SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
----
Filed by the Registrant / X /
----
----
Filed by a Party other than the Registrant / /
----
CHECK THE APPROPRIATE BOX:
----
/ X / Preliminary Proxy Statement
- ----
----
/ / Confidential, for Use of the Commission Only (as
- ---- permitted by Rule 14a-6(e)(2))
----
/ / Definitive Proxy Statement
- ----
----
/ / Definitive Additional Materials
- ----
----
/ / Soliciting Material Pursuant to Sec. 240.14a-11(c) or
- ---- Sec. 240.14a-12
PUTNAM DIVIDEND INCOME FUND
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
----
/ X / No fee required
- ----
----
/ / Fee computed on table below per Exchange Act Rule 14a
- ---- 6(i)(1) and 0-11
<PAGE>
(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
(set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
----
/ / Fee paid previously with preliminary materials.
- ----
----
/ / 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 DIVIDEND INCOME FUND
THE DOCUMENT YOU HOLD IN YOUR HANDS CONTAINS YOUR PROXY STATEMENT
AND PROXY CARD. A PROXY CARD IS, IN ESSENCE, A BALLOT. WHEN YOU
VOTE YOUR PROXY, IT TELLS US HOW TO VOTE ON YOUR BEHALF ON
IMPORTANT ISSUES RELATING TO YOUR FUND. IF YOU COMPLETE AND SIGN
THE PROXY, WE'LL VOTE IT EXACTLY AS YOU TELL US. IF YOU SIMPLY
SIGN THE PROXY, WE'LL VOTE IT IN ACCORDANCE WITH THE TRUSTEES'
RECOMMENDATIONS ON PAGES 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. . . . . . . . . . . . . . . . . . . . . . . . .
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) to fix the number of Trustees and elect your fund's
Trustees; (2) to ratify your fund's independent auditors; (3) to
approve amendments to certain of your fund's fundamental
investment restrictions; and (4) to approve the elimination of
certain of your fund's fundamental investment restrictions.
Although we would like very much to have each shareholder attend
his or her 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 DIVIDEND INCOME FUND
NOTICE OF A MEETING OF SHAREHOLDERS
THIS IS THE FORMAL AGENDA FOR YOUR FUND'S SHAREHOLDER MEETING.
IT TELLS YOU WHAT MATTERS WILL BE VOTED ON AND THE TIME AND PLACE
OF THE MEETING, IF YOU CAN ATTEND IN PERSON.
To the Shareholders of Putnam Dividend Income Fund:
A Meeting of Shareholders of your fund will be held on June 5,
1997 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 INVESTMENTS IN THE VOTING
SECURITIES OF A SINGLE ISSUER. SEE PAGE .
3.B. Approving an amendment to the fund's fundamental investment
restriction with respect to making loans. See page .
3.C. APPROVING AN AMENDMENT TO THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO INVESTMENTS IN COMMODITIES. 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, INC. 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 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 A.J.C. Smith
Elizabeth T. Kennan W. Nicholas Thorndike
Lawrence J. Lasser
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.
March , 1997
<PAGE>
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.
WHO IS ASKING FOR MY VOTE?
THE ENCLOSED PROXY IS SOLICITED BY THE TRUSTEES OF PUTNAM
DIVIDEND INCOME FUND for use at the Meeting of Shareholders of
the fund to be held on June 5, 1997, 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 RATIFYING THE SELECTION OF COOPERS & LYBRAND L.L.P. AS
THE INDEPENDENT AUDITORS OF YOUR FUND;
3.A. FOR AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTMENTS IN THE VOTING SECURITIES OF A
SINGLE ISSUER;
3.B. FOR AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO MAKING LOANS;
3.C. FOR AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTMENTS IN COMMODITIES;
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, INC. 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 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 March 7, 1997,
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 March , 1997.
Each share is entitled to one vote. Unless otherwise noted the
holders of your fund's preferred shares and holders of your
fund's 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
I. ELECTION OF TRUSTEES
WHO ARE THE NOMINEES FOR TRUSTEES?
The Nominating Committee of the Trustees recommends that the
number of Trustees be fixed at thirteen and that you vote for the
election of the nominees described below. Each nominee is
currently a Trustee of your fund and of the other Putnam funds.
