SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
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Filed by the Registrant / X /
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Filed by a Party other than the Registrant / /
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CHECK THE APPROPRIATE BOX:
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/ X / Preliminary Proxy Statement
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/ / Preliminary Additional Materials
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/ / Definitive Proxy Statement
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/ / Definitive Additional Materials
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/ / Soliciting Material Pursuant to Sec. 240.14a-11(e) or
- ---- Sec. 240.14a-12
PUTNAM HIGH YIELD MUNICIPAL TRUST
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
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/ x / $125 per Exchange Act Rules 0-11(c)(1)(ii),
- ---- 14a-6(i)(1), or 14a-6(i)(2).
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/ / $500 per each party to the controversy pursuant
- ---- to Exchange Act Rule 14a-6(i)(3).
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/ / Fee computed on table below per Exchange Act Rules
- ---- 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11:
(4) Proposed maximum aggregate value of transaction:
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/ / Check box if any part of the fee is offset as provided
- ---- by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed: <PAGE>
IMPORTANT INFORMATION
FOR SHAREHOLDERS IN
PUTNAM HIGH YIELD MUNICIPAL TRUST
THE DOCUMENT YOU HOLD IN YOUR HANDS CONTAINS YOUR PROXY STATEMENT
AND PROXY CARD. A PROXY CARD IS, IN ESSENCE, A BALLOT. WHEN YOU
VOTE YOUR PROXY, IT TELLS US HOW TO VOTE ON YOUR BEHALF ON
IMPORTANT ISSUES RELATING TO YOUR FUND. IF YOU COMPLETE AND SIGN
THE PROXY, WE'LL VOTE IT EXACTLY AS YOU TELL US. IF YOU SIMPLY
SIGN THE PROXY, WE'LL VOTE IT IN ACCORDANCE WITH THE TRUSTEES'
RECOMMENDATIONS ON PAGES [ ] AND [ ].
WE URGE YOU TO SPEND A COUPLE OF MINUTES WITH THE PROXY
STATEMENT, FILL OUT YOUR PROXY CARD, AND RETURN IT TO US. WHEN
SHAREHOLDERS DON'T RETURN THEIR PROXIES IN SUFFICIENT NUMBERS, WE
HAVE TO INCUR THE EXPENSE OF FOLLOW-UP SOLICITATIONS, WHICH CAN
COST YOUR FUND MONEY.
WE WANT TO KNOW HOW YOU WOULD LIKE TO VOTE AND WELCOME YOUR
COMMENTS. PLEASE TAKE A FEW MOMENTS WITH THESE MATERIALS AND
RETURN YOUR PROXY TO US.
(PUTNAM LOGO APPEARS HERE)
BOSTON * LONDON * TOKYO
<PAGE>
TABLE OF CONTENTS
A Message from the Chairman 1
Notice of Shareholder Meeting 2
Trustees' Recommendations [4]
PROXY CARD ENCLOSED
If you have any questions, please contact us at the special toll-
free number we have set up for you (1-800-225-1581) or call your
financial adviser.
<PAGE>
A MESSAGE FROM THE CHAIRMAN
(Photograph of George Putnam appears here)
Dear Shareholder:
I am writing to you to ask for your vote on important questions
that affect your investment in your fund. While you are, of
course, welcome to join us at your fund's meeting, most
shareholders cast their vote by filling out and signing the
enclosed proxy. We are asking for your vote on the following
matters:
1. FIXING THE NUMBER OF TRUSTEES AND ELECTING TRUSTEES TO
OVERSEE YOUR FUND;
2. RATIFYING THE SELECTION BY THE TRUSTEES OF THE INDEPENDENT
AUDITORS OF YOUR FUND FOR ITS CURRENT FISCAL YEAR;
3. APPROVING AMENDMENTS TO CERTAIN OF YOUR FUND'S FUNDAMENTAL
INVESTMENT RESTRICTIONS; AND
4. APPROVING THE ELIMINATION OF CERTAIN OF YOUR FUND'S
FUNDAMENTAL INVESTMENT RESTRICTIONS.
Although we would like very much to have each shareholder attend
their fund's meeting, we realize this is not possible. Whether
or not you plan to be present, we need your vote. We urge you to
complete, sign, and return the enclosed proxy card promptly. A
postage-paid envelope is enclosed.
I'm sure that you, like most people, lead a busy life and are
tempted to put this proxy aside for another day. Please don't.
When shareholders do not return their proxies, their fund may
have to incur the expense of follow-up solicitations. All
shareholders benefit from the speedy return of proxies.
Your vote is important to us. We appreciate the time and
consideration that I am sure you will give this important matter.
If you have questions about the proposals, contact your financial
adviser or call a Putnam customer service representative at
1-800-225-1581.
Sincerely yours,
(signature of George Putnam)
George Putnam, Chairman
<PAGE>
PUTNAM HIGH YIELD MUNICIPAL TRUST
NOTICE OF A MEETING OF SHAREHOLDERS
THIS IS THE FORMAL AGENDA FOR YOUR FUND'S SHAREHOLDER MEETING. IT
TELLS YOU WHAT MATTERS WILL BE VOTED ON AND THE TIME AND PLACE OF
THE MEETING, IF YOU CAN ATTEND IN PERSON.
To the Shareholders of Putnam High Yield Municipal Trust:
A Meeting of Shareholders of your fund will be held on October
31, 1996 at 2:00 p.m., Boston time, on the eighth floor of One
Post Office Square, Boston, Massachusetts, to consider the
following:
1. FIXING THE NUMBER OF TRUSTEES AND ELECTING TRUSTEES. SEE
PAGE [ ].
2. RATIFYING THE SELECTION BY THE TRUSTEES OF THE INDEPENDENT
AUDITORS OF YOUR FUND FOR ITS CURRENT FISCAL YEAR. SEE
PAGE [ ].
3.A. APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO DIVERSIFICATION. SEE PAGE
[ ].
3.B. APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO INVESTMENTS IN THE VOTING
SECURITIES OF A SINGLE ISSUER. SEE PAGE [ ].
3.C. APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO MAKING LOANS. SEE PAGE [ ].
3.D. APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO INVESTMENTS IN COMMODITIES. SEE
PAGE [ ].
3.E. APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO CONCENTRATION OF ITS ASSETS. SEE
PAGE [ ].
4.A. APPROVING THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO INVESTMENTS IN
SECURITIES OF ISSUERS IN WHICH MANAGEMENT OF THE FUND OR
PUTNAM INVESTMENT MANAGEMENT OWNS SECURITIES. SEE PAGE [ ].
4.B. APPROVING THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO MARGIN TRANSACTIONS.
SEE PAGE [ ].
4.C. APPROVING THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO SHORT SALES.
SEE PAGE [ ].
4.D. APPROVING THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO PLEDGING ASSETS. SEE
PAGE [ ].
4.E. APPROVING THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO INVESTMENTS IN
RESTRICTED SECURITIES. SEE PAGE [ ].
4.F. APPROVING THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO INVESTMENTS IN
CERTAIN OIL, GAS AND MINERAL INTERESTS. SEE PAGE [ ].
4.G. APPROVING THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT TO INVESTING TO GAIN
CONTROL OF A COMPANY'S MANAGEMENT. SEE PAGE [ ].
5. TRANSACTING OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
By the Trustees
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson A. Baxter Robert E. Patterson
Hans H. Estin Donald S. Perkins
John A. Hill George Putnam, III
Ronald J. Jackson Eli Shapiro
Elizabeth T. Kennan A.J.C. Smith
Lawrence J. Lasser W. Nicholas Thorndike
WE URGE YOU TO MARK, SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN
THE POSTAGE-PAID ENVELOPE PROVIDED SO YOU WILL BE REPRESENTED AT
THE MEETING.
[September ___, 1996]
PROXY STATEMENT
THIS DOCUMENT WILL GIVE YOU THE INFORMATION YOU NEED TO VOTE ON
THE MATTERS LISTED ON THE PREVIOUS PAGES. MUCH OF THE
INFORMATION IN THE PROXY STATEMENT IS REQUIRED UNDER RULES OF THE
SECURITIES AND EXCHANGE COMMISSION ("SEC"); SOME OF IT IS
TECHNICAL. IF THERE IS ANYTHING YOU DON'T UNDERSTAND, PLEASE
CONTACT US AT OUR SPECIAL TOLL-FREE NUMBER, 1-800-225-1581, OR
CALL YOUR FINANCIAL ADVISER.
<PAGE>
WHO IS ASKING FOR MY VOTE?
THE ENCLOSED PROXY IS SOLICITED BY THE TRUSTEES OF PUTNAM HIGH
YIELD MUNICIPAL TRUST for use at the Meeting of Shareholders of
the fund to be held on October 31, 1996, and, if your fund's
meeting is adjourned, at any later meetings, for the purposes
stated in the Notice of Meeting (see previous pages).
HOW DO YOUR FUND'S TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE ON
THESE PROPOSALS?
The Trustees recommend that you vote
1. FOR FIXING THE NUMBER OF TRUSTEES AS PROPOSED AND THE
ELECTION OF ALL NOMINEES;
2. FOR SELECTING PRICE WATERHOUSE LLP AS THE INDEPENDENT
AUDITORS OF YOUR FUND;
3.A. FOR AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO DIVERSIFICATION;
3.B. FOR AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTMENTS IN THE VOTING SECURITIES OF A
SINGLE ISSUER;
3.C. FOR AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO MAKING LOANS;
3.D. FOR AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTMENTS IN COMMODITIES;
3.E. FOR AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO CONCENTRATION OF ITS ASSETS;
4.A. FOR ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO INVESTMENTS IN SECURITIES OF
ISSUERS IN WHICH MANAGEMENT OF THE FUND OR PUTNAM INVESTMENT
MANAGEMENT OWNS SECURITIES;
4.B. FOR ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO MARGIN TRANSACTIONS;
4.C. FOR ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO SHORT SALES;
4.D. FOR ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO PLEDGING ASSETS;
4.E. FOR ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO INVESTMENTS IN RESTRICTED
SECURITIES;
4.F. FOR ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO INVESTMENTS IN CERTAIN OIL, GAS
AND MINERAL INTERESTS; AND
4.G. FOR ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO INVESTING TO GAIN CONTROL OF A
COMPANY'S MANAGEMENT.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on August 2,
1996, are entitled to be present and to vote at the meeting or
any adjourned meeting. The Notice of Meeting, the proxy, and the
Proxy Statement have been mailed to shareholders of record on or
about [September ___, 1996.]
