than:
The greater of $10,000 or 20% of the social Security Wage Base
80% of the social Security Wage Base
Less than the Social Security Wage Base

The applicable percentage is:
2.7%
1.3%
2.4%

Table B
If the Plan s Integration Level is more than:
$0
The greater of $10,000 or 20% of the Social Security Wage Base
80% of the Social Security Wage Base

But not more than:
The greater of $10,000 or 20% of the social Security Wage Base
80% of the social Security Wage Base
Less than the Social Security Wage Base

The applicable percentage is:
5.7%
4.3%
5.4%

Table C
If the Plan s Integration Level is more than:
$0
The greater of $10,000 or 20% of the Social Security Wage Base
80% of the Social Security Wage Base

But not more than:
The greater of $10,000 or 20% of the social Security Wage Base
80% of the social Security Wage Base
Less than the Social Security Wage Base

The applicable percentage is:
5.7%
4.3%
5.4%

ARTICLE V:
Cash or Deferred Arrangement under Section 401(k)(CODA)

5.1 Applicability; Allocations. this Article 5 applies to any
profit sharing plan for which the Employer has elected in the
Plan Agreement to include a CODA. The Employer may specify in
the Plan Agreement that contributions will be made to the Plan
only under the CODA, or that contributions may be made under
Section 4.2 as well as under the CODA. Allocations to
Participants' Accounts of contributions made pursuant to this
Article 5 shall be made as soon as administratively feasible
after their receipt by the Trustee, but in any case no later than
as of the last day of the Plan Year for which the contributions
were made.

5.2 CODA Participation. Each Employee who has met the
eligibility requirements of Article 3 may make Elective Deferrals
to the Plan by completing and returning to the Plan Administrator
a Deferral Agreement form which provides that the Participant's
cash compensation from the Employer will be reduced by the amount
indicated in the Deferral Agreement, and that the Employer will
contribute an equivalent amount to the Trust on behalf of the
Participant.. The following rules will govern Elective
Deferrals:

(a) Subject to the limits specified in the Plan Agreement and set
forth in Section 5.3, a Deferral Agreement may apply to any
amount or percentage of either or both of the Earnings payable to
a Participant in each regular payroll period of the Employer, or
one or more bonuses payable to a Participant from time to time as
specified by the Employer.
<PAGE>
(b) In accordance with such reasonable rules as the Plan
Administrator shall specify, a Deferral Agreement will become
effective as soon as is administratively feasible after the
Deferral Agreement is returned to the Plan Administrator, and
will remain effective until it is modified or terminated. no
Deferral Agreement may become effective retroactively.

(c) A Participant may modify his Deferral Agreement by competing
and returning to the Plan Administrator a new Deferral Agreement
form as of any of the dates specified in the Plan Agreement, and
any such modification will become effective as described in
paragraph (b).

(d) A Participant may terminate his Deferral Agreement at any
time upon advance written notice to the Plan Administrator, and
any such termination will become effective as described in
paragraph (b).

5.3 Annual Limit on Elective Deferrals. During any taxable year
of a Participant, his Elective Deferrals under the Plan and any
other qualified plan of an Affiliated Employer shall not exceed
the dollar limit contained in Section 402(g) of the Code in
effect at the beginning of the taxable year, a Participant's
Elective Deferrals for purposes of this Section 5.3 include all
Employer contributions made on his behalf pursuant to an election
to defer under any qualified CODA as described in Section 401(k)
of the Code, any simplified employee pension cash or deferred
arrangement (SARSEP) as described in Section 401(h)(1)(B) of the
Code, any plan described under Section 501(c)(18) of the Code,
and any Employer contributions made on behalf of the Participant
for the purchase of an annuity contract under Section 403(b) of
the Code pursuant to a salary reduction agreement. The amount of
Elective Deferrals of a Participant who receives a hardship
distribution pursuant to Section 5.14 shall be reduced, for the
taxable year next following the distribution, by the amount of
Elective Deferrals made in the taxable year of the hardship
distribution.

5.4 Distribution of Excess Elective Deferrals. "Excess Elective
Deferrals" means those Elective Deferrals described in Section
5.3 that are incredible in a Participant's gross income under
Section 402(g) of the Code, to the extent that the Participant's
aggregate elective deferrals for a taxable year exceed the dollar
limitation under that Code Section. Excess Elective Deferrals
shall be treated as Annual Additions under the Plan, whether or
not they are distributed under this Section 5.4 . A Participant
may designate to the Plan any Excess Elective Deferrals made
during his taxable year by notifying the Employer on or before
the following March 15 of the amount of the Excess Elective
Deferrals to be so designated. A Participant who has Excess
Elective Deferrals for a taxable year, taking into account only
his Elective Deferrals under the Plan and any other plans of the
Affiliated Employers, shall be deemed to have designated the
entire amount of such Excess Elective Deferrals.

Notwithstanding any other provision of the Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto,
shall be distributed no later than April 15 to any Participant to
whose Account Excess Elective Deferrals were designated or deemed
designated for the preceding year. The income or loss allocable
to Excess Elective Deferrals is the income or loss allocable to
the Participant's Elective Deferral Account for the taxable year
multiplied by a fraction, the numerator of which is the
Participant's Account balance attributable to Elective Deferrals
without regard to any income or loss occurring during the year.

To the extent that the return to a Participant of his Elective
Deferrals would reduce an Excess Amount (as defined in Section
6.5(f)), such Excess Deferrals shall be distributed to the
Participant in accordance with Article 6.

5.5 Satisfaction of ADP and ACP Tests. In each Plan Year, the
Plan must satisfy the ADP test described in Section 5.11. the
Employer may cause the Plan to satisfy the ADP or ACP test or
both test for a Plan Year by any of the following methods or by
any combination of them:

(a) By the distribution of Excess Contributions in accordance
with Section 5.7, or the distribution of Excess Aggregate
Contributions in accordance with Section 5.12, or both;

(b) In a Variable Plan that permits all Participants to make
Participant Contributions, by recharacterization of Excess
Contributions in accordance with Section 5.10; or

(c) If the Employer has so elected in the Plan Agreement, by
making Qualified Nonelective Contributions or Qualified Matching
Contributions or both, in accordance with the Plan Agreement and
this Section 5.5.

5.6 Actual Deferral Percentage Test Limit. The Actual Deferral
Percentage (hereinafter "ADP") for Participants who are Highly
Compensated Employees for each Plan Year and the ADP for
Participants who are Non-Highly Compensated Employees for the
same Plan Year must satisfy one of the following tests:

(a) The ADP for Participants who are Highly Compensated Employees
for the Plan Year shall not exceed the ADP for Participants who
are Non-Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or

(b) The ADP for Participant who are Highly Compensated Employees
for the Plan Year shall not exceed the ADP for Participants who
are Non-Highly Compensated Employees for the same plan Year
multiplied by 2.0, provided that the ADP for Participants who are
Highly compensated Employees does not exceed the ADP for
Participants who are Non-Highly Compensated employees by more
than two percentage points.

The following special rules shall apply to the computation of the
ADP:

(c) Actual Deferral Percentage means, for a specified group of
Participants for a Plan Year, the average of the ratios
(calculated separately for each Participant in the group) of (1)
the amount of Employer contributions actually paid over to the
Trust on behalf of the Participant for the Plan Year to (2) the
Participant s Earnings for the Plan Year (or, provided that the
Employer applies this method to all Employees for a Plan Year the
Participant s Earnings for that portion of the Plan Year during
which he was eligible to participant in the Plan). Employer
contributions on behalf of any Participant shall include: (i) his
Elective Deferrals, including Excess Elective Deferrals, but
excluding Elective Deferrals that are taken into account in the
Average contribution Percentage test described in Section 5.11
(provided the ADP test is satisfied both with and without
exclusion of these Elective Deferrals), and excluding Elective
Deferrals returned to a Participant to reduce an Excess Amount as
defined in Section 6.5(f); and (ii) if the Employer has elected
to make Qualified Nonelective Contributions, such amount of
Qualified Nonelective Contributions, if any, as shall be
necessary to enable the Plan to satisfy the ADP test; and (iii)
if the Employer has elected to make Qualified Matching
Contributions, such amount of Qualified Matching Contributions,
if any, as shall be necessary to enable the Plan to satisfy the
ADP. For purposes of computing Actual Deferral Percentages, an
Employee who would be a Participant but for his failure to make
Elective Deferrals shall be treated as a Participant on whose
behalf no Elective Deferrals are made.

(d) In the event that the Plan satisfies the requirement of
Sections 401(k), 401(a)(4), or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other
plans satisfy the requirement s of such sections of the Code only
if aggregated with the Plan, then this Section 5.6 shall be
applied by determining the ACP of Employees as if all such plans
were a single plan. For Plan years beginning after December 31,
1989, plans may be aggregated in order to satisfy Section 401(k)
of the Code only if they have the same Plan Year.

(e) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Elective
Deferrals (and Qualified Nonelective contributions or Qualified
Matching Contributions, or both, if these are treated as Elective
Deferrals for purposes of the ADP test) allocated to his Accounts
under two or more CODAs described in Section 401(k) of the Code
that are maintained by the Affiliated Employers shall be
determined as if such Elective Deferrals (and, if applicable,
such Qualified Nonelective Contributions or Qualified Matching
Contributions, or both) were made under a single CODA. If a
Highly Compensated Employee participates in two or more CODAs
that have different Plan Years, all CODAs ending with or within
the same calendar year shall be treated as a single CODA.

(f) For purposes of determining the ADP of a Participant who is a
5-percent owner or one of the ten most highly-paid Highly
Compensated Employees, the Elective Deferrals (and Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, if these are treated as Elective Deferrals for purposes of
the ADP test) and the Compensation for the Plan Year of his
Family Members (as defined in section 414(q)(6) of the Code).
Family Members of such Highly Compensated Employees shall be
disregarded as separate employees in determining the ADP both for
Participants who are Non-Highly Compensated Employees and for
Participants who are Highly Compensated Employees.

(g) For purposes of the ADP test, Elective Deferrals , Qualified
Nonelective Contributions and Qualified Matching Contributions
must be made before the last day of the 12 moth period
immediately following the Plan Year to which those contributions
relate.

(h) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified
Nonelective Contributions and Qualified Matching Contributions,
or both, used in satisfying the test.

(i) The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.

5.7 Distribution of Excess Contributions. "Excess Contributions"
means, with respect to any Plan Year, the excess of:

(a) The aggregate amount of employer contributions actually taken
into account in computing the ADP of Highly Compensated Employees
for the Plan Year, over

(b) The maximum amount of Employer contributions permitted by the
ADP test, determined by reducing contributions made on behalf of
Highly Compensated Employees in order of their ADPs, beginning
with the highest of such percentages.

Notwithstanding any other provision of the Plan, Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each
Plan Year to Participants to whose Accounts Excess Contributions
were allocated for the preceding Plan Year; provided, however,
that in the case of a Variable Plan in which the Employer has
elected in the Plan agreement to re characterize Excess
contributions pursuant to Section 5.10, distribution shall be
made pursuant to this Section 5.7 to the extent that excess
contributions are not so recharacterized. If such excess amounts
are distributed more than two an one-half months after the last
day of the Plan Year in which the excess amounts arose, an excise
tax equal to ten percent of the excess amounts will be imposed on
the Employer maintaining the Plan. Such distributions shall be
made to Highly Compensated Employees on the basis of the
respective portions of the Excess Contributions attributable to
each of them. Excess Contributions shall be allocated to
Participants who are subject to the family member aggregation
rules of Section 414(q)(6) of the Code in the manner prescribed
by the regulations under that Section. Excess Contributions
(including any amounts recharacterized in accordance with Section
5.10) shall be treated as Annual Additions under the Plan.

the income or loss allocable to Excess Contributions is the
income or loss allocable to the Participant s Elective Deferral
Account (and, if applicable, his Qualified Nonelective Account or
Qualified Matching Account or both) for the Plan Year multiplied
by a faction, the numerator of which is the Participant s Excess
Contributions for the year and the denominator of which is the
Participant s account balance attributable to Elective Deferrals
(and Qualified Nonelective contributions or Qualified Matching
Contributions, or both, if any of these are included in the ADP
test) without regard to any income or loss occurring during such
Plan Year.

Excess Contributions shall be distributed from the Participant's
Elective Deferral Account and Qualified Matching Account (if
applicable) in proportion to the Participant's Elective Deferrals
and Qualified Matching Contributions (to the extent used in the
ADP test) for the Plan Year. Excess Contributions shall be
distributed from the Participant's Qualified Nonelective Account
only to the extent that such Excess Contributions exceed the
balance in the Participant's Elective Deferral Account and
Qualified Matching Account.

5.8 Matching Contributions. If so specified in the Plan
Agreement, the Employer will make Matching Contributions to the
Plan in accordance with the Plan Agreement, but no Matching
Contribution shall be made with respect to an Elective Deferral
that is returned to a Participant because it represents an Excess
Elective Deferral, an Excess Contribution or an Excess Amount (as
defined in Section 6.5(f)); or with respect to a Participant
contribution that is returned to a Participant because it
represents an Excess Aggregate Contribution or an Excess Amount
(as defined in Section 6.5(f); and if a Matching Contribution has
nevertheless been made with respect to such an Elective Deferral
or Participant contribution, the Matching Contribution shall
become a Forfeiture as of the end of the Plan Year of which it
was contributed, notwithstanding any other provision of the Plan.

(a)Employer Matching Contribution (Variable Plans Only).
Matching Contributions will be allocated among the employer
Matching Accounts of Participants in proportion to their
Elective Deferrals or their Participant Contributions, as
specified by the Employer in the Plan Agreement. Employer
Matching Accounts shall become vested According to the vesting
schedule specified in the Plan Agreement, but regardless of that
schedule shall be fully vested upon the Participant s Retirement
(or, if earlier, his fulfillment of he requirements for early
retirement, if any, or attainment of the normal retirement age
specified in the Plan Agreement), his death during employment
with an Affiliated Employer, an in accordance with Section 19.3.
Forfeitures of Employer Matching Contributions, other than Excess
Aggregate Contributions, shall be made in accordance with Section
8.3. Forfeitures of Employer Matching Accounts for a Plan Year
shall be applied to reduce the total Employer Matching
Contribution for the Plan Year, or allocated among the Employer
Matching Accounts of Participants in addition to the Employer
Matching Contribution for the Plan Year, as elected by the
Employer in the Plan Agreement.

(b) Qualified Matching Contributions. Qualified Matching
Contributions will be allocated among the Qualified Matching
contribution Accounts of Participant as specified by the Employer
in the Plan Agreement. In a Standard Plan, a Qualified Matching
Contribution forfeited pursuant to the first sentence of this
Section 5.8 will be applied to reduce the aggregate Matching
Contributions otherwise required of the Employer.

5.9 Participant Contributions (Variable Plans Only). If so
specified in the Plan Agreement for a Variable Plan, a
Participant may make nondeductible Participant contributions to
the Plan in accordance with the Plan Agreement and subject to the
terms and conditions of this Article 5. Participant
Contributions will be allocated to the Participant Contributions
Account of the contributing Participant. All Participant
Contribution Accounts will be fully vested at all times.

5.10 Recharacterization of Excess Contributions (Variable Plans
Only). Provided that the Plan Agreement permits all Participants
to make Participant Contributions, the Employer may treat a
Participant's Excess Contributions to a Variable Plan as an
amount distributed to the Participant and then contributed by the
Participant to the Plan as a Participant Contribution.
Recharacterized amounts will remain nonforfeitable and subject to
the same distribution requirements as Elective Deferrals.
Amounts may not be recharacterized by a highly compensated
Employee to the extent that a recharacterized amount in
combination with other Participant contributions made by that
Employee would exceed any stated limit under the Plan on
Participant Contributions. Recharacterization must occur no
later than two and one-half months after the last day of the Plan
Year in which the Excess contributions arose, and is deemed to
occur no earlier than the date the last Highly Compensated
employee is informed in writing by the Employer of the amount
recharacterized and the consequences thereof. Recharacterized
amounts will be taxable to the Participant for his tax year in
which the Participant would have received them in cash.

5.11 Average Contribution Percentage Test Limit and Aggregate
Limit. the Average Contribution Percentage (hereinafter "ACP")
for Participants who are High Compensated Employees for each Plan
year and the ACP for Participants who are Non-Highly Compensated
Employees for the same Plan Year must satisfy one of the
following tests:

(a) The ACP for Participants who are Highly Compensated Employees
for the Plan Year shall not exceed the ACP for Participants who
are Non-Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or

(b) The ACP for Participants who are Highly Compensated Employees
for the Plan Year shall not exceed the ACP for Participants who
are Non-Highly Compensated Employees for the same Plan year
multiplied by two(2), provided that the ACP for Participants who
are Highly compensated Employees does not exceed the ACP for
Participants who are Non-Highly Compensated Employees by more
than two percentage points.

The following rules shall apply to the computation of the ACP:
(c) Average Contribution Percentage means the average of the
Contribution Percentages of the Eligible Participants in a group.

(d) Contribution Percentage means the ratio (expressed as a
percentage) of a Participant's Contribution Percentage Amounts to
the Participant's Earnings for the Plan Year (or, provided that
the Employer applies this method to all Employees for a Plan
Year, the Participant's Earnings for that portion of the Plan
Year during which he was eligible to participate in the Plan).

(e) Contribution Percentage Amounts means the sum of the
Participant Contributions, Employer Matching Contributions, and
Qualified Matching Contributions (to the extent not taken into
account for purposes of the ADP test) made under the Plan on
behalf of the Participant for the Plan Year. such Contribution
Percentage Amounts shall include Forfeitures of Excess Aggregate
Contributions or Employer Matching Contributions allocated to the
Participant's Account, taken into account in the year in which
the allocation is made. If the Employer has elected in the Plan
Agreement to make Qualified Nonelective Contributions, such
amount of Qualified Nonelective Contributions, if any, as shall
be necessary to enable the Plan to satisfy the ACP test shall be
included in the Contribution Percentage Amounts. Elective
Deferrals shall also be included in the contribution Percentage
Amounts to the extent, if any, needed to enable the Plan to
satisfy the ACP test, so long as the ADP test is met before the
Elective Deferrals are used in the ACP test, and continues to be
met following the exclusion of those Elective Deferrals that are
used to meet the ACP test.

(f) Eligible Participant means any Employee who is eligible to
make a Participant Contribution (or an Elective Deferral, if
Elective Deferrals are taken into account in the calculation of
the Contribution Percentage), or to receive an Employer Matching
Contribution (or a Forfeiture thereof) or a Qualified Matching
contribution. If a Participant Contribution is required as a
condition of participation in the Plan, any Employee who would be
a Participant in the Plan if he made such a contribution shall be
treated as an Eligible Participant on behalf of whom no
Participant Contributions are made.

(g) Aggregate Limit means the sum of (i) 125 percent of the
greater of the ADP of the Non-Highly Compensated Employees for
the Plan Year, or the ACP of Non-Highly Compensated Employees
under the Plan subject to Code Section 401(m) for the Plan Year
of the CODA, and (ii) the lesser of 200 percent of, or two plus,
the lesser of the ADP or ACP.

(h) If one or more Highly Compensated Employees participate in
both a CODA and a plan subject to the ACP test maintained by an
Affiliated Employer, and the sum of the ADP and ACP of those
Highly Compensated Employees subject to either or both test s
exceeds the Aggregate Limit, then the ACP of those Highly
Compensated Employees who also participate in a CODA will be
reduced (beginning with the Highly Compensated Employee whose
ACP is the highest) so that the Aggregate Limit is not exceeded.
The amount by which each Highly Compensated Employee's
Contribution Percentage Amounts is reduced shall be treated as an
Excess Aggregate contribution. In determining the Aggregate
Limit, the ADP and ACP of Highly Compensated Employees are
determined after any corrections required to meet the ADP and ACP
tests. The Aggregate Limit will be considered satisfied if both
the ADP and ACP of the Highly compensated Employees does not
exceed 1.25 multiplied by the ADP and ACP of the Non-Highly
Compensated Employees.

(i) For purposes of this section, the Contribution Percentage for
any Participant who is a Highly Compensated Employee and who is
eligible to have Contribution Percentage Amounts allocated to his
account under two or more plans described in Section 401(k) of
the Code, that are maintained by an Affiliated Employer, shall be
determined as if the total of such Contribution Percentage
Amounts was made under each plan. If a Highly Compensated
Employee participates in two or more CODAs that have different
plan years, all CODAs ending with or within the same calendar
year shall be treated as a single CODA.

(j) In the event that the Plan satisfies the requirements of
Sections 401(m), 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of such sections of the Code only
if aggregated with the Plan, then this Section 5.10 shall be
applied by determining the contribution Percentage of Employees
as if all such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated in
order to satisfy Section 401(m) of the Code only if they have the
same Plan Year.

(k) For purposes of determining the Contribution Percentage of a
Participant who is a five-percent owner or one of the ten most
highly-paid Highly Compensated Employers, the Contribution
Percentage Amounts and Compensation of the Participant shall
include the Contribution Percentage Amounts and Compensation for
the Plan Year of Family Members (as defined in Section 414(q)(6)
of the Code). Family Members of such Highly Compensated
Employees shall be disregarded as separate employees in
determining the Contribution Percentage both for Participants who
are Non-Highly Compensated Employees and for Participants who are
Highly Compensated Employees.

(l) For purposes of the ACP test, Participant Contributions are
considered to have been made in the Plan Year in which they were
contributed to the Trust. Matching Contributions and Qualified
Nonelective Contributions will be considered made for a Plan Year
if made no later than the end of the 12-month period beginning on
the day after the close of the Plan Year.

(m) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, used in the ACP test.

(n) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.

5.12 Distribution of Excess Aggregate Contributions.
Notwithstanding any other provision of the Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable
thereto, shall be forfeited if forfeitable, or if not
forfeitable, distributed no later than the last day of each Plan
Year to Participants to whose accounts such Excess Aggregate
Contributions were allocated for the preceding Play Year. Excess
Aggregate Contributions shall be allocated to Participants whoa
re subject to the family member aggregation rules of Section
414(q)(6) of the Code in the manner prescribed by the
regulations. If excess amounts attributable to Excess Aggregate
Contributions are distributed more than two and on-half months
after the last day of the Plan Year in which such excess amounts
arose, an excise tax equal to ten percent of the excess amount
will be imposed on the Employer maintaining the Plan. j Excess
Aggregate Contributions shall be treated as Annual Additions
under the Plan.

The income or loss allocable to Excess Aggregate Contributions is
the income or loss allocable to the Participant's Participant
Contribution Account, Employer Matching Contribution Account (if
any, and if all amounts therein are not used in the ADP test),
and, if applicable, Qualified Nonelective Account and Elective
Deferral Account for the Plan Year, multiplied by a fraction, the
numerator of which is the Participant's Excess Aggregate
Contributions for the year and the denominator of which is the
Participant's account balance(s) attributable to Contribution
Percentage Amounts without regard to any income or loss occurring
during the Plan Year.

Forfeitures of Excess Aggregate Contributions shall either be
reallocated to the accounts of Non-Highly Compensated Employees
or applied to reduce Employer contributions, as elected by the
Employer in the Plan Agreement.

Excess Aggregate Contributions shall be forfeited if forfeitable,
or distributed on a prorata basis form the Participant's
Participant Contribution Account, Employer Matching Account, and
Qualified Matching Account (and, if applicable, the Participant's
Qualified Nonelective Account or Elective Deferral Account, or
both).

Excess Aggregate Contributions means, with respect to any Plan
Year, the Excess of:

(a) The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution Percentage
and actually mad on behalf of Highly Compensated Employees for
the Plan Year, over

(b) The maximum Contribution Percentage Amounts permitted by the
ACP test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of their Contribution
Percentages, beginning with the highest of such percentages).

Such determination shall be made after first detraining Excess
Elective Deferrals pursuant to Section 5.4, and then determining
Excess Contributions pursuant to Section 5.7.

5.13 Restriction on Distributions. No distribution may be made
from a Participant's Elective Deferral Account, Qualified
Nonelective Account or Qualified Matching Account until the
occurrence of one of the following events:

(a) The Participant's Disability, death or termination of
employment with the Affiliated Employer;

(b) Termination of the Plan without the establishment of another
defined contribution plan;

(c) If the Plan is a profit sharing plan, the Participant's
attainment of age 591/2 (if the Employer has elected in the Plan
Agreement t permit such distributions); or
<PAGE>
(d) In the case of an Employer that is a corporation, the
disposition by the Employer to an unrelated entity of (i)
substantially all of the assets (within the meaning of Section
409(d)(2) of the Code) used in a trade or business of the
Employer, if the Employer continues to maintain the Plan after
the disposition, but only with respect to Employees who continue
employment with the entity acquiring such assets; or (ii) the
Employer's interest in a subsidiary (within the meaning of
Section 409(d)(3) of the Code), if the Employer continues to
maintain the Plan after the disposition, but only with respect to
Employees who continue employment with such subsidiary.

In addition, if the Employer has elected in the Plan Agreement to
permit such distributions, a distribution may be made from a
Participant's Elective Deferral Account in the event of his
financial hardship as described in Section 5.14. All
distributions upon any of the events listed above are subject to
the conditions of Article 10, Joint and Survivor Annuity
Requirements.

5.14 Hardship Distributions. If the Employer has so elected in
the Plan Agreement, upon a Participant's written request the
Employer may permit a distribution from his Elective Deferral
Account (and, in a Variable Plan, from his Employer Matching
Account). The terms and conditions of Section 12.2 and the
special vesting rule contained in Section 8.4 shall apply to
hardship distributions from an Employer Contribution Account or
and Employer Matching Account. The further terms of this Section
5.14 shall apply to hardship distributions from an Elective
Deferral Account. No hardship distribution shall be made from a
Qualified Nonelective Account or Qualified Matching Account.

(a) The maximum amount that may be distributed on account of
hardship from an Elective Deferral Account after December 31,
1988, shall not exceed the sum of (1) the amount credited to the
Account as of December 31, 1988, and (2) the aggregate amount of
the Elective Deferrals made by the Participant after December 31,
1988, and before the hardship distribution.

(b) Hardship distributions shall be permitted only on account of
the following financial needs:

(1) Expenses for medical care described in section 213(d) of the
Code for the Participant, his spouse, children, and dependents,
or necessary for these persons to obtain such care;

(2) Purchase of the principal residence of the Participant
(excluding regular mortgage payments);

(3) Payment of tuition and related educational fees for the
upcoming 12 months of postsecondary education for the
Participant, his spouse, children, or dependents; or

(4) Payments necessary to prevent the Participant's eviction
from, or the foreclosure of a mortgage on, his principal
residence.

(c) Hardship distributions shall be subject to the spousal
consent requirements contained in Sections 401(a)(11) and 417 of
the Code, to the same extent that those requirements apply to a
Participant pursuant to Section 10.1.

(d) A hardship distribution will be made to a Participant only
upon satisfaction of the following conditions:

(1) The Participant has obtained all nontaxable loans and all
distributions other than hardship distributions available to him
form all plans maintained by the Affiliated Employers;

(2) The hardship distribution does not exceed the amount of the
Participant's financial need as described in paragraph (b) plus
any amounts necessary to pay federal, state, and local income
taxes and penalties reasonably anticipated to result from the
distribution;

(3) All plans maintained by the Affiliated Employers provide that
the Participant's Elective Deferrals and Participant
contributions will be suspended for a period of 12 months
following his receipt of a hardship distribution; and

(4) All plans maintained by the Affiliated Employers provide that
the amount of Elective Deferrals that the Participant may make in
his taxable year immediately following the year of a hardship
distribution will not exceed the applicable limit under Section
402(g) of the Code for the taxable year, reduced by the amount of
Elective Deferrals made by the Participant in the taxable year of
the hardship distribution.

5.15 Special Effective Dates. If the Plan is adopted as an
amendment of an existing plan, the provisions of Sections 5.3 and
Section 5.7 through 5.11 are effective as of the first day of the
first Plan Year beginning after December 31, 1986.

ARTICLE VI:
Limitations on Allocations

6.1 No Additional Plan. If the Participant doe not participate
in and has never participated in another qualified plan, or a
welfare benefit fund, (as defined in Section 419(e) of the Code),
or an individual medical account (as defined in Section 415(1)(2)
of the Code) which provides an Annual Addition as defined in
Section 6.5(a), maintained by an Affiliated Employer:

(a) The amount of Annual Additions which may be credited to the
Participant's accounts for any Limitation Year will to exceed the
lesser of the Maximum Annual Additions or any other limitation
contained in this Plan. If the Employer contribution that would
otherwise be contributed or allocated to the Participant Account
would cause the Annual Additions for the Limitation Year to
exceed the Maximum Annual Additions, the amount contributed or
allocated will be reduced so that the Annual Additions for the
Limitation Year will equal the Maximum Annual Additions.

(b) Before determining a Participant's actual Section 415
compensation for a Limitation Year, the Employer may determine
the Maximum Annual Additions for the Participant on the basis of
a reasonable estimation of the Participant's Section 415
Compensation for the Limitation Year, uniformly determined for
all Participants similarly situated.

(c) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Annual Additions for the Limitation
Year will be determined on the basis of the Participant's actual
Section 415 compensation for the Limitation Year.

(d) If pursuant to paragraph 6.1(c), or as a result of the
reallocation of Forfeitures, or as a result of a reasonable error
in determining the amount of Elective Deferrals that may be made
by a Participant, the Annual Additions exceed the Maximum Annual
Additions, the Excess Amount will be disposed of as follows:

(1) any nondeductible voluntary Participant Contributions and
Elective Deferrals, to the extent they would reduce the Excess
Amount, will be returned to the Participant.

(2) If after the application of (1) above an Excess Amount still
exists, and the Participant is covered by the Plan at the end of
the Limitation Year, the Excess Amount in the Participant's
Accounts will be used to reduce Employer contributions (including
any allocation of Forfeitures) for such Participant in the next
Limitation Year, and each succeeding Limitation Year if
necessary.

(3) If after the application of (1) above an Excess Amount still
exists, and the Participant is not covered by the Plan at the end
of a Limitation Year, the Excess Amount will be held unallocated
in a suspense account. The suspense account will be applied to
reduce future Employer contributions (including allocation of any
Forfeitures) for all remaining Participants in the next
Limitation Year, and each succeeding Limitation Year if
necessary.

(4) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section 6.1(d), it will
participate in the allocation of the Trust's investment gains and
losses. If a suspense account is in existence at any time during
a particular Limitation Year, all amounts in the suspense account
must be allocated and reallocated to Participants' Accounts
before any employer or any Employee contributions may be made to
the Plan for that Limitation Year. Excess amounts may not be
distributed to Participants or former Participants.

6.2 Additional Master or Prototype Plan. If in addition to this
Plan a Participant is covered under another qualified Master or
Prototype defined contribution plan or a welfare benefit fund (as
defined in Section 419(e) of the Code), or an individual medical
account (as defined in Section 415(1)(2) of the Code) which
provides and Annual Addition as defined in Section 6.5(a),
maintained by an Affiliated Employer during any Limitation Year:

(a) the annual Additions which may be credited to a Participant's
Accounts under this Plan for any such Limitation Year will not
exceed the Maximum Annual Additions reduced by the Annual
Additions credited to a Participant's accounts under the other
plans and welfare benefit funds for the same Limitation year. If
the annual Additions with respect to the Participant under other
defined contribution plans and welfare benefit funds maintained
by an Affiliated Employer are less than the Maximum Annual
Additions, an the Employer contribution that would otherwise be
contributed or allocated to the Participant's Accounts under this
Plan would cause the Annual Additions for the Limitation year to
exceed this limitation, the amount contributed or allocated will
be reduced so that the Annual Additions under all such plans an
funds for the Plan Year will equal the Maximum Annual Additions.
If the Annual Additions with respect to the Participant under
such other defined contribution plans and welfare benefit fund in
the aggregate are equal to or greater than the Maximum Annual
Additions, no amount will be contributed or allocated to the
Participant's Accounts under this Plan for the Limitation Year.

(b) Before determining a Participant's actual Section 415
Compensation for a Limitation Year, the Employer may determine
the Maximum Annual Additions for the Participant in the manner
described in Section 6.1(b).

(c) As soon as is administratively feasible after the end of the
Plan Year, the Maximum Annual Additions for the Plan Year will b
determined on the basis of the Participant's actual Section 415
Compensation for the Plan Year.

(d) If, pursuant to Section 6.2(c) or as a result of the
allocation of Forfeitures, or as a result of a reasonable error
in determining the amount of Elective Deferrals that may be made
by a Participant, a Participant's Annual Additions under this
Plan and such other plans would result in an Excess Amount for a
Limitation Year, the Excess Amount will be deemed to consist of
the Annual Additions last allocated under any qualified Master or
Prototype defined contribution plan, except that Annual Additions
to any welfare benefit fund or individual medical account will be
deemed to have been allocated first regardless of the actual
allocation date.

(e) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation
date of another plan, the Excess Amount attributed to this Plan
will be the product of X and Y, where (X) is the total Excess
Amount allocated as of such date, and (Y) is the ratio of (1) the
Annual Additions allocated to the Participant for the Limitation
Year as of such date under this Plan to (2) the total Annual
Additions allocated to the Participant for the Limitation Year as
of such date under the is and all the other qualified Master or
Prototype defined contribution plans.

(f) Any Excess Amount attributed to this Plan will be disposed of
in the manner described in Section 6.1(d).

6.3 Additional Non-Master or Non-Prototype Plan. If the
Participant is covered under another qualified defined
contribution plan maintained by an Affiliated employer which is
not a Master or Prototype plan, Annual Additions which may be
credited to the Participant's Accounts under this Plan for any
Limitation year will be limited in accordance with Section 6.2 as
though the other plan were a Master or Prototype plan, unless the
Employer provides other limitations in the Plan Agreement.

6.4 Additional Defined Benefit Plan. If an Affiliated Employer
maintains, or at any time maintained, a qualified defined benefit
plan covering any Participant in this Plan, the sum of the
Participant's Defined Benefit Plan Fraction will not exceed 1.0
in any Limitation Year. The Annual Additions which may be
credited to the Participant's Accounts under this Plan for any
Limitation Year will be limited in accordance with the Plan
Agreement.

6.5 Definitions

(a) Annual Additions means the sum of the following amounts
credited to a Participant's Accounts for the Limitation Year:

(1) Employer contributions;

(2) For any Limitation Year beginning after December 31, 1986,
after-tax Employee contributions;

(3) Forfeitures;

(4) Amounts allocated after March 31, 1984, to any individual
medical account, as defined in Section 415(1)(2) of the Code,
which is part of a pension or annuity plan maintained by an
Affiliated Employer;

(5) Amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which
are attributable to past-retirement medical benefits allocated to
the separate account of a key Employee, as defined in Section
419(d)(3) of the Code, under a welfare benefit fund as defined in
Section 419(e) of the Code, maintained by an Affiliated Employer;
and

(6) In a Plan that includes a CODA, Excess Elective Deferrals,
Excess Contributions (including recharacterized Elective
Deferrals) and Excess Aggregate Contributions.

For this purpose, any Excess Amount applied under Sections 6.1(d)
or 6.2(e) in the Limitation Year to reduce Employer
contributions will be considered Annual Additions for such
Limitation Year. any rollover contribution will not be
considered an Annual Addition.

