VOTE BY PHONE CONFIRMATION LETTER
(WRITTEN)
VOTE CONFIRMATION
(Shareholder name & address of record)
PUTNAM MASTER INTERMEDIATE INCOME TRUST
Meeting of Shareholders December 18, 1997
Account:
Shares:
Votes Received: (list proposal as on proxy card)
(FOR) (AGAINST) (ABSTAIN)
Dear Shareholder:
In connection with the above-referenced Meeting of
Shareholders, this notice will confirm that your shares have
been voted as indicated above in accordance with your
telephone instructions. If any of the information is
incorrect, please call 1-800-735-3428 immediately, and in
any event no later than 5:00 P.M. Eastern Daylight Time, on
December 17, 1997.
Thank you for your cooperation.
Very truly yours,
(Solicitation Agent)
Vote-By-Phone Solicitation Script for
Putnam Master Intermediate Income Trust
This script provides information to the shareholder and
solicits their vote by phone, to be confirmed by written
confirmation.
Good Morning/Afternoon/Evening. May I please speak with
(name of shareholder)?
I am representing Putnam Investments in Boston. I am
calling in connection with the upcoming shareholder meeting
for Putnam Master Intermediate Income Trust for which you
recently received a combined prospectus/proxy statement
requesting your vote.
To verify that I am speaking with the shareholder of record,
may I confirm that you are (name of shareholder of record)
and that your address of record is (address of record)?
(If the person is unwilling to confirm this information,
thank them for their time and terminate the call.)
We noted that we have not yet received your proxy card. Do
you have any questions regarding the proposals being
presented at the meeting that I can clarify for you?
(If there are questions regarding the proposals, please
refer to the Q & A attached.)
Would you like to vote by telephone?
(If not, ask the shareholder if they would like another
proxy card, thank them for their time and terminate the
call. If so, proceed as follows:)
I will now paraphrase the proxy card so that you can provide
us with your voting instructions. The proxy card generally
states the following:
By authorizing your shares to be voted at the meeting you
are appointing George Putnam, Hans H. Estin, and Robert E.
Patterson, and each of them separately, as proxies, with the
power of substitution, and authorizing them to represent and
vote your shares at the meeting of shareholders of Putnam
Master Intermediate Income Trust on December 18, 1997 at
2:00 p.m., Boston time, and at any adjournments thereof.
When properly authorized, this proxy will be voted in the
manner directed by the shareholder. In their discretion,
the proxies are authorized to vote upon such other matters
as may properly come before the meeting.
The proxy card requests your vote on the following three
proposals.
1. The Trustees are recommending a vote in favor of
Proposal 1. That Proposal is to:
Approve an Agreement and Plan of Reorganization
providing for the transfer of all of the assets of Putnam
Intermediate Government Income Trust (which we'll call the
"Government Fund") to Putnam Master Intermediate Income
Trust (which we'll call the "Master Fund") in exchange for
shares of the Master Fund and the assumption by the Master
Fund of all of the liabilities of the Government Fund, and
the distribution of such shares to the shareholders of the
Government Fund in complete liquidation of the Government
Fund.
How would you like to vote on this proposal? Would you like
to vote for the proposal, against the proposal, or would you
like to abstain from voting on this proposal?
Thank you.
2. The Trustees are recommending a vote in favor of
Proposal 2, for fixing the number of Trustees and electing
all of the nominees.
The nominees are:
J.A. Baxter, H.H. Estin, J.A. Hill, R.J. Jackson,
P.L. Joskow, E.T. Kennan, L.J. Lasser, J.H. Mullin, III,
R.E. Patterson, D.S. Perkins, W.F. Pounds, G. Putnam, G.
Putnam, III, A.J.C Smith, W.T. Stephens, and W.N. Thorndike.
How would you like to vote on this proposal? Would you like
to fix the number of Trustees at 16 and vote for all
nominees, or would you like to withhold authority to vote
for all nominees? You may also vote for some nominees while
voting against others. If you would like to withhold
authority to vote for certain of the nominees, please state
those nominees' names now.
Thank you.
3. The Trustees are recommending a vote in favor of
Proposal 3. That proposal is to ratify the selection of
Coopers & Lybrand L.L.P as the independent auditors of the
Fund.
How would you like to vote on this proposal? Would you like
to vote for the proposal, against the proposal, or would you
like to abstain from voting on this proposal?
Thank you.
I will now repeat your instructions on the proposals:
You:
1. (Voted for, Voted against, Abstained from) the proposal
to approve the Agreement and Plan of Reorganization.
2. (Voted for the proposal for fixing the number of
Trustees at 16 and electing all of the nominees, Withheld
authority to vote for all nominees, Voted for all nominees
except withholding authority to vote for )
3. (Voted for, Voted against, Abstained from) the proposal
to ratify the selection of Coopers & Lybrand L.L.P as the
independent auditors of the Fund.
Is this correct?
Thank you.
We will be sending you a written confirmation of your vote.
Please call us if the information on the confirmation is
incorrect.
Q&A for Putnam Master Intermediate Income Trust
On or about October 31, 1997, a combined prospectus/proxy
statement was sent to shareholders of Putnam Master
Intermediate Income Trust. Listed below are answers to the
questions and concerns shareholders are likely to have
regarding proposal No. 1, the combination of Putnam
Intermediate Government Income Trust into Putnam Master
Intermediate Income Trust, followed by answers and
information regarding each issue.
1. What is being proposed?
The Trustees are recommending that shareholders approve the
combination of Putnam Intermediate Government Income Trust
with Putnam Master Intermediate Income Trust. Your fund's
investment objectives and policies will not be affected.