Each share is entitled to one vote. Unless otherwise noted, the
holders of your fund's preferred shares ("Preferred Shares") and
holders of your fund's common shares ("Common Shares") will vote
together as a single class. Shares represented by duly executed
proxies will be voted in accordance with shareholders'
instructions. If you sign the proxy, but don't fill in a vote,
your shares will be voted in accordance with the Trustees'
recommendations. If any other business is brought before the
meeting, your shares will be voted at the Trustees' discretion.
THE PROPOSALS
1. ELECTION OF TRUSTEES
WHO ARE THE NOMINEES FOR TRUSTEES?
The Nominating Committee of the Trustees recommends that the
number of Trustees be fixed at fourteen and that you vote for the
election of the nominees described below. Each nominee is
currently a Trustee of your fund and of the other Putnam funds.
Pursuant to the Bylaws of your fund and the Investment Company
Act of 1940, holders of the Preferred Shares of the fund are
entitled to elect two trustees. The remaining trustees for your
fund will be elected by the holders of its Preferred Shares and
Common Shares voting together as a single class. Therefore,
Messrs. Hill and Patterson have been nominated as trustees to be
elected by the holders of its preferred shares, while the other
12 trustees have been nominated to be elected by the holders of
its Preferred Shares and Common Shares voting together as a
single class.
The Nominating Committee of the Trustees consists solely of
Trustees who are not "interested persons" (as defined in the
Investment Company Act of 1940) of your fund or of Putnam
Investment Management, Inc., your fund's investment manager
("Putnam Management").
JAMESON ADKINS BAXTER
[INSERT PICTURE]
Ms. Baxter, age 53, is the President of Baxter Associates, Inc.,
a management and financial consulting firm which she founded in
1986. During that time, she was also a Vice President and
Principal of the Regency Group, Inc., and a Consultant to First
Boston Corporation, both of which are investment banking firms.
From 1965 to 1986, Ms. Baxter held various positions in
investment banking and corporate finance at First Boston.
Ms. Baxter currently also serves as a Director of Banta
Corporation, Avondale Federal Savings Bank, and ASHTA Chemicals,
Inc. She is also the Chairman Emeritus of the Board of Trustees
of Mount Holyoke College, having previously served as Chairman
for five years and as a Board member for thirteen years; an
Honorary Trustee and past President of the Board of Trustees of
the Emma Willard School; and Chair of the Board of Governors of
Good Shepherd Hospital. Ms. Baxter is a graduate of Mount
Holyoke College.
HANS H. ESTIN
[INSERT PICTURE]
Mr. Estin, age 68, is a Chartered Financial Analyst and the Vice
Chairman of North American Management Corp., a registered
investment adviser serving individual clients and their families.
Mr. Estin currently also serves as a Director of The Boston
Company, Inc., a registered investment adviser which provides
administrative and investment management services to mutual funds
and other institutional investors, and Boston Safe Deposit and
Trust Company; a Corporation Member of Massachusetts General
Hospital; and a Trustee of New England Aquarium. He previously
served as the Chairman of the Board of Trustees of Boston
University and is currently active in various other civic
associations, including the Boys & Girls Clubs of Boston, Inc.
Mr. Estin is a graduate of Harvard College and holds honorary
doctorates from Merrimack College and Boston University.
JOHN A. HILL
[INSERT PICTURE]
Mr. Hill, age 54, is the Chairman and Managing Director of First
Reserve Corporation, a registered investment adviser investing in
companies in the world-wide energy industry on behalf of
institutional investors.
Prior to acquiring First Reserve in 1983, Mr. Hill held executive
positions with several investment advisory firms and held various
positions with the Federal government, including Associate
Director of the Office of Management and Budget and Deputy
Administrator of the Federal Energy Administration.
Mr. Hill currently also serves as a Director of Snyder Oil
Corporation, an exploration and production company which he
founded, Maverick Tube Corporation, a manufacturer of structural
steel, pipe and well casings, PetroCorp Incorporated, an
exploration and production company, Weatherford Enterra, Inc., an
oil field service company, various private companies controlled
by First Reserve Corporation, and various First Reserve Funds. He
is also a Member of the Board of Advisors of Fund Directions. He
is currently active in various business associations, including
the Economic Club of New York, and lectures on energy issues in
the United States and Europe. Mr. Hill is a graduate of Southern
Methodist University.
RONALD J. JACKSON
[INSERT PICTURE]
Mr. Jackson, age 52, was Chairman of the Board, President and
Chief Executive Officer of Fisher-Price, Inc., a major toy
manufacturer, from 1990 to 1993. He previously served as
President and Chief Executive Officer of Stride-Rite, Inc., a
manufacturer and distributor of footwear, from 1989 to 1990, and
as President and Chief Executive Officer of Kenner Parker Toys,
Inc., a major toy and game manufacturer, from 1985 to 1987. Prior
to that, he held various financial and marketing positions at
General Mills, Inc. from 1966 to 1985, including Vice President,
Controller and Vice President of Marketing for Parker Brothers, a
toy and game company, and President of Talbots, a retailer and
direct marketer of women's apparel.
Mr. Jackson currently serves as a Trustee of Salem Hospital and
an Overseer of the Peabody Essex Museum. He previously served as
a Director of a number of public companies including Fisher-
Price, Inc., Kenner Parker Toys, Inc., Stride-Rite, Inc., and
Mattel, Inc., a major toy manufacturer. Mr. Jackson is a
graduate of Michigan State University Business School.
ELIZABETH T. KENNAN
[INSERT PICTURE]
Ms. Kennan, age 58, is President Emeritus and Professor of Mount
Holyoke College. From 1978 through June 1995, she was President
of Mount Holyoke College. From 1966 to 1978, she was on the
faculty of Catholic University, where she taught history and
published numerous articles.
Ms. Kennan currently also serves as a Director of NYNEX
Corporation, a telecommunications company, Northeast Utilities,
the Kentucky Home Life Insurance Companies, and Talbots. She
also serves as a Member of The Folger Shakespeare Library
Committee. She is currently active in various educational and
civic associations, including the Committee on Economic
Development and the Council on Foreign Relations. Ms. Kennan is
a graduate of Mount Holyoke College, the University of Washington
and St. Hilda College at Oxford University and holds several
honorary doctorates.
LAWRENCE J. LASSER*
[INSERT PICTURE]
Mr. Lasser, age 53, is the Vice President of your fund and the
other Putnam funds. He has been the President, Chief Executive
Officer and a Director of Putnam Investments, Inc. and Putnam
Management since 1985, having begun his career there in 1969.
Mr. Lasser currently also serves as a Director of Marsh &
McLennan Companies, Inc., the parent company of Putnam
Management, and INROADS/Central New England, Inc., a job market
internship program for minority high school and college students.
He is a Member of the Board of Overseers of the Museum of
Science, the Museum of Fine Arts and the Isabella Stewart Gardner
Museum in Boston. He is also a Trustee of the Beth Israel
Hospital and Buckingham, Browne and Nichols School. Mr. Lasser
is a graduate of Antioch College and Harvard Business School.
ROBERT E. PATTERSON
[INSERT PICTURE]
Mr. Patterson, age 51, is the Executive Vice President and
Director of Acquisitions of Cabot Partners Limited Partnership, a
registered investment adviser which manages real estate
investments for institutional investors. Prior to 1990, he was
the Executive Vice President of Cabot, Cabot & Forbes Realty
Advisors, Inc., the predecessor company of Cabot Partners. Prior
to that, he was a Senior Vice President of the Beal Companies, a
real estate management, investment and development company. He
has also worked as an attorney and held various positions in
state government, including the founding Executive Director of
the Massachusetts Industrial Finance Agency.
Mr. Patterson currently also serves as Chairman of the Joslin
Diabetes Center and as a Director of Brandywine Trust Company.
Mr. Patterson is a graduate of Harvard College and Harvard Law
School.
<PAGE>
DONALD S. PERKINS*
[INSERT PICTURE]
Mr. Perkins, age 69, is the retired Chairman of the Board of
Jewel Companies, Inc., a diversified retailer, where among other
roles he served as President, Chief Executive Officer and
Chairman of the Board from 1965 to 1980. He currently also
serves as a Director of various other public corporations,
including AON Corp., an insurance company, Cummins Engine
Company, Inc., an engine and power generator equipment
manufacturer and assembler, Current Assets L.L.C., a corporation
providing financial staffing services, Illinova and Illinois
Power Co., Inland Steel Industries, Inc., LaSalle Street Fund,
Inc., a real estate investment trust, Lucent Technologies Inc.,
Springs Industries, Inc., a textile manufacturer, and Time
Warner, Inc., one of the nation's largest media conglomerates.
He previously served as a Director of several other major public
corporations, including Corning Glass Works, Eastman Kodak
Company, Firestone Tire & Rubber Company and Kmart Corporation.
Mr. Perkins currently also serves as a Trustee and Vice Chairman
of Northwestern University and as a Trustee of the Hospital
Research and Education Trust. He is currently active in various
civic and business associations, including the Business Council
and the Civic Committee of the Commercial Club of Chicago, of
which he is the founding Chairman. Mr. Perkins is a graduate of
Yale University and Harvard Business School and holds an honorary
doctorate from Loyola University of Chicago.