(b) Section 415 Compensation means, for a self-employed person,
his Earned Income; and for any other Participant, his "Form W-2
earnings" as defined in Section 2.8, if the Employer has elected
in item 4 of the Plan Agreement a definition of compensation
based on "Form W-2 earning"; or if the Employer has not so
elected, his wages, salaries, and fees for professional services
and other amounts received for personal services actually
rendered in the course of employment with the Employer
maintaining the Plan (including, but not limited to , commissions
paid salesmen, compensation for services o the basis of a
percentage of profits, commissions on insurance premiums, tips,
and bonuses), and excluding the following:

(1) Employer contributions to a plan of deferred compensation
which are not includible in the Participant's gross income for
the taxable year in which contributed, or Employer contributions
under a simplified Employee pension plan t the extent such
contributions are deductible by the Employee, or any
distributions from a plan of deferred compensations;

(2) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Participant either becomes freely transferable or is not longer
subject to a substantial risk of forfeiture;

(3) Amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and

(4) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) toward the purchase of an annuity described
in Section 403(b) of the Code (whether or not the amounts are
actually excludable from the gross income of the Participant).

For purposes of applying the limitations of this Article 6,
Section 415 Compensation for a Limitation year is the Section 415
compensation actually paid or includible in gross income during
such Limitation Year.

(c) Defined Benefit Fraction means a fraction, the numerator of
which is the sum of the Participant's Projected Annual Benefits
under al the defined benefit plans (whether or not terminated)
maintained by the Affiliated Employers, and the denominator of
which is the lesser of 125 percent of the dollar limitation in
effect for the Limitation Year under Sections 415(b) and (d) of
the Code, or 140 percent of the Participant's Highest Average
Compensation including any adjustments under Section 415(b) of
the Code. Notwithstanding the foregoing, if the Participant was
a Participant as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined benefit
plans maintained by an Affiliated Employer which were in
existence on May 6, 1986, the denominator of this fraction will
not be less than 125 percent of the sum of the annual benefits
under such plans which the Participant had accrued as of the
close of the last Limitation Year beginning before January 1,
1987, disregarding any change in the terms and conditions of the
Plan after May 5, 1986,. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate
satisfied the requirements of Section 415 of the Code for all
Limitation Years beginning before January 1, 1987.

(d) Defined Contribution Dollar Limitation means $30,000 or if
greater, one-fourth of the defined benefit dollar limitation set
forth in Section 415(b)(1) of the Code as in effect for the
Limitation Year.

(e) Defined Contribution Faction means a fraction, the numerator
of which is the sum of the Annual Additions to the Participant's
accounts under all the defined contribution plans (whether or not
terminated) maintained by Affiliated Employers for the current
and all prior Limitation Years (including the Annual Additions
attributable to the Participant's nondeductible Employee
contributions to all defined benefit plans, whether or not
terminated, maintained by the Affiliated Employers, and the
Annual Additions Attributable to all welfare benefit funds, as
defined in Section 419(e) of the Code, and individual medical
accounts as defined in Section 415(1)(2) of the Code), and the
denominator of which is the sum of the Maximum Annual Additions
for the current and all prior Limitation Years of service with
the Affiliated Employers (regardless of whether a defined
contribution plans was maintained by any Affiliated employer).
The Maximum Annual Additions in any Plan Year is the lesser of
125 percent of the dollar limitation determined under Section
415(b) and (d) of the Code in effect under Section 415(c)(1)(A)
of the Code, or 35 percent of the Participant's Section 415
Compensation for such year. If the Employee was a Participant as
of the end of the first day of the first Limitation Year
beginning after December 31, 1986 in one or more defined
contribution plans maintained by an Affiliated Employer which
were in existence on May 6, 1986, the numerator of this fraction
will be adjusted if the sum of this fraction and the Defined
Benefit Fraction would otherwise exceed 1.0 under the terms of
this Plan. Under the adjustment, an amount equal to the product
of the excess of the sum of the fractions over 1.0, multiplied by
the denominator of this fraction, will be permanently subtracted
from the numerator of this fraction. The adjustment is
calculated using the fractions as they would by computed as of
the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of
the Plan after May, 5, 1986, but using the Section 415 limitation
applicable to the first Limitation Year beginning on or after
January 1, 1987. The Annual Addition for any Limitation Year
beginning before January 1, 1987, shall not be recomputed to
treat 100% of nondeductible Employee contributions as Annual
Additions.

(f) Excess Amount means, with respect to any Participant, the
amount by which Annual Additions exceed the Maximum Annual
Additions.

(g) Highest Average Compensation means the average compensation
for the three consecutive Years of Service with the Employer that
produces the highest average. A Year of Service with the
Employer is the period of 12 consecutive months specified as the
Limitation Year in the Plan Agreement.

(h) Limitation Year means the period of 12 consecutive months
specified in the Plan Agreement. All qualified plans maintained
by the Employer must use the same Limitation Year. If the
Limitation Year is amended to a different period of 12
consecutive months, the new Limitation year must begin on a date
within the Limitation Year in which the amendment is made.

(i) Master or Prototype Plan means a plan the form of which is
the subject of a favorable opinion letter from the Internal
Revenue Service.

(j) Maximum Annual Additions, which is the maximum annual
addition that my be contributed or allocated to a Participant's
account under the plan for any Limitation year, means an amount
not exceeding the lesser of (a) the Defined Contribution Dollar
Limitation or (b) 25 percent of the Participant's Section 415
Compensation for the Limitation Year. The compensation
limitation referred to in (b) shall not apply to any contribution
for medical benefits (within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code) which is otherwise treated as an
Annual Addition under Section 415 (1)(1) or Section 419A(d)(2) of
the Code.

If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different period of 12
consecutive months, the Maximum Annual Additions will not exceed
the Defined contribution Dollar Limitation multiplied by the
following fraction:

number of months in the short Limitation Year
12

(k) Projected Annual Benefit means the annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity if
such benefit is expressed in a form other than a straight life
annuity or Qualified Joint and Survivor Annuity) to which the
Participant would be entitled under the terms of the plan
assuming:

(1) the Participant will continue employment until normal
retirement age under the Plan (or current age, if later), and

(2) The Participant's Section 415 Compensation for the current
Limitation year and all other relevant factors used to determine
benefits under the plan will remain constant for al future
Limitation Years.

ARTICLE VII:
Eligibility for Distribution of Benefits

7.1 Retirement. After his Retirement, the amount credited to a
Participant's Accounts will be distributed to him in accordance
with Article 9. The termination of a Participant's employment
with the Affiliated Employers after he has (i) attained the
normal retirement age specified in the Plan Agreement, (ii) in a
Variable Plan, fulfilled the requirement for early retirement (if
any) specified in the Plan Agreement, or (iii) become Disabled,
will constitute his Retirement. In a Variable Plan, upon a
Participant's Retirement (or, if earlier, his attainment of the
normal retirement age specified in the Plan Agreement or
fulfillment of the requirements for early retirement, if any,
specified in the Plan Agreement the participant's Accounts shall
become fully vested, regardless of the vesting schedule specified
by the Employer in the Plan Agreement. In a Variable Plan, a
Participant who separates from service with any vested balance in
his Accounts, after satisfying the service requirements for early
retirement (if any) is specified in the Plan Agreement) but
before satisfying the age requirement (if any is specified in the
Plan Agreement), shall be entitled to a fully vested early
retirement benefit upon his satisfaction of such age requirement.

7.2 Death. If a Participant dies before the distribution of his
Accounts has bee complete, his Beneficiary will be entitled to
distribution of benefits in accordance with Article 9. In a
Variable Plan, a Participant's Accounts will become fully vested
upon his death before termination of his employment with the
Affiliated Employers, regardless of the vesting schedule
specified by the Employer in the Plan Agreement.

A Participant may designate a Beneficiary by completing and
returning to the Plan Administrator a form provided for this
purpose. The form most recently complete and returned to the
Plan Administrator before the Participant's death shall supersede
any earlier form. If a Participant has not designated any
Beneficiary before his death, or if no Beneficiary so designated
survives the Participant, his Beneficiary shall be his surviving
spouse, or if there is no surviving spouse, his estate. A
married Participant in a profit sharing plan may designate a
Beneficiary other an his spouse only if his spouse consents in
writing to the designation, and the spouse's consent acknowledges
the effect of the consent and is witnessed by a notary public or
a representative of the Plan. The beneficiary or beneficiaries
named in the designation to which the spouse has so consented may
not be change without further written spousal consent unless the
terms of the spouse's original written consent expressly permit
such a change, and acknowledge that the spouse voluntarily
relinquish the consent to a specific beneficiary. the marriage
of a Participant shall nullify any designation of a beneficiary
previously executed by the Participant. If it is established to
the satisfaction of the Plan Administrator that the Participant
has no spouse or that the spouse cannot be located, the
requirement of spousal consent shall not apply. Any spousal
consent, or establishment that spousal consent cannot be
obtained, shall apply only to the particular spouse involved.

7.3 Other Termination of Employment. A Participant whose
employment terminates for any reason other than his Retirement or
death will be entitled to distribution, in accordance with
Article 9, of benefits equal to the amount of the vested balance
of his Accounts as determined under Article 8.

ARTICLE VIII:
Vesting

8.1 Vested Balance. The vested balance of a Participant's
Accounts will be determined as follows:

(a) General Rule. A Participant's Deductible Employee
Contribution Account, Participant Contribution Account and
Rollover Account, and in a Standard Plan, all of his Accounts,
shall be fully vested at all times. The vested portion of his
Employer Contribution Account in a Variable plan shall be equal
to the percentage that corresponds, in the vesting schedule
specified in the Plan Agreement (or, if the Plan has become
top-heavy, the vesting schedule determined under Section 15.5),
to the number of Years of Service credited to the Participant as
of the end of the Plan Year in which his employment terminates.

(b)Special Rules for CODA. In a Plan that includes a CODA, a
Participant's Elective Deferral Account, Qualified Nonelective
Account, and Qualified Matching Account shall be fully vested at
all times. The vested portion of his Employer Matching Account
in a Variable Plan shall be equal to the percentage that
corresponds, in the vesting schedule specified in the Plan
Agreement (or, if the Plan has become top-heavy, the vesting
schedule determined under Section 15.5), to the number of Years
of Service credited to the Participant as of the end of the Plan
Year in which his employment terminates.

(c) Retirement. In a Variable Plan, all of a Participant's
Accounts shall become fully vested upon his Retirement or his
earlier attainment of early retirement age (if any) or the normal
retirement age elected by the Employer in the Plan Agreement.

For so long as a former Employee does not receive a distribution
(or a deemed distribution) of the vested portion of his accounts,
the undistributed portion shall be held in a separate account
which shall be invested pursuant to Section 13.3 and shall share
in earning and losses of the Trust Fund pursuant to Section 13.4
in the same manner as the Accounts of active Participants.

8.2 Vesting of Accounts of Returned Former Employees (Variable
Plans Only). the following rules apply in determining the vested
portion of the Accounts of a Participant who incurs one or more
consecutive One-Year Vesting Breaks and then returns to
employment with an Affiliated Employer:

(a) If the Participant incurred fewer than five consecutive
One-Year Vesting Breaks, then all of his Years of Service will be
taken into account in determining the vested portion of his
Accounts, as soon as he has competed one Year of Service
following his return to employment.

(b) If the Participant incurred five or more consecutive One-Year
Vesting Breaks, the:

(1) No Year of Service competed after his return to employment
will be taken into account in determining the vested portion of
his Accounts as of any time before he incurred the first One-Year
Vesting Break;

(2) Years of Service completed before he incurred the first
One-Year Vesting Break will not be taken into account in
determining the vested portion of his Accounts as of any time
after his return to employment (i) unless some portion of his
Employer Contribution Account or Employer Matching Account had
become vested before he incurred the first One-Year Vesting
break, and (ii) until he has completed one Year of Service
following his return to employment; and

(3) Separate sub-accounts will be maintained for the
Participant's pre-break and post-break Employer Contribution
Account and Employer Matching Account, until both sub-accounts
become fully vested. Both sub-accounts will share in the
earnings and losses of the Trust Fund.

8.3 Forfeiture of Non-Vested Amounts (Variable Plans Only). The
portion of a former Employee's Accounts that has not become
vested under Section 8.1 shall become a Forfeiture in accordance
wit the following rules, and shall be reallocated in accordance
with Section 4.2 or 4.3 or Article 5 (whichever applies) no later
than the end of the Plan Year in which it becomes a Forfeiture.

(a) If Distribution Is Made. If any or all of the vested portion
of a Participant's Accounts is distributed in accordance with
Section 9.1 or 9.2 before the Participant incurs five consecutive
One-Year Vesting Breaks, the nonvested portion of his Accounts
shall become a Forfeiture in the Plan Year in which the
distribution occurs. For purposes of the Section 8.3, if the
value of the vested portion of a Participant's Accounts is zero,
he shall be deemed to have received a distribution of the entire
vested balance of his Accounts on the day his employment
terminates. If the Participant elects to have distributed less
than the entire vested portion of his Employer contribution
Account or Employer Matching Accounts, the part of the nonvested
portion that will become a Forfeiture is the total nonvested
portion multiplied by a fraction, the numerator of which is the
amount of the distribution and the denominator of which is the
total value of the entire vested portion of such Accounts.

(b) Right of Payment. If a Participant who receives a
distribution pursuant to paragraph (a) returns to employment with
an Affiliated Employer, the balance of his Employer Contribution
Account and Employer Matching Account will be restored tot he
amount of such balance on the date of distribution, if he repays
to the Plan the full amount of the distribution, before the
earlier of (i) the fifth anniversary of his return to employment
or (ii) the date he incurs five consecutive One-Year Vesting
Breaks following the date of distribution. If an Employee is
deemed to receive a distribution pursuant to this Section 8.3,
and he resumes employment covered under this Plan before the date
he incurs 5 consecutive One-Year Vesting Breaks, upon his
reemployment the Employer-derived account balance of the Employee
will be restored to the amount on the date of such deemed
distribution . Such restoration will be made, first, from the
amount of any Forfeitures available for reallocation as the last
day of the Plan Year in which repayment is made, to the extent
thereof; and to the extent that Forfeitures are not available or
are insufficient to restore the balance, from contributions made
by the Employer pursuant to Section 4.1(f).

(c) If No Distribution Is Made. If no distribution (or deemed
distribution) is made to a Participant before he incurs five
consecutive One-year Vesting Breaks, the nonvested portion of his
Accounts shall become a Forfeiture in the Plan Year that
constitutes his fifth consecutive One-year Vesting Break.

(d) Adjustment of Accounts. Before a Forfeiture is incurred, a
Participant's Accounts shall share in earning s and losses of
the Trust Fund pursuant tot Section 13.4 in the same manner as
the Accounts of active Participants.

(e) Accumulated Deductible Contribution. For Plan Years
beginning before January 1, 1989, a Participant's vested Account
balance shall not include accumulated deductible contributions
within the meaning of Section 72(o)(5)(BB) of the Code.

8.4 Special Rule in the Event of a Withdrawal (Variable Plans
Only). If a withdrawal pursuant to Section 12.2 or 12.3 is made
from a participant's Employer contribution Account or Employer
Matching Account before the Account is fully vested, and the
Participant may increase the vested percentage in the Account,
then a separate account will be established at the time of the
withdrawal, and at any relevant time after the withdrawal the
vested portion of the separate account will be equal to the
amount "X" determined by the following formula:

X = P(AB + D) - D
For purposes of the formula, P is the Participant's vested
percentage at the relevant time, AB is the account balance at the
relevant time, and D is the amount of the withdrawal.

8.5 Vesting Election. If the Plan is amended to change any
vesting schedule, or is amended in any way that directly or
indirectly affects he computation of a Participant's vested
percentage, or is deemed amended by an automatic change to a
top-heavy vesting schedule pursuant to Article 15, each
Participant who has competed not less than three Years of Service
may elect, within a reasonable period after the adoption of the
amendment or change, in a writing files with the Employer to have
his vested percentage computed under the Plan without regard to
such amendment. For a Participant who is not credited with at
least one Hours of Service in a Plan Year beginning after
December 31, 1988, the preceding sentence shall be applied by
substituting "five Years of Service " for "three years of
Service." The period during which the election may be made shall
commence with the date the amendment is adopted, or deemed to be
made, and shall end on the latest of (a) 60 days after the
amendment is adopted; (b) 60 days after the amendment becomes
effective; or (c) 60 days after the Participant is issued written
notice of the amendment by the Employer.

ARTICLE IX:
Payment of Benefits

9.1 Distribution of Accounts. A Participant or Beneficiary who
has become eligible for a distribution of benefits pursuant to
Article 7 may elect to receive such benefits at any time, subject
to the terms and conditions of this Article 9, Article 10 and
Article 11. Unless a Participant or Beneficiary elects
otherwise, distribution of benefits will begin no later than the
60th day after the end of the Plan Year in which the latest of
the following events occurs:

(a) The Participant attains age 65 (or if earlier, the normal
retirement age specified by the Employer in the Plan Agreement);
or

(b) The tenth anniversary of the year in which the Participant
commenced participation in the Plan; or

(c)The Participant's employment wit the Affiliated Employers
terminates.

A Beneficiary who is the surviving spouse of a Participant may
elect to have distribution of benefits begin within the 90-day
period following the Participant's death.

For purposes of this Section 9.1, the failure of a Participant
(and his spouse, if spousal consent is required pursuant to
Article 10) to consent to a Distribution while a benefit is
"immediately distributable" within the meaning of Section 9.2
shall be considered an election to defer commencement of payment.
In a Variable Plan, if the Employer has so specified in the Plan
Agreement, the vested portion of a Participant's Accounts will be
distributed in a lump sum in cash no later than 60 days after the
end of the plan Year in which his employment terminates, if at
the time the Participant first became entitled to a distribution
the value of such vested portion, derived from Employer and
Employee contributions, does not exceed $3,500. Commencement of
distributions in any case shall be subject to Section 9.4.

9.2 Restriction on Immediate Distributions. A Participant's
account balance is considered "immediately distributable" if any
part of the account balance could be distributed to the
Participant (or his surviving spouse) before the Participant
attains, or would have attained if not deceased, the later of the
normal retirement age specified in the Plan Agreement or age 62.

(a) If a distribution is one to which sections 401(a)(11) and 417
of the Internal Revenue Code do not apply, such distribution may
commence less than 30 days after the notice required under
section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that (1) the Plan Administrator clearly informs the
Participant that the Participant has a right to a period of at
least 30 days after receiving the notice to consider the decision
of whether or not to elect a distribution (and, if applicable, a
particular distribution option), and (2) the Participant, after
receiving the notice, affirmatively elects a distribution.

(b) Notwithstanding paragraph (a), only the Participant need
consent to the commencement of a distribution in the form of a
Qualified Joint and Survivor Annuity while the account balance is
immediately distributable. furthermore, if payment in the form
of a Qualified Joint and Survivor Annuity is not required with
respect to the Participant pursuant to Section 10.1 (b) of the
Plan, only the Participant need consent to the distribution of an
account balance that is immediately distributable. Neither the
consent of the Participant nor the spouse shall be required to
the extent that a distribution is required to satisfy Section
401(a)(9) or Section 415 of the Code. In addition, upon
termination of the Plan, if the Plan does not offer an annuity
option (purchased from a commercial provider), a Participant';s
account balance may be distributed to the Participant or
transferred to another defined contribution plan (other than an
Employee stock ownership plan as defined in Section 4975(e)(7) of
the Code) maintained by an Affiliated Employer, without the
Participant's consent. For purposes of determining the
applicability of the foregoing consent requirements to
distributions made before the first day of the first Plan Year
beginning after December 31, 1988, the Participant's vested
account balance shall not include amounts attributable to
accumulated deductible employee contributions within the meaning
of section 72(o)(5)(B) of the Code.

9.3 Optional Forms of Distribution. If at the time a Participant
first becomes entitled t a distribution the value of his vested
Account balance derived from Employer and Employee contributions
does not exceed $3,500, distribution shall be made in a lump sum
in cash. Subject to the preceding sentence and to the rule of
Article 10 concerning joint and survivor annuities, a Participant
or Beneficiary may elect to receive benefits in any of the
following optional forms:

(a) A lump sum payment in cash or in kind or in a combination of
both;

(b) A series of installments over a period certain that meets the
requirements of Article 11; or

(c) A nontransferable annuity contract, purchased for a
commercial provider, with terms complying with the requirements
of Article 11; provided, however, that an annuity for the life of
any person shall be available as an optional form of distribution
in a Profit Sharing Plan only if the Employer has so elected in
the Plan Agreement.

(d) In the event that the Plan is adopted as an amendment to an
existing plan, each optional form of distribute available under
the existing plan shall be made available under the Plan through
the purchase of an appropriate annuity contract in accordance
with paragraph (c).

9.4 Distribution Procedure. The Trustee shall make or commence
distributions to or for the benefit of Participants only on
receipt of a written order from the Employer certifying that a
distribution of a Participant's benefits is payable pursuant to
the Plan, and specifying the time and manner of payment. The
amount to be distributed shall be determined as of the Valuation
Date coincident with or next following the Employer's written
order. The Trustee shall be fully protected in acting upon the
written directions of the Employer in making benefit
distributions, and shall have not duty to determine the rights or
benefits of any person under the Plan or to inquire in to the
right or power of the Employer to direct any such distribution.
The Trustee shall be entitled to assume conclusively that any
determination by the Employer with respect to a distribution
meets the requirements of the Plan. The Trustee shall not be
required to make any payment hereunder in excess of the net
realizable value of the assets of the Account in question at the
time of such payment, nor to make any payment in cash unless the
Employer has furnished written instructions as to the assets to
be converted to cash for the purposes of making payment.

9.5 Lost Distributee. In the event that the Plan Administrator
is unable with reasonable effort to locate a person entitled to
distribution under the Plan, the Accounts distributable to such a
person shall become a Forfeiture at the end of the third Plan
Year after the Plan Administrator's efforts to locate such person
began; provided, however, that the amount of the Forfeiture shall
be restored in the event that such person thereafter submits a
claim for benefits under the Plan. such restoration will be
made, first, from the Amman of Forfeitures available for
reallocation as of the last day of the Plan Year in which the
claim is made, to the extent thereof; and to the extent that
Forfeitures are not available or are insufficient to restore the
balance, from contributions made by the Employer pursuant to
Section 4.1(f). In a Standard Plan, a Forfeiture occurring under
this Section 9.5 shall be reallocated as though it were an
Employer contribution.

9.6 Direct Rollovers. This Section 9.6 applies to distributions
made on or after January 1, 1993. Notwithstanding any provision
of the Plan to the contrary that would otherwise limit a
distributee's election under this Section, a distributee may
elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover. For purposes
of this Section 9.6, the following definitions shall apply:

(a) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an eligible
rollover distribution does not include any distribution that is
on e of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's Designated
Beneficiary, or for a specified period of 10 years or more; any
distribution to the extent such distribution is required under
section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities).

(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section
408(b) of the Code, an annuity plan described in section 403(a)
of the Code, or a qualified trust described in section 410(a) of
the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan
is an individual retirement account or individual retirement
annuity.

(c) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse
or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in section 414(p) of the
Code, are distributees with regard to the interest of the spouse
or former spouse.

(d) Direct rollover: A direct rollover is a payment by the plan
to the eligible retirement plan specified by the distributee.
ARTICLE X:
Joint and Survivor Annuity Requirements

10.1 Applicability.

(a) Generally. The provisions of Sections 10.2 thorough 10.5
shall generally apply to a Participant who is credited with at
least one Hour of Service on or after August 23, 1984, and such
other Participants as provided in Section 10.6.

(b) Exception for Certain Profit Sharing Plans. The provisions
of Sections 10.2 through 10.5 shall not apply to a Participant in
a profit sharing plan if: (i) the Participant does not or cannot
elect payment of benefits in the form of a life annuity, and (ii)
on the death of the Participant, his Vested Account Balance will
be paid to his surviving spouse (unless there is not surviving
spouse, or the surviving spouse has consented to the designation
of another Beneficiary in a manner conforming to a Qualified
Election) and the surviving spouse may elect to have distribution
of the Vested account Balance (adjusted in accordance with
Section 13.4 for gains or losses occurring after the
Participant's death) commence within the 90-day period following
the date of the Participant's death. The Participant may waive
the spousal death benefit described in this paragraph (b) at any
time, provided that no such waiver shall be effective unless it
satisfies the conditions applicable under Section 10.4(c) to a
Participant's waiver of a Qualified Preretirement Survivor
Annuity. The exception in this paragraph (b) shall not be
operative with respect to a Participant in a profit sharing plan
if the Plan:

(1) Is a direct or indirect transferee of a defined benefit plan,
money purchase pension plan, target benefit plan, stock bonus
plan, or profit sharing plan which is subject to the survivor
annuity requirement of Sections 401(a)(11) and 417 of the Code;
or

(2) Is adopted as an amendment of a plan that did not qualify for
the exception in this paragraph (b) before the amendment was
adopted.

For purposes of this paragraph (b), Vested Account Balance shall
have the meaning provided in Section 10.4(f). The provisions of
Sections 10.2 through 10.6 set forth the survivor annuity
requirements of Sections 401(a)(11) and 417 of the Code.

(c) Exception for Certain Amounts. The provisions of Sections
10.2 through 10.5 shall not apply to any distribution mad on or
after the first day of the first Plan Year beginning after
December 31, 1988, from or under a separate account attributable
solely to accumulated deductible employee contributions as
defined in Section 72(o)(5)(B) of the Code, and maintained on
behalf of a Participant in a money purchase pension plan or a
target benefit plan, provided that the exceptions applicable to
certain profit sharing plans under paragraph (b) are applicable
with respect to the separate account (for this purpose, Vested
Account Balance means the Participant's separate account balance
attributable solely to accumulated deductible employee
contributions within the meaning of Section 72(o)(5)(B) of the
Code).

10.2 Qualified Joint and Survivor Annuity. Unless an optional
form of benefit is selected pursuant to a Qualified election
within the 90-day period ending on the Annuity Staring Date, a
married Participant's Vested Account Balance will be paid in the
form of a Qualified Joint and Survivor Annuity and an unmarried
Participant's Vested Account Balance will be paid in the form of
life annuity. In either case, the Participant may elect to have
such an annuity distributed upon his attainment of the Earliest
Retirement Age under the Plan.

10.3 Qualified Preretirement Survivor Annuity. Unless an
optional form of benefit has been selected within the Election
Period pursuant to a Qualified Election, the Vested Account
Balance of a Participant who dies before the Annuity Staring Date
shall be applied toward the purchase of an annuity for the life
of his surviving spouse (a "Qualified Preretirement Survivor
annuity"). The surviving spouse may elect to have such an
annuity distributed within a reasonable period after the
Participant's death. For purposes of this Article 10, the term
"spouse" means the current spouse or surviving spouse of a
Participant, except that a former spouse will be treated as the
spouse or surviving spouse (and a current spouse will not be
treated as the spouse or surviving spouse) to the extent provided
under a qualified domestic relations order as described in
Section 414(p0 of the Code.

10.4 Definitions. The following definitions apply:

(a) Election Period means the period beginning on the first day
of the Plan Year in which a Participant attains age 35 and ending
on the date of the Participant's death. If a Participant
separates from service before the first of the Plan Year in which
he reaches age 35, the Election Period with respect to his
account balance as of the date of separation shall begin on the
date of separation. A Participant who will not attain age 35 as
of the end of a Plan Year may make a special Qualified Election
to waive the Qualified Preretirement Survivor Annuity for the
period beginning on the date of such election and ending on the
first day of the Plan Year in which the Participant will attain
age 35. Such an election shall not be valid unless the
Participant receives a written explanation of the Qualified
Preretirement Survivor Annuity in such terms as are comparable to
the explanation required under Section 10.5. Qualified
Preretirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the
Participant attains age 35. any new waiver on or after that date
shall be subject to the full requirements of this article.

(b) Earliest Retirement Age means the earliest date on which the
Participant could elect to receive Retirement benefits under the
Plan.

(c) Qualified Election means a waiver of a Qualified Joint and
survivor Annuity or a Qualified Preretirement Survivor Annuity.
any such waiver shall not be effective unless: (1) the
Participant's spouse consents in writing to the waiver; (2) the
waiver designates a specific Beneficiary, including any class of
beneficiaries or any contingent beneficiaries, which may not be
changed without spousal consent (unless the spouse's consent
expressly permits designations by the Participant without any
further spousal consent); (3) the spouse's consent acknowledges
the effect of the waiver; and (4) the spouse's consent is
witnessed by a plan representative or notary public.,
Additionally, a Participant's waiver of the Qualified Joint and
Survivor Annuity shall not be effective unless the waiver
designates a form of benefit payment which may not be change d
without spousal consent (unless the spouse's consent expressly
permits designations by the Participant without any further
spousal consent). If it is established to the satisfaction of a
plan representative that there is no souse or that the spouse
cannot be located, a waiver will be deemed a Qualified Election.
Any consent by a spouse obtained under these provisions (and any
establishment that the consent of a spouse may not be obtained)
shall be effective only with respect to the particular spouse
involved. A consent that permits designations by the Participant
without any requirement of further consent by the spouse must
acknowledge that the spouse has the right to limit the consent to
a specific Beneficiary and a specific form o f Benefit where
applicable, and that the spouse voluntarily elects to relinquish
either or both of those rights. a revocation of a prior waiver
may be made by a Participant without the consent of the spouse at
anytime before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this
provision shall be valid unless the Participant has received
notice as provided in Section 10.5.

(d) Qualified Joint and Survivor Annuity means an immediate
annuity for the life of a Participant, with a survivor annuity
for the life of the spouse which is not less than 50 percent and
not more than 100 percent of the amount of the annuity which is
payable during the joint lives of the Participant and the spouse,
and which is the amount of benefit that can be purchased with the
Participant's Vested Account Balance. The percentage of the
survivor annuity under the Plan shall be 50 percent.

(e) Annuity Starting Date means he first day of the first period
for which an amount is paid as an annuity (or any other form).

(f) Vested Account Balance means the aggregate value of the
Participant's vested account balance derived from Employer and
Employee contributions (including rollover), whether vested
before or upon death, including the proceeds of insurance
contracts, if any on the Participant's life. The provisions of
this Article 10 shall apply to a Participant who is vested in
amounts attributable to Employer contributions, Employee
contributions or both at the time of death or distribution.

10.5 Notice Requirements. In the case of a Qualified Joint and
Survivor annuity, no less than 30 days and no more than 90 days
before a Participant's Annuity Starting Date the Plan
Administrator shall provide to him a written explanation of (i)
the terms and conditions of a Qualified and Joint Survivor
Annuity, (ii) the Participant's right to make, and the effect of,
an election to waive the Qualified Joint and Survivor Annuity
form of benefit, (iii) the rights of the Participant's spouse,
and (iv) the right to make and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor
Annuity.

In the case of a Qualified Preretirement survivor Annuity, within
the applicable period for a Participant the Plan Administrator
provide to him a written explanation of the Qualified
Preretirement Survivor Annuity, in terms and manner comparable to
the requirements applicable to the explanation of a Qualified
Joint and Survivor annuity as described in the preceding
paragraph. The applicable period for a Participant is whichever
of the following periods ends last: (i) the period beginning with
the first day of the Plan Year in which the Participant attains
age 32 and ending with the close of the Plan Year preceding the
Plan Year in which the Participant attains age 35; (ii) a
reasonable period ending after an individual becomes a
Participant; (iii) a reasonable period ending after this Article
10 first applies to the Participant. Notwithstanding the
foregoing, in the case of a Participant who separates from
service before attaining age 35, notice must be provided within a
reasonable period ending after his separation from service.

For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (ii) and
(ii) is the end of the two-year period beginning one year before
the date the applicable event occurs, and ending one year after
that date. In the case of a Participant who separates from
service before the Plan Year in which he reaches age 35, notice
shall be provided within the two-year period beginning one year
before the separation and ending one year after the separation .
If such a Participant thereafter returns to employment with the
Employer, the applicable period for the Participant shall be
redetermined.

10.6 Transitional Rules.

(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed by
the preceding sections of this Article 10, must be given the
opportunity to elect to have those sections apply if the
Participant is credited with at least one Hour of Service under
the Plan or a predecessor plan in a Plan Year beginning on or
after January 1, 1976, and the Participant had at least ten years
of vesting service when he or she separated from service.

(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under
the Plan or a predecessor plan on or after September 2, 1974, and
who is not otherwise credited with any service in a Plan Year
beginning on or after January 1, 1976, must be given the
opportunity to have his benefits paid in accordance with
paragraph (d) of this section 10.6.

(c0 The respective opportunities to elect (as described in
paragraphs (a) and (b) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984, and
ending on the date benefits would otherwise commence to be paid
to those Participants.

(d) Any Participant who has so elected pursuant to paragraph (b)
of this Section 10.6, an any Participant who does not elect under
paragraph (a), or who meets the requirements of paragraph (a)
except that he does not have at least ten years of vesting
service when he separates from service, shall have his benefits
distributed in accordance with all of the following requirements,
if his benefits would otherwise have been payable in the form of
a life annuity:

(1) Automatic joint and survivor annuity. If benefits in the
form of a life annuity become payable to a married Participant
who:

(i) begins to receive payments under the Plan on or after normal
retirement age; or

(ii) dies on or after normal retirement age while still working
for the Employer; or

(iii) begins to receive payments on or after the qualified early
retirement age; or

(iv) separates from service on or after attaining normal
retirement age (or the qualified early retirement age) and after
satisfying the eligibility requirement for the payment of
benefits under the Plan and thereafter dies before beginning to
receive such benefits;

then such benefits will be received under the Plan in the form of
a Qualified Joint and Survivor Annuity, unless they Participant
has elected otherwise during the election period, which must
begin at least six months before the Participant attains
qualified early retirement age and end not more than 90 days
before the commencement of benefits. Any election hereunder will
be in writing and may be changed by the Participant at any time.

(2) Election of early survivor annuity. A participant who is
employed after attaining the qualified early retirement age will
be given the opportunity to elect during the election period to
have a survivor annuity payable on death. If the Participant
elects the survivor annuity, payments under such annuity must not
be less than the payments which would have been made to the
spouse under the Qualified Joint and Survivor Annuity if the
Participant had retired on the day before his death. Any
election under this provision will be in writing and may be
changed by the Participant at any time. The election period
begins o the later of (i) the 90th day before the Participant
attains the qualified early retirement age, or (ii) the date on
which participation begins, and ends on the date the Participant
terminates employment.

(3) For purposes of this Section 10.6, qualified early retirement
age is the latest of the earliest date under the Plan on which
the Participant may elect to receive Retirement benefits, the
first day of the 120th month not beginning before the Participant
reaches normal retirement age, or the date the Participant begins
participation.

ARTICLE XI:
Minimum Distribution Requirements

11.1 General Rules. Subject to Article 10, Joint and Survivor
Annuity Requirements, the requirements of this Article 11 shall
apply to any distribution of a Participant's interest and will
take precedence over any inconsistent provisions of the Plan.

Unless otherwise specified, the provisions of this Article 11
apply to calendar years beginning after December 31, 1984. All
distributions required under this Article 11 shall be determined
and made in accordance with the Income Tax Regulations issued
under Section 401(a)(9) of the Code (including proposed
regulations, until the adoption of final regulations), including
the minimum distribution incidental benefit requirement of
Section 1.401(a)(9)-2 of the proposed regulations.
11.2 Required Beginning Date. The entire interest of a
Participant must be distributed, or begin to be distributed, no
later than the Participant's required beginning date, determined
as follows.

(a) General Rule. The required beginning date of a Participant
is the first day of April of the calendar year following the
calendar year in which the Participant attains age 70 1/2.

(b) Transitional Rules. The required beginning date of a
Participant who attains age 70 /2 before January 1, 1988, shall
be determined in accordance with (1) or (2) below:

(1) Non-5-percent Owners. The required beginning date of a
Participant who is not a 5-percent owner is the first day of
April of the calendar year following the calendar year in which
the later of his Retirement or his attainment of age 70 1/2
occurs.