Your fund will, however, grow significantly in size.
Putnam Master Intermediate Income Trust will acquire all of
the assets of Putnam Intermediate Government Income Trust in
exchange for shares of Putnam Master Intermediate Income
Trust and for the assumption by Putnam Master Intermediate
Income Trust of all of the liabilities of the Putnam
Intermediate Government Income Trust. Shares of Putnam
Master Intermediate Income Trust will not be affected by the
transaction.
2. Why are the Trustees proposing the transaction?
After a series of meetings held earlier this year, the
Trustees concluded that it would be in the best interests of
Putnam Intermediate Government Income Trust to add the
capability to invest significantly in the high yield sector.
This decision was based, in part, on a comparison of the
performance of Putnam Intermediate Government Income Trust
to funds such as Putnam Master Intermediate Income Trust
which have the capability to invest significantly in the
high yield sector. The Trustees also decided that, in light
of the substantial similarity of Putnam Intermediate
Government Income Trust and Putnam Master Intermediate
Income Trust, it was in the interests of both funds'
shareholders to consolidate the operations of the two funds
rather than operating them in parallel fashion.
The acquisition of the assets of Putnam Intermediate
Government Income Trust will create a substantially larger
fund of approximately $873 million in assets, as compared to
the fund's current size of approximately $338 million
assets. The Trustees believe that a larger fund offers the
prospect of a lower expense ratio. In addition, the
Trustees believe that a larger fund may result in increased
liquidity for shareholders through the substantial increase
in the number of shares outstanding. This may in turn
attract greater investor interest and lead to lower share
trading discount levels in the market price of your fund's
shares, although no assurances can be given in this regard
since discount levels appear to be influenced by many
factors.
3. What will happen to my shares of Putnam Master
Intermediate Income Trust?
If the combination is approved, your shares will not be
affected by the transaction, but will represent interests in
a substantially larger fund pursuing the same investment
objectives and policies.
4. Why is a shareholder vote on this proposal being
solicited at this time?
Although this transaction will not change the objectives or
policies of your fund in any way, we are required by the
Rules of the New York Stock Exchange to solicit your vote in
this matter.
The shareholders of Putnam Intermediate Government Income
Trust approved the transaction on October 9, 1997.
5. When would the combination occur?
If approved by shareholders at the December 18, 1997
meeting, it is expected that the combination would occur on
or about January 26, 1998.
6. What is Putnam Intermediate Income Trust?
Putnam Intermediate Government Income Trust is a closed-end
investment company with the same Trustees and investment
adviser as your fund. As of September 30, 1997, it had $535
million in assets. Putnam Intermediate Government Income
Trust invests in the U.S. government and foreign government
sectors of the fixed income securities markets. Unlike
Putnam Master Intermediate Income Trust, Putnam Intermediate
Government Income Trust does not invest in the high yield
sector.
Since the assets of Putnam Intermediate Government Income
Trust will be repositioned in connection with the
transaction to reflect the policies of Putnam Master
Intermediate Income Trust and the combined fund will operate
under Putnam Master Intermediate Income Trust's policies,
the policies of Putnam Intermediate Government Income Trust
are not relevant to the operations of Putnam Master
Intermediate Income Trust after the transaction.
7. How do the fees and expenses of the two funds compare,
and what are they estimated to be following the transaction?
The funds currently have the same management fee rates,
Putnam Master Intermediate Income Trust currently has higher
management fees and total fund operating expenses due to
asset size. The combined fund is expected to have lower
management fees and total fund operating expenses than are
currently being paid by either fund.
8. What are the federal income tax consequences of the
proposed transaction?
For federal income tax purposes, no gain or loss will be
recognized by either fund or its shareholders as a result of
the transaction.
9. Will my dividend be affected by the transaction?
The transaction will not result in a change in the dividend
policy or any immediate change in dividend payments of
Putnam Master Intermediate Income Trust. Over the longer
term the level of dividends will depend on market conditions
and the ability of Putnam Investment Management, Inc., the
investment adviser to Putnam Master Intermediate Income
Trust, to invest the fund's assets, including those received
in the transaction, in securities meeting Putnam Master
Intermediate Income Trust's investment guidelines with the
same or greater level of income as the current investments
of the fund.
10. Will the transaction effect the procedures for
purchasing and selling shares?
No. The procedures for purchasing and selling shares of
each fund are identical and will remain unchanged. As closed-
end funds, the funds do not redeem outstanding shares or
continuously offer shares. The funds' shares currently may
be bought and sold at prevailing market prices on the New
York Stock Exchange. Shares may also be purchased through
each fund's dividend reinvestment plan. The Master Fund
will apply to list the shares to be issued to Putnam
Intermediate Government Income Trust shareholders on the
NYSE. It is a condition to the closing of the transaction
that the additional shares be accepted for listing.
11. Will these transactions affect the discount on my
shares?
In recent years, shares of Putnam Master Intermediate Income
Trust have traded at a discount. While discount levels
appear to be influenced by many factors and no assurances
can be given in this regard, the increased liquidity
expected to result from a substantially larger fund could
help reduce future discount levels. Increased liquidity may
result from the substantial increase in the number of shares
outstanding, which may attract greater investor interest and
in turn lead to lower share trading discount levels in the
market price of Putnam Master Intermediate Income Trust's
shares.
12. How will I be notified of the outcome of the
transaction?
If the proposed transaction is approved by shareholders, you
will receive confirmation after the reorganization is
completed. If the transaction is not approved, you will be
notified, and the results of the meeting will be provided in
the next annual report of Putnam Master Intermediate Income
Trust.