WILLIAM F. POUNDS
[INSERT PICTURE]
Dr. Pounds, age 68, is the Vice Chairman of your fund and of the
other Putnam funds. He has been a Professor of Management at the
Alfred P. Sloan School of Management at the Massachusetts
Institute of Technology since 1961 and served as Dean of that
School from 1966 to 1980. He previously served as Senior Advisor
to the Rockefeller Family and Associates and was a past Chairman
of Rockefeller & Co., Inc., a registered investment adviser which
manages Rockefeller family assets, and Rockefeller Trust Company.
Dr. Pounds currently also serves as a Director of IDEXX
Laboratories, Inc., EG&G, Inc., Perseptive Biosystems, Inc.,
Management Sciences For Health, Inc. and Sun Company, Inc. He is
also a Trustee of the Museum of Fine Arts in Boston; an Overseer
of WGBH Educational Foundation, and a Fellow of The American
Academy of Arts and Sciences. He previously served as a Director
of Fisher-Price, Inc. and General Mills, Inc. Dr. Pounds is a
graduate of Carnegie-Mellon University.
<PAGE>
GEORGE PUTNAM*
[INSERT PICTURE]
Mr. Putnam, age 70, is the Chairman and President of your fund
and of the other Putnam funds. He is the Chairman and a Director
of Putnam Management and Putnam Mutual Funds Corp. and a Director
of Marsh & McLennan, their parent company. Mr. Putnam is the son
of the founder of the Putnam funds and Putnam Management and has
been employed in various capacities by Putnam Management since
1951, including Chief Executive Officer from 1961 to 1973. He is
a former Overseer and Treasurer of Harvard University; a past
Chairman of the Harvard Management Company; and a Trustee
Emeritus of Wellesley College and Bradford College.
Mr. Putnam currently also serves as a Director of The Boston
Company, Inc., Boston Safe Deposit and Trust Company, Freeport-
McMoRan, Inc., Freeport Copper and Gold, Inc., McMoRan Oil and
Gas, Inc., mining and natural resources companies, General Mills,
Inc., Houghton Mifflin Company, a major publishing company, and
Rockefeller Group, Inc., a real estate manager. He is also a
Trustee of Massachusetts General Hospital, McLean Hospital,
Vincent Memorial Hospital, WGBH Educational Foundation and the
Museum of Fine Arts and the Museum of Science in Boston; the New
England Aquarium; an Overseer of Northeastern University; and a
Fellow of The American Academy of Arts and Sciences. Mr. Putnam
is a graduate of Harvard College and Harvard Business School and
holds honorary doctorates from Bates College and Harvard
University.
GEORGE PUTNAM, III*
[INSERT PICTURE]
Mr. Putnam, age 45, is the President of New Generation Research,
Inc., a publisher of financial advisory and other research
services relating to bankrupt and distressed companies, and New
Generation Advisers, Inc., a registered investment adviser which
provides advice to private funds specializing in investments in
such companies. Prior to founding New Generation in 1985, Mr.
Putnam was an attorney with the Philadelphia law firm Dechert
Price & Rhoads.
Mr. Putnam currently also serves as a Director of the
Massachusetts Audubon Society. He is also a Trustee of the Sea
Education Association and St. Mark's School and an Overseer of
the New England Medical Center. Mr. Putnam is a graduate of
Harvard College, Harvard Business School and Harvard Law School.
<PAGE>
ELI SHAPIRO
[INSERT PICTURE]
Dr. Shapiro, age 80, is the Alfred P. Sloan Professor of
Management, Emeritus at the Alfred P. Sloan School of Management
at the Massachusetts Institute of Technology, having served on
the faculty of the Sloan School for eighteen years. He
previously was also on the faculty of Harvard Business School,
The University of Chicago School of Business and Brooklyn
College. During his academic career, Dr. Shapiro authored
numerous publications concerning finance and related topics. He
previously served as the President and Chief Executive Officer of
the National Bureau of Economic Research and also provided
economic and financial consulting services to various clients.
Dr. Shapiro is a past Director of many companies, including
Nomura Dividend Income Fund, Inc., a privately held registered
investment company managed by Putnam Management, Reece
Corporation, a sewing machine manufacturer, Commonwealth
Mortgage, Dexter Corporation, a manufacturer of plastics and
related products, Avis Corporation, a car rental company,
Connecticut Bank and Trust Company, Connecticut National Gas
Corporation, the Federal Home Loan Bank of Boston, where he
served as Chairman from 1977 to 1989, Travelers' Corporation, an
insurance company, and Norlin Corporation, a musical instrument
manufacturer; and a past Trustee of Mount Holyoke College and the
Putnam funds (from 1984 to 1989).
Dr. Shapiro is a Fellow of The American Academy of Arts and
Sciences and is active in various professional and civic
associations, including the American Economic Association, the
American Finance Association and the Council on Foreign
Relations. Dr. Shapiro is a graduate of Brooklyn College and
Columbia University.
A.J.C. SMITH*
[INSERT PICTURE]
Mr. Smith, age 62, is the Chairman and Chief Executive Officer of
Marsh & McLennan Companies, Inc. He has been employed by Marsh &
McLennan and related companies in various capacities since 1961.
Mr. Smith is a Director of the Trident Corp., and he also serves
as a Trustee of the Carnegie Hall Society, the Central Park
Conservancy, The American Institute for Chartered Property
Underwriters, and is a Founder of the Museum of Scotland Society.
He was educated in Scotland and is a Fellow of the Faculty of
Actuaries in Edinburgh, a Fellow of the Canadian Institute of
Actuaries, a Fellow of the Conference of Actuaries in Public
Practice, an Associate of the Society of Actuaries, a Member of
the American Academy of Actuaries, the International Actuarial
Association and the International Association of Consulting
Actuaries.
W. NICHOLAS THORNDIKE**
[INSERT PICTURE]
Mr. Thorndike, age 63, serves as a Director of various
corporations and charitable organizations, including Data General
Corporation, a computer and high technology company, Bradley Real
Estate, Inc., a real estate investment firm, Providence Journal
Co., a newspaper publisher and owner of television stations, and
Courier Corporation, a book binding and printing company. He is
also a Trustee of Eastern Utilities Associates, Massachusetts
General Hospital, where he previously served as chairman and
president, and Northeastern University.
Prior to December 1988, he was the Chairman of the Board and
Managing Partner of Wellington Management Company/Thorndike,
Doran, Paine & Lewis, a registered investment adviser which
manages mutual funds and institutional assets. He also
previously served as a Trustee of the Wellington Group of Funds
(now The Vanguard Group) and was the Chairman and a Director of
Ivest Fund, Inc. Mr. Thorndike is a graduate of Harvard College.
- ----------------------------
* Nominees who are or may be deemed to be "interested persons"
(as defined in the Investment Company Act of 1940) of your
fund, Putnam Management and Putnam Mutual Funds Corp.
("Putnam Mutual Funds"), the principal underwriter for all
the open-end Putnam funds and an affiliate of Putnam
Management. Messrs. Putnam, Lasser, and Smith are deemed
"interested persons" by virtue of their positions as
officers or shareholders of your fund, or directors of
Putnam Management, Putnam Mutual Funds or Marsh & McLennan
Companies, Inc., the parent company of Putnam Management and
Putnam Mutual Funds. Mr. George Putnam, III, Mr. Putnam's
son, is also an "interested person" of your fund, Putnam
Management and Putnam Mutual Funds. Mr. Perkins may be
deemed to be an "interested person" of your fund because of
his service as a director of a certain publicly held company
that include registered broker-dealer firms among its
subsidiaries. Neither your fund nor any of the other Putnam
funds currently engages in any transactions with such firms
except that certain of such firms act as dealers in the
retail sale of shares of certain Putnam funds in the
ordinary course of their business. The balance of the
nominees are not "interested persons."
** In February 1994 Mr. Thorndike accepted appointment as a
successor trustee of certain private trusts in which he has
no beneficial interest. At that time he also became
Chairman of the Board of two privately owned corporations
controlled by such trusts, serving in that capacity until
October 1994. These corporations filed voluntary petitions
for relief under Chapter 11 of the U.S. Bankruptcy Code in
August 1994.
Except as indicated above, the principal occupations and business
experience of the nominees for the last five years have been with
the employers indicated, although in some cases they have held
different positions with those employers. Except for Mr.
Jackson, all the nominees were elected by the shareholders in
October 1995. Mr. Jackson was elected by the other Trustees in
May 1996. As indicated above, Dr. Shapiro also previously served
as a Trustee of the Putnam funds from 1984 to 1989. As stated
earlier, Messrs. Hill and Patterson have been nominated as
Trustees to be elected by the holders of the Preferred Shares.
The remaining 12 nominees for election as Trustees who receive
the greatest number of votes of the holders of the Preferred
Shares and the Common Shares voting together as a single class
will be elected as Trustees of your fund. The Trustees serve
until their successors are elected and qualified. Each of the
nominees has agreed to serve as a Trustee if elected. If any of
the nominees is unavailable for election at the time of the
meeting, which is not anticipated, the Trustees may vote for
other nominees at their discretion, or the Trustees may recommend
that the shareholders fix the number of Trustees at less than 14
for your fund.
WHAT ARE THE TRUSTEES' RESPONSIBILITIES?
Your fund's Trustees are responsible for the general oversight of
your fund's business and for assuring that your fund is managed
in the best interests of its shareholders. The Trustees
periodically review your fund's investment performance as well as
the quality of other services provided to your fund and its
shareholders by Putnam Management and its affiliates, including
administration, custody and investor servicing. At least
annually, the Trustees review the fees paid to Putnam Management
and its affiliates for these services and the overall level of
your fund's operating expenses. In carrying out these
responsibilities, the Trustees are assisted by an independent
administrative staff and by your fund's auditors and legal
counsel, which are selected by the Trustees and are independent
of Putnam Management and its affiliates.