(2) 5-percent Owners. The required beginning date of a
Participant who is a 5-percent owner during any year beginning
after December 31, 1979, is the first day of April following the
later of:

(i) the calendar year in which the Participant attains age 70
1/2, or

(ii) the earlier of the calendar year with or within which ends
the Plan Year in which the Participant becomes a 5-percent owner,
or the calendar year in which the Participant retires.

The required beginning date of a Participant who is not a
5-percent owner, who attains age 70 1/2 during 1988 and who has
not retired as of January 1, 1989, is April 1, 1990.

(c) Rules for 5-percent Owners. A Participant is treated as a
5-percent owner for purposes of this Section 11.2 if he is a
5-percent owner as defined in Section 416(i) of the Code
(determined in accordance with Section 416 but without regard to
whether the Plan is top heavy) at nay time during the Plan Year
ending with or within the calendar year in which he attains age
66 1/2, or any subsequent Plan Year. Once distributions have
begun to a 5-percent owner under this Section 11.2, they must
continue, even if the Participant ceases to be a 5-percent owner
in a subsequent year.

11.3 Limits on Distribution Periods. As of the first
Distribution Calendar Year, distributions not made in a single
sum may be made only over one or a combination of the following
periods:

(a) the life of the Participant,

(b) the life of the Participant and his Designated beneficiary,

(d) a period certain not extending beyond the Joint and Last
survivor Expectancy of the Participant and his Designated
Beneficiary.

Designated Beneficiary means the individual who is designated as
the Beneficiary under the Plan in accordance with Section
401(a)(9) of the Code and the regulations issued thereunder
(including proposed regulations, until the adoption of final
regulations) and Section 7.2.

Distribution Calendar Year means a calendar year for which a
minimum distribution is required under Section 401(a)(9) of the
Code and this Section 11.3. For distributions beginning before
the Participant's death, the first Distribution Calendar Year is
the calendar year immediately preceding the calendar year which
contains the Participant's required beginning date. For
distributions beginning after the Participant's death, the first
Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to Section 11.5.

Life Expectancy and Joint and Last Survivor Expectancy are
computed by use of the expected return multiples in Tables V and
VI of Section 1.72-9 of the Income Tax Regulations. Unless
otherwise elected by the Participant (or his spouse, in the case
of distributions described in Section 11.5(b)) by the time
distributions are required to begin, Life Expectancies shall be
recalculated annually. Any such election shall be irrevocable as
to the Participant (or spouse) and shall apply to all subsequent
years. The Life Expectancy of a nonspouse beneficiary may not be
recalculated.

11.4 Determination of Amount To Be Distributed Each Year. If the
Participant's interest is to be distributed in other than a
single sum, the following minimum distribution rules shall apply
on or after the required beginning date. Paragraphs (a) through
(d) apply to distributions in forms other than the purchase of an
annuity contract.

(a) If a Participant's Benefit is to be distributed over (1) a
period not extending beyond the Life Expectancy of the
Participant or the Joint Life and Last Survivor Expectancy of the
Participant and his Designated Beneficiary, or (2) a period not
extending beyond the Life Expectancy of the Designated
Beneficiary, the amount required to be distributed for each
calendar year, beginning with distributions for the first
Distribution Calendar Year, must at least equal the quotient
obtained by dividing the Participant's Benefit by the Applicable
Life Expectancy.

(b) For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the Designated Beneficiary, the
method of distribution selected must assure that at least 50
percent of the present value of the amount available for
distribution is paid within the Life Expectancy of the
Participant.

(c) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions
for the first Distribution Calendar Year, shall not be less than
the quotient obtained by dividing the Participant's Benefit by
the lesser of (1) the Applicable Life Expectancy or (2) if the
Participant's spouse is not the Designated Beneficiary, the
applicable divisor determined from the table set forth in Q&A-4
of Section 1.401(a)(9)-2 of the Proposed Income Tax Regulations.
Distributions after the death of the Participant shall be
distributed using the Applicable Life Expectancy in paragraph (a)
above as the relevant divisor, without regard to Proposed
Regulations Section 1.401(a)(9)-2.

(d) the minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the
Participant's required beginning date. The minimum distribution
for other calendar years, including the minimum distribution for
the Distribution Calendar Year in which the Employee's required
beginning date occurs, must be made on or before December 31 of
that Distribution Calendar Year.

(e) If the Participant's Benefit is distributed in the form of an
annuity contract purchased from an insurance company,
distributions thereunder shall be made in accordance with the
requirements of Section 401(a)(9) of the Code and the regulations
issued thereunder (including proposed regulations, until the
adoption of final regulations).

Applicable Life Expectancy means the Life Expectancy (or Joint
and Last Survivor Expectancy) calculated using the attained age
of the Participant (or Designated Beneficiary) as of the
Participant's (or Designated Beneficiary's) birthday in the
applicable calendar year, reduced by one for each calendar year
which has elapsed since the date Life Expectancy was first
calculated. If Life Expectancy is being recalculated, the
Applicable Life Expectancy shall be the Life Expectancy as so
recalculated. The applicable calendar year shall be the first
Distribution Calendar Year, and if Life Expectancy is being
recalculated, the Applicable Life Expectancy shall be the Life
Expectancy as so recalculated. the applicable calendar year
shall be the first Distribution Calendar Year, an if Life
Expectancy is being recalculated such succeeding calendar year.
If annuity payments commence in accordance with Section 11.4(e)
before the required beginning date, the applicable calendar year
is the year such payments commence. If distribution is in the
form of an immediate annuity purchased after the Participant's
death with the Participant's remaining interest in the Plan, the
applicable calendar year is the year of purchase.

Participant's Benefit means the account balance as of the last
valuation date in the calendar year immediately preceding the
Distribution Calendar Year (valuation calendar year), increased
by the amount of any contributions or Forfeitures allocated to
the account balance as of date in the valuation calendar year
after the valuation date and decreased by distributions made in
the valuation calendar year after the valuation date. For
purposes of the preceding sentence, if any portion of the minimum
distribution for the first Distribute Calendar Year is made in
the second Distribution Calendar Year on or before the required
Beginning date, the amount of the minimum distribution made in
the second Distribution Calendar Year hall be treated as if it
had been made in the immediately preceding Distribute Calendar
Year.

1.5 Death Distribution Provisions.

(a) Distribution Beginning before Death. If the Participant dies
after distribution of his interest has begun, the remaining
portion of his interest will continue to be distributed at least
as rapidly as under the method of distribution being used before
the participant' death.

(b) Distribution Beginning after Death. If the Participant dies
before distribution of his interest begins, distribution of his
entire interest shall be completed by December 31 of the calendar
year containing the fifth anniversary of the Participant's death,
except to he extent that an election is made to receive
distributions in accordance with (1) or (2) below:
(1) If any portion of he Participant's interest is payable to a
Designated Beneficiary, distributions may be mad over the
Designated Beneficiary's life, or over a period certain not
greater than the Life Expectancy of the Designated Beneficiary,
commencing on or before December 31 of the calendar year
immediately following the calendar year in which the Participant
died; or

(2) If the Designated Beneficiary is the Participant's surviving
spouse, the date distributions are required to begin in
accordance with (1) above shall not be earlier than the later of
(i) December 31 of the calendar year immediately following the
calendar year in which the Participant died, and (ii) December 31
of the calendar year in which the Participant would have attained
age 70 1/2.

If the Participant has not made an election pursuant to this
Section 11.5 by the time of this death, the Participant's
Designated Beneficiary must elect the method of distribution no
later than the earlier of (i) December 31 of the calendar year in
which distributions would be required to begin under this Section
11.5 or (ii) December 31 of the calendar year which contains the
fifth anniversary of the date of death of the Participant. If
the Participant has no Designated Beneficiary, or if the
Designated Beneficiary does to elect a method of distribution,
distribution of the Participant's entire interest must be
completed by December 31 of the calendar year containing the
fifth anniversary of the Participant's death.

(c) For purposes of paragraph (b), if the surviving spouse dies
after the Participant, but before payments to the souse begin ,
the provisions of paragraph (b), with the exception of
subparagraph (2) therein, shall be applied as if the surviving
spouse were the Participant.

(d) For purposes of this Section 11.5, any amount paid to a child
of the Participant will be treated as if it had been paid to the
surviving spouse of the Participant if the amount becomes payable
to the surviving spouse when the child reaches the age of
majority.

(e) For the purposes of this Section 11.5, distribution of a
Participant's interest is considered to begin on the
Participant's required beginning date (or, if paragraph (c) above
is applicable the date distribution is required to begin to the
surviving spouse pursuant to paragraph(b) above). If
distribution in the form of an annuity contract described in
Section 11.4(e) irrevocably commences to the Participant before
the required beginning date, the date distribution is considered
to begin is the date distribution actually commences.

11.6 Transitional Rule. Notwithstanding the other requirements
of this Article 11, and subject to the requirements of Article
10, Joint and Survivor Annuity Requirement, distribution on
behalf of any Participant, including a 5-percent owner, may be
made in accordance with al of the following requirements
(regardless of when such distribution commences):

(a) The distribution is one which would not have disqualified the
Trust under Section 401(a)(9) of the Internal Revenue code of
1954 as in effect before its amendment by the Deficit Reduction
Act of 1984.
(b) The distribution is in accordance with a method of
distribution designated by the Employee whose interest in the
Trust is being distributed of, if the Employee is deceased, by a
Beneficiary of the Employee.

(c) The designation specified in paragraph (b) was in writing,
was signed by the Employee or the Beneficiary, and as made before
January 1, 1984.

(d) The Employee had accrued a benefit under the plan as of
December 31, 1983.

(e) The method of distribution designated by the Employee or the
Beneficiary specifies the time at which distributor will
commence, the period over which distributions will be made, an
din the case of any distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of priority.

A distribution upon death will not be covered by this
transitional rule unless the information in the designation
contains the required information described above with respect to
the distributions to be made upon the death of the Employee. For
any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee or the
Beneficiary to whom such distribution is being made will be
presumed to have designated the method of distribute under which
the distribution is being made if the method of distribution was
specified in writing and the distribution satisfies the
requirements in paragraphs (a) and (e).

If a designation is revoked, any subsequent distribution must
satisfy the requirements of Section 401(a)(9) of the Code and the
regulations thereunder. If a designation is revoked after the
date distributions are required to begin, the Trust must
distribute by the end of the calendar year following the calendar
year in which the revocation occurs the total amount not yet
distributed which would have been required to have been
distributed to satisfy Section 401(a)(9) of the Code and the
regulations thereunder, but for the designation described in
paragraphs (b) through (e). For calendar years beginning after
December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in Section
1.401(a)(9)-2 of the Proposed Income Tax Regulations. Any
changes in the designation generally will be considered to be a
revocation of the designation, but the mere substitution or
addition of another beneficiary (one not name in the designation)
under the designation will not be considered to be a revocation
of the designation, so long as the substation or addition does
not alter the peered over which distributions are to be made
under the designation, directly or indirectly (for example, by
altering the relevant measuring life). In the case of an amount
transferred or rolled over from one plan to another plan, the
rules in Q&AJ-2 and Q&AJ-3 of Section 1.401(a)(9)-1 of the
Proposed Income Tax Regulations.

ARTICLE XII:
Withdrawals and Loans

12.1 Withdrawals from Participant Contribution Accounts. Subject
to the requirements of Article 10, a Participant may upon written
notice to the Employer withdraw any amount from his Participant
Contribution Account. A withdrawn amount may not be repaid to
the Plan. No forfeiture will occur solely as a result of an
Employee's withdrawal of Participant contributions.

12.2 Withdrawals on Account of Hardship (Profit Sharing Plans
Only). If the employer has so elected in the Plan Agreement for
a profit sharing plan, upon a Participant's written request the
Plan Administrator may permit a withdrawal fro the vested portion
of the Participant's Accounts on account of the Participant's
financial hardship, which must be demonstrated to the
satisfaction of the Plan Administrator. In considering such
requests, the Plan Administrator shall apply uniform standards
that do not discriminate in favor of Highly Compensated
Employees. In a Standard Plan with a Code, if hardship
withdrawals are permitted from both the Employer Contribution
Account and the Elective Deferral Account, they shall be made
first from a participant's Employer Contribution Account and
thereafter from a Participant's Elective Deferral Account,
subject to the additional requirements set forth in Section 5.14.
In a Standard Plan, the requirements of Section 5.14(b), (c),
(d)(1) and (d)(2) shall also apply to hardship distributions from
a Participant's Employer contribution Account. In a Variable
Plan with a CODA, if hardship withdrawals are permitted from more
than one of the Elective Deferral Account, Employer Matching
Account, and Employer contribution Account , they shall be made
first from a Participant's Employer contribution Account, and
thereafter from the Employer Matching Account, and finally from
the Elective Deferral Account, subject to the additional
requirement of Section 5.14. A withdrawn amount may not be
repaid to the Plan.
12.3 Withdrawals after Reaching Age 59 1/2 (Profit Sharing Plans
Only). If so specified by the Employer in the Plan Agreement, a
Participant who has reached age 59 1/2 may upon written request
to the Employer withdraw during his employment any amount not
exceeding the vested balance of his Accounts. A withdrawn amount
may not be repaid to the Plan.

12.4 Loans (Variable Plans Only). If the Employer has so elected
in the Plan Agreement, the Employer may direct the Trustee to
make a loan to a Participant or Beneficiary from the vested
portion of his Accounts, subject to the following terms and
conditions:

(a) The Plan Administrator shall administer the loan program
subject to the terms and conditions of this Section 12.4 and to
such reasonable additional rules and regulations as the Plan
Administrator may establish for the orderly operation of the
program.

(b) A Participant's or Beneficiary's request for a loan shall be
submitted to the Plan Administrator by means of a written
application on a form supplied by the Plan Administrator.
Applications shall be approved or denied by the Plan
Administrator on the basis of its assessment of the borrower's
ability to collateralize and repay the loan, as revealed in the
loan application.

(c) Loans shall be made to all Participants and Beneficiaries on
a reasonable equivalent basis. Loans shall not be made available
to highly compensated Employees (as defined in Section 414(q) of
the Code) in amount greater than the amount made available to
other employees (relative to the borrower s Account balance).
(d) Loans must be adequately secured by assignment of fifty
percent (50%) of the Participant s entire right, title, and
interest in and to the Trust fund, evidenced by the Participant s
collateral promissory not for the amount of the loan payable to
the order of the Trustee.

(e) Loans must bear a reasonable interest rate comparable tot he
rate charged by commercial lenders in the geographical area for
similar loans. The Plan Administrator shall not discriminate
among Participants in the matter of interest rates, but loans may
bear different interest rates if, in the opinion of the Plan
Administrator, the difference in rates is justified by conditions
that would customarily be taken into account by a commercial
lender in the Employer s geographical area.

(f) The period for repayment for any loan shall not exceed five
years, except in the case of a loan used to acquire a dwelling
unit which within a reasonable time is to be used as the
principal residence of the Participant, in which case the
repayment period shall not exceed ten years. The terms of a loan
shall require that it be repaid in level payments of principal
and interest not less frequently then quarterly throughout the
repayment period, except that alternative arrangements for
repayment may apply in the event that the borrower is on unpaid
leave of absence for a period not to exceed one year.

(g) To the extent that t Participant would be required under
Article 10 to obtain the consent of his spouse to a distribution
of an immediately distributable benefit other than a Qualified
Joint and Survivor Annuity, the consent of the Participant s
spouse shall be required for the u se of the Account as security
for a loan. The spouse s consent must be obtained no earlier
than the beginning of the 90-day period that ends on the date on
which the loan is to be so secured, and obtained in accordance
with the requirements of Section 10.4(c) for a Qualified
Election. Any such consent shall thereafter be binding on the
consenting spouse and any subsequent spouse of the Participant.
a new consent shall be required for use of the Account as
security for any extension, renewal, renegotiation or revision of
the original loan.

(h) If valid spousal consent has been obtained in accordance with
Section 12.4(g), then notwithstanding any other provision of the
Plan the portions of the Participant s account balance used as a
security interest held by the Plan by reason of a loan
outstanding to the Participant shall be taken into account for
purposes of determining the amount of the account balance payable
at the time of death or distribution, but only if the reduction
is used as repayment of the loan. If less than 100% of the
Participant s vested account balance (determined without regard
to the preceding sentence) is payable to the surviving spouse,
then the account balance shall be adjusted by fist reducing the
vested account balance by the amount of the security used as
repayment of the loan, and then determining the benefit payable
to the surviving spouse.

(i) In the event of default on a loan by a Participant who is an
active Employee, foreclosure on the Participant s Account as
security will not occur until the Employer has reported to the
Trustee the occurrence of an event permitting distribution from
the Plan in accordance with Article 9 or Section 5.13.

(j) No loan shall be made to an Owner-Employee or a
Shareholder-Employee.

(k) No loan to any Participant or Beneficiary can be made tot he
extend that the amount of the loan, when added to the outstanding
balance of all other loans to the Participant or Beneficiary,
would exceed the lesser of (a) $50,000 reduced by the excess (if
any) of the highest outstanding balance of loans during the one
year period ending on the day before the loan is made, over the
outstanding balance of loans from the Plan on the date the loan
is made, or (b) one-half the value of the vested account balance
of the Participant. For the purpose of the above limitation, all
loans from all qualified plans of the Affiliated Employers are
aggregated.

(l) Loans shall be considered investments directed by a
Participant pursuant to Section 13.3. The amount loaned shall be
charged solely against the Accounts of the Participant, and
repaid amounts and interest shall be credited solely thereto.

12.5 Procedure; Amount Available.
Withdrawals and loans shall be made subject to the terms and
condition applicable to distributions pursuant to Section 9.4,
except that the amount of any withdrawal or loan shall be
determined by reference to the vested balance of the
Participant s Account as of the most recent Valuation Date
preceding the withdrawal or loan, and shall not exceed the amount
of the vested account balance.

ARTICLE XIII:
Trust Fund and Investments

13.1 Establishment of Trust Fund. The Employer and the Trustee
hereby agree to the establishment of a Trust Fund consisting of
all amounts as shall be contributed or transferred from time to
time to the Trustee pursuant to the Plan, and all earnings
thereon. The Trustee shall hold the assets of the Trust Fund for
the exclusive purpose of providing benefits to Participant and
Beneficiaries and defraying the reasonable expenses of
administering the Plan and no such assets shall ever revert to
the Employer, except that:

(a) contributions made by the Employer by mistake of fact may be
returned to the Employer within one (1) year of the date of
payment.

(b) contributions that are conditioned on their deductibility
under the Code may be returned to the Employer within one (1)
year of the disallowance of the deduction,

(c) contributions that are conditioned on the initial
qualification of the Plan under the Code may be returned to the
Employer within one (1) year after such qualification is denied
by determination of the Internal Revenue Service, but only if an
application for determination of such qualification is made
within the time prescribed by law for filing the Employer s
federal income tax return for its taxable year in which the Plan
is adopted, or such later date as the Secretary of the Treasury
may prescribe, and

(d) amounts held in a suspense account may be returned to the
Employer on termination of the Plan, to the extent that they may
not then be allocated to any Participant s Account in accordance
with Article 6.

13.2 Management of Trust Fund. Except to the extent of any
investment in Policies pursuant to Article 14, the assets of the
Trust Fund shall be held in trust by the Trustee and accounted
for in accordance with this Article 13, and shall be invested in
accordance with Section 13.3 in the Investment Products specified
by the Employer in the Plan Agreement and from time to time
thereafter in writing. The Employer shall have the exclusive
authority and discretion to select the Investment Products
available under the Plan. In making that selection, the Employer
shall use the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in a
like capacity and familiar with such matter would use in the
conduct of an enterprise of like character and with like aims.
The Employer shall cause the available Investment Products be
diversified sufficiently to minimize the risk of large losses,
unless under the circumstances it is clearly prudent not to do
so. It is especially intended that the Trustee shall have no
discretionary authority to determine the investment of Trust
assets.

13.3 Investment Instructions. Except as Article 14 may apply,
all amounts held in the Trust Fund under the Plan shall be
invested in Investment Products. If the Employer has elected in
the Plan Agreement to make investment decisions for the Plan,
investment instructions as to the Employer Contribution Accounts,
Employer Matching Accounts, Qualified Matching Accounts, and
Qualified Nonelective Contribution Accounts shall be the
fiduciary responsibility of the Employer, and each of such
Accounts shall have a pro rata interest in all assets of the
Trust (other than life insurance policies under Article 14) to
which the Employer s instructions apply. If the Employer has not
elected to make investment decisions for the Plan, then assets of
the Trust shall be invested solely in accordance with the
instructions of the Participant w to whose Accounts they are
allocable, as delivered by the Employer to Putnam in accordance
with its service agreement with the Employer, if any.
Instructions shall apply to future contributions, past
accumulations, or both, according to their terms, and shall be
communicated by the Employer to Putnam in accordance with
procedures prescribed in the service agreement, if any, between
the Employer and Putnam. Instructions shall be effective
prospectively, coincident with or within a reasonable time after
their receipt in good order by Putnam. An instruction once
received shall remain in effect until it is changed by the
provision of a new instruction. New instructions shall be
accepted by Putnam at any Valuation Date. To the extent the
assets of the Trust are to be invested solely in accordance with
the instructions of the Participants, the Plan is intended to
constitute a plan described in section 404 (cc) of ERISA and
Title 29 of the Code of Federal Regulations section 2550.404c-1.
In such case, the Employer shall be responsible for providing the
Participant with all information required to be given pursuant to
ERISA section 404(c) and Title 29 of the Code of Federal
Regulations section 2550.404c-1.

In the event that the Employer adopts a Putnam prototype plan as
an amendment to or restatement of an existing plan, the Employer
shall specify one or more Investment Products to serve as the
sole investments for all Participants Accounts during the period
in which existing records of the Plan are transferred to the
Recordkeeper. During that period, new investment, instructions
as to existing assets of the Plan cannot be carried out, not can
distributions be made from the Plan except to the extent
permitted under the terms of the service agreement between the
Employer and Putnam. The Employer and the Recordkeeper shall use
their best efforts to minimize the duration of the period to
which the preceding sentence applies.

Neither the Employer nor the Trustee nor Putnam shall be
responsible for questioning any instructions of a Participant or
for reviewing the investments selected therein, or for any loss
resulting from instructions of a Participant or from the failure
of a Participant to provide or to change instructions. Neither
Putnam nor the Trustee shall have any duty to question any
instructions received from the Employer or a Participant or to
review the investments thus selected, nor shall Putnam or the
Trustee be responsible for any loss resulting from instructions
received from the Employer or a Participant or from the failure
of the Employer or a Participant to provide or change
instructions. In the event that Putnam or the Trustee receives a
contribution under the Plan as to which no instructions are
delivered, or such instructions as are delivered are unclear to
Putnam or the Trustee, such contributions shall be invested until
clear instructions are received in the default option set forth
in the service agreement between the Employer an Putnam or if no
such option is so set forth, in Putnam Daily Dividend Trust.
neither Putnam nor the Trustee shall have any discretionary
authority or responsibility in the investment of the assets of
the Trust Fund.

13.4 Valuation of the Trust Fund. As of each Valuation Date, the
Trustee shall determine the fair market value of the Trust Fund,
and the net earnings or losses and expenses of the Trust Fund for
the period elapsed since the most recent previous Valuation Date
shall be allocated amount the Accounts of Participants.
Earnings, losses and expenses which pertain to investments which
are specifically held for a given Participant s Account shall be
allocated solely to that Account. In the event that an
investment is not specifically held for a given Participant s
Account, the earnings, losses and expenses pertaining o that
investment shall be allocated among all Participants Accounts in
the ratio that each such Account bears to the total of all
Accounts of all Participants. Each Participant s Accounts shall
be adjusted pursuant to this Section 13.4 until such time as they
are either fully distributed or forfeited, regardless of whether
the Participant continues to be an Employee.

13.5 Distributions on Investment Company Shares. Subject to
Section 9.3, all dividends and capital gains or other
distributions received on any Investment company Shares credited
to Participant s Account will (unless received in additional
Investment Company Shares) be reinvested in full and fractional
shares of the same Investment Company at the price determined as
provided in the then current prospectus of the Investment
Company. The shares so received or purchased upon such
reinvestment will be credited to such accounts. If any dividends
or capital gain or other distributions may be received on such
Investment Company Shares at the elections of the shareholder in
additional share or in cash or other property, the Trustee will
elect to receive such dividends or distributions in additional
Investment Company Shares.

13.6 Registration and Voting of Investment Company Shares. All
Investment Company Shares shall be registered in the name of the
Trustee or its nominee. Subject to any requirements of applicable
law, the Trustee will transmit to Participants in a Standard
Plan, and to the Employer in a Variable Plan, copies of any
notices of shareholders meetings, proxies and proxy-soliciting
material, prospectuses and the annual or other reports to
shareholders, with respect to Investment Company Shares held in
the Trust Fund. the Trustee shall act in accordance with
directions received fro such Participants or Employer, as the
case may be, with respect to matters to be voted upon by the
shareholders of the Investment Company. Such directions must be
in writing on a form approved by the Trustee, signed by the
addressee and delivered to the Trustee within the time prescribed
by it. The Trustee will not vote Investment Company Shares as to
which it receives no written directions.

13.7 Investment Manager (Variable Plans Only). The Employer,
with the consent of Putnam, may appoint an investment manager, as
defined in Section 3(38) of the Employee Retirement Income
Security Act of 1974, with respect to all or a portion of the
assets of the Trust Fund. The Trustee shall have no liability in
connection with any action or nonaction pursuant to directions of
such an investment manager.

ARTICLE XIV:
Insurance Policies

14.1 Purchase of Insurance Products. At the time of
establishment of the Plan, the Employer shall purchase for each
Participant such Policy or Policies, if any, as a Participant
shall request and annually thereafter such additional Policies as
a Participant shall request, subject to the limitations of
Section 14.2. All Policies shall have the same day and month of
issue, insofar as reasonably possible. The premiums on all
Policies shall be paid at the same intervals (for example,
annually, semi-annually, quarterly or monthly) but the interval
may be changed with respect to all Policies from time to time.

14.2 Limitation on Premiums. the premiums paid for Policies in
respect of any Participants shall be limited so that premiums
paid on any ordinary insurance Policies (that is, Policies with
both nonincreasing premiums and nondecreasing death benefits) on
the life of the Participant shall be 49 percent or less of the
Employer s total contributions for the Participant (and
Forfeitures allocated and amounts reapplied to his Employer
Contribution Account), and premiums paid on term insurance
Policies on the life of the Participant shall be less than 25
percent of such amount; provided that if both ordinary life
insurance Policies and term Policies are purchased for any
Participant, the total premiums on term Policies plus one-half
the premiums on ordinary life Policies shall be less than 25
percent of such amount. If at any time the total premiums to be
paid by the Employer for a Participant shall equal or exceed the
above limitations, then the life insurance coverage of that
Participant shall be reduced so that the total premiums shall not
equal or exceed the limitations. The required reduction shall be
made by changing all or a portion of the life insurance on the
Participant to paid-up life insurance or by canceling all or a
portion of any term life insurance.

14.3 Policy Options. At the election of the Participant covered
hereunder, a Policy may contain a waiver of premium disability
benefit provision or a provision for additional indemnity in the
event of accidental death, or both, if available on the type of
Policy selected and if permitted by the insurer.

14.4 Insurability. If any Participant who has elected that a
Policy be purchased is found by the insurer not to be insurable
at standard rates, the Employer shall, if permitted by the rules
of the insurer, purchase a similar Policy which provides a lesser
death benefit and which can be purchased for the same premium.

14.5 Dividends on Policies. Dividends payable on any Policy
shall be applied tot he purchase of additional benefits under the
Policy unless the Participant requests that they be applied in
reduction of premiums.

14.6 Trustee of Policy. The Insurance Trustee shall apply for an
be the owner of each Policy purchased under the terms of the
Plan. Each Policy must provide that proceeds will be payable to
the Insurance Trustee; however, the Insurance Trustee shall be
required t pay over all such proceeds to the Participant s
Designated Beneficiary in accordance with the distribution
provisions of the Plan including, without limitation, Section
10.3. Under no circumstances shall the Trust retain any part of
the proceeds. In the event of any conflict between the terms of
the Plan and the terms of any Policy purchased hereunder, the
Plan provisions shall control.

14.7 Obligations with Respect to Policies. Except as may be
otherwise provided in any conditional or dinging receipt issued
by an insurer, there shall be no coverage and no death benefit
payable under any Policy to be purchased from such insurer until
such Policy shall have been delivered and the premium therefor
shall have been paid. The Employer and the Insurance Trustee
shall not have any responsibility as to the effectiveness of any
Policy purchased from an insurer, nor shall either of them have
any liability or obligation to pay any amount to any Participant
or his beneficiary by reason of any failure or refusal by the
insurer to make such payment.

14.8 Distribution of Proceeds on Participant s Death. In the
event of the death of a Participant before the conversion
provided for in Section 14.9, there shall be payable to the
beneficiary named in any Policy on his life the benefits provided
by the terms of such Policy.

14.9 conversion of Policies. Except as provided in Section 19.3,
if any Policies of a Participant ( other than retirement income,
endowment or annuity Policies) are held for his benefit at the
time distribution is to commence, the Policies may be converted
by the Insurance Trustee into cash, paid to the Trustee, credited
to the Employer contribution Account of the Participant, invested
in accordance whit the written instructions of the Employer ( and
if no such instructions have been given or if such instructions
are not clear, invested in Investment Company Shares in the same
proportion as the most recent contributions to the Participant s
Accounts) and distributed pursuant to Article 9, subject to the
terms and conditions of Article 10. Retirement income, endowment
or annuity Policies will be distributed directly to the
Participant at the time distribution is to commence.

14.10 Conflict with Policies. In the event of any conflict
between the terms of the Plan and the terms of any Policies
hereunder, the Plan provisions shall control.

14.11 Insurance Loans to Owner-Employees. If an Owner-Employee
or Shareholder-Employee receives, either directly or indirectly,
any amount from an Insurer as a loan under a Policy, the amount
so received shall be considered a distribution under the Plan.
Any assignment or pledge (or agreement to assign or pledge) by an
Owner-Employee or Shareholder-Employee of any interest in the
Plan shall be considered a distributions of such interest.

ARTICLE XV:
Top-Heavy Plans

15.1 Superseding Effect. For any Plan Year beginning after
December 31, 1983, in which Plan is determined to be a Top-Heavy
Plan under Section 15.2(b), the provisions of this Article 15
will supersede any conflicting provisions in the Plan or the Plan
Agreement. These provisions will be deemed applicable to a
Standard Plan at all times, unless the Employer has affirmatively
elected in the Plan Agreement to perform top-heavy testing
annually.

15.2 Definitions. For purposes of this Article 13, the terms
below shall be defined as follows:

(a) key Employee means any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was: (1) an officer of the Employer having
annual compensation greater than 50 percent of the amount in
effect under Section 415(b)(1)(A) of the Code; (2) an owner (or
considered an owner under Section 318 of the Code) of one of the
ten largest interests in the Employer having annual compensation
of more than $150,000. Annual compensation means compensation as
defined in Section 415(c)(3) of the Code, but including amounts
contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the Employee s gross income
under Section 125, Section 402(a)(8), Section 402(h) or Section
403(b) of the Code. The determination period is the Plan Year
containing the Determination Date, and the four preceding Plan
Years. The determination of who is a key Employee will be made
in accordance with Section 416(i)(1) of the code and the
Regulations thereunder.

(b) Top-Heavy: The Plan is Top-Heavy for a Plan Year beginning
after December 31, 1983, if any of the following conditions
exists:

(1) If the Top-Heavy Ratio for this Plan exceeds 60 percent and
this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.

(2) If this Plan is a part of a Required Aggregation Group of
plans but not part of a Permissive Aggregation Group and the
Top-Heavy Ratio for the group of plans exceeds 60 percent.

(3) If his Plan is part of a Required Aggregation Group and part
of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio for the Permissive Aggregation group exceeds 60 percent.

(1) If the Employer maintains one or more qualified defined
contribution plans (or any simplified employee pension plan) and
the Employer has not maintained any qualified defined benefit
plan which during the 5-year period ending on the Determination
Date(s) has or has had accrued benefits, the Top-Heavy Ratio for
the Plan alone or for the Required or Permissive Aggregation
Group as appropriate is a fraction, the numerator of which is the
sum of the account balances of all Key Employees as of the
Determination Date(s) (including any part of any account
distributed in the 5-year period ending on the Determination
Date(s)), and the denominator of which is the sum of all account
balances (including any part of any account balance distributed
in the 5-year period ending on the Determination Date(s)), both
computed in accordance with Section 416 of the Code and the
regulations thereunder. Both the numerator and denominator of
the Top-Heavy Ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which is required
to be taken into account on that date under Section 416 of the
Code and the regulations thereunder.

(2) If the Employer maintains one or more qualified defined
contribution plans (or any simplified employee pension plan) and
the Employer maintains or has maintained one or more qualified
defined benefit plans which during the 5-year period ending on
the Determination Date(s) has or has had any accrued benefits,
the Top-Heavy Ratio for any Required or Permissive Aggregation
Group as appropriate is a fraction, the numerator of which is the
sum of account balance under the aggregated qualified defined
contribution plan or plans for all Key Employees, determined in
accordance with (1) above, and the Present Value of accrued
benefits under the aggregated qualified defined benefit plan or
plans for all Key Employees, as of the Determination Date(s), and
the denominator of which is the sum of the account balances under
the aggregated qualified defined contributions plan or plans for
all Participants, determined in accordance with (1) above, and
the Present Value of accrued benefits under the qualified defined
benefit plan or plans for all Participants as of the
Determination Date(s), all determined in accordance with Section
416 of the Code and the regulations thereunder. The accrued
benefits under a defined benefit plan in both the numerator an
denominator of the Top-Heavy Ratio are increased for any
distribution of an accrued benefit made in the 5-year period
ending on the Determination Date.

(3) For purposes of (1) and (2) above, the value of account
balances and the Present Value of accrued benefits will be
determined as of the most recent Valuation Date that falls within
or ends with the 12-month period ending on the Determination
Date; except as provided in Section 416 of the Code and the
regulations thereunder for the first and second Plan Years of a
defined benefit plan. The account balances and accrued benefits
of a Participant(a) who is a not a Key Employee but who was a Key
Employee in a prior Plan Year, or (b) who has not been credited
with at least one Hour of Service for the Employer during the
5-year period ending on the Determination date, will be
disregarded. The calculation of the Top-Heavy Ratio, and the
extent to which distributions, rollovers and transfers are taken
into account will be made in accordance with Section 416 of the
Code and the regulations thereunder. Deductible Employee
contributions will not be taken into account for purposes of
computing the Top-Heavy Ratio. when aggregating plans, the value
of account balances and accrued benefits will be calculated whit
reference to the Determination Dates that fall within the same
calendar year.

The accrued benefit of a participant other than a Key Employee
shall be determined under (a) the method, if any, that uniformly
applies for accrual purposes under all defined benefit plans
maintained by the Employer or (b) if there is no such method, as
if such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional rule of Section 411(b)(1)(C)
of the Code.

(d) Permissive Aggregation Group means the Required Aggregation
Group of plans plus any other qualified plan or plans (or
simplified employee pension plan) of the Employer which, when
considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of Sections 401(a)(4) and
410 of the Code.