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 the preferred shares, while the other
eleven Trustees have been nominated to be elected by the holders
of the 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 55, 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 53, 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 Director of Safety 1st, Inc., a
company which markets a wide range of child care and safety
products. He also serves as a Trustee of Salem Hospital and 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.
<PAGE>
ELIZABETH T. KENNAN
[INSERT PICTURE]
Ms. Kennan, age 59, 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 54, is the Vice President of your fund and the
other Putnam funds. He has been the President, Chief Executive
Officer and a Director of Putnam Investments, Inc. and Putnam
Management since 1985, having begun his career there in 1969.
Mr. Lasser currently also serves as a Director of Marsh &
McLennan Companies, Inc., the parent company of Putnam
Management, and INROADS/Central New England, Inc., a job market
internship program for minority high school and college students.
He is a Member of the Board of Overseers of the Museum of
Science, the Museum of Fine Arts and the Isabella Stewart Gardner
Museum in Boston. He is also a Trustee of the Beth Israel
Hospital and Buckingham, Browne and Nichols School. Mr. Lasser
is a graduate of Antioch College and Harvard Business School.
ROBERT E. PATTERSON
[INSERT PICTURE]
Mr. Patterson, age 51, is the Executive Vice President and
Director of Acquisitions of Cabot Partners Limited Partnership, a
registered investment adviser which manages real estate
investments for institutional investors. Prior to 1990, he was
the Executive Vice President of Cabot, Cabot & Forbes Realty
Advisors, Inc., the predecessor company of Cabot Partners. Prior
to that, he was a Senior Vice President of the Beal Companies, a
real estate management, investment and development company. He
has also worked as an attorney and held various positions in
state government, including the founding Executive Director of
the Massachusetts Industrial Finance Agency.
Mr. Patterson currently also serves as Chairman of the Joslin
Diabetes Center and as a Director of Brandywine Trust Company.
Mr. Patterson is a graduate of Harvard College and Harvard Law
School.
DONALD S. PERKINS*
[INSERT PICTURE]
Mr. Perkins, age 69, is the retired Chairman of the Board of
Jewel Companies, Inc., a diversified retailer, where among other
roles he served as President, Chief Executive Officer and
Chairman of the Board from 1965 to 1980. He currently also
serves as a Director of various other public corporations,
including 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.
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.
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, 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 includes 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
June, 1996. Mr. Jackson was elected by the other Trustees in
May, 1996. The 13 nominees for election as Trustees at the
shareholder meeting of your fund who receive the greatest number
of votes will be elected Trustees of your fund. The Trustees
serve until their successors are elected and qualified. Each of
the nominees has agreed to serve as a Trustee if elected. If any
of the nominees is unavailable for election at the time of the
meeting, which is not anticipated, the Trustees may vote for
other nominees at their discretion, or the Trustees may recommend
that the shareholders fix the number of Trustees at less than 13
for your fund.
WHAT ARE THE TRUSTEES' RESPONSIBILITIES?
Your fund's Trustees are responsible for the general oversight of
your fund's business and for assuring that your fund is managed
in the best interests of its shareholders. The Trustees
periodically review your fund's investment performance as well as
the quality of other services provided to your fund and its
shareholders by Putnam Management and its affiliates, including
administration, custody, distribution 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 96 Putnam funds
based on their own investment needs. The Trustees' aggregate
investments in the Putnam funds total over $ million. The
table below lists each Trustee's current investments in the fund
and in the Putnam funds as a group. Except as noted below, each
Trustee has sole investment power and sole voting power with
respect to his or her shares of the fund.