DO THE TRUSTEES HAVE A STAKE IN YOUR FUND?
The Trustees believe it is important that each Trustee have a
significant investment in the Putnam funds. The Trustees
allocate their investments among the more than 99 Putnam funds
based on their own investment needs. The Trustees' aggregate
investments in the Putnam funds total over $47 million. The
table below lists each Trustee's current investments in the fund
and in the Putnam funds as a group.<PAGE>
SHARE OWNERSHIP BY TRUSTEES
TRUSTEES
YEAR FIRST ELECTED AS
TRUSTEE OF THE PUTNAM
FUNDS
NUMBER OF SHARES
OF FUND OWNED AS
OF JUNE 28, 1996*
NUMBER OF SHARES
OF ALL PUTNAM FUNDS
OWNED AS OF JUNE 28,
1996**
- --------------------------------------------------
Jameson A. Baxter
1994
100
24,102
Hans H. Estin
1972
152
26,270
John A. Hill
1985
100
123,624
Ronald J. Jackson
1996
200
12,209
Elizabeth T. Kennan
1992
214
27,475
Lawrence J. Lasser
1992
100
451,608
Robert E. Patterson
1984
300
60,322
Donald S. Perkins
1982
1,179
160,110
William F. Pounds
1971
500
348,913
George Putnam
1957
1,100
1,516,577
George Putnam, III
1984
300
287,830
Eli Shapiro
1995***
- --
80,677
A.J.C. Smith
1986
200
35,339
W. Nicholas Thorndike
1992
140
79,113
- ------------------------------------------------------------------------------
* [Except as noted below,] [each] Trustee has sole inves
tment power and sole voting power
with respect to his or her shares of the fund.
** These holdings do not include shares of Putnam money
market funds.
*** Dr. Shapiro previously served as a Trustee of the
Putnam funds from 1984 to 1989.
As of June 28, 1996, the Trustees and officers of the fund owned a total of
4,585 Common Shares of
the fund, comprising less than 1% of its outstanding Common Shares on that
date. None of the
Trustees own any of the fund's Preferred Shares.
<PAGE>
WHAT ARE SOME OF THE WAYS IN WHICH THE TRUSTEES REPRESENT SHAREHOLDER
INTERESTS?
The Trustees believe that, as substantial investors in the Putnam funds,
their interests are closely aligned with those of individual
shareholders. Among other ways, the Trustees seek to represent
shareholder interests:
by carefully reviewing your fund's investment performance on an
individual basis with your fund's managers;
by also carefully reviewing the quality of the various other services
provided to the funds and their shareholders by Putnam Management and
its affiliates;
by discussing with senior management of Putnam Management steps being
taken to address any performance deficiencies;
by reviewing the fees paid to Putnam Management to ensure that such fees
remain reasonable and competitive with those of other mutual funds,
while at the same time providing Putnam Management sufficient resources
to continue to provide high quality services in the future
by monitoring potential conflicts between the funds and Putnam
Management and its affiliates to ensure that the funds continue to be
managed in the best interests of their shareholders;
by also monitoring potential conflicts among funds to ensure that
shareholders continue to realize the benefits of participation in a
large and diverse family of funds.
HOW OFTEN DO THE TRUSTEES MEET?
The Trustees meet each month (except August) over a two-day period to
review the operations of your fund and of the other Putnam funds. A
portion of these meetings is devoted to meetings of various Committees
of the board which focus on particular matters. These include: the
Contract Committee, which reviews all contractual arrangements with
Putnam Management and its affiliates; the Communication and Service
Committee, which reviews the quality of services provided by the
investor's servicing agent and custodian for the Putnam funds; the
Pricing, Brokerage and Special Investments Committee, which reviews
matters relating to valuation of securities, best execution, brokerage
costs and allocations and new investment techniques; the Audit
Committee, which reviews accounting policies and the adequacy of
internal controls and supervises the engagement of the funds' auditors;
the Compensation, Administration and Legal Affairs Committee, which
reviews the compensation of the Trustees and their administrative staff
and supervises the engagement of the funds' independent counsel; and
the Nominating Committee, which is responsible for selecting nominees
for election as Trustees.
Each Trustee generally attends at least two formal committee meetings
during such monthly meeting of the Trustees. During 1995, the average
Trustee participated in approximately 40 committee and board meetings.
In addition, the Trustees meet in small groups with Chief Investment
Officers and Portfolio Managers to review recent performance and the
current investment climate for selected funds. These meetings ensure
that each fund's performance is reviewed in detail at least twice a
year. The Contract Committee typically meets on several additional
occasions during the year to carry out its responsibilities. Other
Committees, including an Executive Committee, may also meet on special
occasions as the need arises.
WHAT ARE THE TRUSTEES PAID FOR THEIR SERVICES?
Your fund pays each Trustee a fee for his or her services. Each Trustee
also receives fees for serving as Trustee of the other Putnam funds.
The Trustees periodically review their fees to assure that such fees
continue to be appropriate in light of their responsibilities as well as
in relation to fees paid to trustees of other mutual fund complexes.
The fees paid to each Trustee by your fund and by all of the Putnam
funds are shown below:
<PAGE>
COMPENSATION TABLE+
Total
Aggregate compensation
compensation from all
Trustees from the fund* Putnam funds**
- --------------------------------------------------------------
Jameson A. Baxter $906 $150,854
Hans H. Estin 901 150,854
John A. Hill*** 892 149,854
Elizabeth T. Kennan 901 148,854
Lawrence J. Lasser 897 150,854
Robert E. Patterson 906 152,854
Donald S. Perkins 897 150,854
William F. Pounds 896 149,854
George Putnam 901 150,854
George Putnam, III 901 150,854
Eli Shapiro**** 825 95,372
A.J.C. Smith 892 149,854
W. Nicholas Thorndike 906 152,854
+ Ronald J. Jackson became a Trustee of the fund effective May 3,
1996 and received no compensation from the fund or the other Putnam
funds in 1995.
* Includes an annual retainer and an attendance fee for each meeting
attended.
** Reflects total payments received from all Putnam funds in the most
recent calendar year. As of December 31, 1995, there were 99 funds
in the Putnam family.
*** Includes compensation deferred pursuant to a Trustee Compensation
Deferral Plan. The total amount of deferred compensation payable
to Mr. Hill by all Putnam funds as of
December 31, 1995 was $51,141, including income earned on such
amounts.
**** Elected as a Trustee in April 1995.
Your fund's Trustees have approved Retirement Guidelines for Trustees of
the Putnam funds. These guidelines provide generally that a Trustee who
retires after reaching age 72 and who has at least 10 years of
continuous service will be eligible to receive a retirement benefit from
each Putnam fund for which he or she served as a Trustee. The amount
and form of such benefit is subject to determination annually by the
Trustees and, unless otherwise determined by the Trustees, will be an
annual cash benefit payable for life equal to one-half of the Trustee
retainer fees paid by each fund at the time of retirement. Several
retired Trustees are currently receiving benefits pursuant to the
Guidelines and it is anticipated that the current Trustees will receive
similar benefits upon their retirement. A Trustee who retired in
calendar 1995 and was eligible to receive benefits under these
Guidelines would have received an annual benefit of $66,749, based upon
the aggregate retainer fees paid by the Putnam funds for such year. The
Trustees reserve the right to amend or terminate such Guidelines and the
related payments at any time, and may modify or waive the foregoing
eligibility requirements when deemed appropriate.
For additional information about your fund, including further
information about its Trustees and officers, please see "Further
Information About Your Fund," on page [ ].
PUTNAM INVESTMENTS
Putnam Investment Management, Inc. and its affiliate, Putnam Fiduciary
Trust Company, your fund's investor servicing agent and custodian, are
wholly owned by Putnam Investments, Inc., One Post Office Square,
Boston, Massachusetts 02109, a holding company that is in turn wholly
owned by Marsh & McLennan Companies, Inc., which has executive offices
at 1166 Avenue of the Americas, New York, New York 10036. Marsh &
McLennan Companies, Inc. and its operating subsidiaries are professional
services firms with insurance and reinsurance brokering, consulting, and
investment management businesses.
2. SELECTION OF INDEPENDENT AUDITORS
Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts,
independent accountants, has been selected by the Trustees as the
auditor of your fund for the current fiscal year. Among the country's
preeminent accounting firms, this firm also serves as the auditor for
approximately half of the other funds in the Putnam family. It was
selected primarily on the basis of its expertise as auditors of
investment companies, the quality of its audit services, and the
competitiveness of the fees charged for these services.
A majority of the votes on the matter is necessary to ratify the
selection of auditors. A representative of the independent auditors is
expected to be present at the meeting to make statements and to respond
to appropriate questions.
PROPOSALS 3 AND 4
As described in the following proposals, the Trustees are recommending
that shareholders approve a number of changes to your fund's fundamental
investment restrictions, including the elimination of certain of these
restrictions. The purpose of these changes is to standardize the
investment restrictions of all of the Putnam funds, including your fund
where appropriate, and in certain cases to increase the fund's
investment flexibility. By having standard investment restrictions for
all Putnam funds, Putnam Management will be able to more easily monitor
each fund's compliance with its investment policies. Most of these
changes will have little practical effect on the way the fund is managed
given the fund's current investment objective and policies.
Several of these changes expand the fund's opportunities to invest in
securities that generate taxable income. In any case, the fund will
continue to meet the asset composition requirements under the Internal
Revenue Code for passing through tax-exempt income as exempt-interest
dividends to its shareholders.
The adoption of any of these proposals is not contingent on the adoption
of any other proposal.
The holders of Common Shares and Preferred Shares on the record date
will each vote as a separate class with respect to the proposals set
forth below.