(e) Required Aggregation Group means: (i) each qualified plan of
the Employer in which at least one Key Employee participates or
participated at any time during the determination period
(regardless of whether the Plan has terminated) and (ii) any
other qualified plan of the Employer which enables a plan
described in (i) to meet the requirements of Section 401(a)(4) or
410 of the Code.

(f) Determination Date means, for any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year. For the
first Plan Year of the Plan, the Determination Date is the last
day of that Plan Year.

(g) Valuation Date means the last day of the Plan Year.

(h) Present Value means present value based only on the interest
and mortality rates specified in any defined benefit plan
maintained by the Employer and set forth in the Plan Agreement.

15.3 Minimum Allocation.
(a) Except as otherwise provided in paragraphs (c) and (d) below,
the Employer contributions and Forfeitures allocated on behalf of
any Participant who is not a Key Employee shall not be less than
the lesser of three percent of such Participant s Earnings, or in
the case here the Employer has not defined benefit plan which
designates this Plan to satisfy Section 401 of the Code, the
largest percentage of Employer contributions and Forfeitures, as
a percentage of the first $200,000 of the Key Employee s
Earnings, allocated on behalf of any Key Employee for that year.
The minimum allocation is determined without regard to any Social
Security contribution. This minimum allocation shall be made
even though, under other Plan provisions, the Participant would
not otherwise be entitled to receive an allocation, or would have
received a lesser allocation of the Employer s contributions and
Forfeitures for the Plan Year because of (1) the Participant s
failure to be credited with at least 1,000 Hours of Service, or
(2) the Participant s failure to make mandatory Employee
contributions to the Plan, or (3) the Participant s receiving
Earnings less than a stated amount. Neither Elective Deferrals,
Employer Matching Contributions nor Qualified Matching
Contributions for non-key employees shall be taken into account
for purpose of satisfying the requirement of this Section
15.3(a).

(b) For purposes of computing the minimum allocation. Earnings
will mean Earnings as defined in Section 2.13 of the Plan.

(c) The provision in paragraph (a) above shall not apply to any
Participant who was to employed by the Employer on the last day
of the Plan Year.

(d) The provision in paragraph (a) above shall not apply to any
Participant to the extent he is covered under any other plan or
plans of the Employer, and the Employer has provided in the Plan
Agreement that the minimum allocation requirement applicable to
Top-Heavy Plans will be met in the other plan or plans.

(e) The minimum allocation required (to the extend required to be
nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Sections 411(a)(3)(B) or (D) of the Code.

15.4 Earnings Limitation. For any Plan Year in which the Plan is
Top-Heavy, only the first $200,000 (or such larger amount as may
be prescribed by the Secretary of the Treasury or his delegate)
of a Participant s annual Earnings shall be taken into account
for purposes of determining Employer contributions under the
Plan.

15.5 Minimum Vesting Schedules (Variable Plans Only). For any
Plan Year in which this Plan is Top-Heavy and any subsequent Plan
Year, a minimum vesting schedule will automatically apply to the
Plan, as follows:

(a) If the Employer has selected in the Plan Agreement as the
Plan s regular vesting schedule the Tree Year Cliff, Five Year
Graded or Six Year Graded schedule, then the schedule selected in
the Plan Agreement shall continue to apply for any Plan Year to
which this Section 15.5 applies.

(b) If the Employer has selected in the Plan Agreement as the
Plans regular vesting schedule the Five Year Cliff schedule,
then the Three Year Cliff schedule shall apply in any Plan Year
to which this Section 15.5 applies.

(c) If the Employer has selected in the Plan Agreement as the
Plan s regular vesting schedule the Seven Year Graded schedule,
then the Six Year Graded schedule shall apply in any Plan Year to
which this Section 15.5 applies.

(d) If the Employer has selected in the Plan Agreement as the
Plan s regular vesting schedule a schedule other than those
described in paragraphs (a), (b) and (c), then the schedule
specified by the Employer in the Plan Agreement for this purpose
shall apply in any Plan Year to which this Section 15.5 applies.

The minimum vesting schedule applies to all benefits within the
meaning of Section 411(a)(7) of the Code except those
attributable to Employee contributions, including benefits
accrued before the effective date of Section 416 of the Code and
benefits accrued before the Plan became Top-Heavy. Further, to
reduction in a Participant s nonforfeitable percentage may occur
in the event the Plan s status as Top-Heavy changes for any Plan
Year. However, the vested portion of the Employer Contribution
Account of any Employee who does not have an Hour of Service
after the Plan has initially become Top-Heavy will be determined
without regard to this Section 15.5.

15.6 Adjustment of Fractions. For any Plan Year in which the
Plan is Top-Heavy, the Defined Benefit Fraction and the Defined
Contribution Fraction in Article 6 shall each be computed using
100 percent of the dollar limitations specified in Sections
415(b)(1)(A) and 415(c)(1)(A) instead of 125 percent. In a
Variable Plan, the foregoing requirement shall not apply if the
Top-Heavy Ratio does not exceed 90 percent and the Employer has
elected in the Plan Agreement to provide increased minimum
allocations or benefits satisfying Section 416(h)(2) of the Code.

ARTICLE XVI:
Administration of the Plan

16.1 Plan Administrator. The Plan shall be administered by the
Employer, as Plan Administrator and Named Fiduciary within the
meaning of ERISA, under rules of uniform application; provided,
however, that the Plan Administrator s duties and
responsibilities may be delegated to a person appointed by the
Employer or a committee established for that purpose, in which
case the committee shall be the Plan Administrator and Named
Fiduciary. The members of such a committee shall act by majority
vote, and may by majority vote authorize any one or ones of their
number to act for the committee. The person or committee (if
any) initially appointed by the Employer may be named in the Plan
Agreement, but the Employer may remove any such person or
committee member by written notice to him, and any such person or
committee may resign by written notice to the Employer, without
the necessity of amending the Plan Agreement. To the extent
permitted under applicable law, the Plan Administrator shall
have the sole authority to enforce the terms hereof on behalf of
any and all persons having or claiming any interest under the
Plan, and shall be responsible for he operations of the Plan in
accordance with its terms. The Pan Administrator shall have
discretionary authority to determine all questions arising out of
the administration, interpretation and application of the Plan,
all of which determinations shall be conclusive and binding on
all persons. The Plan Administrator in carrying out its
responsibilities under the Plan , may rely upon the written
opinions of its counsel and on certificates of physicians.
Subject to the provisions of the Plan and applicable law, the
Plan Administrator shall have no liability to any person as a
result of any action taken or omitted hereunder by the Plan
Administrator.

16.2 Claims Procedure. Claims for participation in or
distribution under the Plan shall be made in writing to the Plan
Administrator, or an agent designated by the Plan Administrator
whose name shall have been communicated t all Participants and
other persons as required by law. If any claim so made is denied
in whole or in part, the claimant shall be furnished promptly by
the Plan Administrator with a written notice:

(a) setting forth the reason for the denial,

(b) making reference to pertinent Plan provisions.

(d) explaining the claim review procedure set forth herein.

Within 60 days after denial of any claim for participation or
distribution under the Plan, the claimant may request in writing
a review of the denial by the Plan Administrator. Any claimant
seeking review hereunder shall be entitled to examine all
pertinent documents and to submit issues and comments in writing.
The Plan Administrator shall render a decision on review
hereunder; provided, that if the Plan Administrator determines
that a hearing would be appropriate, its decision on review shall
be rendered within 120 days after receipt of the request for
review. The decision on review shall be in writing and shall
state the reason for the decision, referring to the Plan
provisions upon which it is based.

16.3 Employer s Responsibilities. The Employer shall be
responsible for:

(a) Keeping record of employment and other matters containing all
relevant data pertaining to any person affected hereby and his
eligibility to participate, allocations to his Accounts, and his
other rights under the Plan;

(b) Periodic, timely filing of all statements, reports and
returns required to be filed by ERISA;

(d) Providing notice to interested parties as required by Section
7476 of the Code;

(e) Retention of records for periods required by law; and

(f) Seeing that all persons required to be bonded on account of
handling assets of the Plan are bonded.

16.4 Recordkeeper. The Recordkeeper is hereby designated as
agent of the Employer under the Plan to perform directly or
through agents certain ministerial duties in connection with the
Plan, in particular:

(a) To keep and regularly furnish to the Employer a detailed
statement of each Participant s Accounts, showing contributions
thereto by the Employer and the Participant, Investment Products
purchased therewith, earnings thereon and Investment Products
purchased therewith, and each redemption or distribution made for
any reason, including fees or benefits; and

all as may be more fully set forth in a service agreement
executed by the Employer and the Recordkeeper. If the Employer
does not appoint another person or entity as Recordkeeper, the
Employer itself shall be the Recordkeeper.

16.5 Prototype Plan. Putnam is the sponsor of the Putnam Basic
Plan Document, a prototype plan approved as to form by the
Internal Revenue Service. Provided that an Employer s adoption
of the Plan is made known to and accepted by Putnam in accordance
with the Plan Agreement, Putnam will inform the Employer of
amendments to the prototype plan and provide such other services
in connection with the Plan as may be agreed between Putnam and
the Employer. Putnam may impose for its services as sponsor of
the prototype plan such fees as it may establish from time to
time in a fee schedule addressed to the Employer. Such fees
shall, unless paid by the Employer, be paid from the Trust Fund,
and shall in that case be charged pro rata against the Accounts
of all Participants. The Trustee is expressly authorized to
cause Investment Products to be sold or redeemed for the purpose
of paying such fees.

ARTICLE XVII:
Trustee and Insurance Trustee

17.1 Powers and Duties of the Trustee. The Trustee shall have
the authority, in addition to any authority given by law, to
exercise the following powers in the administration of the Trust:

(a) To invest all or a part of the Trust Fund in Investment
Products in accordance with the investment instructions delivered
by the Employer pursuant to Section 13.3, without restriction to
investments authorized for fiduciaries, including without
limitation any common, collective or commingled trust fund
maintained by the Trustee (or any other such fund, acceptable to
Putnam and the Trustee, that qualifies for exemption from federal
income tax pursuant to Revenue Ruling 81-100). Any investment
in, and any terms and conditions of, any such common, collective
or commingled trust fund available only to employee trusts which
meet the requirements of the Code, or corresponding provisions of
subsequent income tax laws of the United States, shall constitute
an integral part of this Agreement;

(b) If this is a Variable Plan and Putnam and the Trustee have
consented thereto in writing, to invest without limit in stock of
the Employer or any affiliated company;

(c) To dispose of all or part of the investments, securities or
other property which may from time to time or at any time
constitute the Trust Fund in accordance with the written
directions furnished by the Employer for the investment of
Participants separate Accounts or the payment of benefits or
expenses of the Plan, and to make, execute and deliver to the
purchasers thereof good and sufficient deeds of conveyance
therefore, and all assignments, transfers and other legal
instruments, either necessary or convenient for passing the title
and ownership thereto, free and discharged of all trust and
without liability on the part of such purchasers to see to the
application of the purchase money;

(d) To hold cash uninvested to the extent necessary to pay
benefits or expenses of the Plan;

(e) To follow the directions of an investment manager appointed
pursuant to Section 13.7;

(f) To cause any investment of the Trust Fund to be registered in
the name of the Trustee or the name of its nominee or nominees or
to retain such investment unregistered or in a form permitting
transfer by delivery; provided that the books and records of the
Trustee shall at all times show that all such investments are
part of the Trust Fund:

(g) Upon the written direction of or through the Employer, to
vote in person or by proxy (in accordance with Section 13.6 and,
in the case of stock of the Employer, at the direction of the
Employer) with respect to all securities that are part of the
Trust Fund;

(h) To consult and employ any suitable agent to act on behalf of
the Trustee and to contract for legal, accounting, clerical and
other services deemed necessary by the Trustee to manage and
administer the Trust Fund according to the terms of the Plan;

(i) Upon the written direction of the Employer, to make loans
from the Trust Fund to Participants in amounts and on terms
approved by the Plan Administrator in accordance with the
provisions of the Plan; provided that the Employer shall have the
sole responsibility for computing and collecting all loan
repayments required to be made under the Plan; and

(j) To pay from the Trust Fund all taxes imposed or levied with
respect to the Trust Fund or any part thereof under existing or
future laws, and to contest the validity or amount of any tax
assessment, claim or demand respecting the Trust Fund or nay part
thereof.

17.2 Limitation of Responsibilities. Except as may otherwise be
required under applicable law, neither the Trustee nor the
Insurance Trustee nor any of their respective agents shall have
any responsibility for:

(a) Determining the correctness of the amount of any contribution
for the sole collection or payment of contributions, which shall
be the sole responsibility of the Employer;

(b) Loss or breach caused by any Participant s exercise of
control over his Accounts, which shall be the sole responsibility
of the Participant;

(c) Loss or breach caused by the Employer s exercise of control
over Accounts pursuant to Section 13.3, which shall be the sole
responsibility of the Employer;

(d) Sums paid to an insurer or the validity of any Policy or the
accuracy of information provided by an insurer, which shall be
the sole responsibility of the insurer;

(e) Performance of any other responsibilities not specifically
allocated to them under the Plan.

17.3 Fees and Expenses. The Trustee s fees for performing its
duties hereunder shall be such reasonable amounts as shall be
established by the Trustee from time to time in a fee schedule
addressed to the Employer. Such fees, any taxes of any kind
which may be levied or assessed upon or in respect of the Trust
Fund and any and all expenses reasonably incurred by the Trustee
shall, unless paid by the Employer, be paid from the Trust Fund
and shall, unless allocable to the Accounts of specific
Participants, be charged pro rata against the Accounts of all
Participants. The Trustee is expressly authorized to cause
Investment Products to be sold or redeemed for the purpose of
paying such amounts. Charges and expenses incurred in connection
with a specific Investment Product, unless allocable to the
Accounts of specific Participants, shall be charged pro rata
against the Accounts of all Participants for whose benefit
amounts have been invested in the specific Investment Product.

17.4 Reliance on Employer. The Trustee and its agents (and the
Insurance Trustee, if any) shall rely upon any decision of the
Employer, or of any person authorized by the Employer, purporting
to be made pursuant to he terms of the Plan, and upon any
information or statements submitted by the Employer or such
person (including those relating to the entitlement of any
Participant to benefits under the Plan), and shall to inquire as
to the basis of any such decision or information or statements,
and shall incur no obligation or liability for any action taken
or omitted in reliance thereon. The Trustee and its agents shall
be entitled to rely on the latest written instruction received
from the Employer as to the person or persons authorized to act
for the Employer hereunder, and to sign on behalf of the Employer
any directions or instructions, until receipt from the Employer
of written notice that such authority has been revoked.

17.5 Action Without Instructions. If the Trustee receives no
instructions from the Employer in response to communications sent
by registered or certified mail to the Employer at its last known
address as shown on the books of the Trustee, then the Trustee
may make such determinations with respect to administrative
matters arising under the Plan as it considers reasonable,
notwithstanding any prior instructions or directions given by or
on behalf of the Employer, but subject to any instruction or
direction given by or on behalf of the Participants. To the
extent permitted by applicable law, any determination so made
will be binding on all persons having or claiming any interest
under the Plan or Trust, and the Trustee will incur no obligation
or responsibility for any such determination made in good faith
or for any action taken pursuant thereto. I making any such
determination the Trustee may require that it be furnished with
such relevant documents as it reasonably considers necessary.
17.6 Advice of Counsel. The Trustee and the Insurance Trustee
may each consult with legal counsel (who may, but need not be,
counsel for the Employer) concerning any questions which may
arise with respect to their respective rights and duties under
the Plan, and the opinion of such counsel shall be full and
complete protection to the extent permitted by applicable law in
the respect of any action taken or omitted by the Trustee or the
Insurance Trustee, as the case may be, hereunder in accordance
with the opinion of such counsel.

17.7 Accounts. The Trustee shall keep full accounts of all
receipts and disbursement which pertain to investments in
Investment Products, and the Trustee and the Insurance Trustee
shall each keep accounts of such other transactions as it is
required to perform hereunder. Within a reasonable time
following the close of each Plan Year, or upon its removal or
resignation or upon termination of the Trust and at such other
times as may be appropriate, each shall render to the Employer
and any other persons as may be required by law an account of its
administration of the Plan and Trust during the period since the
last previous such accounting, including such information as may
be required by law. The written approval of any account by the
Employer and all other persons to whom an account is rendered
shall be final and binding as to all matters and transactions
stated or shown therein, upon the Employer and Participants and
all persons who then are or thereafter become interested in the
Trust. The failure of the Employer or any other person to whom
an account is rendered to notify the party rendering the account
within 60 days after the receipt of any account of his or its
objection to the account shall be the equivalent of written
approval. If the Employer or any other person to whom an account
is rendered files any objections within such 60-day period with
respect to any matters or transactions stated or shown in the
account and the Employer or such other person and the party
rendering the account and the Employer or such person shall have
the right to have such questions settled by judicial proceedings,
although the Employer or such other person to whom an account is
rendered shall have, to the extent permitted by applicable law,
only 60 days from filing of written objection t the account to
commence legal proceedings. Nothing herein contained shall be
construed so as to deprive the Trustee or the Insurance Trustee
of the right to have a judicial settlement of its accounts. In
any proceeding for a judicial settlement of any account or for
instructions, the only necessary parties shall be the Trustee,
the Insurance Trustee, the Employer and persons to whom an
account is required by law to be rendered.

17.8 Access to Records. The Trustee and the Insurance Trustee
shall give access to their respective records with respect to the
Plan at reasonable times and on reasonable notice to any persona
required by law to have access to such records.

17.9 successors. any corporation into which the Trustee may
merge or with which it may consolidate or any corporation
resulting from any such merger or consolidation shall be the
successor of the Trustee without the execution or filing of any
additional instrument or the performance of any further act.

17.10 Persons Dealing With Trustee or Insurance Trustee. No
person dealing with the Trustee or the Insurance Trustee shall be
bound to see to the application of any money or property paid or
delivered to such party or to inquire into the validity or
propriety of any transactions.

17.11 Resignation and Removal; Procedure. The Trustee or the
Insurance trustee may resign at any time by giving 60 days
written notice to the Employer and to Putnam. The Employer may
remove the Trustee or the Insurance Trustee at any time by giving
60 days written notice to the party removed and to Putnam. In
any case of resignation or removal hereunder, the period of
notice may be reduced to such shorter period as is satisfactory
to the Trustee, the Insurance Trustee and the Employer.
Notwithstanding anything to the contrary herein, any resignation
hereunder shall take effect at the time notice hereof is given if
the Employer may no longer participate in the prototype Plan and
is deemed to have an individually designed plan at the time
notice is given.

17.12 Action of Trustee Following Resignation or Removal. When
the resignation or removal of the Trustee becomes effective, the
Trustee shall perform all acts necessary to transfer the Trust
Fund to its successor. However, the Trustee may reserve such
portion of the Trust Fund as it may reasonably determine to be
necessary for payment of its fees and any taxes and expenses, and
any balance of such reserve remaining after payment of such fees,
taxes and expenses shall be paid over to its successor. The
Trustee shall have no responsibility for acts or omissions
occurring after its resignation becomes effective.

17.13 Action of Insurance Trustee Following Resignation or
Removal. when the Insurance Trustee s resignation or removal
becomes effective, the Insurance Trustee shall perform all acts
necessary to transfer ownership of the Policies to its successor.
If no successor has accepted appointment, the Policies shall be
held and owned by the Employer acting as Insurance Trustee until
a successor is appointed.

17.14 Effect of Resignation or Removal. Resignation or removal
of the Trustee or the Insurance Trustee shall to terminate the
Trust. In the event of any vacancy in the position of Trustee
(or, in a Plan having amounts invested in Policies, the position
of Insurance Trustee), whether the vacancy occurs because of the
resignation or removal of the Trustee (or the Insurance Trustee)
the Employer shall appoint a successor to fill the vacant
position. If the Employer does not appoint such a successor who
accepts appointment by the later of 60 days after notice of
resignation or removal is given or by such later date as the
Trustee or the Insurance Trustee, as the case may be, and
Employer may agree in writing to postpone the effective date of
the Trustee or the Insurance Trustee s resignation or removal,
the Trustee or Insurance Trustee may apply t a court of competent
jurisdiction for such appointment of cause the Trust to be
terminated, effective as of the date specified by the Trustee or
Insurance Trustee, as the case may be, in writing delivered to
the Employer. Each successor trustee so appointed and accepting
a trusteeship hereunder shall have all of the rights and powers
and all of the duties and obligations of the original Trustee or
Insurance Trustee, as the case may be, under the provisions
hereof, but shall have no responsibility for acts or omissions
before he becomes a Trustee or Insurance Trustee.

17.15 Fiscal Year of Trust. The fiscal year of the Trust will
coincide with the Plan Year.

17.16 Limitation of Liability. Except as may otherwise be
required by law and other provisions of the Plan, no fiduciary of
the Plan, within the meaning of Section 3(21) of ERISA, shall be
liable for any losses incurred with respect to the management of
this Plan nor shall he or it be liable for any acts or omissions
except those caused by his or its own negligence or bad faith in
failing to carry out his or its duties under the terms contained
the Plan.

17.17 Indemnification. Subject to the limitations of applicable
law, the Employer agrees to indemnify and hold harmless (i) all
fiduciaries, within the meaning of ERISA Sections 3(21) and 404,
and (ii) Putnam, for all liability occasioned by any act, of such
party or omission to act, in good faith and without gross
negligence, and for all expenses incurred by any such party in
determining its duty or liability under ERISA with respect to any
questions arising under the Plan.

ARTICLE XVIII:
Amendment

18.1 General. The Employer reserves the power at any time or
times to amend the provisions of the Plan and the Plan Agreement
to any extent and in any manner that it may deem advisable. If,
however, the Employer makes any amendment (including an amendment
occasioned by a waiver of the minimum funding requirement under
Section 412 (d) of the Code) other than
(a) a change in an election made in the Plan Agreement,

(b) amendments stated in the Plan Agreement which allow the Plan
to satisfy Section 415 and to avoid duplication of minimums
under Section 416 of the Code because of the required aggregation
of multiple plans, or

(c) model amendments published by the Internal Revenue Service
which specifically provide that their adoption will not cause the
Plan to be treated a individually designed, the Employer shall
cease to participate in this prototype Plan and will be
considered to have an individually designed plan. In that event,
Putnam shall have no further responsibility to provide to the
Employer any amendments or other material incident to the
prototype plan, and Putnam may resign immediately as Trustee and
as Recordkeeper. Any amendment shall be made by delivery to the
Trustee (and the Recordkeeper, if any) of a written instrument
executed by the Employer providing for such amendment. Upon the
delivery of such instrument to the Trustee, such instrument shall
become effective in accordance with its terms as to all
Participants and all person having or claiming any interest
hereunder, provided, that the Employer shall not have the power:

(1) To amend the Plan in such a manner as would cause or permit
any part of the assets of the Trust to be diverted to purposes
other than the exclusive benefit of Participants or their
Beneficiaries, or as would cause or permit any portion of such
assets to revert to or become the property of the Employer.

(2) To amend the Plan retroactively in such a manner as would
have the effect of decreasing a Participant s accrued benefit,
except that Participant s Account balance may be reduced to the
extent permitted under Section 412(c)(80 of the Code. For
purposes of this paragraph (2), an amendment shall be treated as
reducing a Participant s accrued benefit if it has the effect of
reducing his Account balance, or of electing an optional form of
benefit with respect to amount attributable to contributions made
performed before the adoption of the amendment; or

(3) To amend the Plan so as to decrease the portion of a
Participant s Account balance that has become vested, as compared
to the portion that was vested, under the terms of the Plan
without regard to the amendment, as of the later of the date the
amendment is adopted or the date it becomes effective.

(4) To amend the Plan in such a manner as would increase the
duties or liabilities of the Trustee or the Recordkeeper unless
the Trustee or the Recordkeeper consents thereto in writing.

18.2 Delegation of Amendment Power. The Employer and all
sponsoring organizations of the Putnam Basic Plan Document
delegate to Putnam Financial Services, Inc., the power to amend
the Plan (including the power to amend this Section 18.2 to name
a successor to which such power of amendment shall be delegated),
for he purpose of adopting amendments which are certified to
Putnam Financial Services, Inc., by counsel satisfactory to it,
as necessary or appropriate under applicable law, including any
regulation or ruling issued by the United States Treasury
Department or any other federal or state department or agency;
provided that Putnam Financial Services, Inc., or such successor
may amend the Plan only if it has mailed a copy of the proposed
amendment to the Employer at its last known address as shown on
its books by the date on which it delivers a written instrument
providing for such amendment, and only if the same amendment is
made on said date to all plans in this form as to which Putnam
Financial Services, Inc., or such successor has a similar power
of amendment. If a sponsoring organization does not adopt any
amendment mad by Putnam Financial Services, Inc., such sponsoring
organization shall cease to participate in this prototype Plan
and will be considered to have an individually designed plan.

ARTICLE XIX:
Termination of the Plan and Trust

19.1 General. The Employer has established the Plan and the
Trust with the bona fide intention and expectation that
contributions will be continued indefinitely, but the Employer
shall have not obligation or liability whatsoever to maintain the
Plan for any given length of time and may discontinue
contributions under the Plan or terminate the Plan at any time by
written notice delivered to the Trustee and Insurance Trustee,
without any liability whatsoever for any such discontinuance or
termination.

19.2 Events of Termination. The Plan will terminate upon the
happening of any of the following events:

(a) Death of the Employer, if a sole proprietor, or dissolution
or termination of the Employer, unless within 60 days thereafter
provision is made by the successor to the business with respect
to which the Plan was established for the continuation of the
Plan, and such continuation is approved by the Trustee;

(b) Merger, consolidation or reorganization of the Employer into
one or more corporations or organizations, unless the surviving
corporations or organizations adopt the Plan by an instrument in
writing delivered to the Trustee within 60 days after such a
merger, consolidation and reorganization;

(c) Sale of all or substantially all of the assets of the
Employer, unless the purchaser adopts the Plan by an instrument
in writing delivered to the Trustee within 60 days after the
sale;

(d) the institution of bankruptcy proceedings by or against the
Employer, or a general assignment by the Employer to or for the
benefit of its creditors; or

(e) Delivery of notice as provided in Section 19.1.

19.3 Effect of Termination. Notwithstanding any other provisions
of this Plan, other than Section 19.4, upon termination of the
Plan or complete discontinuance of contributions thereunder, each
Participant s Accounts will become fully vested and
nonforfeitable, and upon partial termination of the Plan, the
Accounts of each Participant affected by the partial termination
will become fully vested and nonforfeitable. The Employer shall
notify the Trustee and the Insurance Trustee in writing of such
termination, partial termination or complete discontinuance of
contributions. In the events of the complete termination of the
Plan or discontinuance of contributions, the Trustee will, after
payment of all expenses of the Trust Fund, make distribution of
the Trust assets to the Participants or other persons entitled
thereto, in such form as the Employer may direct pursuant to
Article 10 or, in the absence of such direction, in a single
payment in cash or in kind. Upon completion of such
distributions under this Article, the Trust will terminate, the
Trustee and the Insurance Trustee will be relieved from their
obligations under the Trust, and no Participant or other person
will have any further claim thereunder.

19.4 Approval of Plan. Notwithstanding any other provision of
the Plan, if the Employer fails to obtain or to retain the
approval by the Internal Revenue Service of the Plan as a
qualified plan under Section 401(a) of the Code, then (i) the
Employer shall promptly notify the Trustee, and (ii) the Employer
may no longer participate in the Putnam prototype plan, but will
be deemed to have an individually designed plan. If it is
determined by the Internal Revenue Service that the Plan upon its
initial adoption does not qualify under Section 401(a) of the
Code, all assets then held under the Plan will be returned within
one year of the denial of initial qualification to the
Participants and the Employer to the extent attributable to their
respective contributions and any income earned thereon, but only
if the application for qualification is made by the time
prescribed by law for filing the Employer s federal income tax
return for the taxable year in which the Plan is adopted, or such
later date as the Secretary of the Treasury may prescribe. Upon
such distribution, the Plan will be considered to be rescinded
and to be of no force or effect.
ARTICLE XX:
Transfers from Other Qualified Plans; Mergers

20.1 General. Notwithstanding any other provision hereof,
subject to he approval of the Trustee there may be transferred to
the Trustee all or any of the assets held (whether by a trustee,
custodian or otherwise) in respect of any other plan which
satisfies the applicable requirements of Section 401(a) of the
Code and which is maintained for the benefit of any Employee
(provided, however, that the Employee is not a member of a class
of Employees excluded from eligibility to participate in the
Plan) except that insurance policies held in respect of such
other plan shall be transferred tot he Insurance Trustee as
trustee if the Employer so determines. Any such assets so
transferred shall be accompanied by written instructions from the
Employer naming the persons for whose benefit such assets have
been transferred and showing separately the respective
contributions made by the Employer and by the Participants and
the current value of the assets attributable thereto.

20.2 Amounts Transferred. The Employer shall credit any assets
transferred pursuant to Section 201. to the appropriate Accounts
of the persons for whose benefit such assets have been
transferred. Any amounts credited as contributions previously
made by an employer or by such persons under such other plan
shall e treated as contributions previously made under the Plan
by the Employer or by such persons, as the case may be.

20.3 Merger or Consolidation. The Plan shall not be merged or
consolidated with any other plan, nor shall any assets or
liabilities of the Trust Fund be transferred to any other plan,
unless each Participant would receive a benefit immediately after
the transaction, if the Plan then terminated, which is equal to
or greater than the benefit he would have been entitled to
receive immediately before the transaction if the Plan had then
terminated.

ARTICLE XXI:
Miscellaneous

21.1 Notice of Plan. The Plan shall be communicated to all
Participants by the Employer on or before the last day on which
such communication may be made under applicable law.

21.2 No Employment Rights. Neither the establishment of the Plan
and the Trust, nor any amendment thereof, nor the creation of any
fund or account, nor the purchase of Policies, nor the payment of
any benefits shall be construed as giving to any Participant or
any other person any legal or equitable right against the
Employer, the Trustee, or the Insurance Trustee, or the Insurance
Trustee, except as provided herein or by ERISA; and in no event
shall the terms of employment or service of any Participant be
modified or in any way be affected hereby.

21.3 Distributions Exclusively From Plan. Participants and
Beneficiaries shall look solely to the assets held in the trust
and any Policies purchased pursuant to the Plan for the payment
of any benefits under the Plan.

21.4 No Alienation. The benefits provided hereunder shall not be
subject to alienation, assignment, garnishment, attachment,
execution or levy of any kind, and any attempt to cause such
benefits to be so subjected shall not be recognized, except as
provided in Section 12.4 or in accordance with a Qualified
domestic relations order within the meaning of Section 414(p) of
the Code. The Plan Administrator shall determine whether a
domestic relations order is qualified in accordance with written
procedures adopted by the Plan Administrator.

21.5 Provision of Information. The Employer, Trustee and
Insurance Trustee shall furnish to each other such information
relating to the Plan and Trust as may be required under the Code
or ERISA and any regulations issued or forms adopted by the
Treasury Department or the Labor Department or otherwise
thereunder.

21.6 no Prohibited Transactions. The Employer, Trustee, and
Insurance Trustee shall, to the extent of their respective powers
and authority under the Plan, prevent the Plan from engaging in
any transaction known by that person to constitute a transaction
prohibited by Section 4975 of the Code and any rules or
regulations with respect thereto.

21.7 Governing Law. The Plan shall be construed, administered,
regulated and governed in all respects under and by the laws of
the United States, and to the extent permitted by such laws, by
the laws of the Commonwealth of Massachusetts.

21.8 Gender. Whenever used herein, a pronoun in the masculine
gender includes the feminine gender unless the context clearly
indicates otherwise.
<PAGE>
II. IRS Opinion Letters

II. IRS Opinion Letters
Putnam Standard Profit Sharing and 401(k) Plan
Opinion Letter 38

Putnam Standard Money Purchase Pension Plan
Opinion Letter 39

Putnam Variable Profit Sharing and 401(k) Plan
Opinion Letter 40

Putnam Variable Money Purchase Pension Plan
Opinion Letter 41

Putnam
Retirement
Plans:
Plan Agreements
for the Simplified
Retirement Plans

Putnam Profit Sharing Plan (Keogh)

Putnam Money Purchase Pension Plan (Keogh)

Putnam Profit Sharing and 401(k) Plan

Boston*London*Tokyo
<PAGE>
Contents

Part I: Summary of Plan Services

Summary of Plan Services 2

Part II: Adopting a Simplified Putnam Retirement Plan

Step-by-Step Guide to Establishing a
Putnam Profit Sharing Plan (Keogh) 4

Step-by-Step Guide to Establishing a
Putnam Money Purchase Pension
Plan (Keogh) 5

Step-by-Step Guide to Establishing a
Putnam Profit Sharing and 401(k) Plan 6

Suggested Form of Board Resolution
for a New Plan 7

Putnam Plan Agreement #001 9

Putnam Plan Agreement #002 19

Instructions for Completing and Distributing
Notice to Interested Parties 27

Notice to Interested Parties 29

Plan Investment Form 33

Part III: Questions and Answers about the
Simplified Putnam Retirement Plans

General Comments 39

Key Definitions 40

Contributions 41

Plan Investments 45

Plan Distributions 45

Top-Heavy Testing 46

Plan Administration 47

Glossary of Terms 49
<PAGE>
Part I: Summary of Plan Services

Summary of Plan Services 2
Summary of Plan Services

Putnam will provide the following administrative services listed
below for each of the Simplified Putnam Retirement Plans.

A. Plan Installation/Maintenance:

1 Putnam will provide the initial SUMMARY PLAN DESCRIPTION to the
Employer for the Employer s completion, review, approval and
submission to the Department of Labor and distribution to the
Plan Participants and Beneficiaries.

2 Putnam will provide the NOTICE TO INTERESTED PARTIES (page 29
of this booklet) for the Employer s completion, review, approval
and distribution to the Plan Participants.

3 Putnam will provide the Employer any PLAN AMENDMENTS necessary
to comply with changes required by law.

B. Employer and Employee Reports

1 Putnam will process Employer authorization for hardship
withdrawals, if applicable, benefit payments, and investment
change elections pursuant to Employer instructions in accordance
with the Plan.

2 Putnam will allocate contributions to Participant accounts
pursuant to Employer instructions in accordance with the Plan.

3 Putnam will provide Consolidated Quarterly Statements and
confirmations of each fund transaction to Participants.

4 Putnam will provide the Employer with assistance with the
preparation of a Summary Annual Report for distribution to Plan
Participants.

5 Putnam will provide the Employer with a 401(k) Plan Group
Investment Report, if applicable.

6 Putnam will provide the Employer with sample administrative
forms.

7 Putnam will provide the Employer with a Form 5500 kit with
instructions to assist the Employer with preparation of the
applicable Form 5500 for filing with the IRS.
<PAGE>
8 Putnam will provide the Employer with an information kit to
assist the Employer in performing an annual TEFRA Top-Heavy Test,
if applicable.*

9 Putnam will provide the Employer with an informational kit to
assist the Employer in performing a Plan Year-end 401(k) Actual
Deferral Percentage Test, if applicable.*

10 Putnam will process Plan distributions, including preparation
and mailing of IRS Forms 1099-R. Plan distributions include all
payments to Participants and Beneficiaries, and payments to the
Employer or its designee.

*Putnam will not be responsible for providing information
necessary for aggregating tests with other plans maintained by
the Employer or plans maintained by other companies under the
same controlled group of companies or affiliated service group.