Share Ownership by Trustees
<TABLE><CAPTION>
Year first Number of Number of shares
elected as shares of the of all Putnam
Trustee of the fund owned funds owned
Trustees Putnam funds as of 1/31/97 as of 1/31/97(1)
- --------------------------------------------------------------------------------------
<C> <C> <C> <C>
Jameson A. Baxter 1994 100 46,224
Hans H. Estin 1972 177 29,127
John A. Hill 1985 100 147,666
Ronald J. Jackson 1996 200(2) 126,086
Elizabeth T. Kennan 1992 244(3) 31,130
Lawrence J. Lasser 1992 100 485,575
Robert E. Patterson 1984 300 63,651
Donald S. Perkins 1982 928 144,275
William F. Pounds 1971 500 366,513
George Putnam 1957 1,777 1,758,831
George Putnam, III 1984 300 313,590
A.J.C. Smith 1986 200(4) 51,112
W. Nicholas Thorndike 1992 160 81,733
- ---------------------------------------------------------------------------------------
(1) These holdings do not include shares of Putnam money market funds.
(2) Mr. Jackson has shared investment power and shared voting power with respect to such
shares.
(3) Ms. Kennan is the custodian of a trust which owns 144 of these shares in which she
has no economic interest.
(4) Mr. Smith has shared investment power and shared voting power with respect to such
shares.
</TABLE>
As of January 31, 1997, the Trustees and officers of the fund owned
a total of 5,085 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.
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; and
by also monitoring potential conflicts among funds to
ensure that shareholders continue to realize the
benefits of participation in a large and diverse family
of funds.
HOW OFTEN DO THE TRUSTEES MEET?
The Trustees meet each month (except August) over a two-day
period to review the operations of your fund and of the other
Putnam funds. A portion of these meetings is devoted to meetings
of various Committees of the board which focus on particular
matters. These include: the Contract Committee, which reviews
all contractual arrangements with Putnam Management and its
affiliates; the Communication and Service Committee, which
reviews the quality of services provided by your fund's investor
servicing agent and custodian; the Pricing, Brokerage and Special
Investments Committee, which reviews matters relating to
valuation of securities, best execution, brokerage costs and
allocations and new investment techniques; the Audit Committee,
which reviews accounting policies and the adequacy of internal
controls and supervises the engagement of the funds' auditors;
the Compensation, Administration and Legal Affairs Committee,
which reviews the compensation of the Trustees and their
administrative staff and supervises the engagement of the funds'
independent counsel; and the Nominating Committee, which is
responsible for selecting nominees for election as Trustees.
Each Trustee generally attends at least two formal committee
meetings during each regular meeting of the Trustees. During
1996, 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?
Each Trustee receives 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 Compensation
Committee, which consists solely of Trustees not affiliated with
Putnam Management, estimates that Committee and Trustee meeting
time together with the appropriate preparation requires the
equivalent of at least three business days per Trustee meeting.
The following table shows the fees paid to each Trustee by the
fund for fiscal 1996 and the fees paid to each Trustee by all of
the Putnam funds during calendar year 1996:
<PAGE>
COMPENSATION TABLE<TABLE><CAPTION>
Pension or Estimated Total
Aggregate retirement annual benefits compensation
compensation benefits accrued from all from all
from the as part of Putnam funds Putnam
Trustees fund(1) fund expenses(2) upon retirement(3) funds(4)
<C> <C> <C> <C> <C>
Jameson A. Baxter (5) $916 $0 $85,646 $172,291
Hans H. Estin 912 0 85,646 171,291
John A. Hill (5) 904 0 85,646 170,791
Ronald J. Jackson (5)(6) 77 0 85,646 94,807
Elizabeth T. Kennan 912 0 85,646 171,291
Lawrence J. Lasser 905 0 85,646 169,791
Robert E. Patterson 953 0 85,646 182,291
Donald S. Perkins 907 0 85,646 170,291
William F. Pounds (7) 926 0 85,646 197,291
George Putnam 912 0 85,646 171,291
George Putnam, III 912 0 85,646 171,291
A.J.C. Smith 905 0 85,646 169,791
W. Nicholas Thorndike 951 0 85,646 181,291
(1) Includes an annual retainer and an attendance fee for each meeting attended.
(2) The Trustees approved a Retirement Plan for Trustees of the Putnam funds on October 1, 1996.
Prior to that date, voluntary retirement benefits were paid to certain retired Trustees.
(3) Assumes that each Trustee retires at the normal retirement date. Estimated benefits for each
Trustee are based on Trustee fee rates in effect during calendar 1996.
(4) As of December 31, 1996, there were 96 funds in the Putnam family.