3.A. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT
TO DIVERSIFICATION
The Trustees are recommending that the fund's fundamental investment
restriction with respect to the diversification of its investments be
revised to reflect the standard restriction expected to be used by other
Putnam funds and to clarify that the diversification restriction does
not apply to securities guaranteed by the U.S. government or its
agencies or instrumentalities.
The fund's current restriction states that the fund may not:
"With respect to 75% of its total assets, invest in securities
of any issuer if, immediately after such investment, more than
5% of the total assets of the fund (taken at current value)
would be invested in the securities of such issuer; provided
that this limitation does not apply to securities of the U.S.
government or its agencies or instrumentalities."
The proposed amended fundamental investment restriction is set forth
below.
"The fund may not . . .
With respect to 75% of its total assets, invest in the
securities of any issuer if, immediately after such
investment, more than 5% of the total assets of the fund
(taken at current value) would be invested in the securities
of such issuer; provided that this limitation does not apply
to obligations issued or guaranteed as to interest or
principal by the U.S. government or its agencies or
instrumentalities."
The amended restriction clarifies, consistent with the Investment
Company Act of 1940 (the "1940 Act"), that U.S. government securities
include obligations issued or guaranteed as to interest or principal by
the U.S. government or its agencies or instrumentalities.
REQUIRED VOTE. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding Common Shares and
the outstanding Preferred Shares of the fund, each voting as a separate
class, or (2) 67% or more of the Common Shares and the Preferred Shares
of the fund, each voting as a separate class, present at the meeting if
more than 50% of the outstanding Common Shares and the outstanding
Preferred Shares, respectively, are present at the meeting in person or
by proxy.
3.B. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT
TO INVESTMENTS IN THE VOTING SECURITIES OF A SINGLE ISSUER
The Trustees are recommending that the fund's fundamental investment
restriction with respect to investments in the voting securities of a
single issuer be revised to reflect the standard restriction expected to
be used by other Putnam funds and to grant the fund the maximum
flexibility permitted under the 1940 Act. The 1940 Act prohibits a
diversified fund such as the fund from investing, with respect to 75% of
its total assets, in the voting securities of an issuer if as a result
it would own more than 10% of the outstanding voting securities of that
issuer. The fund's current investment restriction, which is more
restrictive than the 1940 Act, states that the fund may not:
"Acquire more than 10% of the voting securities of any issuer."
The proposed amended fundamental investment restriction is set forth
below.
"The fund may not ...
With respect to 75% of its total assets, acquire more than 10%
of the outstanding voting securities of any issuer."
The amendment enables the fund to purchase more than 10% of the voting
securities of an issuer with respect to 25% of the fund's total assets.
However, since the fund inevest primarily in fixed- income securities,
which are not typically voting securities, this proposal will have
little practical effect on the fund. Nevertheless, Putnam Management
believes it would be in the best interest of the fund to conform the
policy to provide the fund with maximum flexibility should circumstances
change.
The o the extent the fund individually or with other funds and accounts
managed by Putnam Management or its affiliates were to own all or a
major portion of the outstanding voting securities of a particular
issuer, under adverse market or economic conditions or in the event of
adverse changes in the financial condition of the issuer the fund could
find it more difficult to sell these voting securities when Putnam
Management believes it advisable to do so, or may be able to sell the
securities only at prices significantly lower than if they were more
widely held.
REQUIRED VOTE. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding Common Shares and
the outstanding Preferred Shares, each voting as a separate class, or
(2) 67% or more of the Common Shares and the Preferred Shares, each
voting as a separate class, present at the meeting if more than 50% of
the outstanding Common Shares and the outstanding Preferred Shares,
respectively, are present at the meeting in person or by proxy.
3.C. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT
TO MAKING LOANS
The Trustees are recommending that the fund's fundamental investment
restriction with respect to making loans be revised to reflect the
standard restriction expected to be used by other Putnam funds and to
remove any asset limitations on the fund's ability to enter into
repurchase agreements and securities loans. The current restriction
states that the fund may not:
"Make loans, except by purchase of debt obligations in which
the fund may invest consistent with its investment policies, by
entering into repurchase agreements with respect to not more
than 25% of its total assets (taken at current value), or
through the lending of its portfolio securities with respect to
not more than 25% of its total assets."
The proposed amended fundamental investment restriction is set forth
below.
"The fund may not ...
Make loans, except by purchase of debt obligations in which
the fund may invest consistent with its investment policies,
by entering into repurchase agreements, or by lending its
portfolio securities."
Following the amendment, the fund may, consistent with its investment
objective and policies and applicable law, enter into repurchase
agreements and securities loans without limit. Given the fund's
investment policies and the fact that securities loans and repurchase
agreements give rise to taxable income, Putnam Management does not
presently intend to engage in securities loans or repurchase agreements
on behalf of the fund. Nevertheless, Putnam Management believes it is
in the best interest of the fund to conform the policy and to provide
the fund with maximum flexibility should circumstances change.
When the fund enters into a REPURCHASE AGREEMENT, it typically purchases
a security for a relatively short period (usually not more than one
week), which the seller agrees to repurchase at a fixed time and price,
representing the fund's cost plus interest. When the fund enters into a
SECURITIES LOAN, it lends certain of its portfolio securities to broker-
dealers or other parties and typically receives an interest payment in
return. These transactions must be fully collateralized at all times,
but involve some risk to the fund if the other party should default on
its obligation. If the other party in these transactions should become
involved in bankruptcy or insolvency proceedings, it is possible that
the fund may be treated as an unsecured creditor and be required to
return the underlying collateral to the other party's estate.
REQUIRED VOTE. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding Common Shares and
the outstanding Preferred Shares of the fund, each voting as a separate
class, or (2) 67% or more of the Common Shares and Preferred Shares of
the fund, each voting as a separate class, present at the meeting if
more than 50% of the outstanding Common Shares and the outstanding
Preferred Shares, respectively, are present at the meeting in person or
by proxy.
3.D. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT
TO INVESTMENTS IN COMMODITIES
The Trustees are recommending that the fund's fundamental investment
restriction with respect to investments in commodities be revised to
reflect the standard restriction expected to be used by other Putnam
funds. The current restriction states that the fund may not
"Purchase or sell commodities or commodity contracts, except
that it may purchase or sell financial futures contracts and
related options."
The proposed amended fundamental restriction is set forth below.
"The fund may not ...
Purchase or sell commodities or commodity contracts, except
that the fund may purchase and sell financial futures
contracts and options and may enter into foreign exchange
contracts and other financial transactions not involving
physical commodities."
Under the revised restriction, the fund will continue to be able to
engage in a variety of transactions involving the use of financial
futures and options, as well as various other financial transactions to
the extent consistent with its investment objective and policies.
Although the fund may already engage in many of these activities, Putnam
Management believes that the revised language more clearly sets forth
the fund's policy. The addition of financial transactions not
involving the direct purchase or sale of physical commodities is
intended to give the fund maximum flexibility to invest in a variety of
financial instruments that could technically be considered commodities,
but which do not involve the direct purchase or sale of physical
commodities, which is the intended focus of the restriction.
Foreign exchange transactions are subject to many of the risks
associated with futures and options. However, given the fund's
investment policies and the fact that foreign currency exchange
transactions give rise to taxable income, the fund currently has no
intention of engaging in such investments.
REQUIRED VOTE. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding Common Shares and
the outstanding Preferred Shares of the fund, each voting as a separate
class, or (2) 67% or more of the Common Shares and Preferred Shares of
the fund, each voting as a separate class, present at the meeting if
more than 50% of the outstanding Common Shares and the outstanding
Preferred Shares, respectively, are present at the meeting in person or
by proxy.
3.E. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT
TO CONCENTRATION OF ITS ASSETS
The Trustees are recommending that the fund's fundamental investment
restriction regarding concentration be revised to reflect the standard
restriction expected to be used by other Putnam funds. The current
restriction states that the fund may not:
"Invest more than 25% of the value of its total assets in any
one industry. (Securities of the U.S. Government, its
agencies, or instrumentalities and securities backed by the
credit of a governmental entity are not considered to
represent industries.)"
The proposed amended fundamental restriction is set forth below.
"The fund may not . . .
Purchase securities (other than securities of the U.S.
Government, its agencies or instrumentalities or tax- exempt
securities, except tax-exempt securities backed only by the
assets and revenues of nongovernmental issuers) if, as a
result of such purchase, more than 25% of the fund's total
assets would be invested in any one industry."
The proposed amendment merely conforms the fund's restriction and would
have no effect on the fund's investments.
REQUIRED VOTE. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding Common Shares and
the outstanding Preferred Shares of the fund, each voting as a separate
class, or (2) 67% or more of the Common Shares and Preferred Shares of
the fund, each voting as a separate class, present at the meeting if
more than 50% of the outstanding Common Shares and the outstanding
Preferred Shares, respectively, are present at the meeting in person or
by proxy.
4.A. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO INVESTMENTS IN SECURITIES OF ISSUERS IN WHICH MANAGEMENT
OF THE FUND OR PUTNAM INVESTMENT MANAGEMENT OWNS SECURITIES
The Trustees are recommending eliminating the fund's fundamental
investment restriction which prevents the fund from investing in the
securities of issuers in which management of the fund or Putnam
Management owns a certain percentage of securities because it is
unnecessary in light of current regulatory requirements. The current
restriction states that the fund may not:
"Invest in securities of any issuer, if, to the knowledge of
the fund, officers and Trustees of the fund and officers and
directors of Putnam who beneficially own more than 0.5% of the
securities of that issuer together own more than 5% of such
securities."
If the restriction were eliminated, the fund would be able to invest in
the securities of any issuer without regard to ownership in such issuer
by management of the fund or Putnam Management, except to the extent
prohibited by the fund's investment policies or the 1940 Act.