Part II: Adopting a Simplified Putnam Retirement Plan

Step-by-Step Guide to Establishing a
Putnam Profit Sharing Plan (Keogh) 4

Step-by-Step Guide to Establishing a
Putnam Money Purchase Pension
Plan (Keogh) 5

Step-by-Step Guide to Establishing a
Putnam Profit Sharing and 401(k) Plan 6

Suggested Form of Board Resolution
for a New Plan 7

Putnam Plan Agreement #001 9

Putnam Plan Agreement #002 19

Notice to Interested Parties 29

Plan Investment Form 33
<PAGE>
Step-by-Step Guide to Establishing a Putnam Profit Sharing Plan
(Keogh)

1 Contact Putnam or your investment dealer to order Employee
Enrollment Kits and the appropriate fund prospectuses for each of
your employees. If you already have a retirement plan and will
be transferring assets to Putnam, please request the Plan
Transfer Booklet.

2 Before adopting the Putnam Plan, corporate employers must pass
a Board Resolution. A suggested Form of Board Resolution for New
Plan is on page 7. (If you are transferring from your current
plan, please see the Suggested Form of Board Resolution provided
in the Plan Transfer Booklet.)

3 Complete Plan Agreement #001 on pages 9-18. (You do not need
to complete Item 12 of Plan Agreement #001 when adopting a Putnam
Profit Sharing Plan.) If you wish to adopt a Paired Putnam
Profit Sharing and Money Purchase Pension Plan, you must also
complete Plan Agreement #002.

4 Complete and post the Notice to Interested Parties on page 29.

5 Enroll your employees. Each eligible employee must receive an
employee enrollment kit and Buyer s Guides (prospectuses) for the
Putnam funds that are being offered through your plan. All
eligible employees should return a signed enrollment form to you.

6 Complete the Plan Investment Form on pages 33-37 using the
employee enrollment forms.

7 Send the following items to Putnam Investor Services, ATTN:
Investment Processing, P.O. Box 2701, Boston, MA 02208:

* Board Resolution
* Plan Agreement #001
* Employee Enrollment Forms
* Plan Investment Form
* Check payable to Putnam Fiduciary Trust Company for initial
contribution and annual participant fee

Be sure to keep copies of these forms for your files.

8 Putnam will review your Plan Agreement for acceptance. (Putnam
must accept this Agreement in order for you to receive future
amendments to the plan.) Putnam will provide you with a Summary
Plan Description and Your Putnam Retirement Plan Kit. This kit
contains the administrative forms associated with the operation
of a Putnam plan.
Step-by-Step Guide to Establishing a Putnam Money Purchase
Pension Plan (Keogh)

3 Complete Plan Agreement #002 on pages 19-26. (If you wish to
adopt a Paired Putnam Profit Sharing and Money Purchase Pension
Plan, you must also complete Plan Agreement #001.

4 Complete and post the Notice to Interested Parties on page 29.

5 Enroll your employees. Each eligible employee must receive an
employee enrollment kit and Buyers Guides (prospectuses) for the
Putnam funds that are being offered through your plan. All
eligible employees should return a signed enrollment form to you.

6 Complete the Plan Investment Form on pages 33-37 using the
employee enrollment forms.

7 Send the following items to Putnam Investor Services, ATTN:
Investment Processing, P.O. Box 2701, Boston, MA 02208:

* Board Resolution
* Plan Agreement #002
* Employee Enrollment Forms
* Plan Investment Form
* Check payable to Putnam Fiduciary Trust Company for initial
contribution and annual participant fee

Be sure to keep copies of these forms for your files.

8 Putnam will review your Plan Agreement for acceptance. (Putnam
must accept this Agreement in order for you to receive future
amendments to the plan.) Putnam will provide you with a Summary
Plan Description and Your Putnam Retirement Plan Kit. This kit
contains the administrative forms associated with the operation
of a Putnam plan.
<PAGE>
Step-by-Step Guide to Establishing a Putnam Profit Sharing and
401(k) Plan

2 Before adopting the Putnam Plan, corporate employers must pass
a Board Resolution. A Suggested Form of Board Resolution for New
Plan is on page 7. (If you are transferring from your current
plan, please see the Suggested Form of Board Resolution provided
in the Plan Transfer Booklet.)

3 Complete Plan Agreement #001 on pages 9-18.

4 Complete and post the Notice to Interested Parties on page 29.

5 Enroll your employees. Each eligible employee must receive an
employee enrollment kit and Buyers Guides (prospectuses) for the
Putnam funds that are being offered through your plan. All
eligible employees should return a signed enrollment form to you.

6 Based on the information provided in your employee s Salary
Reduction Agreements, perform the preliminary 401(k) Actual
Deferral Percentage Test which is described on page 43 of this
booklet. Once you are sure that your plan meets the Actual
Deferral Percentage Test, begin payroll deduction procedures.

7 Complete the Plan Investment Form on pages 33-37 using the
employee enrollment forms.

8 Send the following items to Putnam Investor Services, ATTN:
Investment Processing, P.O. Box 2701, Boston, MA 02208:

* Board Resolution
* Plan Agreement #001
* Employee Enrollment Forms
* Plan Investment Form
* Check payable to Putnam Fiduciary Trust Company for initial
contribution and annual participant fee

Be sure to keep copies of these forms for your files.

9 Putnam will review your Plan Agreement for acceptance. (Putnam
must accept this Agreement in order for you to receive future
amendments to the plan.) Putnam will provide you with a Summary
Plan Description and Your Putnam Retirement Plan Kit. This kit
contains the administrative forms associated with the operation
of a Putnam plan.
<PAGE>
For Corporate Employers Only
Suggested Form of Board Resolution for New Plan

THE UNDERSIGNED certifies that he/she is Secretary of ,
a corporation organized and existing under the laws of the State
of
,
and that the following resolutions were adopted at a meeting of
the Board of Directors of the Corporations called and held on the
day of _______ , 19_______, and that the same have not been
amended or rescinded and are in full force and effect:

RESOLVED, that this Board authorizes and directs the proper
officers of this Corporation in the name an on behalf of this
Corporation to execute and deliver a Plan Agreement in the form
now before this meeting, adopting, effective as of ______, 19____
, the Putnam _________________ Plan (insert type of plan);

FURTHER RESOLVED, that this Board authorizes and directs the
proper officers of this Corporation to do all such acts and
things as they, in their discretion and with advice of counsel,
find necessary or desirable to carry out the Plan, including
making contributions out of funds of the Corporation in
accordance with the Plan Agreement;

FURTHER RESOLVED, that ______________ is appointed as Trustee to
serve in accordance with the terms and conditions of the Plan,
commencing on the effective date as designated in the foregoing
resolution:

FURTHER RESOLVED, that this Board authorizes and empowers any one
of the following officers of this Corporation (insert designated
officers): ___________________________________________
to represent this Corporation in all transactions with the
Trustee under the terms and conditions of the Plan, and in the
name of and on behalf of this Corporation to give all notices and
instructions to the Trustee which are necessary or desirable to
carry out the Plan, and to receive all communications for the
Trustee pursuant thereto;

FURTHER RESOLVED, that the President of this Corporation is
authorized and directed to submit an application to the Internal
Revenue Service for a determination that the Plan qualifies under
the provisions of Section 401 of the Internal Revenue Code of
1986, as amended.
(Note: IRS filing will not be necessary for most adopters of the
Putnam Standard Plans.)
THE UNDERSIGNED further certifies that the following are the
names and authentic signatures of the officers of the Corporation
referred to in the foregoing resolution. (Insert designated
officers.)
<PAGE>
Title Name Signature
____________________ ________________________

IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and the corporate seal of the Corporation this ____________ day
of___________, 19__________.

Secretary
_______________________________________

(Corporate Seal)
<PAGE>
Plan Agreement #001
Putnam Standard Profit Sharing and 401(k) Plan

This is the Plan Agreement for a Putnam prototype profit sharing
plan with optional Section 401(k) provisions. Please consult a
tax or legal advisor and review the entire form before you sign
it. If you fail to fill out this Putnam Plan Agreement properly,
the Plan may be disqualified. You can get further information to
help you complete the Plan Agreement from your investment dealer,
or from Putnam at:

Putnam Retirement Plan Services
P.O. Box 2701
Boston, Ma 02208
Phone: 1-800-662-0019

By executing this Plan Agreement, the Employer establishes a
profit sharing plan and trust upon the terms and conditions of
Putnam Basic Plan document #01, as supplemented and modified by
the provisions elected by the Employer in this Plan Agreement.
This Plan Agreement must be accepted by Putnam in order for the
Employer to receive future amendments to the Putnam Standard
Profit Sharing and 401(k) Plan.

All Employers complete items 1-11 below. Employers who wish to
adopt Section 401(k) provisions also complete item 12.

1. Business Information
A. Business Name

B. Business Address
Street City/State Zip Code
Phone SIC Code
Person for Putnam to Contact

C. Federal Tax Identification Number

D. Form of Organization (check one):
_____Sole Proprietorship _____Corporation
_____Partnership _____SCorporation
E. Taxable Year of Business:
_____Calendar Year _____Fiscal year ending on_____

1
Provide the Information requested about the Employer.

2. Plan Information

A. Plan Year The Plan Year of your Plan will be the same as the
Taxable Year of your Business shown in 1.E. above. If you change
the Taxable Year of your Business, the Plan Year will change
accordingly. The Plan Year will also be your Plan s Limitation
Year for purposes of the contribution limitation rules in Article
6 of the Plan.

B. Effective Date of Adoption of Plan.
Are you adopting this Plan to replace an existing plan?
_____Yes _____No

If you answered Yes in 2.B. above, the Effective Date of your
adoption of this Plan will be the first day of the current Plan
Year. Please complete the following:

Name of the plan you are replacing
Original Effective Date of the plan you are replacing

If you answered No in 2.B. above, the Effective Date of your
adoption of this Plan will be the later of the first day of the
current Plan Year, or the first day your Business began.

The Effective Date is (month/day/year)

2B
Complete this section only if the adoption of this plan is an
amendment to an existing plan. When signed, this document
becomes the official plan agreement, superseding any previously
signed plan agreements.

NOTE: If you are adopting this Plan to replace an existing plan,
certain retroactive dates shall apply to comply with the Tax
Reform Act of 1986, provided that you adopt this Plan before the
end of the 1994 Plan year.

3. Eligibility for Plan Participation (Plan Section 3.1)

NOTE: Refer to the Affiliated Employer Determination section in
the Putnam Retirement Planning, Easy-to-Follow Instructions
Booklet.

Employees will be eligible to participate in the Plan when they
complete the requirements you select in A, B and C below.

A. Classes of Eligible Employees The Plan requires coverage of
all classes of employees of the Employer and any Affiliated
Employer, except for union employees and nonresident aliens
without U.S.source income. The general rules of the Plan exclude
employees in those two groups, but if you want employees in one
or both categories to be eligible for your Plan, check the
appropriate space below.

B. Age Requirement (check one)
_____No minimum age required for participation
_____Employees must reach age_______(not over 21)to participate

3B
Complete 3B to establish the age required (if any) before an
employee can become a Plan Participant.

C. Service Requirements

1. To become eligible, an employee must complete (check one)
_____No minimum service requirement. Skip the rest of this part
C if you select this rule.
_____One Eligibility Period
_____Two Eligibility Periods (may not be chosen if you adopt
Section 401(k) provisions under item 12)

An Eligibility Period is the 12 month period beginning on an
employee s first day of work, and anniversaries of that day.

2. To receive credit for an Eligibility Period, an employee must
complete during that period at least (check one)
_____1,000 Hours of Service
_____Hours of Service (may not exceed 1,000)

3C
Complete 3C1 and 3C2 to establish the service required (if any)
before an employee can become a Plan Participant.

NOTE: A plan may not condition eligibility to participate in the
plan on more than two years of service, and may require two years
of eligibility service only if the plan provides for full and
immediate vesting after two years of service.

3. Hours of Service will be credited to employees by the
following method (check one)
_____Actual hours for which an employee is paid
_____Any employee who has one actual paid hour in the following
period will be credited with the number of Hours of Service
indicated (check one):
_____Day(10 Hours of Service) _____Week(45 Hours of Service)
_____Semi-monthly payroll period (95 Hours of Service)
_____Month (190 Hours of Service)
<PAGE>
Complete 3C3 to indicate how Hours of Service will be measured.

NOTE: An employee begins participation as of the first day of the
month in which he first fulfills the eligibility requirements you
have selected. If you are adopting this Plan to replace an
existing plan, employees will be credited under this Plan with
all service credited to them under the plan you are replacing.

4. Compensation (Plan Section 2.8)

Compensation for purposes of the Plan will be the amount of the
following that is actually paid by your Business to an employee
during the Plan Year (check one)

_____Form W-2 earnings as descried in Section 2.8 of the Plan
_____Form W-2 earnings as described in Section 2.8 of the Plan
plus any amounts withheld from the employee under a 401(k) plan,
cafeteria plan, SARSEP, tax-sheltered 403(b) arrangement, Section
457 deferred compensation plan or contributions described in
Section 414(h)(2) that are picked up by a governmental
employer.
_____All compensation included in the definition of Section 415
Compensation in Section 6.5(b) of the Plan
_____All compensation included in the definition in Section
6.5(b) of the Plan, plus any amounts withheld from the employee
under a 401(k) plan, cafeteria plan, SARSEP, tax-sheltered 403(b)
arrangement, Section 457 deferred compensation plan or
contributions described in Section 414(h)(2) that are picked up
by a governmental employer.

4
Complete this section to define plan compensation for employees
other than owner-employees or self-employed individuals. For
owner-employees and self-employed individuals, compensation is
earned income as defined in Section 2.12 of the Basic Plan
Document.

5. Contributions (Plan Sections 4.1 and 4.2)

A. Profit Limitation Will your contributions to the Plan be
limited to the current and accumulated profits of your Business?
(check one)
_____Yes _____NO

5
NOTE: Refer to the Contribution Limits Worksheet contained in a
separate booklet for a detailed explanation of contribution
limits.

You may limit Plan contributions to the profits of your business,
but you are not required to do so. Employer Contributions under
this plan include profit sharing contributions, Elective
Deferrals, Qualified Nonelective Contributions and Qualified
Matching Contributions.

If you will make contributions only under the Section 401(k)
provisions in item 12 of this Plan Agreement, skip the rest of
this part 5.

B. Amount The Employer will contribute to the Plan for each Plan
Year (check one)
_____An amount chosen by the Employer from year to year
_____% (not more than 15%) of the Earnings of all Qualified
Participants for the Plan Year

Any Employee who has met the eligibility requirements in item 3
of this Plan Agreement is a Qualified Participant unless his
employment terminates before the last day of the Plan Year for
reasons other than his death or Retirement, and he is not
credited with more than 500 Hours of Service in the Plan Year.

C. Allocation to Qualified Participants Contributions under
paragraph B will be shared by Qualified Participants in
proportion to their Earnings, unless you check the following
space to indicate that your Plan will be integrated with Social
Security, as explained on page 41. You must choose the Top-Heavy
Integration Formula unless you elect to perform annual top-heavy
testing for your Plan.
_____Contributions will be shared according to the Top-Heavy
Integration Formula in Section 4.2(c)(1) of the Basic Plan
Document in every Plan Year, whether or not the Plan is
top-heavy.
_____Contributions will be shared according to the Top-Heavy
Integration Formula in Section 4.2(c)(1) of the Basic Plan
Document only in Plan Years in which the Plan is top-heavy. In
all other Plan Years, contributions will be shared according to
the Non-Top-Heavy Integration Formula in Section 4.2(c)(2) of the
Basic Plan Document.

Complete 5B and 5C only if you wish to increase the amount of
contributions allocated to Participants who earn more than the
stated amount, by integrating your plan with Social Security.
See page 41 for more information.

NOTE: If you maintain any other qualified plan in addition to
this Plan, only one plan may be integrated with Social Security.
If you integrate this Plan with Social Security, see also the
top-heavy provisions in item 10.

D. Integration Level The Integration Level will be (check one)
_____The Social Security Wage Base in effect at the beginning of
the Plan Year.
_____% (not more than 100%) of the Social Security Wage Base in
effect at the beginning of the Plan Year.
_____$_____(not more than the Social Security Wage Base).

5D
Complete 5D only if you have elected in 5C to integrate your plan
with Social Security. See page 41 for more information.

6. Investments (Plan Sections 13.2 and 13.3)

The Employer selects in part A below the Investment Products that
will be available under the Plan (in addition to life insurance
policies selected under Plan Article 14, if any). All Investment
Products must be sponsored, underwritten or managed by Putnam.
From the group of available Investment Products selected by the
Employer, each Participant chooses the investments for his own
Accounts, unless the Employer elects differently in part B below.
Investment instructions may be changed on any business day.

A. Available Investment Products (Plan Section 13.2) The
following investments will be available under the Plan (check
one)
_____Any Putnam funds _____Other Investment Products

In the event that there is any amount in the Trust Fund for which
no instructions or unclear instructions are delivered, it will be
invested in Putnam Daily Dividend Trust until instructions are
received in good order, and the Employer will be deemed to have
selected Putnam Daily Dividend Trust as an available Investment
Product for that purpose.

6A
If you wish to offer Putnam Capital Manager a variable annuity
issued by Hartford with underlying funds managed by
Putnam through your plan, please call Putnam for more
information, 1-800-662-0019.

B. Instructions (Plan Section 13.3) Investment instructions for
amounts held under the Plan generally will be given by each
Participant for his own Accounts and delivered to Putnam by the
Employer. Check below only if the Employer will make investment
decisions under the Plan.
_____The Employer will make investment decisions.
<PAGE>
6B
Place a check mark in the blank if the Employer will direct the
investment of Employer Contributions. If you do not check the
blank, the Plan provides that each Participant will direct the
investment of Employer Contributions allocated to the Employee s
account.

7. Distributions and Withdrawals.

A. Retirement Distributions.

1. Retirement Age (Plan Section 7.1) Normal retirement age will
be _____ (not over the lesser of 65 or any mandatory retirement
age enforced by the Employer).

2. Annuities (Plan Section 9.3) Will your Plan permit a
Participant to select a life annuity form of distribution? You
must check Yes if this Plan replaces an existing Plan that
permits distributions in life annuity form. (check one)
_____Yes _____No

7A
Enter the age (no later than 65) when an Employee may retire from
the service of the Employer.

B. Hardship Distributions (Plan Section 12.2) Will your Plan
permit hardship distributions from Employer Contribution
Accounts? You must check Yes if this Plan replaces an existing
Plan that permits hardship distributions. (check one)
_____Yes _____No

C. Withdrawals after Age 59 1/2 (Plan Section 12.3) Will your
Plan permit employees over age 59 1/2 to withdraw amounts upon
request? You must check Yes if this Plan replaces an existing
Plan that permits withdrawals after age 59 1/2. (check one)
_____Yes _____No

8. Other Plans

You must complete this section if you maintain or ever maintained
another qualified plan (other than a Putnam Money Purchase
Pension Plan under Plan Agreement #002) in which any Participant
in this Plan is (or was) a participant or could become a
participant, or if you maintain a welfare benefit fund (as
defined in section 419(e) of the Code) or an individual medical
account (as defined in section 415(1)(2) of the Code) under which
amount are treated as annual additions with respect to any
Participant in this Plan.

8
Skip this item 8 if the Plan is the only qualified plan your
Business has ever had.

The Plan and your other plan(s) combined will meet the
contribution limitation rules in Article 6 of the Plan as you
specify below:

A. If a Participant in the Plan is covered under another
qualified defined contribution plan maintained by your Business,
other than a master or prototype plan (check one)
_____The provisions of Section 6.2 of the Plan will apply as if
the other plan were a master or prototype plan.
_____The plans will limit total annual additions to the maximum
permissible amount, and will properly reduce any excess amounts,
in the manner you describe below.
_____
_____

B. If a Participant in the Plan is or has ever been a participant
in a defined benefit plan maintained by your Business, the plans
will meet the limits of Article 6 in the manner you describe
below:
_____
_____

If your Business has ever maintained a defined benefit plan,
state below the interest rate and mortality table to be used in
establishing the present value of any benefit under the defined
benefit plan, for purposes of computing the top-heavy ratio:
Interest rate:_____%
Mortality table

8A and 8B
Complete 8A only if the Employer maintains or ever maintained any
other defined contribution plan (other than a master or prototype
plan) or any other defined benefit plan.

Complete 8B only if the Employer maintains or ever maintained a
defined benefit plan.

If any of these factual situations exist, the Employer should
consult with an attorney or actuary. Failure to complete this
section when applicable may adversely affect the tax-qualified
status of the Plan.

NOTE: Your description under A or B above must not leave the
selection of a method to your discretion from year to year.

9. Vesting

All Accounts are fully vested at all times.

10. Top-Heavy Provisions (Plan Section 15.3)

Federal tax laws require certain plans, called top-heavy plans,
to provide a minimum contribution for every non-key employee
covered by the plan. Whether a plan is top-heavy is determined
by an annual test, explained on page 46. If the plan s regular
contribution provisions already meet or exceed the top-heavy
minimum contribution, no additional action is required when the
plan is top-heavy, so there is no need to perform annual testing.
If the plan s regular contribution provisions do not already meet
or exceed the top-heavy minimum contribution, annual testing must
be performed, and, if the plan proves to be top-heavy, an
additional contribution must be made.

Your Plan s regular contribution provisions will meet or exceed
the top-heavy minimum, and you will not need to perform annual
testing, if any of the following applies:

(a) You will make contributions only under item 5 of this Plan
Agreement (no Section 401(k)), and your Plan is not integrated
with Social Security; or

(b) Your Plan is integrated with Social Security and you have
specified the Top-Heavy Integration Formula in item 5.C; or

(c) You will make contributions under item 12 (Section 401(k)),
and you have specified in item 12.C. a Qualified Nonelective
Contribution of at least 3% on behalf of all Participants; or

(d) You will make contributions under item 5 and item 12 (Section
401(k)), and you have specified in item 5.B a contribution of at
least 3% of Earnings that will not be integrated with Social
Security; or

(e) You maintain paired Putnam plans, or you maintain any other
qualified plan that automatically provides a minimum top-heavy
contribution or benefit for every non-key employee covered by
this Plan.

NOTE: If you maintain a defined benefit plan in additions to this
Plan, you cannot rely on categories (a) through (d).

If you fit into any of the above categories, STOP HERE. You do
not need to perform annual top-heavy testing.

If you do not fit into any of the above categories, then unless
you check this item 10 to indicate that you will perform annual
top-heavy testing for your Plan, the requirement of a minimum
contribution for each non-key employee, contained in Plan Section
15.3, will apply to your Plan at all times. If you check this
item 10, Section 15.3 will apply only in Plan Years when you Plan
fails the top-heavy test.
_____The Employer will perform annual top-heavy testing for the
Plan.
<PAGE>
11. Plan Administrator (Plan Section 16.1)

You may appoint a person or a committee to serve as Plan
Administrator. You may remove and replace anyone you have
appointed, and anyone you have appointed may resign, without the
need to amend this Plan Agreement, provided that you notify
Participants in writing of any such change. If you do not
appoint a Plan Administrator, the Plan provides that the Employer
will be the Plan Administrator.

The initial Plan Administrator will be (check one)
_____This person:
_____A committee composed of these people:
__________
__________
__________

12. Section 401(k) Plan Provisions (Plan Article 5)

12
Complete item 12 below if your Plan will allow employees to elect
pre-tax contributions under Section 401(k) of the Code. If you
will make contributions to the Plan only under item 12, see also
the top-heavy provisions in item 10.

A. Elective Deferrals (Plan Section 5.2)

1. A Participant may make Elective Deferrals in an amount not to
exceed (check one)
_____% of his Earnings (not more than 15%)
_____$_____(specify a dollar amount in each payroll period)

12A1
Complete section 12 only if you are adopting a Putnam Profit
Sharing and 401(k) Plan. If you are adopting a Putnam Profit
Sharing Plan (Keogh), go to section 13.

By the option selected in 12A1, the Employee s Elective Deferral
will be limited to a stated percentage of annual pay, or a stated
amount for each pay period. You must state a percentage or an
amount, as applicable.

NOTE: Elective Deferrals may not exceed the annual dollar limit
under Section 402(g) of the Internal Revenue Code.

2. A Participant may begin to make Elective Deferrals, or change
the amount of his Elective Deferrals, as of the following dates
(check one):
_____First business day of each month (monthly).
_____First business day of the first, fourth, seventh and tenth
months of the Plan Year (quarterly).
<PAGE>
_____First business day of the first and sixth months of the Plan
Year (semiannually).
_____First business day of the Plan Year only (annually).

12A2
Complete this section by designating the periods during which
employee elections to make Elective Deferral contributions will
be permitted, the date such an election will become effective,
the periods during which modifications can be made to employees
Elective Deferral elections and the date such a modification will
take effect.

3. May Participants make Elective Deferrals of bonuses?
_____Yes _____No

12A3
If this option is checked, Employees will be entitled to
contribute as Elective Deferrals to the Plan a percentage of (or
an amount from) bonuses that would otherwise be paid in cash.

B. Qualified Matching Contributions (Plan Section 2.60)

12B
Skip this part B if you will not make Qualified Matching
Contributions.

1. Qualified Matching contributions will be made with respect to
(check one)
_____Elective Deferrals by all Participants
_____Elective Deferrals only by Non-Highly Compensated
Participants

12B1
If this section is checked, the Employer will make Qualified
Matching contributions (i.e., contributions that match employee
Elective Deferrals and that can be used to assist in satisfying
the special 401(k) non-discrimination test). These contributions
must be fully vested at all times and must be subject to the
distribution restrictions described in Section 5.13 of the Basic
Plan Document. You must designate the class of employees on
whose behalf Qualified Matching Contributions will be made.

2. The amount of Qualified Matching Contributions made with
respect to a Participant will be:

(Check the provision desired and fill in the % blank(s) in the
provision you check. If you wish to determine the amount of
Qualified Matching Contributions from year to year instead of
specifying a fixed percentage, write V for variable in the %
blank at the beginning of each provision you check.)
_____% of his Elective Deferrals
_____% of his Elective Deferrals that do not exceed _____% of his
Compensation.

12B2
By completing this section, the Employer determines the degree to
which Qualified Matching Contributions will match the
Employees Elective Deferrals. Check one blank and provide the
appropriate information for the sentence following the one that
you check.

C. Qualified Nonelective Contributions (Plan Section 2.62)

12C
Skip this part C if you will not make Qualified Nonelective
Contributions.

If this section is checked, the Employer will be entitled to make
Qualified Nonelective Contributions to the Plan, as described
in Section 2.62 of the Basic Plan Document. These contributions
can assist the Employer in meeting the special 401(k)
non-discrimination test. If you complete 1, you must also check
2 (and provide percentage limits where appropriate), to determine
the amount of Qualified Nonelective Contributions to be made.
See page 42 for more information.

Note: If you wish to avoid annual testing to determine whether
your Plan is top-heavy, you may need to select a Qualified
Nonelective Contribution of at least 3% for all Participants,
because Elective Deferrals and Qualified Matching Contributions
for non-key employees do not count toward the top-heavy minimum
contribution requirement. See item 10 for more information.

1. Qualified Nonelective Contributions will be made on behalf of
(check one):
_____All Participants
_____Only Participants who are not Highly Compensated Employees

2. The amount of Qualified Nonelective Contributions for a Plan
Year will be (check one):
_____% (not over 15%) of the Earnings of Participants on whose
behalf Qualified Nonelective Contributions are made
_____An amount determined by the Employer, to be shared in
proportion to Compensation by Participants on whose behalf
Qualified Nonelective Contributions are made

D. Hardship Distributions from 401(k) Accounts (Plan Sections
12.2 and 5.14) Will your Plan permit hardship distributions from
Elective Deferral Accounts? (check one)
_____Yes _____No

13. Reliance on Opinion Letter

You may rely on the opinion letter issued by the National Office
of the Internal Revenue Service for this Plan, and avoid filing
an application for an IRS determination letter, only if you never
maintain or maintained at any time any other plan, except a
Putnam Standard Money Purchase Pension Plan under Plan Agreement
#002.

If you even maintained or you later adopt any plan (including a
welfare benefit fund, as defined in Section 419(e) of the Code,
which provides post-retirement medical benefits allocated to
separate account for key employees, as defined in section
419A(d)(3) of the Code; or an individual medical account, as
defined in section 415(1)(2) of the Code) in addition to this
plan (other than a Putnam Standard Money Purchase Pension Plan
under Plan Agreement #002), you may not rely on the opinion
letter issued by the National Office of the Internal Revenue
Service as evidence that your Plan is qualified under Section 401
of the Internal Revenue Code. If you adopt or maintain multiple
plans and you wish to obtain reliance that your plan(s) are
qualified, you should apply to the appropriate Key District
Director of Internal Revenue for a determination letter.

Putnam will inform you of all amendments it makes to the
prototype plan. If Putnam ever discontinues or abandons the
prototype plan, Putnam will inform you. This Plan Agreement #001
may be used only in conjunction with Putnam s basic plan document
#01.

13
Employers should review this section carefully. The adoption of
the Putnam Standard Profit Sharing Plan should be reviewed with
your legal counsel and tax advisor.

<PAGE>
Employers Adoption of Putnam Standard Profit Sharing Plan

The Employer named below hereby adopts a PUTNAM STANDARD PROFIT
SHARING PLAN, and appoints ___________ to serve as Trustee of the
Plan. The Employer agrees to pay the fees as determined by
completing the Plan Investment Form, in accordance with the terms
of the Plan. The Employer acknowledges that it has received
copies of the current prospectus for each Investment Product
available under the Plan, and represents that it will deliver
copies of the then-current prospectus for each such Investment
Product to each Participant before each occasion on which the
Participant makes an investment instruction as to his Account.
The Employer further acknowledges that the Plan will be a Putnam
Standard Profit Sharing Plan upon Putnam s acceptance of this
Plan Agreement.

Employer signature(s) to adopt Plan:
_____
Date of signature:

Provide a signature form an authorized representative of the
Employer

Please print name(s) of authorized person(s) signing above:
_________ Phone:
Phone:

A new Plan must be signed by the last day of the Employer s
Taxable Year in which the Plan is to be effective.

Dealer Information (to be completed by investment dealer)
Name of Investment Dealer
Name and No. of Investment Dealer/Representative
Name and No of Branch Office
Signature of Investment Dealer/Representative
Authorized Dealer Signature
Representative Phone Number

Acceptance of Trustee

The Trustee accepts appointment in accordance with the terms and
conditions of the Plan, effective as of the date of execution by
the Employer set forth above.

A. Putnam Fiduciary Trust Company, Trustee
By _______________________________

B. Other Trustee
By _________________________ Trustees Tax I.D. Number __
(Trustee)
Address of Trustee ______________________________________
Person for Putnam to Contact ____ Phone ____________________

Complete Part B only if you have appointed a Trustee other than
Putnam Fiduciary Trust Company.

NOTE: Putnam may impose an annual maintenance fee as a condition
of its acceptance of this plan as a Putnam Standard Profit
Sharing Plan.

C. Appointment and Acceptance of Insurance Trustee

1. Appointment to:
Name of Insurance Trustee ________________________________

You are hereby designated as Insurance Trustee for Policies to be
held in accordance with the terms and conditions of this Plan and
Trust.

Employer signature to appoint Insurance Trustee:
By ___________________________________________________
(Authorized Signature)

2. Acceptance as Insurance Trustee is agreed to in accordance
with the terms and conditions of the Plan, effective as of the
date of execution by the Employer as set forth above.
By _________________________ Trustee s Tax I.D. Number _____
Address of Insurance Trustee ______________________________
Person for Putnam to Contact ____ Phone ____________________

Complete Part C only if insurance Policies will be purchased
under Article 14 of the Plan (in addition to Putnam investment
Products).

Acceptance by Putnam

Putnam hereby accepts this Employer s Plan as a prototype
established under the Putnam Defined Contribution Retirement Plan
and Trust Agreement.

Putnam Mutual Funds Corp.
By ___________________________________________________
<PAGE>
Plan Agreement #002
Putnam Standard Money Purchase Pension Plan

This is the Plan Agreement for a Putnam prototype money purchase
pension plan. Please consult a tax or legal advisor and review
the entire form before you sign it. If you fail to fill out this
Putnam Plan Agreement properly, the Plan may be disqualified.
You can get further information to help you complete the Plan
Agreement from your investment dealer, or from Putnam at:

Putnam Retirement Plan Services
P.O. Box 2701
Boston, MA 02208
Phone: 1-800-662-0019

By executing this Plan Agreement, the Employer establishes a
money purchase pension plan and trust upon the terms and
conditions of Putnam Basic Plan Document #01, as supplemented and
modified by the provisions elected by the Employer in this Plan
Agreement. This Plan Agreement must be accepted by Putnam in
order for the Employer to receive future amendments to the Putnam
Standard Money Purchase Pension Plan.

1. Business Information

A. Business Name

B. Business Address
Street City/State Zip Code
Phone SIC Code
Person for Putnam to Contact

C. Federal Tax Identification Number

D. Form of Organization (check one):
_____Sole proprietorship _____Corporation
_____Partnership _____S Corporation
E. Taxable Year of Business:
_____Calendar Year _____Fiscal year ending on:_____

1
Provide the information requested about the Employer.

2. Plan Information

Plan Year The Plan Year of your Plan will be the same as the
Taxable Year of your Business shown in 1.E. above. If you change
the Taxable Year of your Business, the Plan Year will change
accordingly. The Plan Year will also be your Plan s Limitation
Year for purposes of the contribution limitation rules in Article
6 of the Plan.
<PAGE>
A. Effective Date of Adoption of Plan.
Are you adopting this Plan to replace an existing plan?
_____Yes _____No

If you answered Yes in 2.A. above, the Effective Date of your
adoption of this Plan will be the first day of the current Plan
Year. Please complete the following:

Name of the plan you are replacing:
Original Effective Date of the plan you are replacing:

If you answered No in 2.A. above, the Effective Date of your
adoption of this Plan will be the later of the first day of the
current Plan Year, or the first day your Business began.

The Effective Date is (month/day/year)

2A
Complete this section only if the adoption of this plan is an
amendment to an existing Plan. When signed, this document
becomes the official plan agreement, superseding any previously
signed plan agreements.

NOTE: If you are adopting this Plan to replace an existing Plan,
certain retroactive dates shall apply to comply with the Tax
Reform Act of 1986, provided that you adopt this Plan before the
end of the 1994 Plan year.

3. Eligibility for Plan Participation (Plan Section 3.1)

Employees will be eligible to participate in the Plan when they
complete the requirements you select in A, B and C below.

A. Classes of Eligible Employees The Plan requires coverage of
all classes of employees of the Employer and any Affiliated
Employer, except for union employees and nonresident aliens
without U.S. source income. The general rules of the Plan
exclude employees in those two groups, but if you want employees
in one or both categories to be eligible for your Plan, check the
appropriate space below.

The following employees will be eligible to participate in the
Plan:
_____Members of the following collective bargaining unit(s) (give
names of unions)
_____Nonresident aliens with no U.S. source income
<PAGE>
NOTE: Refer to the Affiliated Employer Determination section in
the Putnam Retirement Planning, Easy-to-Follow Instructions
booklet.

B. Age Requirement (check one)
_____No minimum age required for participation
_____Employees must reach age_______(not over 21) to participate

3B
Complete 3B to establish the age required (if any) before an
employee can become a Plan Participant.

C. Service Requirements

An Eligibility Period is the 12 months beginning on an employees
first day of work, and anniversaries of that day.

2. To receive credit for an Eligibility Period, an employee must
complete during that period at least (check one)
_____1,000 Hours of Service
_____Hours of Service (may not exceed 1,000)

3C1 and 3C2
Complete 3C1 and 3C2 to establish the service required (if any)
before an Employee can become a Plan Participant.