REQUIRED VOTE. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding Common Shares and
the outstanding Preferred Shares of the fund, each voting as a separate
class, or (2) 67% or more of the Common Shares and Preferred Shares of
the fund, each voting as a separate class, present at the meeting if
more than 50% of the outstanding Common Shares and the outstanding
Preferred Shares, respectively, are present at the meeting in person or
by proxy.
4.B. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO MARGIN TRANSACTIONS
The Trustees are recommending that the fund's fundamental investment
restriction with respect to margin transactions be eliminated. "Margin
transactions" involve the purchase of securities with money borrowed
from a broker, with cash or eligible securities as collateral against
the loan. The current restriction states that the fund may not:
"Purchase securities on margin, except such short-term credits as
may be necessary for the clearance of purchases and sales of
securities, and except that it may make margin payments in
connection with transactions in futures contracts and options."
Putnam Management recommended that this restriction be eliminated
because it is unnecessary in light of current regulatory requirements;
the 1940 Act does not require the fund to have such a restriction. If
the restriction were removed, the fund would be able to engage in margin
transactions to the extent consistent with its investment policies.
The fund's potential use of margin transactions beyond transactions in
financial futures and options and for the clearance of purchases and
sales of securities, including the use of margin in ordinary securities
transactions, is currently limited by the current position taken by the
Staff of the SEC which prohibits margin transactions because they create
senior securities. The fund's ability to engage in margin transactions
is also limited by its investment policies, which generally permit the
fund to borrow money only in limited circumstances.
REQUIRED VOTE. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding Common Shares and
the outstanding Preferred Shares of the fund, each voting as a separate
class, or (2) 67% or more of the Common Shares and Preferred Shares of
the fund, each voting as a separate class, present at the meeting if
more than 50% of the outstanding Common Shares and the outstanding
Preferred Shares, respectively, are present at the meeting in person or
by proxy.
4.C. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO SHORT SALES
The Trustees are recommending that the fund's fundamental investment
restriction with respect to short sales be eliminated. The current
restriction states that the fund may not:
"Make short sales of securities or maintain a short position in
securities for the account of the fund unless at all times when a
short position is open it owns an equal amount of such securities
or owns securities which, without payment of any further
consideration, are convertible into or exchangeable for securities
of the same issue as, and in equal amount to, the securities sold
short."
Putnam Management recommended that this restriction be eliminated
because it is unnecessary in light of current regulatory requirements;
the 1940 Act does not require the fund to have such a restriction.
Given the fund's investment policies and the fact that short sales give
rise to taxable income, Putnam Management does not currently intend to
engage in short sales on behalf of the fund. Nevertheless, Putnam
Management believes it is in the best interest of the fund to eliminate
the policy to provide the fund with maximum flexibility should
circumstances change.
REQUIRED VOTE. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding Common Shares and
the outstanding Preferred Shares of the fund, each voting as a separate
class, or (2) 67% or more of the Common Shares and Preferred Shares of
the fund, each voting as a separate class, present at the meeting if
more than 50% of the outstanding Common Shares and the outstanding
Preferred Shares, respectively, are present at the meeting in person or
by proxy.
4.D. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO PLEDGING ASSETS
The Trustees are recommending that the fund's fundamental investment
restriction which limits the fund's ability to pledge its assets be
eliminated. The current restriction states that the fund may not:
"Pledge, hypothecate, mortgage, or otherwise encumber its
assets in excess of 15% of its total assets (taken at current
value) in connection with borrowings permitted by restriction
2 above." [Restriction 2 referred to in this restriction
permits the fund to borrow money in an amount equal to up to
15% of its total net assets for limited purposes.]
This proposal would remove all restrictions on the fund's ability to
pledge its assets. Putnam Management believes that this enhanced
flexibility could assist the fund in achieving its investment objective.
Putnam Management believes that the fund's current limits on pledging
may conflict with the fund's ability to borrow money for temporary or
emergency purposes. This conflict arises because lenders may require
borrowers such as the fund to pledge assets in order to collateralize
the amount borrowed. These collateral requirements are typically for
amounts at least equal to, and often larger than, the principal amount
of the loan. If the fund needed to borrow the maximum amount permitted
by its policies (currently 15% of its total assets), it might be
possible that a bank would require collateral in excess of 15% of the
fund's total assets. Thus, the current restriction could have the effect
of reducing the amount that the fund may borrow in these situations.
Pledging assets does entail certain risks. To the extent that the fund
pledges its assets, the fund may have less flexibility in liquidating
its assets and meeting certain obligations. If a large portion of the
fund's assets were involved, the fund's ability to meet its obligations
could be delayed.
REQUIRED VOTE. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding Common Shares and
the outstanding Preferred Shares of the fund, each voting as a separate
class, or (2) 67% or more of the Common Shares and Preferred Shares of
the fund, each voting as a separate class, present at the meeting if
more than 50% of the outstanding Common Shares and the outstanding
Preferred Shares, respectively, are present at the meeting in person or
by proxy.
4.E. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO INVESTMENTS IN RESTRICTED SECURITIES
The Trustees are recommending that the fund's fundamental investment
restriction which limits the fund's investments in securities subject to
restrictions on resale, which are known as "restricted securities," be
eliminated. The current fundamental investment restriction states that
the fund may not:
"Purchase securities restricted as to resale 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 fund (or the person
designated by them to make such determinations) to be readily
marketable."
Putnam Management believes the restriction is unnecessary in light of
current regulatory requirements, which prohibit the fund from investing
more than 15% of its net assets in any combination of (a) securities
which are not readily marketable, (b) securities restricted as to resale
(excluding securities determined by the Trustees of the fund (or the
person designated by the Trustees of the fund to make such
determinations) to be readily marketable), and (c) repurchase agreements
maturing in more than seven days.
Putnam Management believes that the fund may benefit from the added
flexibility of having the fund's policy with respect to illiquid
investments, including restricted securities, contained in a single non-
fundamental investment restriction. The fund would then have maximum
flexibility to respond quickly to legal, regulatory and market
developments regarding illiquid investments. If the restriction were no
longer required, the Trustees could modify or eliminate the restriction
to increase the fund's investment flexibility without the need for
shareholder approval.
To the extent the fund invests in illiquid investments, the fund may
encounter difficulty in determining the fair value of such securities
for purposes of computing net asset value.
REQUIRED VOTE. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding Common Shares and
the outstanding Preferred Shares of the fund, each voting as a separate
class, or (2) 67% or more of the Common Shares and Preferred Shares of
the fund, each voting as a separate class, present at the meeting if
more than 50% of the outstanding Common Shares and the outstanding
Preferred Shares, respectively, are present at the meeting in person or
by proxy.
4.F. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO INVESTMENTS IN CERTAIN OIL, GAS AND MINERAL INTERESTS
The Trustees are recommending that the fund's fundamental investment
restriction with respect to investments in oil, gas and mineral leases,
rights or royalty contracts be eliminated. The current restriction
states that the fund may not:
"Buy or sell oil, gas, or other mineral leases, rights, or royalty
contracts, although it may purchase securities of issuers which
deal in, represent interests in, or are secured by interests in
such leases, rights or contracts, and it may acquire or dispose of
such leases, rights, or contracts acquired through the exercise of
its rights as a holder of debt obligations secured thereby."
Putnam Management recommended that this restriction be eliminated
because it is unnecessary in light of current regulatory requirements;
the 1940 Act does not require that the fund have such a restriction.
Putnam Management also believes that eliminating the restriction will
provide the fund with maximum investment flexibility, although given the
fund's investment policies, Putnam Management has no current intention
of causing the fund to invest in such securities.
REQUIRED VOTE. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding Common Shares and
the outstanding Preferred Shares of the fund, each voting as a separate
class, or (2) 67% or more of the Common Shares and Preferred Shares of
the fund, each voting as a separate class, present at a meeting if more
than 50% of the outstanding Common Shares and the outstanding Preferred
Shares, respectively, are present at the meeting in person or by proxy.
4.G. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO INVESTING TO GAIN CONTROL OF A COMPANY'S MANAGEMENT
The Trustees are recommending that the fund's fundamental investment
restriction which states that the fund may not "[m]ake investments for
the purpose of gaining control of a company's management" be eliminated.
Eliminating the restriction would make it clear that the fund can freely
exercise its rights as a shareholder of the various companies in which
it may invest. These rights may include the right to actively oppose
or support the management of such companies. Since the fund invests
primarily in fixed-income securities, this proposal will not impact the
majority of the fund's investments. Nevertheless, Putnam Management
believes it would be in the best interest of the fund to eliminate the
restriction.
Putnam Management believes that eliminating this restriction will allow
the fund maximum flexibility to protect the value of its investments
through influencing management of companies in which it may invest.
Although Putnam Management believes that the fund currently may engage
in such activities without necessarily violating this restriction, it
believes that eliminating the restriction will eliminate any potential
obstacle to the fund in protecting its interests as a shareholder.
This area of corporate activity is highly prone to litigation, and
whether or not the restriction is eliminated, the fund could be drawn
into lawsuits related to these activities. The fund will direct its
efforts toward those instances where Putnam Management believes the
potential for benefit to the fund outweighs potential litigation risks.
REQUIRED VOTE. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding Common Shares and
the outstanding Preferred Shares of the fund, each voting as a separate
class, or (2) 67% or more of the Common Shares and Preferred Shares of
the fund, each voting as a separate class, present at the meeting if
more than 50% of the outstanding Common Shares and the outstanding
Preferred Shares, respectively, are present at the meeting in person or
by proxy.
FURTHER INFORMATION ABOUT VOTING AND THE SHAREHOLDER MEETING
QUORUM AND METHODS OF TABULATION. A majority of the shares entitled to
vote -- present in person or represented by proxy -- constitutes a
quorum for the transaction of business with respect to any proposal at
the meeting (unless otherwise noted in the proxy statement), except that
where the Preferred Shares or Common Shares shall vote as a separate
class, then a majority of the aggregate number of shares of that class
shall be necessary to constitute a quorum for the transaction of
business by that class. Shares represented by proxies that reflect
abstentions and "broker non- votes" (i.e., shares held by brokers or
nominees as to which (i) instructions have not been received from the
beneficial owners or the persons entitled to vote and (ii) the broker or
nominee does not have the discretionary voting power on a particular
matter) will be counted as shares that are present and entitled to vote
on the matter for purposes of determining the presence of a quorum.
Votes cast by proxy or in person at the meeting will be counted by
persons appointed by your fund as tellers for the meeting.
The tellers will count the total number of votes cast "for" approval of
the proposals for purposes of determining whether sufficient affirmative
votes have been cast. With respect to the election of Trustees and
selection of auditors, neither abstentions nor broker non-votes have any
effect on the outcome of the proposal. With respect to any other
proposals, abstentions and broker non-votes have the effect of a
negative vote on the proposal.
OTHER BUSINESS. The Trustees know of no other business to be brought
before the meeting. However, if any other matters properly come before
the meeting, it is their intention that proxies that do not contain
specific restrictions to the contrary will be voted on such matters in
accordance with the judgment of the persons named as proxies in the
enclosed form of proxy.
SIMULTANEOUS MEETINGS. The meeting of shareholders of your fund is
called to be held at the same time as the meetings of shareholders of
certain of the other Putnam funds. It is anticipated that all meetings
will be held simultaneously. If any shareholder at the meeting objects
to the holding of a simultaneous meeting and moves for an adjournment of
the meeting to a time promptly after the simultaneous meetings, the
persons named as proxies will vote in favor of such adjournment.
SOLICITATION OF PROXIES. In addition to soliciting proxies by mail,
Trustees of your fund and employees of Putnam Management, Putnam
Fiduciary Trust Company, and Putnam Mutual Funds may solicit proxies in
person or by telephone. Your fund may also arrange to have votes
recorded by telephone. The telephone voting procedure is designed to
authenticate shareholders' identities, to allow shareholders to
authorize the voting of their shares in accordance with their
instructions and to confirm that their instructions have been properly
recorded. Your fund has been advised by counsel that these procedures
are consistent with the requirements of applicable law. If these
procedures were subject to a successful legal challenge, such votes
would not be counted at the meeting. Your fund is unaware of any such
challenge at this time. Shareholders would be called at the phone
number Putnam Investments has in its records for their accounts, and
would be asked for their Social Security number or other identifying
information. The shareholders would then be given an opportunity to
authorize proxies to vote their shares at the meeting in accordance with
their instructions. To ensure that the shareholders' instructions have
been recorded correctly, they will also receive a confirmation of their
instructions in the mail. A special toll-free number will be available
in case the information contained in the confirmation is incorrect.
Your fund's Trustees have adopted a general policy of maintaining
confidentiality in the voting of proxies. Consistent with this policy,
your fund may solicit proxies from shareholders who have not voted their
shares or who have abstained from voting.
Persons holding shares as nominees will upon request be reimbursed for
their reasonable expenses in soliciting instructions from their
principals. Your fund has retained at its expense D. F. King & Co.,
Inc., 77 Water Street, New York, New York 10005, to aid in the
solicitation instructions for nominee and registered accounts for a fee
not to exceed $2,500 plus reasonable out-of-pocket expenses for mailing
and phone costs. Your fund has also retained Tritech Services, 4
Corporate Place, Corporate Park 287, Piscataway, New Jersey, 08854, to
aid in the solicitation of instructions for nominee and registered
accounts for a fee not to exceed $6,500 plus reasonable out-of-pocket
expenses.
REVOCATION OF PROXIES. Proxies, including proxies given by telephone,
may be revoked at any time before they are voted by a written revocation
received by the Clerk of your fund, by properly executing a later-dated
proxy or by attending the meeting and voting in person.
DATE FOR RECEIPT OF SHAREHOLDERS' PROPOSALS FOR THE NEXT ANNUAL MEETING.
It is anticipated that your fund's next annual meeting of shareholders
will be held in October, 1997. Shareholder proposals to be included in
your fund's proxy statement for the next annual meeting must be received
by your fund before [MAY 31, 1997]
ADJOURNMENT. If sufficient votes in favor of any of the proposals set
forth in the Notice of the Meeting are not received by the time
scheduled for the meeting, the persons named as proxies may propose
adjournments of the meeting for a period or periods of not more than 60
days in the aggregate to permit further solicitation of proxies with
respect to any of such proposals. Any adjournment will require the
affirmative vote of a majority of the votes cast on the question in
person or by proxy at the session of the meeting to be adjourned. The
persons named as proxies will vote in favor of such adjournment those
proxies which they are entitled to vote in favor of such proposals.
They will vote against such adjournment those proxies required to be
voted against such proposals. Your fund pays the costs of any
additional solicitation and of any adjourned session. Any proposals for
which sufficient favorable votes have been received by the time of the
meeting may be acted upon and considered final regardless of whether the
meeting is adjourned to permit additional solicitation with respect to
any other proposal.
FINANCIAL INFORMATION. YOUR FUND WILL FURNISH, WITHOUT CHARGE, TO YOU
UPON REQUEST A COPY OF THE FUND'S ANNUAL REPORT FOR ITS MOST RECENT
FISCAL YEAR, AND A COPY OF ITS SEMIANNUAL REPORT FOR ANY SUBSEQUENT
SEMIANNUAL PERIOD. SUCH REQUESTS MAY BE DIRECTED TO PUTNAM INVESTOR
SERVICES, P.O. BOX 41203, PROVIDENCE, RI 02940-1203 OR 1-800-225-1581.
FURTHER INFORMATION ABOUT YOUR FUND
LIMITATION OF TRUSTEE LIABILITY. The Agreement and Declaration of
Trust of your fund provides that the fund will indemnify its Trustees
and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices
with the fund, except if it is determined in the manner specified in the
Agreement and Declaration of Trust that they have not acted in good
faith in the reasonable belief that their actions were in the best
interests of the fund or that such indemnification would relieve any
officer or Trustee of any liability to the fund or its shareholders
arising by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of his or her duties. Your fund, at its expense,
provides liability insurance for the benefit of its Trustees and
officers.
AUDIT AND NOMINATING COMMITTEES. The voting members of the Audit
Committee of your fund include only Trustees who are not "interested
persons" of the fund by reason of any affiliation with Putnam
Investments and its affiliates. The Audit Committee currently consists
of Messrs. Estin (Chairman), Perkins (without vote), Putnam, III
(without vote), Shapiro, Smith (without vote), and Ms. Kennan. The
Nominating Committee consists only of Trustees who are not "interested
persons" of your fund or Putnam Management. The Nominating Committee
currently consists of Dr. Pounds and Ms. Kennan (Co-chairpersons), Ms.
Baxter, and Messrs. Estin, Hill, Jackson, Patterson, Shapiro, and
Thorndike.
OFFICERS AND OTHER INFORMATION. In addition to George Putnam and
Lawrence J. Lasser, the officers of your fund are as follows:
[CHECK AGES] Year first
elected to
Name (age) Office office
- -----------------------------------------------------------------
Charles E. Porter (58) Executive Vice President 1989
Patricia C. Flaherty (49) Senior Vice President 1993
John D. Hughes (61) Senior Vice President
& Treasurer 1989
Gordon H. Silver (49) Vice President 1990
Triet M. Nguyen*(39) Vice President 1989
Leslie J. Burke (33) Vice President 19
William N. Shiebler** (54) Vice President 1991
John R. Verani (57) Vice President 1989
Paul M. O'Neil (43) Vice President 1992
Beverly Marcus (52) Clerk 1989
- -----------------------------------------------------------------
* The fund's portfolio manager
** President of Putnam Mutual Funds
All of the officers of your fund are employees of Putnam Management or
its affiliates. Because of their positions with Putnam Management or
its affiliates or their ownership of stock of Marsh & McLennan
Companies, Inc., the parent corporation of Putnam Management, Messrs.
Putnam, George Putnam, III, Lasser and Smith (nominees for Trustees of
your fund), as well as the officers of your fund, will benefit from the
management fees, custodian fees, and investor servicing fees paid or
allowed by the fund.
ASSETS AND SHARES OUTSTANDING OF YOUR FUND
AS OF JULY 26, 1996
Net assets $238,764,927
Common shares outstanding and
authorized to vote 21,536,232 shares
Preferred shares outstanding and
authorized to vote 900 shares
5% beneficial ownership of your fund as of JULY 31, 1996
Persons beneficially owning more than 5%
of your fund's Common shares
RIDER 36A
(1) Merrill Lynch #4 Corporate Place, Corporate Park 287
Piscataway, New Jersey 08855
2,439,964 shares or 11.32%
(2) Prudential Securities, 111 Eighth Avenue, 4th Floor, New York,
New York, 10011
3,636,217 shares or 16.93%
(3) Whitter (Dean Reynolds), 5690 West Cypress Street, Tampa,
Florida 33607
1,088,303 shares or 5.07%
Persons beneficially owning more than 5%
of your fund's Preferred shares
RIDER 36B
(1) Merrill Lynch #4 Corporate Place, Corporate Park 287
Piscataway, New Jersey 08855
601 shares or 67%
(2) Prudential Securities, 111 Eighth Avenue, 4th Floor, New York,
New York, 10011
226 shares or 25%
(3) Montgomery Securities, c/o ADP 600 Montgomery Street, 4th
Floor, San Francisco, California 94111-2720
72 shares or 8%
<PAGE>
PUTNAMINVESTMENTS
THE PUTNAM FUNDS
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581<PAGE>
PUTNAMINVESTMENTS
THIS IS YOUR PROXY CARD.
PLEASE VOTE THIS PROXY, SIGN IT BELOW, AND RETURN IT PROMPTLY IN THE
ENVELOPE PROVIDED. YOUR VOTE IS IMPORTANT.