NOTE: A plan may not condition eligibility to participate in the
plan on more than two years of service and may require two years
of eligibility service only if the plan provides for full and
immediate vesting after two years of service.

3C3
Complete 3C3 to indicate how Hours of Service will be measured.

4. Compensation (Plan Section 2.8)

Compensation for purposes of the Plan will be the amount of the
following that is actually paid by your Business to an employee
during the Plan Year (check one)

_____Form W-2 earnings as descried in Section 2.8 of the Plan
_____Form W-2 earnings as described in Section 2.8 of the Plan
plus any amounts withheld from the employee under a 401(k) plan,
cafeteria plan, SARSEP, tax-sheltered 403(b) arrangement, Section
457 deferred compensation plan or contributions described in
Section 414(h)(2) that are picked up by a governmental
employer.
_____All compensation included in the definition of Section 415
Compensation in Section 6.5(b) of the Plan
_____All compensation included in the definition of section 415
compensation in Section 6.5(b) of the Plan, plus any amounts
withheld from the employee under a 401(k) plan, cafeteria plan,
SARSEP, tax-sheltered 403(b) arrangement, Section 457 deferred
compensation plan or contributions described in Section 414(h)(2)
that are picked up by a governmental employer.

4
Complete this section to determine Plan compensation for
Employees other than owner-employees or self-employed
individuals. For owner-employees and self-employed individuals,
Compensation is earned income as defined in Section 2.12 of the
Basic Plan Document.

5. Contributions (Plan Section 4.3)

A. Amount The Employer will contribute to the Plan for each Plan
Year this Base Contribution Percentage _____ (not more than 25%)
of the Earnings of all Qualified Participants for the Plan Year.

5
NOTE: Refer to the Contribution Limits Worksheet contained in a
separate booklet for a detailed explanation of contribution
limits.

Enter the percentage of Compensation required to be contributed
to the Plan each year. The contribution cannot exceed 25% of
Compensation paid to all Participants during the Plan Year. If
you accept both this Plan and a profit sharing plan, the combined
percentages for the two must not exceed 25% of Compensation. If
you wish to integrate your Plan, skip 5A and complete 5B and 5C.

B. Allocation to Qualified Participants Contributions will be
shared by Qualifed Participants in proportion to their Earnings,
unless you check the following space to indicate that your Plan
will be integrated with Social Security, as explained on page 41.
_____The Plan will be integrated with Social Security, and the
Base Contribution Percentage will be _____% (not less than 3%
unless you will perform annual top-heavy testing for your Plan).

C. Integration Level The Integration Level will be (check one)
_____The Social Security Wage Base in effect at the beginning of
the Plan Year.
_____% (not more tan 100%) of the Social Security Wage Base in
effect at the beginning of the Plan Year.
_____$_____ (not more than the Social Security Wage Base).

5B and 5C
Complete 5B and 5C only if you wish to increase the amount of
contributions allocated to Participants who earn more than a
stated amount by integrating your plan with Social Security. See
page 41 for more information.

6. Investments (Plan Sections 13.2 and 13.3)

A. Available Investment Products (Plan Section 13.2) The
following investments will be available under the Plan (check
one)
_____Any Putnam funds _____Other Investment Products

6B
If you place a check mark in the blank the Employer will direct
the investment of Employer contributions. If you do not check
the blank, the Plan provides that each Participant will direct
the investment of Employer contributions allocated to his
account.

7. Retirement Age (Plan Section 7.1)

Normal retirement age will be _____ (not over the lesser of 65 or
any mandatory retirement age enforced by the Employer).

7
Enter the age (no later than 65) when an Employee may retire from
the service of the Employer.

8. Other Plans

You must complete this section if you maintain or ever maintained
another qualified plan (other than a Putnam Profit Sharing Plan
under Plan Agreement #001) in which any Participant in this Plan
is (or was) a participant or could become a participant, or if
you maintain a welfare benefit fund (as defined in section 419(e)
of the Code) or an individual medical account (as defined in
section 415(1)(2) of the Code) under which amounts are treated as
annual additions with respect to any Participant in this Plan.

8
Skip this item 8 if the Plan is the only qualified plan your
Business has ever had.

The Plan and your other plan(s) combined will meet the
contribution limitation rules in Article 6 of the Plan as you
specify below:

8A and 8B
Complete 8A only if the Employer maintains or ever maintained any
other defined contribution plan (other than a master or prototype
plan) or any other defined benefit plan.

Complete 8B only if the Employer maintains or ever maintained a
defined benefit plan.

NOTE: Your description under A or B above must not leave the
selection of a method to your discretion from year to year.

9. Vesting

All Accounts are fully vested at all times.

10. Top-Heavy Provisions (Plan Section 15.3)

Your Plan s regular contribution provisions will meet or exceed
the top-heavy minimum, and you will not need to perform annual
testing, if any of the following applies:

(a) Your Plan is not integrated with Social Security; or

(b) Your Plan is integrated with Social Security and you have
specified in item 5.B. a Base Contribution Percentage of at least
3%; or

(c) You maintain any other qualified plan that automatically
provides a minimum top-heavy contribution or benefit for every
non-key employee covered by this Plan.

NOTE: If you maintain a defined benefit plan in addition to this
Plan, you cannot rely on categories (a) or (b).

If you fit into any of the above categories, STOP HERE. You do
not need to perform annual top-heavy testing.

11. Plan Administrator (Plan Section 16.1)

The initial Plan Administrator will be (check one)
_____This person:
_____A committee composed of these people:
__________
__________
__________

12. Reliance on Opinion Letter

If you ever maintained or you later adopt any plan (including a
welfare benefit fund, as defined in Section 419(e) of the Code,
which provides post-retirement medical benefits allocated to
separate account for key employees, as defined in section
419A(d)(3) of the Code; or an individual medical account, as
defined in section 415(1)(2) of the Code) in addition to this
plan (other than a Putnam Standard Profit Sharing Plan under Plan
Agreement #001), you may not rely on the opinion letter issued by
the National Office of the Internal Revenue Service as evidence
that your Plan is qualified under Section 401 of the Internal
Revenue Code. If you adopt or maintain multiple plans and you
wish to obtain reliance that your plan(s) are qualified, you
should apply to the appropriate Key District Director of Internal
Revenue for a determination letter.

Putnam will inform you of all amendments it makes to the
prototype plan. If Putnam ever discontinues or abandons the
prototype plan, Putnam will inform you. This Plan Agreement #002
may be used only in conjunction with Putnam s basic plan document
#01.

12
Employers should review this section carefully. Adoption of the
Plan should be reviewed with your legal counsel and tax advisor.

<PAGE>
Employers Adoption of Putnam Standard Money Purchase Pension Plan

The Employer named below hereby adopts a PUTNAM STANDARD MONEY
PURCHASE PENSION PLAN, and appoints ___________ to serve as
Trustee of the Plan. The Employer agrees to pay the fees as
determined by completing the Plan Investment Form, in accordance
with the terms of the Plan. The Employer acknowledges that it
has received copies of the current prospectus for each Investment
Product available under the Plan, and represents that it will
deliver copies of the then-current prospectus for each such
Investment Product to each Participant before each occasion on
which the Participant makes an investment instruction as to his
Account. The Employer further acknowledges that the Plan will be
a Putnam Money Purchase Pension Sharing Plan upon Putnam s
acceptance of this Plan Agreement.

Employer signature(s) to adopt Plan:
_____
Date of signature:

Provide a signature from an authorized representative of the
Employer.

Please print name(s) of authorized person(s) signing above:
_________ Phone:
Phone:

A new Plan must be signed by the last day of the Employer s
Taxable Year in which the Plan is to be effective.

Dealer Information (to be completed by investment dealer)

Name of Investment Dealer ________________________________
Name and No. of Investment Dealer/Representative ______________
Name and No. of Branch Office ______________________________
Signature of Investment Dealer/Representative ________________
Authorized Dealer Signature _______________________________
Representative Phone Number ______________________________

Acceptance of Trustee

The Trustee accepts appointment in accordance with the terms and
conditions of the Plan, effective as of the date of execution by
the Employer set forth above.

A. Putnam Fiduciary Trust Company, Trustee
By ___________________________________________________

B. Other Trustee ________________________________________
By (Trustee) _________________ Trustee s Tax I.D. Number _____

Address of Trustee ______________________________________
Person for Putnam to Contact ____ Phone ____________________

Complete Part B only if you have appointed a Trustee other than
Putnam Fiduciary Trust Company.

NOTE: Putnam may impose an annual maintenance fee as a condition
of its acceptance of this plan as a Putnam Standard Money
Purchase Pension Plan.

C. Appointment and Acceptance of Insurance Trustee

1. Appointment to:
Name of Insurance Trustee ________________________________

You are hereby designated as Insurance Trustee for Policies to be
held in accordance with the terms and conditions of this Plan and
Trust.

Employer signature to appoint Insurance Trustee
By (Authorized Signature)

2. Acceptance as Insurance Trustee is agreed to in accordance
with the terms and conditions of the Plan, effective as of the
date of execution by the Employer as set forth above.
By Trustee s Tax I.D. Number
Address of Insurance Trustee
Person for Putnam to Contact Phone

Complete Part C only if insurance Policies will be purchased
under Article 14 of the Plan (in addition to Putnam Investment
Products).

Acceptance by Putnam

Putnam hereby accepts this Employer s Plan as a prototype
established under the Putnam Defined Contribution Retirement Plan
and Trust Agreement.

Putnam Mutual Funds Corp.
By ___________________________________________________
<PAGE>
Instructions for Completing and Distributing Notice to Interested
Parties

You must distribute the completed Notice to Interested Parties no
less than 7 days and no more than 21 days after you sign the Plan
Agreement for your Putnam Plan. For your current employees, you
may simply post a copy of the Notice on a bulletin board or other
space customarily used for announcements to your employees. If
you adopt your Putnam Plan as an amendment to an existing plan,
individuals who are not current employees but are entitled to
benefits under your existing plan (for example, vested former
employees or beneficiaries of deceased employees) should be sent
a copy of the Notice by first class mail no less than 10 days and
no more than 24 days after you sign your Putnam Plan Agreement.

Portions of the Notice must be completed by you as described
below.

Item 1 Enter the name of your business.
Item 2 Enter the name of your plan.
Item 3 Enter the final digit of the plan number you have chosen
for your plan. If this is the first plan you have ever adopted
for your business, or if you have adopted the Putnam Plan as an
amendment of your only existing plan, the correct number is 001.
If your business has one or more other tax qualified retirement
plans that were adopted before this plan, and you have not
adopted the Putnam Plan as an amendment to any plan, the correct
number for his plan is the next higher number after the number(s)
of your existing plan(s); for example, 002 or 003. Enter the
appropriate IRS opinion letter number. If you have adopted the
Profit Sharing and 401(k) Plan, enter D240174a, if you have
adopted the Money Purchase Pension Plan, D240175a.
Item 4 Enter the name and address of your business and the
nine-digit tax identification number assigned to your business
for federal income tax and employment tax reporting; for example,
04-0010023.
Item 5 If you have appointed a committee or a particular person
as plan administrator, enter the name(s) and address of the
person(s) appointed. If you have not selected a plan
administrator enter the word "Employer."
Item 6 Enter the minimum number of years of service and minimum
age required for eligibility to participate in your plan, as
selected by you in the Plan Agreement. If you selected no
minimum requirement, enter "0".
Item 7 Select from the attached address chart on page 28 the
address of the IRS Key District office that applies to you, and
enter that address in the space provided.
Item 8 If you have fewer than 100 employees, enter the number
equal to 10% of your employees, rounded up. For example, if you
have 12 employees, enter "2." If you have 100 or more employees,
enter "10."
Item 9 Calculate the dates that are 45, 55, 75 and 90 days after
the date you signed the Plan Agreement. Enter these dates in the
blanks as marked on the Notice.
Item 13 Enter the name of your business.
<PAGE>
IRS DISTRICT
Albany, August, Boston, Brooklyn,
Buffalo, Burlington, Hartford,
Manhattan, Portsmouth, Providence
KEY DISTRICT OFFICE
Internal Revenue Service
EP/EO Division
P.O. Box 1680, GPO
Brooklyn, NY 11202

IRS DISTRICT
Baltimore, District of Columbia, Newark, Philadelphia,
Pittsburgh, Richmond, Wilmington, any U.S. possession or foreign
country
KEY DISTRICT OFFICE
Internal Revenue Service
EP/EO Division
P.O. Box 17010
Baltimore, MD 21203

IRS DISTRICT
Cincinnati, Cleveland, Detroit, Indianapolis, Louisville,
Parkersburg
KEY DISTRICT OFFICE
Internal Revenue Service
EP/EO Division
P.O. Box 3159
Cincinnati, OH 45201

IRS DISTRICT
Albuquerque, Austin, Cheyenne, Dallas, Denver, Houston, Oklahoma
City, Phoenix, Salt Lake City, Wichita
KEY DISTRICT OFFICE
Internal Revenue Service
EP/EO Division
Mail code 4950 DAL
1100 Commerce Street
Dallas, TX 75242

IRS DISTRICT
Atlanta, Birmingham, Columbia, Ft. Lauderdale, Greensboro,
Jackson, Jacksonville, Little Rock, Nashville, New Orleans
KEY DISTRICT OFFICE
Internal Revenue Service
EP/EO Division
P.O. Box 941
Atlanta, GA 30370

IRS DISTRICT
Honolulu, Laguna Niguel, Las Vegas, Los Angeles, San Jose
KEY DISTRICT OFFICE
Internal Revenue Service
EP Application Receiving
Room 5127
P.O. Box 536
Los Angeles, CA 90053-0536

IRS DISTRICT
Aberdeen, Chicago, Des Moines, Fargo, Helena, Milwaukee, Omaha,
St. Louis, St. Paul, Springfield
KEY DISTRICT OFFICE
Internal Revenue Service
EP/EO Division
230 S. Dearborn
DPN 20-6
Chicago, IL 60604

IRS DISTRICT
Sacramento, San Francisco
KEY DISTRICT OFFICE
Internal Revenue Service
EP Application Receiving
Stop SF 4446
P.O. Box 36001
San Francisco, CA 94102

IRS DISTRICT
Anchorage, Boise, Portland, Seattle
KEY DISTRICT OFFICE
Internal Revenue Service
EP Application Receiving
P.O. Box 21224
Seattle, WA 98111
<PAGE>
Notice to Interested Parties

1. Notice to: All Employees of ______________________________
The employer named above has adopted the plan described in this
notice, and had provided this notice as part of the automatic
plan qualification process prescribed by the Internal Revenue
Service.

2. Name of Plan: ________________________________________

3. Plan Number: 00_______
Opinion Letter No.______

4. Name and address of Plan Sponsor:
Employer's Tax Identification No.: ________________________
5. Name of Plan Administrator:
______
______

6. The employees eligible to participate under the Plan are
those who have reached at least _____ years of age and completed
at least _____ years of service.
In addition, the following classifications of employees are
included:

7. Address of Key District Director having jurisdiction of Plan:
___
____
_____
_____Members of the following collective bargaining unit(s)(give
names of unions):
_____
_______
_____Nonresident aliens with no U.S. source of income.

Requests for Comments by the Department of Labor

8. It is not contemplated that the Plan will be submitted to the
Internal Revenue Service for an advanced determination as to
whether or not it meets the qualification requirements of Section
401 or 403(a) of the Internal Revenue Code.

9. The Internal Revenue Service has not issued a determination
letter with respect to the qualification of this Plan, which is a
standardized prototype plan sponsored by Putnam Mutual Funds
Corp. Plans in this category generally are entitled to automatic
qualification and are not required to seek a determination
letter.

Rights of Interested Parties
10. You have the right to submit to the IRS Key District
Director at the above address, either individually or jointly
with other interested parties, your comments as to whether this
Plan meets the qualification requirements of the Internal Revenue
Code.

You may instead, individually or jointly with other interested
parties, request the Department of Labor to submit comments on
your behalf to the Key District Director regarding qualification
of the Plan. If the Department declines to comment on all or
some of the matters you raise, you may individually or jointly
(if your request was made to the Department jointly) submit your
comments on these matters directly to the IRS Key District
Director.

11. The Department of Labor may not comment on behalf of
interested parties unless requested to do so by the lesser of ten
employees or ten percent of the employees who qualify as
interested parties. The number of persons needed for the
Department to comment with respect to this Plan is _____ . If
you request the Department to comment, your request must be in
writing and must specify the matters upon which comments are
requested, and must also include:

(1) The information contained in items 2 through 5 of this
Notice; and

(2) the number of persons needed for the Department to comment.

A request to the Department to comment should be addressed as
follows:

Assistant Secretary
Pension and Welfare Benefit Administration
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, D.C. 20216

Attn: 3001 Comment Request

Comments to the Internal Revenue Service

12. Comments submitted by you to the IRS Key District Director
must be in writing and received by him by _____ , 199_____ (75
days after Plan adoption). However, if there are matters that
you request the Department of Labor to comment upon on your
behalf, and the Department declines, you may submit comments on
these matters to the Key District Director to be received by him
within 15 days from the time the Department notifies you that it
will not comment on a particular matter, or by ____ , 199_____
(75 days after Plan adoption), whichever is later, but in no
event later than ___, 199__(90 days after Plan adoption). A
request to the Department to comment on your behalf must be
received by it by _____ , 199_____ (45 days after Plan adoption)
if you wish to preserve your right to comment on a matter upon
which the Department declines to comment, or by _____ , 199_____
(55 days after Plan adoption) if you wish to waive that right.

Additional Information

13. Detailed instructions regarding the requirements for
notification of interested parties may be found in sections 16,
17 and 18 of Revenue Procedure 91-10. Additional information
concerning this application (including an updated copy of the
Plan and related trust and copies of section 16 of Revenue
Procedure 91-10) are available at the offices of ______________
during the hours of 9:00 a.m. to 5:00 p.m. for inspection and
copying. (There may be a nominal charge for copying and/or
mailing.)

NOTE: Section 17 of Revenue Procedure 94-6 is included to provide
plan participants with additional information.
<PAGE>
Section 17 of Revenue Procedure 94-6

WHAT RIGHTS TO NOTICE AND COMMENT DO INTERESTED PARTIES HAVE?
* 01 Persons who qualify as interested parties under section
1.7476-1(b) of the regulations, have the following rights:
(1) To receive notice, in accordance with section 18 below, that
there will be filed an application for an
advance determination regarding the qualification of plans
described in sections 401, 403(a), 409 and 4975(e)(7) of the
Code, or, with respect to plans described in section 7.05 above,
to receive notice, in accordance with section 19 below, of the
adoption or amendment of such plans;
(2) To submit written comments with respect to the qualification
of such plans to the Internal Revenue Service;
(3) To request the Department of Labor to submit a comment to the
Service on behalf of the interested parties; and
(4) To submit written comments to the Service on matters with
respect to which the Department of Labor was requested to comment
but declined.

* 02 comments submitted by interested parties must be received
by the Key District Director by the 45th day after the date on
which the application for determination is received by the Key
District Director (see section 17.03 and 17.04 for filing
deadlines where the Department of Labor has been requested to
comment). Such comments must be in writing, signed by the
interested parties or by an authorized representative of such
parties (as provided in section 9.01(7) of Rev. Proc. 91-4),
addressed to the Key District director to whom the application
for determination was submitted, and contain the following
information:
(1) The names of the interested parties making the comments;
(2) The name and taxpayer identification number of the applicant
for a determination:
(3) The name of the plan, the plan identification number, and the
name of the plan administrator;
(4) Whether the parties submitting the comment are:
(a) Employees eligible to participate under the plan,
(b) Employees with accrued benefits under the plan, or former
employees with vested benefits under the plan,
(c) Beneficiaries of deceased former employees who are eligible
to receive or are currently receiving benefits under the plan,
(d) Employees not eligible to participate under the plan.
(5) The specific matters raised by the interested parties on the
question of whether the plan meets the requirements for
qualification involving sections 401 and 403(a) of the Code, and
how such matters relate to the interests of the parties making
the comment; and
(6) The address of the interested party submitting the comment
(or if a comment is submitted jointly by more than one party, the
name and address of a designated representative) to which all
correspondence, including a notice of the Service's final
determination with respect to qualification, should be sent.
(The address designated for notice by the Service will also be
used by the Department of Labor in communicating with the parties
submitting a request for comment.) The designated representative
may be one of the interested parties submitting the comment or an
authorized representative. If two or more interested parties
submit a single comment and one person is not designated in the
comment as the representative for receipt of correspondence, a
notice of determination mailed to any interested party who
submitted the comment shall be notice to all the interested
parties who submitted the comment for purposes of section
7476(b)(5) of the Code.

* 03 A request to the Department of Labor to submit to the Key
District Director a comment pursuant to section 3001(b)(2) of the
Employee Retirement Income Security Act of 1974 (ERISA) must be
made in accordance with the following procedures:
(1) The request must be received by the Department of Labor by
the 25th day after the day the application is received by the Key
District Director. However, if the parties requesting the
Department to submit a comment wish to preserve the right to
comment to the Key District Director in the event the Department
declines to comment, the request must be received by the
Department by the 15th day after the application is received by
the Key District Director.
(2) The request to the Department of Labor to submit a comment to
the Key District Director must:
(a) Be in writing;
(b) Be signed as provided in section 17.02 above;
(c) Contain the names of the interested parties requesting the
Department to comment and the address of the interested party or
designated representative to whom all correspondence with respect
to the request should be sent. See also section 17.02(6) above;
(d) Contain the information prescribed in section 17.02(2), (3),
(4), above;
(e) Contain the address of the Key District Director to whom the
application was or will be submitted;
(f) Contain a statement of the specific matters upon which the
Department's comment is sought, as well as how such matters
relate to the interested parties making the request; and
(g) Be addressed as follows:
Deputy Assistant Secretary
Pension and Welfare Benefits
Administration
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, D.C. 20210
Attention: 3001 Comment Request

04 If a request described in 17.03 is made and the Department of
Labor notifies the interested parties making the request that it
declines to comment on a matter concerning qualification of the
plan which was raised in the request, the parties submitting the
request may still submit a comment to the Key District Director
on such matter. The comment must be received by the later of the
45th day after the day the application for determination is
received by the Key District Director or the 15th day after the
day on which notification is given by the Department that it
declines to submit a comment on such matter. (See section 17.07
for the date of notification.) In no event may the comment be
received later than the 60th day after the application for
determination was received. Such a comment must comply with the
requirements of section 17.02 and include a statement that the
comment is being submitted on matters raised in a request to the
Department upon which the Department declined to comment.

05 For rules regarding the confidentiality of contents of
written comments submitted by interested parties to the Service
pursuant to section 17.02 or 17.04, see section 601.201(o)(5) of
the Statement of Procedural Rules.

06 For rules regarding the availability to the application of
copies of all comments on the application submitted pursuant to
section 17.01(1), (2), or (3) of this revenue procedure, see
section 601.201(o)(5) of the Statement of Procedural Rules.

07 An application for an advance determination, a comment to the
Key District Director, or a request to the Department of Labor
shall be deemed made when it is received by the Key District
Director, or the Department. Notification by the Department that
it declines to comment shall be deemed given when it is received
by the interested party or designated representative. The notice
described in section 18.01 below shall be deemed given when it is
given in person, posted as prescribed in the regulations under
section 7476 of the Code, or received through the mail. In any
case where such an application, comment, request, notification,
or notice is sent by mail, it shall be deemed received as of the
date of the postmark (or if sent by certified or registered mail,
the date of certification or registration), if it is deposited in
the mail in the United States in an envelope or other appropriate
wrapper, first class postage prepaid, properly addressed.
However, if such an application, comment, request, notification,
or notice is not received within a reasonable period from the
date of postmark, the immediately preceding sentence shall not
apply.
<PAGE>
Plan Investment Form
Simplified Putnam Retirement Plans

Please use this form to indicate your plan's initial investment
in the Putnam Family of Funds, listing only one source of
contribution per page.

1. Employer Phone No. ( )
Address
City/State/Zip
Employer's Name (Please Print)
Authorized Employer Signature

2. Type of Simplified Putnam Retirement Plan (check one)
_____ Putnam Profit Sharing Plan (Keogh)
_____ Putnam Money Purchase Pension Plan (Keogh)
_____ Paired Putnam Profit Sharing and Money Purchase Pension
Plan (Keogh)
_____ Putnam Profit Sharing and 401(k) Plan

Note: If you have a Paired Putnam Profit Sharing and Money
Purchase Pension Plan, you have two plans involving separate Plan
contributions. Check this option and complete two Plan
Investment Forms. To do this, make a copy of this Form, complete
it accordingly and send both Forms with the plans' initial
contribution checks. Remember, you only need to include one
participant fee in one of your Plan contribution checks.

3. Dealer Representative Phone No. ( )
Dealer Firm
Branch Location
Representative's Signature

4. Participant Fee: $10.00 X _______ = ___________________
Number of
Participants Annual Participant Fee

Total Check Amount:

Annual Participant Fee $ __________
Employer Contribution $ __________
(from final page)

TOTAL $ __________

NOTE: Minimum contribution: $500 per plan; $25 per participant
account. This plan does not allow for employee voluntary
after-tax contributions.
<PAGE>
The following Putnam funds are available for retirement plan
accounts. Please use these fund codes, listing only one fund per
line, when completing the Plan Investment Form.

A26 Putnam Adjustable Rate U.S. Government Fund
A08 Putnam Convertible Income-Growth Trust
A0A Putnam Daily Dividend Trust
A43 Putnam Dividend Growth Fund
A29 Putnam Diversified Income Trust
B0H Putnam Energy-Resources Trust
A44 Putnam Europe Growth Fund
A02 The Putnam Fund for Growth and Income
A01 The George Putnam Fund of Boston
A18 Putnam Global Governmental Income Trust
A05 Putnam Global Growth Fund
A16 Putnam Federal Income Trust
A0L Putnam Health Sciences Trust
A10 Putnam American Government Income Fund
A0D Putnam High Yield Trust
A15 Putnam High Yield Advantage Fund
A04 Putnam Income Fund
A0U Putnam New Opportunities Trust
A03 Putnam Investors Fund
A0C Putnam Equity/Income Fund
A19 Putnam OTC Emerging Growth Fund
A0Y Putnam U.S. Government Income Trust
A06 Putnam Vista Fund
A07 Putnam Voyager Fund

In addition to Putnam mutual funds, retirement investments may be
made through the Putnam Capital Manager (PCM), a variable
annuity. The PCM investment options are listed below. (Please
call Putnam if you wish to use PCM in your retirement plan.)

PCM Fixed Account
PCM Money Market Account
PCM U.S. Government and High Quality Bond Fund
PCM High Yield Fund
PCM Growth and Income Fund
PCM International Equities Fund, a global fund
PCM Voyager Fund
PCM Multi-Strategy Fund
<PAGE>
Profit Sharing Plan Contributions

Employer Date

(Please list only one fund per line. Continue on an additional
sheet if necessary.)

Participant Participant Investment Employer
Name Social Security Fund Selected Profit Sharing Plan
Number (Please list only Contribution
one fund per line)

___________ ______________ __________ $__________
___________ ______________ __________ __________

Total Profit Sharing Plan Contributions: $ _____________

<PAGE>
Money Purchase Pension Plan Contributions

Employer Date

(Please list only one fund per line. Continue on an additional
sheet if necessary.)

Participant Participant Investment Employer
Name Social Security Fund Selected Money Purchase
Number (Please list only Pension Plan
one fund per line) Contribution

___________ _________ __________ $__________
___________ _________ __________ __________

Total Money Purchase Pension Plan Contributions: $ ___________

<PAGE>
Employee 401(k) Contributions

Employer Date

(Please list only one fund per line. Continue on an additional
sheet if necessary.)

Participant Participant Investment
Name Social Security Fund Selected Employee
Number (Please list only 401(k)
one fund per line) Contribution

________ ____________ __________ $__________
________ ____________ __________ __________

Total 401(k) Contributions: $ _____________
<PAGE>
Part III: Questions and Answers about the Simplified Putnam
Retirement Plans

General Comments 39
Key Definitions 40
Contributions 41
Plan Investments 45
Plan Distributions 45
Top-Heavy Testing 46
Plan Administration 47
Glossary of Terms 49
<PAGE>
Questions and Answers about the Simplified Putnam Retirement
Plans

While Putnam cannot give you legal or tax advice, our
professionals have prepared these Questions and Answers to assist
you in selecting among the many options presented in the Putnam
Plan Agreements #001 and #002. If you have questions after
reviewing them, consult your investment dealer or call Putnam
Retirement Plan Services at 1-800-662-0019.

Please remember that these Questions and Answers are only a
general guide to help you make decisions in consultation with
your legal and tax advisors.

I. General Comments

Q-1. Why should I adopt a Putnam Plan?

A-1. Simplified Putnam Retirement Plans offer you and your
Employees the opportunity to make retirement contributions on a
tax-favored basis. The benefits to your business are twofold.
First, a retirement plan will help you attract and retain good
employees. Second, your Plan will qualify for tax-favored
treatment. The tax laws generally do not allow employers to
deduct wages until an employee includes those wages in income.
But an employer can deduct its qualified retirement plan
contributions when they are made, even though employees will not
have to report those amounts as taxable income until the plan
later distributes benefits. In the meantime, the plan
contributions accumulate earnings tax-deferred.

Q-2. What documents do I need?

A-2. (1) A Putnam Basic Plan Document and
(2) A Putnam Plan Agreement #001 (Standard Profit Sharing (Keogh)
and Standard Profit Sharing and 401(k) Plan) or Putnam Plan
Agreement #002 (Standard Money Purchase Pensions Plan (Keogh)).

Q-3. What are these documents for?

A-3. The Putnam Basic Plan Document contains the general rules
for maintaining a Putnam Retirement Plan, and allows you to make
certain choices for your own plan. You indicate your choices
when you complete Putnam Plan Agreement #001 (for the Profit
Sharing Plan (Keogh) or the Profit Sharing and 401(k) Plan) or
#002 (for the Money Purchase Pension Plan Keogh).

Q-4. Do terms beginning with capital letters have special
meanings?

A-4. Both the Putnam Basic Plan Document and the Plan Agreements
contain terms that begin with capital letters because they have
special definitions in the Basic Plan Document. These Questions
and Answers also contain terms that begin with a capital letter
because they have a special definition, either here or in Article
2 of the Basic Plan Document. All of these terms are defined in
the Glossary of Terms at the end of these Questions and Answers.

When the term "item" is used in these Questions and Answers, it
refers to the numbered and lettered items to be completed in
Putnam Plan Agreement #001 or #002.

II. Key Definitions

Q-5. What is an Affiliated Employer for purposes of the Plan?
(Item 3.A)

A-5. The term Affiliated Employer includes the business that is
adopting or amending a Putnam plan, and any businesses related to
that business as part of:

* a "controlled group of corporations," as defined in Internal
Revenue Code Section 414(b),
* a group of businesses under "common control," as defined in
Internal Revenue Code Section 414(c), or
* an "affiliated service group," as defined in Internal Revenue
Code Section 414(m).

Generally, businesses that have 80% or more common ownership are
Affiliated Employers, and businesses with as little as 10% common
ownership may form an affiliated service group if one of them
regularly performs services for or with the other. Your close
relatives generally are considered to own any interest in a
business that you own, and vice versa, for purposes of these
rules. Please read the Affiliated Employers Worksheet (contained
in a separate booklet) and consult your attorney or tax advisor
if you suspect your business falls within any of the categories
mentioned above.

Q-6. How many Hours of Service should I specify as the minimum
requirement for an Eligibility Period? (item 3.C.2)

A-6. You may not require an Employee to complete more than 1,000
Hours of Service during the 12 months following his date of hire
(or anniversaries of that date) in order to be credited with an
Eligibility Period. Because 1,000 Hours of Service over 12
months equals approximately 20 hours per week, your election of
the 1,000-hour option will prevent Employees who normally work
less than 20 hours per week from becoming participants in your
Plan. On the other hand, you could completely avoid counting
Hours of Service by entering "1" in item 3.C.2 as the Hours of
Service requirement. In that case, an individual who is paid
for one Hour of Service will be credited with that Eligibility
Period. You may require, in item 3.C.1, that an employee remain
employed for one or two Eligibility Periods before he begins to
participate in your Plan. (One Eligibility Period maximum for
Elective Deferrals.)

Q-7. How should "Compensation" be defined for purposes of my
Plan? (Item 4)

A-7. The definition of Compensation you choose will affect the
amount you contribute to the Plan for you Employees. As a basic
measure, you may elect either Form W-2 wages or the amount
treated as compensation for purposes of Code Section 415, which
is described in Section 6.5(b) of the Basic Plan Document. (The
principal difference is that Form W-2 wages include all
reimbursements for moving expenses, while the Code Section 415
amount includes reimbursements for moving expenses only if the
reimbursed amount is not deductible by the Employee.)

The term Earnings refers to both the Compensation paid to an
Employee and the earned income of a self-employed worker. The
Earnings of a self-employed worker include only his earned income
from the trade or business with respect to which the Plan is
established, and do not include contributions to the Plan (to the
extent deductible under Code Section 404). See Section 2.13 of
the Basic Plan Document.

The definition of Compensation that you choose in the Plan
Agreement will not affect the calculation of certain limits in
the tax laws, for which special definitions apply regardless of
the definition in the Plan. For an explanation of these limits
and special definitions, see the Contribution Limits Worksheet
contained in a separate booklet.

Profit Sharing and 401(k) Plans Only:

Both of the basic measures of compensation exclude any pre-tax
contributions made by the Employee under a cafeteria (flexible
compensation) plan, 401(k) plan, SARSEP, 403(b) plan, Section 457
deferred compensation plan or contributions described in Section
414(h)(2) that are "picked up" by a governmental employer. You
may choose to add back these pre-tax amount for purposes of your
Putnam Plan. For example, suppose Employee A has Form W-2 wages
of $25,000, and he makes Elective Deferrals of $2,000 under a
Putnam Profit Sharing and 401(k) Plan. If your business makes an
Employer Contribution equal to 3% of each Plan Participant's
Earnings, Employee A's allocation will be $750 (3% of 25,000) if
the Plan counts only Form W-2 wages as Earnings, but $810 (3% of
$27,000) if the Elective Deferral
is added back.

Q-8. Is there a limit on the amount of Earnings my Plan may take
into account during a Plan Year?

A-8. Yes. Regardless of the definition of Earnings you choose
in item 4, for Plan Years beginning after December 31, 1993, only
the first $150,000 of any Employee's Gross Earnings (including
any pre-tax contributions) counts for your 1994 Plan Year for
purposes of your Putnam Plan. The calculation is made on the
basis of your Plan Year specified in item 2.A., which may or may
not be the calendar year. If your Plan Year contains less than
12 months (for example, if you did not establish your Plan as of
the first day of the Plan Year), you must limit each Employee's
Earnings to the portion of the $150,000 limit that corresponds to
the portion of 12 months represented by your Plan Year. The
ceiling will be adjusted periodically for inflation.

If your business employs the spouse or child (under age 19) of a
5% owner of the business, or of one of its ten most highly
compensated employees, the combined Earnings of the spouse or
child and those of the 5% owner or highly compensated employee
may not exceed the current dollar limit.

III. Contributions

Q-9. What does it mean to "integrate" my Plan with Social
Security? (Item 5.C and D of Plan Agreement #001, and Item 5.B
and C of Plan Agreement #002).

A-9. Generally, a Profit Sharing Plan or Money Purchase Pension
Plan must allocate Employer Contributions pro rata according to
the Earnings of Participants. For example, if the Earnings of
all Participants total $200,000 for a given year, a Participant
who earns $20,000 will be entitled to 10% ($20,000/$200,000) of
the Employer Contribution.

Integration represents a narrow exception to that general rule.
By integrating, a plan may allocate extra contributions to
Employees who have Earnings in excess of the Social Security Wage
Base ("Wage Base"). This extra allocation is allowed because
Social Security calls for no employer FICA tax payments on an
employee's income in excess of the Wage Base, and thus prevents
individuals who earn above the Wage Base from accruing Social
Security retirement benefits in the same proportion to total pay
as those earning below the Wage Base.

Q-10. How does integration work?

A-10. Section 4.2(c) of the Basic Plan Document sets forth the
Integration Formula according to which Employer Contributions
will be allocated among participants in an integrated Plan.
Under that formula, the amount of Earnings at which a plan begins
to make extra allocations is called its Integration Level.

A related term is Excess Earnings, which means the amount of a
Participant's Earnings above in Integration Level. For example,
if a plan has an Integration Level of $16,000, an Employee whose
Earnings are $20,000 a year has Excess Earnings of $4,000.
Remember, the term Earnings includes amounts above and below the
Integration Level.

Putnam has designed its Integration Formula to adjust
automatically each year so that the percentage of the extra
Employer Contribution allocated in proportion to Excess Earnings
is the maximum allowed by law. In general, the percentage rate
of extra Employer Contributions allocated on the basis of Excess
Earnings cannot exceed the percentage rate allocated on the basis
of total Earnings, or 5.7% of Excess Earnings, whichever is less.

For example, if your Plan requires an Employer Contribution
sufficient to provide all Participants an allocation of 3% of
their total Earnings, it may also allocate to the accounts of
Participants who earn more than the Integration Level an extra
amount equal to no more than 3% of their Excess Earnings. Thus,
a Participant with Earnings of $20,000 will get a regular
allocation of $600. If the Integration Level of the Plan is
$16,000, he will also get an extra allocation of $120. On the
other hand, if the Integration Formula results in an allocation
to all Participants of an amount in excess of 5.7% of their total
Earnings, the extra amount allocated to the Accounts of
Participants who earn more than the Integration Level may not be
more than 5.7% of their Excess Earnings.

Q-11. How should I choose my Plan's Integration Level? (Item 5.D
of Plan Agreement #001, and Item 5.C of Plan Agreement #002)

A-11. You may select an Integration Level from among the three
alternatives listed. The first choice presented is the Wage
Base, which is adjusted annually to keep pace with the cost of
living. Over recent years, the Wage Base has risen steadily:

Year 1991 1992 1993 1994
Wage Base $53,400 $55,500 $57,600 $60,600

By defining your Plan's Integration Level as the Wage Base, or as
a percentage of the Wage Base (the second option listed), you
will build in an annual increase that you can expect to reflect
the annual increase in pay levels. If instead you select a fixed
dollar amount as your Integration Level (the third option), your
formula is simpler, but it does not provide any hedge against
annual wage inflation.

To Maximize the extra allocations to Employees you want to
benefit through integration, the Integration Level should be set
as close as possible to the highest Earnings of the Participants
you want to exclude from sharing in extra contributions. For
example, suppose that your work force breaks down as follows for
1994:
Class of Employee Executives Supervisors Rank and File
Earnings Range Over $65,000 $30,000-$45,000 Under $20,000

If you want to make extra allocations only to your executives,
the Wage Base ($60,600 for 1994) would be appropriate. An
Integration Level equal to 50% of the Wage Base ($30,300 for
1994) would extend the benefits of integration to your
supervisors as well as executives.

Q-12. What types of contributions should I choose for my Profit
Sharing and 401(k) Plan? (Items 5 and 12 of Plan Agreement #001)

A-12. The various types of employer and employee contributions
that may be made to your Putnam Profit Sharing and 401(k) Plan
are described below.

Employer Contributions (Item 5).

Your business may make contributions in a discretionary amount
that can vary from year to year, or you may specify a formula
that will be used to calculate every year's contributions (for
example, 5% of pay for the year). Generally, every Employee's
share of each Employer Contribution will equal the percentage
that his Earnings bear to the total Earnings of all Participants.
Alternatively, you may elect to "integrate" your Plan with Social
Security. Item 5.C presents this choice, and Q&A-9 and Q&A-10
explain how integration works.

Elective Deferrals (Item 12.A).

These contributions are often called 401(k) or before-tax
contributions, because an Employee's taxable income will be
reduced by the amount he chooses to contribute as an Elective
Deferral. An active Employee under age 59 1/2 may withdraw
elective Deferrals only in the event of financial hardship, and
then only if you check "Yes" for item 12.D.

Qualified Matching Contributions (Item 12.B).

Qualified Matching Contributions cannot be withdrawn while a
Participant remains an active Employee. You may use Qualified
Matching Contributions to help your Plan pass the ADP Test, and
thereby increase the Elective Deferrals allowed for Highly
Compensated Employees. See Q&A-19.

Qualified Nonelective Contributions (Item 12.C).

Qualified Nonelective Contributions are subject to the same
distribution restrictions as Qualified Matching Contributions.
You may use Qualified Nonelective Contributions to help your Plan
pass the ADP Test, and thereby increase the Elective Deferrals
allowed for your Highly Compensated Employees. See Q&A-19.

Q-13. Are there any overall limits on the amount that may be
contributed to my Plan each year?

A-13. Yes, there are two different limits. For a detailed
explanation, refer to the Contribution Limits Worksheet contained
in a separate Booklet.

The first rule limits your overall contribution to the Plan for
each Plan Year to the amount your business is allowed to deduct
under section 404 of the Internal Revenue Code (see Section
4.2(a) of your Basic Plan Document).

The deduction limit for Profit Sharing Plans is 15% of the total
Earning paid during the Plan Year to all Plan Participants,
excluding Elective Deferrals. For purposes of the 15% Profit
Sharing Plan deduction limit, all of the following types of
contributions are aggregated:
* Employer Contributions
* Qualified Matching contributions
* Qualified Nonelective Contributions
* Elective Deferrals

The deduction limit for Money Purchase Pension Plans is 25% of
the total Earnings paid during the Plan Year to all Plan
Participants.

The second overall Plan contribution limit applies on a
Participant-by-Participant basis. This limit provides generally
that the Annual Additions (as defined in the next paragraph) to
each Participant's Account for a Plan Year may not exceed the
lesser of:
* 25% of the Participant's Earnings, excluding Elective Deferrals
and pre-tax contributions under a cafeteria (flexible
compensation) plan, SARSEP, 403(b) annuity or account, or a
Section 457 deferred compensation plan, or
* $30,000.

The following types of contributions are considered to be Annual
Additions: Employer Contributions, Qualified Matching
Contributions, Qualified Nonelective Contributions, and Elective
Deferrals. Rollover Contributions and investment earnings of all
kinds are not Annual Additions.

The Annual Additions limit applies on a combined basis to all
plans of a single business, and to all plans of any businesses
that would meet the definition of Affiliated Employers (in Q&A-3)
if "50%" were substituted for "80%."

Q-14. What is the deadline for making employer contributions for
a Plan Year?

A-14. In order to deduct the contributions your business makes
for a Plan Year, the contributions must be paid to the Trustee no
later than the due date (including any applicable extension) for
filing the tax return for the taxable year of your business that
corresponds to the Plan Year. In addition, ERISA requires that
Elective Deferrals to a 401(k) plan be paid to the Trustee as
soon as practicable after they are made or withheld, and in any
event within 90 days.

Q-15. For a Putnam Profit Sharing and 401(k) Plan, what is the
current dollar limit on the amount of a Participant's annual
Elective Deferrals, and how is that amount determined? (Item 12.A
of Plan Agreement #001)

A-15. For calendar year 1994, the dollar limit is $9,240. This
amount is revised annually by the Internal Revenue Service to
reflect the cost-of-living adjustments, and is published in an
IRS announced issued early each year. The limits for the past
four years have been as follows:

Year 1991 1992 1993 1994
Deferral Limit $8,475 $8,728 $8,994 $9,240

For the current limit, please call Putnam Retirement Plan
Services at 1-800-662-0019.

Q-16. Is there any other limit on the amount of Elective
Deferrals that my Employees may make?

A-16. No, for your Non-Highly Compensated Employees ("NHCEs").
Yes, for your Highly Compensated Employees ("HCEs"), because the
amount of their Elective Deferrals is subject to a second limit
under the ADP Test contained in Section 401(k) of the Internal
Revenue Code.

"ADP," an abbreviation of the term "actual deferral percentage,"
means the average of the percentages of Earnings that a group of
Employees contribute in the form of Elective Deferrals during the
Plan Year. For example, suppose Widget Company's Plan covers two
HCEs, who earn $75,000 and $100,000 respectively during the 1991
Plan Year. If the first HCE makes total Elective Deferrals of
$7,500 for the year, his deferral percentage equals 10% ($7,500
deferred divided by $75,000 Earnings). If the other HCE makes no
Elective Deferrals, her deferral percentage equals 0%. The
actual deferral percentage, or ADP, for the HCEs as a group
equals the average of 10% and 0%, or 5%. The same method applies
when you calculate the ADP of your NHCEs.

For each Plan Year, the ADP of your HCEs cannot exceed the ADP
of your NHCEs by more than a certain percentage. That percentage
varies as shown below:

Actual ADP of NHCE Group
1% 2% 3% 4% 5% 6% 8% 10% 12%
14% 16%

Maximum ADP of HCE Group
2% 4% 5% 6% 7% 8% 10% 2.5% 15%
17.5% 20%

For example, the ADP of Widget's two HCEs was 5%. According to
the above chart, the ADP of Widget's NHCEs must be at least 3% in
order for Widget's Plan to satisfy the ADP test.

Suppose the ADP of Widget's NHCEs was only 1%. The ADP of its
HCEs would then be capped at 2%. If the ADP of Widget's HCEs
exceeded 2% as of the end of the Plan Year being tested, Widget
would have to reduce that ADP to 2% by following one of the two
methods described in Q&A-18.

The precise rules for ADP testing are set forth in Section 5.6 of
your Basic Plan Document and a separate booklet. To protect the
qualified status of your Plan, your Plan Administrator is
responsible for performing the ADP Test each year to ensure that
the ADP of your HCEs falls within the limits described above.
The ADP Worksheet will guide you, step-by-step, through
performance of this test.

Q-17. Who is a Highly Compensated Employee?

A-17. Your Highly Compensated Employees ("HCEs") include any
Employee described in Section 2.58 of the Basic Plan Document.
The HCE Worksheet contained in a separate booklet will help you
identify your HCEs. Any Employee who is not an HCE is a
Non-Highly Compensated Employee ("NHCE").

Q-18. What if my Plan fails the ADP Test for a Plan Year?

A-18. If the ADP for HCEs for a Plan Year exceeds the maximum
allowed under the ADP Test, then the difference between the ADP
for HCEs and the ADP for NHCEs must be reduced by either lowering
the ADP for HCEs, or raising the ADP for NHCEs, or both.

To lower the ADP for HCEs, your Plan may refund sufficient
Elective Deferrals to HCEs to bring their ADP down to the level
that satisfies the ADP Test. Amounts refunded within the first
2-1/2 months after the end of a Plan Year, and the income
attributable to the refunded Excess Contributions, will be
included in the contributing HCEs' gross income in the taxable
year when the Excess Contributions were made (not the year when
the distribution occurs). Exception: If the total amount of
Excess Contributions refunded to a Participant is less than $100,
the refunded amount is taxable in the year of distribution. If
the refunds are not made until after the 2-1/2 month deadline,
the refunded amount and income will be taxable in the year of
distribution. Section 5.4 of your Basic Plan Document sets forth
the rules for calculating the income attributable to Excess
Contributions by HCEs.

Your business must take action to make the necessary refunds
within 2-1/2 months after the Plan Year ends in order to avoid
paying a nondeductible 10% excise tax on the Excess
Contributions. If the excess is not corrected within 12 months
after the Plan Year ends, the Elective Deferral portion of your
Plan will be disqualified.

An alternative way to correct a failed ADP Test is to raise the
ADP of the NHCE group to the required level by making Qualified
Nonelective Contributions for allocation to NHCEs only (see item
12.C.1). These contributions must be made by the due date
(including extensions) for the Employer's tax return for its
fiscal year that corresponds to the Plan Year to which the ADP
Test applies.

Q-19. How may Qualified Nonelective Contributions ("QNECs") and
Qualified Matching Contributions help my Plan pass the ADP Test
for a Plan Year?

A-19. QNECs and Qualified Matching Contributions may be counted
as Elective Deferrals by NHCEs in the ADP Test.

IV. Plan Investments

Q-20. Who should direct the investment of Employer contributions
to my Plan? (Item 6.B)

A-20. If your Plan is a 401(k) Plan, Participants always control
the investment of Elective Deferrals themselves. With respect to
all other contributions to a Profit Sharing or Money Purchase
Pension Plan, you may choose in item 6.B of your Plan Agreement
to make investment decisions for those contributions yourself.

If you elect to direct your Plan's investments, you may be held
personally liable for losses or for an inadequate rate of return.
On the other hand, if you do not elect this option, the Plan
provides that your Employees will direct the investment of all
assets in their accounts. The Plan has been drafted to take
advantage of the provisions of ERISA Section 404(c)1 if you
choose. Generally you cannot be held responsible for the
performance of the Plan's investments directed by Participants
and Beneficiaries in an ERISA Section 404(c) plan, provided that:

(1) Participants and Beneficiaries may choose from at least three
diversified categories of investments, designated by you, having
materially different risk and return characteristics;
(2) Participants and Beneficiaries may change their investment
instructions at least once in any three-month period, and more
frequently if any investment with comparatively high market
volatility is offered under the Plan; and
(3) You provide Participants and Beneficiaries with sufficient
information concerning the Plan's investment alternatives, such
as prospectuses. Please call Putnam Retirement Plan Services at
1-800-662-0019 for more information regarding these requirements.

Even if your Plan complies with the requirements described above
for an ERISA Section 404(c) plan, you remain responsible for
selecting and monitoring on an on-going basis the group of
investments that will be available under the Plan, and for
directing the investment of the account of a Participant or
Beneficiary who gives no directions himself or who is legally
incompetent. Putnam mutual funds and the separate investment
portfolios available under PCM annuity contracts are considered
"look-through" investments that provide diversification within a
risk and return category, even for small accounts in a Plan. Of
course, your Plan may offer more than three choices of
investments.

V. Plan Distributions

Q-21. Should my Profit Sharing and 401(k) Plan permit
Participants to choose life annuities as a form of distribution?
(Item 7.A.2 of Plan Agreement #001)

(Note: All Money Purchase Pension Plans are required to include
life annuities as a form of distribution.)

A-21. The life annuity option presented in item 7.A.2 allows
Participants to use their Account balances to purchase an annuity
contract such as the Putnam Capital Manager variable annuity.
Under the annuity contract, a Participant will receive monthly
payments for the remainder of his life, or for the Participant's
life and that of another person. If a Participant who is married
at the time of separation from service chooses a life annuity,
then the Participant's spouse must give notarized, written
consent to the election of any form of distribution other than a
"joint and survivor" annuity providing income for the spouse's
life, after the death of the Participant (see Article 11 of the
Basic Plan Document). Spousal consent will also be required for
any subsequent hardship distribution.

If you are adopting your Putnam Plan as a replacement for a prior
plan under which Participants had an option to receive their
benefits in the form of a life annuity, you must check "Yes" for
item 7.A.2.

Q-22. What rules apply if my Profit Sharing (Keogh) or Profit
Sharing and 401(k) Plan permits hardship distributions to
Participants? (Items 7.B and 12.D of Plan Agreement #001)

(Note: Money Purchase Pension Plans are not allowed to make
hardship distributions.)

A-22. Section 5.14 of the Basic Plan Document sets forth the
precise standards for making hardship distributions to Employees
from Putnam's Profit Sharing Plans.

Generally, an applicant for a hardship distribution must fulfill
two conditions to the satisfaction of the Plan Administrator.
The purpose for the hardship distribution must be one of the
following: (1) paying medical expenses of the Participant and his
family, (2) making a down payment or paying closing costs for
purchasing the Participant's primary residence, (3) paying
tuition for the upcoming 12 months of post-secondary education
for the Participant or his immediate family, or (4) paying an
amount necessary to prevent the Participant's eviction form his
principal residence, or foreclosure of the mortgage on it. In
addition, the amount distributed must be limited to the amount of
the expense that creates the hardship (plus taxes generated by
the distribution), and in a Profit Sharing and 401(k) Plan the
amount of a hardship distribution from any source other than the
Employer Contribution Account cannot exceed the aggregate amount
of Elective Deferrals he has made after December 31, 1988, plus
the balance credited to the Participant's Elective Deferral
Account as of December 31, 1988. Earnings that accrue on
Elective Deferrals after that date may not be distributed on
account of hardship.

Q-23. What income tax withholding rules apply to distributions
from the Plan?

A-23. If a Participant's Account distributions will continue
over a period of at least 10 years in substantially equal
installments, the Participant may elect whether to have federal
income tax withheld. If the Account will be distributed in any
other form -- such as a single payment -- then the Plan must
withhold federal income tax from the distribution unless the
Participant elects to have the distribution transferred directly
to an individual retirement account (IRA) or to another
employer's qualified retirement plan. Each Participant who is
entitled to a Plan distribution should receive the Special Tax
Notice explaining the choices the Participant has with respect to
income tax withholding. A copy of the Special Tax Notice is
available by contacting ***** at 1-800-622-0019.

VI. Top-Heavy Testing

Q-24. Can I avoid annual top-heavy testing of my Plan? (Item
10).

A-24. Yes, if you design the Plan to operate as though it is
always top-heavy. To do that, you must select in item 5 of your
Plan Agreement a contribution formula that meets the following
requirements:

If your Plan is a Profit Sharing Plan (Keogh), either leave item
5.C blank, or check the first blank in item 5.C.
If your Plan is a Profit Sharing and 401(k) Plan, either complete
the second blank in item 5.B with a percentage that is at least
3% AND leave item 5.C blank, or complete the first blank in item
12.C.2 with a percentage that is at least 3%.
If your Plan is a Money Purchase Pension Plan, either complete
item 5.A and leave items 5.B and 5.C blank, or leave item 5.A
blank and complete the second blank in item 5.B with a percentage
that is at least 3%.

Q-25. What is a top-heavy Plan? (Item 10).

A-25. Your Plan will be top-heavy for a Plan Year it its
Top-Heavy Ratio exceeds 60%. Q&A-26 explains how to compute the
Top-Heavy Ratio. The determination of whether your plan is
top-heavy must be made separately for each Plan Year, because the
top-heavy status of your Plan can change from Plan Year to Plan
Year.

Q-26. How is the Top-Heavy Ratio calculated?

A-26. The Top-Heavy Ratio is a fraction, determined for a Plan
Year, based on the Account balances in all qualified defined
contribution plans of your business as of the last day of the
preceding Plan Year. (In the first Plan Year of your Plan, these
determinations are made as of its last day.) The numerator of
the Top-Heavy Ratio fraction equals the sum of the Account
balances of your Key Employees, as defined in Q&A-27. The
denominator of the Top-Heavy Ratio fraction equals the sum of the
Account balances of all of your Employees (including Key
Employees). For purposes of determining the numerator and
denominator of the Top-Heavy Ratio fraction, any part of any
Account balance which has been distributed to a Participant in
the five-year period ending on the calculation date is added back
to the Participant's Account.

Q-27. Who is a Key Employee?

A-27. A person is a Key Employee of a business (corporation or
unincorporated form) if he owns certain amounts of the business
or has relatively large Gross Earnings from the business. Gross
Earnings means Earnings plus Elective Deferrals plus any pre-tax
contributions made by the Employee under a cafeteria (flexible
compensation) plan, 401(k) plan, SARSEP, 403(b) plan, or a
Section 457 deferred compensation plan.

Your Key Employees for 1994 include any individual who, during
your Plan Year beginning in 1994, falls into at least one of the
following categories:

receive more than $59,400 in Gross Earnings and is an officer of
your business.
receives more than $30,000 in Gross Earnings, and is one of the
ten (or fewer) Employees who own the largest employee-owned
interests in your business.
owns at least a 5% interest in your business.
receives more than $150,000 in Gross Earnings and owns at least
a 1% interest in your business.

Your Key Employees for 1994 also include anyone who was a Key
Employee in any of the previous four Plan Years.

The IRS annually adjusts the dollar amounts listed above
according to cost-of-living increases. For the most current
amounts, call Putnam Retirement Plan Services at 1-800-662-0019.

any Employee who is not a Key Employee is a Non-Key Employee.

Q-28. What are the consequences if my Plan is Top-Heavy? (Item
10)

A-28. As explained in item 10 of your Plan Agreement, for any
Plan Year in which your Plan is top-heavy, each Non-Key Employee
who is employed on the last day of the Plan Year must have
allocated to his account an Employer Contribution equal to the
lesser of:

(1) 3% of his Earnings, or

(2) the highest percentage of Earnings allocated to any Key
Employee (including the Key Employees' Elective Deferrals, if
any).

See the Top-Heavy Worksheet contained in a separate booklet for a
detailed explanation.

Q-29. Does this mean the contribution rules of my Plan may
change form year to year, depending on whether it is top-heavy?

A-29. Yes, unless you design the Plan to operate as though it is
always top-heavy, as described in Q&A-24.

VII. Plan Administration

Q-30. Whom should I appoint to be my Plan Administrator? (Item
11)

A-30. The person or entity you appoint as Plan Administrator
bears legal responsibility for the operation of your Plan. A
plan's administrator is a "fiduciary" under federal law, and is
therefore subject to duties of prudence and loyalty to the Plan
when acting as Plan Administrator. Frequently, the business that
adopts a Plan acts in this capacity, although you may instead
name a committee or individual by resolution or vote of the board
of directors.

The Plan Administrator has authority to interpret the provisions
of the Plan and apply them to specific situations, a such as
whether an Employee has become eligible to participate. All
decisions of the Plan Administrator must follow the written rules
of the Plan and must apply uniformly to all Participants in
similar circumstances.

Q-31. Do I have to obtain a special fidelity bond from an
insurance company for my Plan?

A-31. Yes, federal law requires a bond insuring the Plan against
any fraud or dishonesty which may be committed by you or any of
your officers or Employees who have access to the Plan's assets.
Often the bond coverage can be obtained as a rider to your
existing business insurance.

Q-32. Should I submit my Plan to the Internal Revenue Service
for a determination letter?

A-32. The Internal Revenue Service has issued a favorable
opinion letter as to the form of the Putnam Basic Plan Document,
Plan Agreement #001, and Plan Agreement #002. This letter shows
that Putnam's plan documents include all the terms required to
qualify for tax-favored treatment under Section 401(a) of the
Internal Revenue Code (see Q&A-1). You do not need to submit
your Putnam Plan to the Internal Revenue Service, provided that:

(1) you make only the choices presented in the Plan Agreement and
do not modify the Plan in any other way; and
(2) your business does not now have, and never has had, any other
plan except for a Putnam paired plan, as explained in Q&A-33.
Note: if you adopt a Putnam Plan as an amendment to an existing
plan of the same type (profit sharing or money purchase), the
existing plan is not an "other" plan for this purpose.

If you now maintain or you have ever maintained any other plan
except your Putnam Plan or a Putnam paired plan, you must file
IRS Form 5307, "Application for Determination for Adopters of
Master or Prototype, Regional Prototype or Volume Submitter
Plans," with the Internal Revenue Service no later than the last
day of your first Plan Year that begins after December 31, 1991.

Please keep in mind that, even if you take the above steps,
Putnam's opinion letter and your Plan's own determination letter
do not control whether or not your Plan complies in operation
with the Internal Revenue Code requirements described in the
Putnam Basic Plan Document and Plan Agreement. Compliance in
operation is your responsibility. We have prepared these
Questions and Answers to assist you, but there is no substitute
for individual attention to your particular situation.
Therefore, we strongly encourage you to consult with your legal
and tax advisors.

Q-33. What are Putnam paired plans?

A-33. Putnam paired plans are specially designed so that you can
adopt both a Profit Sharing Plan and a Money Purchase Pension
Plan, and not be required to submit either Putnam plan to the
Internal Revenue Service for a determination letter. A Putnam
Standard Money Purchase Pension Plan may be paired with either a
Putnam Standard Profit Sharing Plan (Keogh) or a Putnam Standard
Profit Sharing and 401(k) Plan. Only one of two paired plans may
be integrated with Social Security. If paired plans are
top-heavy, the top-heavy minimum contributions will be made in
the Money Purchase Pension Plan.

You might choose to adopt paired plans if you want to provide a
minimum contribution every year (such as 5% of Earnings), but
you also want to have the flexibility of making contributions
greater than 15% of Earnings when your business has an especially
profitable year. For example, if you adopt a Money Purchase
Pension Plan with an annual contribution equal to 10% of Earnings
and a Profit Sharing Plan with a discretionary contribution that
varies from year to year, your business could contribute and
deduct 10% of Earnings to the Money Purchase Pension Plan in any
year regardless of profits or losses, but could also contribute
and deduct up to 25% of Earnings in a profitable year (10% in the
Money Purchase Pension Plan and 15% in the Profit Sharing Plan).
Alternatively, you could use paired plans in order to have both a
fixed rate of annual employer contributions (in a Money Purchase
Pension Plan) and permit optional 401(k) contributions (in a
Profit Sharing and 401(k) Plan).

<PAGE>
Part VIII. Glossary of Terms

Account: All of a Participant s accounts. Basic Plan Document.

ADP Test: A test limiting the Elective Deferrals that may be
made on behalf of HCEs. (BPD5.6)

Affiliated Employer: A member of a controlled group of
corporations, or trades or businesses under common control, or an
affiliated service group, with your business. (BPD2.2)

Annual Additions: All of the following: Elective Deferrals,
Employer Contributions, Qualified Matching Contributions, and
Qualified Nonelective Contributions. (BPD Article 6)

Actual Deferral Percentage Test: See ADP Test.

Compensation: Whatever amount you designate in item 4. (BPD2.8)

Earnings: Compensation of an employee or earned income of a
self-employed worker, as limited (for 1994) to $150,000. Call
Putnam Retirement Plan Services 1-800-662-0019 for the current
limit. (BPD2.13)

Elective Deferrals: Before-tax contributions made pursuant to an
Employee s salary reduction agreement, according to the terms you
select in item 12.A of your Plan Agreement. (BPD2.54)

Eligibility Period: The 12-month periods beginning on an
Employees first day of work and anniversaries of that date.
(BPD2.15)

Employee: An individual who performs services for your business.
(BPD2.16)

Employer Contributions: Contributions made pursuant to item 5 of
your Plan Agreement. (BPD2.18)

ERISA: The Employee Retirement Income Security Act of 1974, a
federal law governing employee benefits, as amended from time to
time. (BPD2.19)

Family Member: An Employees spouse, children, grandchildren,
parents or grandparents, and the spouse of an Employee s child or
grandchild.

A Family Member of an Employee who is one of the 10 highest paid
Employees or is a 5% owner is not considered separately from the
Employee for purposes of determining who are HCEs. (BPD2.58)

Fidelity Bond: A bond, obtained from an insurance company, that
protects the Plan against loss from the dishonesty of persons who
handle contributions or distributions.

Gross Earnings: Earnings plus Elective Deferrals plus any other
pre-tax contributions to a cafeteria (flexible compensation)
plan, SARSEP or 403(b) plan.

Highly Compensated Employee (HCE): Generally, one who:

Received more than $99,000 in Gross Earnings in the 1994 Plan
Year or $96,368 the previous Plan Year.
Received more than $66,000 in Gross Earnings in the 1994 Plan
Year or $64,245 the previous Plan Year, and was in the top-paid
20% of your Employees.
Received more than $59,400 in Gross Earnings in the 1994 Plan
Year or $57,821 the previous Plan Year, and acted as an officer
of your business.
Owned at least a 5% interest in your business in the 1994 or 1993
Plan Year.
These compensation limits are adjusted annually. Please call
Putnam Retirement Plan Services at 1-800-662-0019 for the current
limits.

Hour of Service: Generally, any hour for which an Employee is
paid or entitled to payment. (BPD2.22)

Integration Level: The level of Earnings selected in item 5.
Participants who earn in excess of the Integration Level receive
an extra share of Employer Contributions. (BPD2.24)

Key Employee: Generally, an Employee who during the current Plan
Year falls into one of the following categories or was a Key
Employee during any of the previous four years:
Received more than $59,400 in Gross Earnings and acted as an
officer of the business.
Received more than $30,000 in Gross Earnings and was one of 10
Employees who owned the largest employee-owned interests in your
business.
Owned at least a 5% interest in your business.
Received more than $150,000 in Gross Earnings and owned at least
a 1% interest in your business. (BPD 15.2(a))
These compensation limits are adjusted annually. Please call
Putnam Retirement Plan Services at 1-800-345-4000 for the current
limits.

Non-Key Employee: An Employee who is not a Key Employee.
(BPD15.2(a))

Officer: For both corporate and non-corporate entities, officer
includes any person who performs officer-like functions.

Participant: An Employee who has satisfied the eligibility
requirements specified in item 3 of your Plan Agreement.
(BPD2.32)

Plan: Your Putnam Profit Sharing Plan (Keogh), Putnam Profit
Sharing and 401(k) Plan or Putnam Money Purchase Pension Plan
(Keogh). (BPD2.34)

Plan Administrator: The entity you appoint in item 11. The Plan
Administrator has responsibility for enforcing the terms of the
Plan. (Q&A-29; BPD2.35 and 16.1)

Plan Year: Your Plans 12-month reporting year, as selected in
item 2.A of your Plan Agreement. (BPD2.37)

Qualified Matching Contributions: Contributions made pursuant to
item 12.B. (BPD2.60)

Qualified Nonelective Contributions: Contributions made pursuant
to item 12.C. (BPD2.62)

Top-Heavy Plan: A plan subject to special contribution rules
because Key Employees Accounts hold 60% or more of Plan assets.
(BPD15.3)

Top-Heavy Ratio: The ratio of Key Employees Account balances to
total assets of the Plan, used to determine whether a plan is
top-heavy. (BPD15(c))

Wage Base: The maximum amount considered as wages for purposes
of Social Security (FICA) tax, as in effect on the first day of
the Plan Year. (BPD2.46)

<PAGE>
DRAFT OF 10/15/93

PUTNAM PROFIT SHARING AND 401(K) PLAN

PLAN AGREEMENT #001

Putnam Dedicated Corporate Services
One Adams Place E2B
Quincy, MA 02169
Phone: 1-800-752-9894

* * * * *

By executing this Plan Agreement, the Employer establishes a
profit sharing plan and trust upon the terms and conditions of
Putnam Basic Plan Document #05, as supplemented and modified by
the provisions elected by the Employer in this Plan Agreement.
This Plan Agreement must be accepted by Putnam in order for the
Employer to receive future amendments to the Putnam Profit
Sharing and 401(k) Plan.

* * * * *

All Employers complete items 1-13 below. Employers who wish to
adopt Section 401(k) provisions also complete item 14.

1. Business Information. The Employer adopting this Plan
is:

a. Business Name: ____________________________________

b. Business Address: _____________________________

________________________SIC Code: _______

_______________________________

Person for Putnam to Contact: __________________________

Phone: __________________________

c. Federal Tax Identification Number: __________________

<PAGE>
d. Form of Organization (check one):

_____ Sole proprietorship _____ Corporation

_____ Partnership _____ S Corporation

e. Taxable Year of Business:

______ Calendar Year

______ Fiscal year ending on _______________________

2. Plan Information.

a. Plan Year. Check one:

_____ The Plan Year will be the
same as the Taxable Year of
the Business shown in 1.E.
above. If the Taxable Year
of the Business changes, the
Plan Year will change
accordingly.

_____ The Plan Year will be the period of 12
months beginning on the first day of
__________________________ (month) and
ending on the last day of
__________________________ (month).

The Plan Year will also be your Plan's Limitation
Year for purposes of the contribution limitation
rules in Article 6 of the Plan.

If your Plan Year is the calendar year, do you
wish to make the "calendar year election" for
identifying your Highly Compensated Employees?

_____ Yes

_____ No

b. Effective Date of Adoption of Plan.

Are you adopting this Plan to replace an existing plan?

_____ Yes

_____ No

If you answered Yes in 2.B. above, the Effective Date
of your adoption of this Plan will be the first day of
the current Plan Year. Please complete the following:
<PAGE>
____________________________________________________________
Name of the plan you are replacing

____________________________________________________________
Original Effective Date of the plan you are replacing

If you answered No in 2.B. above, the Effective Date of
your adoption of this Plan will be the day you select
below (not before the first day of the current Plan
Year, and not before the day your Business began).

The Effective Date is: _______________________
month/day/year

3. Eligibility for Plan Participation (Plan Section 3.1).
Employees will be eligible to participate in the Plan
when they complete the requirements you select in A, B
and C below.

a. Classes of Eligible Employees. The Plan requires
coverage of all classes of employees of the
Employer and any Affiliated Employer, except for
union employees and nonresident aliens without
U.S.-source income. The general rules of the
Plan exclude employees in those two groups, but
if you want employees in one or both categories
to be eligible for your Plan, check the
appropriate space below.

The following employees will be eligible to participate
in the Plan:

_____ Members of the following collective
bargaining unit(s) (give names of unions):

________________________________________________________________

_____ Nonresident aliens with no U.S.-source
income

b. Age Requirement (check and complete one):

_____ No minimum age required for participation

_____ Employees must reach age __ (not over 21) to
participate
<PAGE>
c. Service Requirements.

i. To become eligible, an employee must
complete (choose one):

_____ a. No minimum service required. Skip
the rest of this part C.

_____ b. One 6-month Eligibility Period

_____ c. One 12-month Eligibility Period

_____ d. Two 12-month Eligibility Periods
(may not be chosen if you adopt
either Section 401(k) provisions
under item 14 or a vesting schedule
other than the first choice under
item 8.A, which provides for 100%
full and immediate vesting).

ii. A 6-month Eligibility Period is a 6 month
period beginning either on an employee's
first day of work with the Employer, or on
the date 6 months following the employee's
first day of work and anniversaries of those
dates. A 12-month Eligibility Period is the
12-month period beginning on an employee's
first day of work with the Employer, and
anniversaries of that date. If the Employer
acquires a business, will the Eligibility
Period for employees of the acquired
business be the 12-month period beginning on
the first day of work for the acquired
business and anniversaries of that date (or
the 6 month period beginning on the first
day of work for the acquired business, the
date 6 months following the first day of
work and anniversaries of those dates, if
applicable)?

_____ Yes

_____ No
<PAGE>
iii.

a. To receive credit for a 6-month Eligibility
Period, an employee must complete during it
at least:

_____ 500 Hours of Service

_____ _____________ Hours of Service
(under 500)

Note: If you adopt a 6-month Eligibility Period,
in any event, an employee will automatically
receive credit for the Eligibility Period if the
employee completes at least 1,000 Hours of
Service during a 12-month consecutive month
period following the first day of work.

b. To receive credit for a 12-month Eligibility
Period, an employee must complete during it
at least:

_____ 1,000 Hours of Service

_____ _____________ Hours of Service
(under 1,000)

iv. Hours of Service will be credited to
employees by the following method (check
one):

_____ a. Actual hours for which an employee
is paid

_____ b. Any employee who has one actual
paid hour in the following period
will be credited with the number of
Hours of Service indicated (check
one):

_____ Day (10 Hours of Service)

_____ Week (45 Hours of Service)

_____ Semi-monthly payroll period
(95 Hours of Service)

_____ Month (190 Hours of Service)

Note: If you are adopting this Plan to replace an existing plan,
employees will be credited under this Plan with all service
credited to them under the plan you are replacing.

v. Entry Dates. Each Employee in an eligible
class who completes the age and service
requirements specified above will begin to
participate in the Plan on (check one):

_____ The first day of the month in which he
fulfills the requirements

_____ The first of the following dates
occurring after he fulfills the
requirements (or, if earlier, the first
day of the first Plan Year that begins
after the date he fulfills the
requirements) (check one):

_____ The first day of any month (monthly).

_____ The first day of the first, fourth,
seventh and tenth months in a Plan Year
(quarterly).

_____ The first day of the first month and
the seventh month in a Plan Year
(semiannually).

d. (For New Plans Only) Will all Employees be
required to meet the age and service requirements
specified in B and C above?