HAS YOUR ADDRESS CHANGED?
Please use this form to notify us of any change in address or telephone
number or to provide us with your comments. Detach this form from the
proxy ballot and return it with your signed proxy in the enclosed
envelope.
Street
- --------------------------------------------------------------------
City State Zip
- --------------------------------------------------------------------
Telephone
- --------------------------------------------------------------------
DO YOU HAVE ANY COMMENTS?
- --------------------------------------------------------------------
- --------------------------------------------------------------------
- --------------------------------------------------------------------
DEAR SHAREHOLDER:
Your vote is important. Please help us to eliminate the expense of
follow-up mailings by signing and returning this proxy as soon as
possible. A postage-paid envelope is enclosed for your convenience.
THANK YOU!
- --------------------------------------------------------------------
Please fold at perforation before detaching.
<PAGE>
Proxy for a meeting of shareholders,to be held on October 31, 1996 for
PUTNAM HIGH YIELD MUNICIPAL TRUST (PREFERRED SHARES).
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF THE FUND.
The undersigned shareholder hereby appoints George Putnam, Hans H.
Estin, and Robert E. Patterson, and each of them separately, Proxies,
with power of substitution, and hereby authorizes them to represent and
to vote, as designated below, at the meeting of shareholders of Putnam
High Yield Municipal Trust on October 31, 1996, at 2:00 p.m., Boston
time, and at any adjournments thereof, all of the shares of the fund
that the undersigned shareholder would be entitled to vote if personally
present.
IF YOU COMPLETE AND SIGN THE PROXY, WE'LL VOTE IT EXACTLY AS YOU TELL
US. IF YOU SIMPLY SIGN THE PROXY, IT WILL BE VOTED FOR FIXING THE
NUMBER OF TRUSTEES AND ELECTING TRUSTEES AS SET FORTH IN PROPOSAL 1 AND
FOR PROPOSALS 2, 3.A.-3.E. AND 4.A-4.G. IN THEIR DISCRETION, THE
PROXIES WILL ALSO BE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS THAT MAY
COME BEFORE THE MEETING.
NOTE: If you have questions on any of the proposals, please call
1-800-225-1581.
PLEASE BE SURE TO SIGN AND DATE THIS PROXY.
Please sign your name exactly as it appears on this card. If you are a
joint owner, each owner should sign. When signing as executor,
administrator, attorney, trustee, or guardian, or as custodian for a
minor, please give your full title as such. If you are signing for a
corporation, please sign the full corporate name and indicate the
signer's office. If you are a partner, sign in the partnership name.
- --------------------------------------------------------------------
Shareholder sign here Date
- --------------------------------------------------------------------
Co-owner sign here Date
<PAGE>
THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES AND
ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE OTHER PROPOSALS
LISTED BELOW.
PLEASE MARK YOUR CHOICES / X / IN BLUE OR BLACK INK.
1. PROPOSAL TO FIX THE NUMBER OF AND ELECT TRUSTEES
The nominees for Trustees are: J.A. Baxter, H.H. Estin, J.A. Hill,
R.J. Jackson, E.T. Kennan, L.J. Lasser, R.E. Patterson, D.S.
Perkins, W.F. Pounds, G. Putnam, G. Putnam, III, E. Shapiro, A.J.C.
Smith and W.N. Thorndike.
/ / FOR electing all the nominees
(EXCEPT AS INDICATED TO THE CONTRARY BELOW)
/ / WITHHOLD authority to vote for all nominees
TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE NOMINEES, WRITE
THOSE NOMINEES' NAMES BELOW:
- -------------------------------------------------------------
PROPOSAL TO:
2. RATIFY THE SELECTION FOR AGAINST ABSTAIN
OF PRICE WATERHOUSE
LLP AS THE INDEPENDENT / / / / / /
AUDITORS OF YOUR FUND.
3. AMEND THE
FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION
WITH RESPECT TO:
A. DIVERSIFICATION. / / / / / /
B. INVESTMENTS IN THE / / / / / /
VOTING SECURITIES
OF A SINGLE ISSUER.
C. MAKING LOANS. / / / / / /
D. INVESTMENTS IN / / / / / /
COMMODITIES.
E. CONCENTRATION OF ITS / / / / / /
ASSETS.
4. ELIMINATE THE
FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION
WITH RESPECT TO:
A. INVESTMENTS IN SECURITIES / / / / / /
OF ISSUERS IN WHICH
MANAGEMENT OF THE FUND OR
PUTNAM INVESTMENT MANAGEMENT
OWNS SECURITIES.
B. MARGIN TRANSACTIONS. / / / / / /
C. SHORT SALES. / / / / / /
D. PLEDGING ASSETS. / / / / / /
E. INVESTMENTS IN / / / / / /
RESTRICTED SECURITIES.
F. INVESTMENTS IN CERTAIN / / / / / /
OIL, GAS AND MINERAL
INTERESTS.
G. INVESTING TO GAIN CONTROL / / / / / /
OF A COMPANY'S MANAGEMENT.
<PAGE>
PUTNAMINVESTMENTS
THIS IS YOUR PROXY CARD.
PLEASE VOTE THIS PROXY, SIGN IT BELOW, AND RETURN IT PROMPTLY IN THE
ENVELOPE PROVIDED. YOUR VOTE IS IMPORTANT.
HAS YOUR ADDRESS CHANGED?
Please use this form to notify us of any change in address or telephone
number or to provide us with your comments. Detach this form from the
proxy ballot and return it with your signed proxy in the enclosed
envelope.
Street
- --------------------------------------------------------------------
City State Zip
- --------------------------------------------------------------------
Telephone
- --------------------------------------------------------------------
DO YOU HAVE ANY COMMENTS?
- --------------------------------------------------------------------
- --------------------------------------------------------------------
- --------------------------------------------------------------------
DEAR SHAREHOLDER:
Your vote is important. Please help us to eliminate the expense of
follow-up mailings by signing and returning this proxy as soon as
possible. A postage-paid envelope is enclosed for your convenience.
THANK YOU!
- --------------------------------------------------------------------
Please fold at perforation before detaching.
<PAGE>
Proxy for a meeting of shareholders to be held on October 31, 1996 for
PUTNAM HIGH YIELD MUNICIPAL TRUST. (COMMON SHARES)
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF THE FUND.
The undersigned shareholder hereby appoints George Putnam, Hans H.
Estin, and Robert E. Patterson, and each of them separately, Proxies,
with power of substitution, and hereby authorizes them to represent and
to vote, as designated below, at the meeting of shareholders of Putnam
High Yield Municipal Trust on October 31, 1996, at 2:00 p.m., Boston
time, and at any adjournments thereof, all of the shares of the fund
that the undersigned shareholder would be entitled to vote if personally
present.
IF YOU COMPLETE AND SIGN THE PROXY, WE'LL VOTE IT EXACTLY AS YOU TELL
US. IF YOU SIMPLY SIGN THE PROXY, IT WILL BE VOTED FOR ELECTING
TRUSTEES AS SET FORTH IN PROPOSAL 1 AND FOR PROPOSALS 2, 3.A.-3.E. AND
4.A.-4.G. IN THEIR DISCRETION, THE PROXIES WILL ALSO BE AUTHORIZED TO
VOTE UPON SUCH OTHER MATTERS THAT MAY COME BEFORE THE MEETING.
NOTE: If you have questions on any of the proposals, please call
1-800-225-1581.
PLEASE BE SURE TO SIGN AND DATE THIS PROXY.
Please sign your name exactly as it appears on this card. If you are a
joint owner, each owner should sign. When signing as executor,
administrator, attorney, trustee, or guardian, or as custodian for a
minor, please give your full title as such. If you are signing for a
corporation, please sign the full corporate name and indicate the
signer's office. If you are a partner, sign in the partnership name.
- --------------------------------------------------------------------
Shareholder sign here Date
- --------------------------------------------------------------------
Co-owner sign here Date
<PAGE>
THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES AND
ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE OTHER PROPOSALS
LISTED BELOW.
PLEASE MARK YOUR CHOICES / X / IN BLUE OR BLACK INK.
1. PROPOSAL TO FIX THE NUMBER OF AND ELECT TRUSTEES
The nominees for Trustees are: J.A. Baxter, H.H. Estin, R.J.
Jackson, E.T. Kennan, L.J. Lasser, D.S. Perkins, W.F. Pounds, G.
Putnam, G. Putnam, III, E. Shapiro, A.J.C. Smith and W.N.
Thorndike.
/ / FOR electing all the nominees
(EXCEPT AS INDICATED TO THE CONTRARY BELOW)
/ / WITHHOLD authority to vote for all nominees
TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE NOMINEES, WRITE
THOSE NOMINEES' NAMES BELOW:
- -------------------------------------------------------------
PROPOSAL TO:
2. RATIFY THE SELECTION FOR AGAINST ABSTAIN
OF PRICE WATERHOUSE
LLP AS THE INDEPENDENT
AUDITORS OF YOUR FUND. / / / / / /
3. Amend the
fund's fundamental
investment restriction
with respect to:
A. Diversification. / / / / / /
B. Investments in the / / / / / /
voting securities
of a single issuer.
C. Making loans. / / / / / /
D. Investments in / / / / / /
commodities.
E. Concentration of its / / / / / /
assets.
4. Eliminate the
fund's fundamental
investment restriction
with respect to:
A. Investments in securities / / / / / /
of issuers in which
management of the fund or
Putnam Investment Management
owns securities.
B. Margin transactions. / / / / / /
C. Short sales. / / / / / /
D. Pledging assets. / / / / / /
E. Investments in / / / / / /
restricted securities.
F. Investments in certain / / / / / /
oil, gas and mineral
interests.
G. Investing to gain control / / / / / /
of a company's management.
<PAGE>
/lipsett/106290.111/proxys/hymun2.wpf