_____ Yes

_____ No; all Employees on the Effective Date will
be eligible as of the Effective Date, even
if they have not met the age and service
requirements.

4. Compensation (Plan Section 2.8). Compensation for
purposes of the Plan will be the amount of the
following that is actually paid by your Business to an
employee during the Plan Year (check one):

_____ Form W-2 earnings as defined in Section 2.8 of
the Plan

_____ Form W-2 earnings as defined in Section 2.8 of
the Plan, plus any amounts withheld from the
employee under a 401(k) plan, cafeteria plan,
SARSEP, tax sheltered 403(b) arrangement, or
Code Section 457 deferred compensation plan, or
contributions described in Code Section 414(h)(2)
that are picked up by a governmental employer
<PAGE>
_____ All compensation included in the definition of
Code Section 415 Compensation in Section 6.5(b)
of the Plan

_____ All compensation included in the definition of
Code Section 415 Compensation in Section 6.5(b)
of the Plan, plus any amounts withheld from the
employee under a 401(k) plan, cafeteria plan,
SARSEP, tax sheltered 403(b) arrangement, or Code
Section 457 deferred compensation plan, or
contributions described in Code Section 414(h)(2)
that are picked up by a governmental employer

5. Contributions (Plan Sections 4.1 - 4.3).

a. Profit Limitation. Will Employer contributions
to the Plan be limited to the current and
accumulated profits of your Business? Check one:

_____ Yes

_____ No

If you will make contributions only under the Section
401(k) provisions in item 14 of this Plan Agreement,
skip the rest of this part 5.

b. Amount. The Employer will contribute to the Plan
for each Plan Year (check one):

_____ An amount chosen by the Employer from year
to year

______ ____% of the Earnings of all Qualified
Participants for the Plan Year

If you checked (2) above, will Forfeitures for a Plan
Year be applied to reduce the amount of the
contribution otherwise required?

_____ Yes

_____ No

If you check No, Forfeitures will be allocated as
though they were additional Employer Contributions.
<PAGE>
c. Allocations to Participants

1. Allocation to Qualified Participants. Any
Employee who has met the eligibility requirements
in item 3 of this Plan Agreement is a Qualified
Participant unless, for reasons other than his
death or Retirement, he is not an active Employee
on the last day of the Plan Year, and he is not
credited with more than 500 Hours of Service in
the Plan Year.

2. Integration with Social Security. Contributions
under paragraph B will be shared by Qualified
Participants in proportion to their Earnings,
unless you check one of the spaces below.

_____ Each Qualified Participant's share will be a
uniform dollar amount.

_____ Contributions will be shared according to
the Top-Heavy Integration Formula in Section
4.2(d)(1) of the Basic Plan Document in
every Plan Year, whether or not the Plan if
top-heavy.

3. Integration Level. (Complete only if you have
elected in 5C2 to integrate your Plan with Social
Security). The Integration Level will be (check
one):

____ The Social Security Wage Base in effect at the
beginning of the Plan Year.

____ __% (not more than 100%) of the Social Security
Wage Base in effect at the beginning of the Plan
Year.

____ $__________ (not more than the Social Security
Wage Base).

D. Participant Contributions. Will your Plan allow
Participants to make after-tax contributions?
Yes

6. Investments (Plan Sections 13.2 and 13.3). The
Employer selects in part A below the Investment
Products that will be available under the Plan (in
addition to life insurance policies selected under Plan
Article 14, if any). All Investment Products must be
sponsored, underwritten, managed or expressly agreed to
in writing by Putnam. From the group of available
Investment Products selected by the Employer, each
Participant chooses the investments for his own
Accounts unless the Employer elects differently in B
below.

a. Available Investment Products (Plan Section
13.2). The following investments will be
available under the Plan (check one):

_____ The group of Putnam funds selected by the
Employer and communicated to Participants in
writing. A current list of the funds
selected by the Employer from time to time
shall be kept with the records of the Plan.
The initial list of funds is as follows:
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
______ Putnam Fiduciary Trust Company GIC Fund

______ Other Investment Products (as defined in
Section 2.26 of the Plan)
In the event that there is any amount in the Trust Fund for which
no instructions or unclear instructions are delivered, it will be
invested in the default option selected by the Employer in its
Service Agreement with Putnam (or if the Employer makes no such
selection, in Putnam Daily Dividend Trust) until instructions are
received in good order, and the Employer will be deemed to have
selected the option indicated in its Service Agreement with
Putnam (or if none, Putnam Daily Dividend Trust) as an available
Investment Product for that purpose.

b. Instructions (Plan Section 13.3). Investment
instructions for amounts held under the Plan
generally will be given by each Participant for
his own Accounts and delivered to Putnam as
indicated in the Service Agreement between Putnam
and the Employer. Check below only if the
Employer will make investment decisions under the
Plan.

_____ The Employer will make investment decisions.
<PAGE>
c. Changes. Investment instructions may be changed
(check one):

_____ on any Valuation Date (daily)

_____ on the first day of any month (monthly)

_____ on the first day of the first, fourth,
seventh and tenth months in a Plan Year
(quarterly)

d. Voting of Employer Stock. Section 13.8 of the
Plan provides that Employer Stock held as an
investment under the Plan will be voted in
accordance with the Employer's instructions
unless the Employer elects that Participants will
direct the voting of Employer Stock to the extent
described in Section 13.8. Check below only if
Participants will direct the voting of Employer
Stock.

_____ Participants are hereby appointed named
fiduciaries for the purpose of voting of
Employer Stock in accordance with Section
13.8.

7. Distributions and Withdrawals.

a. Retirement Distributions.

i. Normal Retirement Age (Plan Section 7.1).
Normal retirement age will be _______ (not
over the lesser of 65 or any mandatory
retirement age enforced by the Employer).

ii. Early Retirement (Plan Section 7.1). Check
and complete the item below only if you want
Participants to become fully vested upon
fulfilling specified age and service
requirements before reaching normal
retirement age:

_____ Early retirement will be permitted at
age ____ with at least ________ Years
of Service.
<PAGE>
iii. Annuities (Plan Section 9.3). Will your
Plan permit a Participant to select a life
annuity form of distribution? You must
check Yes if this Plan replaces an existing
Plan that permits distributions in life
annuity form. Check one:

_____ Yes

_____ No

b. Hardship Distributions (Plan Section 12.2). Will
your Plan permit hardship distributions from
Employer Contribution Accounts? You must check
Yes if this Plan replaces an existing Plan that
permits hardship distributions. Check one:

_____ Yes

_____ No

c. Withdrawals after Age 59 1/2 (Plan Section 12.3).
Will your Plan permit employees over age 59 1/2 to
withdraw amounts upon request? You must check
Yes if this Plan replaces an existing Plan that
permits withdrawals after age 59 1/2. Check one:

_____ Yes

_____ No

8. Vesting.

a. Time of Vesting. The provision checked below
will determine a Participant's vested percentage
in his Employer Contribution Account and, if you
adopt the Section 401(k) provisions in item 14
and will make Employer Matching Contributions,
his Employer Matching Contribution Account (check
one):

_____ 100% vesting immediately upon participation
in the Plan. If you check this option, skip
the rest of this part 8.

_____ Six Year Graded Schedule:

Vested Percentage 20% 40% 60% 80% 100%

Years of Service 2 3 4 5 6
<PAGE>
_____ Three Year Cliff Schedule:

Vested Percentage 0% 100%

Years of Service 0-2 3

_____ Other Schedule (must be at least as
favorable as Six Year Graded Schedule or
Three Year Cliff Schedule):

Vested Percentage __% __% __% __% __%

Years of Service ___ ___ ___ ___ ___

b. Service. Skip this part B if your Plan will
include all of an employee's service in
determining his Years of Service for vesting.

Years of Service for vesting will exclude (check one or
more):

_____ Service before the Effective Date of the
Plan, if this is a new plan, or service
before the effective date of your existing
plan, if this Plan replaces an existing plan

_____ Service before the Plan Year in which an
employee reached age 18

_____ Service for a business acquired by the
Employer, before the date of acquisition

c. Hours of Service. The number of Hours of Service
required for crediting a Year of Service for
vesting will be (check one):

_____ 1,000 Hours of Service

_____ ___________________ Hours of Service
(under 1,000)

d. Year of Service Measuring Period (Plan Section
2.49). The periods of 12 months used for
measuring Years of Service will be (check one):

_____ Plan Years

_____ 12-month Eligibility Periods

_____ Yes

_____ No

10. Automatic Distribution of Small Accounts (Plan Section
9.1). Will your Plan automatically distribute vested
account balances not exceeding $3,500, within 60 days
after the end of the Plan Year in which a Participant
separates from employment?

_____ Yes

_____ No

Note: The time for distribution cannot be left to the discretion
of the Employer or the Plan Administrator. If you check No
above, small accounts will be distributable at the time selected
by the Participant.

11. Top-Heavy Minimum Contributions (Plan Section 15.3).
For any Plan Year in which the Plan is top-heavy, you
must provide for each Participant who is a non-key
employee and who is employed on the last day of the
Plan Year an allocation equal to 3% of his Earnings (or
if less, the highest percentage allocated to any key
employee). Neither Elective Deferrals, nor Employer
Matching Contributions nor Qualified Matching
Contributions for a non-key employee may be taken into
account for purposes of this requirement.

Skip paragraphs A and B below if you do not maintain any
other qualified plan in addition to this Plan.

a. If you maintain another qualified plan in
addition to this Plan, specify below whether a
non-key employee who participates in both plans
will receive a top-heavy minimum contribution (or
benefit) in this Plan or the other plan (check
one):

The top-heavy minimum contribution (or benefit) for
non-key employees participating both in this Plan and
another qualified plan maintained by the Employer will
be provided in:

_____ This Plan

_____ The plan named here: ______________________
<PAGE>
b. (Skip this paragraph if you do not maintain a
defined benefit plan.) If you maintain a defined
benefit plan in addition to this Plan, and the
Top-Heavy Ratio (as defined in Plan Section
15.2(c)) for the combined plans is between 60%
and 90%, you may elect to provide an increased
minimum allocation or benefit pursuant to Plan
Section 15.4. Specify your election by
completing the statement below:

The Employer will provide an increased (specify
contribution or benefit)
__________________________________ in its (specify
defined contribution or defined benefit)
______________________ plan as required under Plan
Section 15.4.

12. Other Plans. Skip this item 12 if the Plan is the only
qualified plan your Business has ever had. You must
complete this section if you maintain or ever
maintained another qualified plan in which any
Participant in this Plan is (or was) a participant or
could become a participant.

The Plan and your other plan(s) combined will meet the
contribution limitation rules in Article 6 of the Plan as
you specify below:

a. If a Participant in the Plan is covered under
another qualified defined contribution plan
maintained by your Business, other than a master
or prototype plan (check one):

_____ The provisions of Section 6.2 of the Plan
will apply as if the other plan were a
master or prototype plan.

_____ The plans will limit total annual additions
to the maximum permissible amount, and will
properly reduce any excess amounts, in the
manner you describe below.

_________________________________________________________________

B. If a Participant in the Plan is or has ever been a
participant in a defined benefit plan maintained by
your Business, the plans will meet the limits of
Article 6 in the manner you describe below:

_________________________________________________________________

Note: Your description under A or B above must not leave the
selection of a method to your discretion from year to year.

13. Administration.

a. Plan Administrator (Plan Section 16.1). You may
appoint a person or a committee to serve as Plan
Administrator. You may remove and replace anyone
you have appointed, and anyone you have appointed
may resign, without the need to amend this Plan
Agreement, provided that you notify Participants
in writing of any such change. If you do not
appoint a Plan Administrator, the Plan provides
that the Employer will be the Plan
Administrator.

The initial Plan Administrator will be (check one):

_____ This person:
_______________________________

_____ A committee composed of these people:

________________________________________________________________

b. Recordkeeper (Plan Section 16.3). Unless Putnam
expressly permits otherwise, you must appoint
Putnam as Recordkeeper to perform certain routine
services determined upon execution of a written
Service Agreement between Putnam and you.

The initial Recordkeeper will be:

_______________________________________________________
Name

_______________________________________________________
Address

Complete item 14 below if your Plan will allow employees to elect
pre-tax contributions under Section 401(k) of the Code.

14. Section 401(k) Plan Provisions (Plan Article 5).

a. Elective Deferrals (Plan Section 5.2).

i. A Participant may make Elective Deferrals in
an amount not to exceed (check one):

_____ (a) ___% of his Earnings

_____ (b) $_______ (specify a dollar
amount) for each payroll
period

Note: Elective Deferrals may not exceed the annual dollar limit
under Section 402(g) of the Internal Revenue Code.

ii. A Participant may begin to make Elective
Deferrals, or change the amount of his
Elective Deferrals, as of the following
dates (check one):

_____ First business day of each month
(monthly).

_____ First business day of the first,
fourth, seventh and tenth months of the
Plan Year (quarterly).

_____ First business day of the first and
seventh months of the Plan Year
(semiannually).

_____ First business day of the Plan Year
only (annually).

iii. May Participants make Elective Deferrals of
bonuses?

_____ Yes

_____ No

Note: You may choose to make Employer Matching Contributions or
Qualified Matching Contributions, or neither, or both. Qualified
Matching Contributions are always fully vested and cannot be
distributed from the Plan before a Participant reaches age 59 1/2 or
leaves employment. They will be used, to the extent needed, to
help the Plan pass the ADP test explained on page __ of the Q &
As. Employer Matching Contributions are subject to the vesting
schedule elected in item 8 of this Plan Agreement, and can be
withdrawn during employment in the event of financial hardship
(as defined in Section 12.2 of the Plan) if you so elect in part
F below.

b. Employer Matching Contributions (Plan Section
5.8). Skip this part B if you will not make
Employer Matching Contributions.

i. The Employer will contribute and will
allocate to each Participant's Employer
Matching Account an amount equal to:

(Check the provision(s) desired, and fill in the
% blank(s) in each provision you check. If you
wish to determine the amount of Employer Matching
Contributions from year to year instead of
specifying a fixed percentage, write "V" for
variable in the % blank at the beginning of each
provision you check.)

_____ ___% of Elective Deferrals

_____ ___% of Elective Deferrals that do not
exceed ___% of Earnings

_____ ___% of Elective Deferrals that do not
exceed ___% of Earnings plus
___% of Elective Deferrals that do not
exceed ___% of Earnings

_____ ___% of Elective Deferrals that do not
exceed ___% of Earnings plus
___% of Elective Deferrals that do not
exceed ___% of Earnings plus
___% of Elective Deferrals that do not
exceed ___% of Earnings

ii. Will forfeited Employer Matching
Contributions be applied to reduce the total
contribution specified in B.(1) above?

_____ Yes

_____ No

If you check No, forfeited Employer Matching
Contributions will be allocated as though they
were additional Employer Matching Contributions.

c. Qualified Matching Contributions (Plan Section
2.58). Skip this part C if you will not make
Qualified Matching Contributions.

i. Qualified Matching Contributions will be
made with respect to (check one):

_____ Elective Deferrals by all Participants

_____ Elective Deferrals only by Non-Highly
Compensated Participants

ii. The amount of Qualified Matching
Contributions made with respect to a
Participant will be:

(Check the provision desired and fill in the %
blank(s) in the provision you check. If you wish
to determine the amount of Qualified Matching
Contributions from year to year instead of
specifying a fixed percentage, write "V" for
variable in the % blank at the beginning of each
provision you check.)

_____ ___% of his Elective Deferrals

_____ ___% of his Elective Deferrals that do
not exceed ___% of his Earnings

_____ ___% of his Elective Deferrals that do
not exceed ___% of Earnings, plus ___%
of Elective Deferrals that do not
exceed ___% of Earnings

_____ ___% of his Earnings

d. Qualified Nonelective Contributions (Plan Section
2.60): Skip this part D if you will not make
Qualified Nonelective Contributions.

i. Qualified Nonelective Contributions will be
made on behalf of (check one):

_____ All Participants

_____ Only Participants who are not Highly
Compensated Employees

ii. The amount of Qualified Nonelective
Contributions for a Plan Year will be (check
one):

_____ ___% (not over 15%) of the Earnings of
Participants on whose behalf Qualified
Nonelective Contributions are made

_____ An amount determined by the Employer
from year to year, to be shared in
proportion to Earnings by Participants
on whose behalf Qualified Nonelective
Contributions are made

Note: Qualified Nonelective Contributions will be used, to the
extent needed, to help the Plan pass the ADP test, explained on
page __ of the Q & As.

e. ACP Test. Every plan that has after-tax
Participant Contributions, Employer Matching
Contributions or Qualified Matching Contributions
must pass an annual test called the ACP test,
which is explained on page __ of the Q & As.
Elective Deferrals and Qualified Nonelective
Contributions will be used to help the Plan pass
the ACP test, to the extent needed.

f. Hardship Distributions from 401(k) Accounts (Plan
Sections 12.2 and 5.14).

<PAGE>
i. Will your Plan permit hardship distributions
from Elective Deferral Accounts? Check one:

_____ Yes

_____ No

ii. If your Plan has Employer Matching
Contributions, will it permit hardship
distributions from Employer Matching
Accounts? You must check Yes if this Plan
replaces an existing plan that permits
hardship distributions. Check one:

_____ Yes

_____ No

15. Reliance on Opinion Letter. If you ever maintained or
you later adopt any plan (including a welfare benefit
fund, as defined in Section 419(e) of the Code, which
provides post-retirement medical benefits allocated to
separate accounts for key employees, as defined in
Section 419A(d)(3) of the Code; or an individual
medical account, as defined in Section 415(l)(2) of
the Code) in addition to this plan, you may not rely on
an opinion letter issued to Putnam by the National
Office of the Internal Revenue Service as evidence that
the Plan is qualified under Section 401 of the
Internal Revenue Code. If you maintain or adopt
multiple plans, in order to obtain reliance with
respect to plan qualification of the Plan, you must
receive a determination letter from the appropriate Key
District Office of Internal Revenue. Putnam will
prepare an application for such a letter upon your
request at a fee agreed upon by the parties.

The Employer may not rely on the opinion letter issued by
the National Office of the Internal Revenue Service as
evidence that this plan is qualified under Section 401 of
the Code unless the terms of the plan, as herein adopted or
amended, that pertain to the requirements of Section
401(a)(4), 401(a)(17), 401(1), 401(a)(5), 410(b) and 414(s)
of the Code, as amended by the Tax Reform Act of 1986 or
later laws, (a) are made effective retroactively to the
first day of the first Year beginning after December 31,
1988 (or such later date on which these requirements first
become effective with respect to this plan); or (b) are made
effective no later than the first day on which the Employer
is no longer entitled, under regulations, to rely on a
reasonable, good faith interpretation of these requirements,
and the prior provisions of the plan constitute such an
interpretation.

Putnam will inform you of all amendments it makes to the
prototype plan. If Putnam ever discontinues or abandons the
prototype plan, Putnam will inform you. This Plan Agreement
#001 may be used only in conjunction with Putnam's basic
plan document #05.

<PAGE>
* * * * *

EMPLOYER'S ADOPTION OF PUTNAM
PROFIT SHARING AND 401(k) PLAN

The Employer named below hereby adopts a PUTNAM PROFIT SHARING
AND 401(k) PLAN, and appoints __________________ to serve as
Trustee of the Plan. (Note: you may appoint a trustee other than
Putnam Fiduciary Trust Company only with Putnam's express
permission.) The Employer acknowledges that it has received
copies of the current prospectus for each Investment Product
available under the Plan, and represents that it will deliver
copies of the then current prospectus for each such Investment
Product to each Participant before each occasion on which the
Participant makes an investment instruction as to his Account.
The Employer further acknowledges that the Plan will be
acknowledged by Putnam as a Putnam Profit Sharing and 401(k) Plan
only upon Putnam's acceptance of this Plan Agreement.

Employer signature(s) to adopt Plan: Date of
signature:

_________________________________________________________________

Please print name(s) of authorized person(s) signing above:

_________________________________________________________________

Phone:____________________

_________________________________________________________________

Phone:____________________

A new Plan must be signed by the last day of the Plan Year in
which the Plan is to be effective.

INVESTMENT DEALER INFORMATION

Firm: _________________________________________________________________

Branch: ________________________________________________________________

Address: _________________________________________________________________

<PAGE>
Registered Representative: ___________________________________
Name

_________________________________________
Phone
<PAGE>
* * * * *

ACCEPTANCE OF TRUSTEE

The Trustee accepts appointment in accordance with the terms and
conditions of the Plan, effective as of the date of execution by
the Employer set forth above.

A. Putnam Fiduciary Trust Company, Trustee

By: _________________________________________________________________

Complete Part B only if you have appointed a Trustee other than
Putnam Fiduciary Trust Company. Note: Putnam may impose an
annual maintenance fee as a condition of its acceptance of this
plan as a Putnam Prototype Profit Sharing and 401(k) Plan.

B. _________________________________, Trustee

By: _________________________________ Trustee's Tax I.D.
Number _______________
(Trustee)

_________________________________________________________________
Address of Trustee

Person for Putnam to Contact: ________________________________

P
h
o
n
e
:
_______________

Complete Part C only if insurance Policies will be purchased
under Article 14 of the Plan (in addition to Putnam Investment
Products).

C. Appointment and Acceptance of Insurance Trustee

1. Appointment to:

_________________________________________________________________
Name of Insurance Trustee

You are hereby designated as Insurance Trustee for Policies to be
held in accordance with the terms and conditions of this Plan and
Trust.

Employer signature to appoint Insurance Trustee:

By:______________________________________________________________
(Authorized Signature)

2. Acceptance as Insurance Trustee is agreed to in accordance
with the terms and conditions of the Plan, effective as of
the date of execution by the Employer as set forth above.

By:_____________________________________ Trustee's Tax I.D.
Number _________________

_________________________________________________________________
Address of Insurance Trustee

Person for Putnam to Contact: ________________________________
Phone: _______________

<PAGE>
* * * * *

ACCEPTANCE BY PUTNAM

Putnam hereby accepts this Employer's Plan as a prototype
established under Putnam Basic Plan Document #05.

Putnam Mutual Funds Corp.

By: ______________________________

<PAGE>
DRAFT OF 10/18/93

PUTNAM MONEY PURCHASE PLAN

PLAN AGREEMENT #002

This is the Plan Agreement for a Putnam prototype money purchase
plan. Please consult a tax or legal advisor and review the
entire form before you sign it. If you fail to fill out this
Putnam Plan Agreement properly, the Plan may be disqualified.
You can get further information to help you complete the Plan
Agreement from your investment dealer, or from Putnam at:

Putnam Dedicated Corporate Services
One Adams Place E2B
Quincy, MA 02169
Phone: 1-800-752-9894

* * * * *

By executing this Plan Agreement, the Employer establishes a
money purchase plan and trust upon the terms and conditions of
Putnam Basic Plan Document #05, as supplemented and modified by
the provisions elected by the Employer in this Plan Agreement.
THIS PLAN AGREEMENT MUST BE ACCEPTED BY PUTNAM IN ORDER FOR THE
EMPLOYER TO RECEIVE FUTURE AMENDMENTS TO THE PUTNAM MONEY
PURCHASE PLAN.

* * * * *

16. Business Information. The Employer adopting this Plan
is:

a. Business Name: ____________________________________

b. Business Address: ______________________________

_______________________________ SIC Code: ______

_______________________________

Person for Putnam to Contact: __________________________

Phone: __________________________

c. Federal Tax Identification Number: _____________

<PAGE>
d. Form of Organization (check one):

_____ Sole proprietorship _____ Corporation

_____ Partnership _____ S Corporation

e. Taxable Year of Business:

______ Calendar Year

______ Fiscal year ending on ________________________

17. Plan Information.

a. Plan Year. Check one:

_____ The Plan Year will be the
same as the Taxable Year of
the Business shown in 1.E.
above. If the Taxable Year
of the Business changes, the
Plan Year will change
accordingly.

_____ The Plan Year will be the period of 12
months beginning on the first day of
__________________________ (month) and
ending on the last day of
__________________________ (month).

The Plan Year will also be your Plan's Limitation
Year for purposes of the contribution limitation
rules in Article 6 of the Plan.

If your Plan Year is the calendar year, do you
wish to make the "calendar year election" for
identifying your Highly Compensated Employees?

_____ Yes

_____ No

b. Effective Date of Adoption of Plan.

Are you adopting this Plan to replace an existing plan?

_____ Yes

_____ No
<PAGE>
If you answered Yes in 2.B. above, the Effective Date
of your adoption of this Plan will be the first day of
the current Plan Year. Please complete the following:

_____________________________________________________________
Name of the plan you are replacing

______________________________________________________________
Original Effective Date of the plan you are replacing

The Effective Date is: _______________________
month/day/year

18. Eligibility for Plan Participation (Plan Section 3.1).
Employees will be eligible to participate in the Plan
when they complete the requirements you select in A, B
and C below.

The following employees will be eligible to participate
in the Plan:

_____ Members of the following collective
bargaining unit(s) (give names of unions):

________________________________________________________________

_____ Nonresident aliens with no U.S.-source
income
<PAGE>
b. Age Requirement (check and complete one):

_____ No minimum age required for participation

_____ Employees must reach age __ (not over 21) to
participate

c. Service Requirements.

i. To become eligible, an employee must
complete (choose one):

_____ a. No minimum service required. Skip
the rest of this part C.

_____ b. One 6-month Eligibility Period

_____ c. One 12-month Eligibility Period

ii. A 6-month Eligibility Period is a 6-month
period beginning either on an employee's
first day of work with the Employer or on
the date 6-months following the employee's
first day of work, and anniversaries of
those dates. A 12-month Eligibility Period
is the 12-month period beginning on an
employee's first day of work with the
Employer, and anniversaries of that date.
If the Employer acquires a business, will
the Eligibility Period for employees of the
acquired business be the 12-month period
beginning on the first day of work for the
acquired business and anniversaries of that
date (or the 6-month period beginning on the
first day of work for the acquired business,
the date 6 months following the first day of
work and anniversaries of those dates, if
applicable)?

_____ Yes

_____ No
<PAGE>
iii.

a. To receive credit for a 6-month Eligibility
Period, an employee must complete during it
at least:

_____ 500 Hours of Service

_____ _____________ Hours of Service
(under 500)

b. To receive credit for a 12-month Eligibility
Period, an employee must complete during it
at least:

_____ 1,000 Hours of Service

_____ _____________ Hours of Service
(under 1,000)

iv. Hours of Service will be credited to
employees by the following method (check
one):

_____ a. Actual hours for which an employee
is paid

_____ b. Any employee who has one actual
paid hour in the following period
will be credited with the number of
Hours of Service indicated (check
one):

_____ Day (10 Hours of Service)

_____ Week (45 Hours of Service)

_____ Semi-monthly payroll period
(95 Hours of Service)

_____ Month (190 Hours of Service)

Note: If you are adopting this Plan to replace an existing plan,
employees will be credited under this Plan with all service
credited to them under the plan you are replacing.
<PAGE>
v. Entry Dates. Each Employee in an eligible
class who completes the age and service
requirements specified above will begin to
participate in the Plan on (check one):

_____ The first day of the month in which he
fulfills the requirements.

_____ The first day of any month (monthly).

_____ The first day of the first, fourth,
seventh and tenth months in a Plan Year
(quarterly).

_____ The first day of the first month and
the seventh month in a Plan Year
(semiannually).

d. (For New Plans Only) Will all Employees be
required to meet the age and service requirements
specified in B and C above?

_____ Yes

_____ No; all Employees on the Effective Date will
be eligible as of the Effective Date, even
if they have not met the age and service
requirements.

19. Compensation (Plan Section 2.8). Compensation for
purposes of the Plan will be the amount of the
following that is actually paid by your Business to an
employee during the Plan Year (check one):

_____ Form W-2 earnings as defined in Section 2.8 of
the Plan.

_____ Form W-2 earnings as defined in Section 2.8 of
the Plan, plus any amounts withheld from the
employee under a 401(k) plan, cafeteria plan,
SARSEP, tax sheltered 403(b) arrangement, or
Code Section 457 deferred compensation plan, or
contributions described in Code Section 414(h)(2)
that are picked up by a governmental employer.
<PAGE>
_____ All compensation included in the definition of
Code Section 415 Compensation in Section 6.5(b)
of the Plan.

20. Contributions (Plan Section 4.3).

a. Amount. The Employer will contribute to the Plan
for each Plan Year this Basic Contribution
Percentage (not more than 25%) ____% of the
Earnings of all Qualified Participants for the
Plan Year.

b. Allocations to Participants

2. Integration with Social Security. Contributions
under paragraph B will be shared by Qualified
Participants in proportion to their Earnings,
unless you check the following space to indicate
that your Plan will be integrated with Social
Security, as explained on page 3 of the Qs & As.

The Plan will be integrated with Social Security,
and the Base Contribution Percentage will be ___%
(not less than 3% unless you will perform annual
top-heavy testing for your Plan).

3. Integration Level. (Complete only if you have
elected in 5.B.2. to integrate your Plan with
Social Security). The Integration Level will be
(check one):

____ The Social Security Wage Base in effect at the
beginning of the Plan Year.
<PAGE>
____ __% (not more than 100%) of the Social Security
Wage Base in effect at the beginning of the Plan
Year.

____ $__________ (not more than the Social Security
Wage Base).

c. Participant Contributions. Will your Plan allow
Participants to make after-tax contributions?

Yes

21. Investments (Plan Sections 13.2 and 13.3). The
Employer selects in part A below the Investment
Products that will be available under the Plan (in
addition to life insurance policies selected under Plan
Article 14, if any). All Investment Products must be
sponsored, underwritten, managed or expressly agreed to
in writing by Putnam. From the group of available
Investment Products selected by the Employer, each
Participant chooses the investments for his own
Accounts unless the Employer elects differently in B
below.

a. Available Investment Products (Plan Section
13.2). The following investments will be
available under the Plan (check one):

_____ The group of Putnam funds selected by the
Employer and communicated to Participants in
writing. A current list of the funds
selected by the Employer from time to time
shall be kept with the records of the Plan.
The initial list of funds is as follows:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

______ Putnam Fiduciary Trust Company GIC Fund

______ Other Investment Products (as defined in
Section 2.26 of the Plan)

In the event that there is any amount in the Trust Fund for which
no instructions or unclear instructions are delivered, it will be
invested in the default option selected by the Employer in its
Service Agreement with Putnam (or if the Employer makes no such
selection, in Putnam Daily Dividend Trust) until instructions are
received in good order, and the Employer will be deemed to have
selected the option indicated in its Service Agreement with
Putnam (or if none, Putnam Daily Dividend Trust) as an available
Investment Product for that purpose.

_____ The Employer will make investment decisions.

c. Changes. Investment instructions may be changed
(check one):

_____ on any Valuation Date (daily)

_____ on the first day of any month (monthly)

_____ on the first day of the first, fourth,
seventh and tenth months in a Plan Year
(quarterly)

_____ Participants are hereby appointed named
fiduciaries for the purpose of voting of
Employer Stock in accordance with Section
13.8.

22. Retirement Age.

a. Normal Retirement Age (Plan Section 7.1). Normal
retirement age will be _______ (not over the
lesser of 65 or any mandatory retirement age
enforced by the Employer).

b. Early Retirement (Plan Section 7.1). Check and
complete the item below only if you want
Participants to become fully vested upon
fulfilling specified age and service requirements
before reaching normal retirement age:

_____ Early retirement will be permitted at
age ____ with at least ________ Years
of Service.

23. Vesting.

a. Time of Vesting. The provision checked below
will determine a Participant's vested percentage
in his Employer Contribution Account.

_____ 100% vesting immediately upon participation
in the Plan. If you check this option, skip
the rest of this part 8.

_____ Six Year Graded Schedule:

Vested Percentage 20% 40% 60% 80% 100%

Years of Service 2 3 4 5 6

_____ Three Year Cliff Schedule:

Vested Percentage 0% 100%

Years of Service 0-2 3

_____ Other Schedule (must be at least as
favorable as Six Year Graded Schedule or
Three Year Cliff Schedule):

Vested Percentage __% __% __% __% __%

Years of Service ___ ___ ___ ___ ___

b. Service. Skip this part B if your Plan will
include all of an employee's service in
determining his Years of Service for vesting.

Years of Service for vesting will exclude (check one or
more):

_____ Service before the Effective Date of the
Plan, if this is a new plan, or service
before the effective date of your existing
plan, if this Plan replaces an existing plan

_____ Service before the Plan Year in which an
employee reached age 18

_____ Service for a business acquired by the
Employer, before the date of acquisition

c. Hours of Service. The number of Hours of Service
required for crediting a Year of Service for
vesting will be (check one):

_____ 1,000 Hours of Service

_____ ___________________ Hours of Service
(under 1,000)

d. Year of Service Measuring Period (Plan Section
2.49). The periods of 12 months used for
measuring Years of Service will be (check one):

_____ Plan Years

_____ 12-month Eligibility Periods

NOTE: IF YOU ARE ADOPTING THIS PLAN TO REPLACE AN EXISTING PLAN,
EMPLOYEES WILL BE CREDITED UNDER THIS PLAN WITH ALL SERVICE
CREDITED TO THEM UNDER THE PLAN YOU ARE REPLACING.

24. Loans. Will your Plan permit loans to employees from
their Accounts?

_____ Yes

_____ No

25. Automatic Distribution of Small Accounts (Plan Section
9.1). Will your Plan automatically distribute vested
account balances not exceeding $3,500, within 60 days
after the end of the Plan Year in which a Participant
separates from employment?

_____ Yes

_____ No

26. Top-Heavy Minimum Contributions (Plan Section 15.3).
For any Plan Year in which the Plan is top-heavy, you
must provide for each Participant who is a non-key
employee and who is employed on the last day of the
Plan Year an allocation equal to 3% of his Earnings (or
if less, the highest percentage allocated to any key
employee).

Skip paragraphs A and B below if you do not maintain any
other qualified plan in addition to this Plan.

<PAGE>
The top-heavy minimum contribution (or benefit) for
non-key employees participating both in this Plan and
another qualified plan maintained by the Employer will
be provided in:

_____ This Plan (Check this if the other plan is
another Putnam prototype plan.)

_____ The plan named here: ______________________

b. (Skip this paragraph if you do not maintain a
defined benefit plan.) If you maintain a defined
benefit plan in addition to this Plan, and the
Top-Heavy Ratio (as defined in Plan Section
15.2(c)) for the combined plans is between 60%
and 90%, you may elect to provide an increased
minimum allocation or benefit pursuant to Plan
Section 15.4. Specify your election by
completing the statement below:

27. Other Plans. Skip this item 12 if the Plan is the only
qualified plan your Business has ever had. You must
complete this section if you maintain or ever
maintained another qualified plan in which any
Participant in this Plan is (or was) a participant or
could become a participant.