(5) Includes compensation deferred pursuant to a Trustee Compensation Deferral Plan. The
total amount of deferred compensation payable by the Putnam Funds to Ms. Baxter, Mr. Hill and
Mr. Jackson as of December 31, 1996 were $54,002, $205,377 and $75,102, respectively.
Information of Deferred Compensation includes income earned on such amounts.
(6) Elected as a Trustee in May 1996.
(7) Includes additional compensation for service as Vice Chairman of the Putnam funds.
</TABLE>
Under a Retirement Plan for Trustees of the Putnam funds (the
"Plan"), each Trustee who retires with at least five years of
service as a Trustee of the funds is entitled to receive an annual
retirement benefit equal to one-half of the average annual
compensation paid to such Trustee for the last three years of
service prior to retirement. This retirement benefit is payable
during a Trustee's lifetime, beginning the year following
retirement, for a number of years equal to such Trustee's years of
service. A death benefit is also available under the Plan which
assures that the Trustee and his or her beneficiaries will receive
benefit payments for the lesser of an aggregate period of (i) ten
years or (ii) such Trustee's total years of service.
The Plan Administrator (a committee comprised of Trustees that are
not "interested persons" of the fund, as defined in the Investment
Company Act of 1940) may terminate or amend the Plan at any time,
but no termination or amendment will result in a reduction in the
amount of benefits (i) currently being paid to a Trustee at the time
of such termination or amendment, or (ii) to which a current Trustee
would have been entitled to receive had he or she retired
immediately prior to such termination or amendment.
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 brokerage, consulting, and investment management
businesses.
2. RATIFICATION OF INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P., One Post Office Square, Boston,
Massachusetts, independent accountants, has been selected by the
Trustees as the independent 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 its fees.
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 restrictions. The purpose of these proposed
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. Many of these changes will
have little practical effect on the way the fund is managed given
the fund's current investment objective and policies.
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 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 INVESTMENTS IN THE VOTING SECURITIES OF A SINGLE
ISSUER
The Trustees are recommending that the fund's fundamental investment
restriction with respect to investment in the voting securities of a
single issuer be revised to reflect the standard restriction used by
other Putnam funds and to grant the fund the maximum flexibility
permitted under the Investment Company Act of 1940 (the "1940 Act").
The 1940 Act prohibits a diversified fund such as the fund from
investing, with respect to 75% of its total assets, in the
securities of an issuer if as a result it would own more than 10% of
the outstanding voting securities of that issuer. The fund's
current investment restriction, which is more restrictive than the
1940 Act, states that the fund may not:
"Acquire more than 10% of the voting securities of any issuer."
The 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."
Putnam Management believes that limiting this restriction to 75% of
the fund's total assets will enhance the fund's investment
flexibility. Putnam Management has advised the Trustees that the
current restriction could prevent the fund from investing in certain
opportunities to the fullest extent that Putnam Management believes
would best serve the fund's investment objective.
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. To 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 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. In
addition, certain of the companies in which the fund may invest a
greater portion of its assets following the amendment could have
relatively small equity market capitalizations (e.g., under $1
billion). Such companies often have limited product lines, markets
or financial resources. The securities of these companies may trade
less frequently and in limited volume, and only in the
over-the-counter market or on a regional securities exchange. As a
result, these securities may fluctuate in value more than those of
larger, more established companies. Under such circumstances, it
may also be more difficult to determine the fair value of such
securities.
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 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 used by other Putnam funds and to remove the
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
entry 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. Putnam
Management believes that the increased investment flexibility could
assist the fund in achieving its investment objective.
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 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.C. 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 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 or 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 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
investment policies, Putnam Management currently has no present
intention of engaging in such transactions on behalf of the fund.
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.
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, INC.
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. The restriction
states that the fund may not:
"Invest in any securities of any issuer, if, to the knowledge
of the fund, officers and Trustees of the fund and officers and
directors of Putnam [Management] who beneficially own more than
0.5% of the securities of that issuer together own more than 5%
of such securities."
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 this proposal is approved, the fund may 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.
Putnam Management believes that this enhanced flexibility could
assist the fund in meeting its investment objective.
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.
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 being used
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."
If this proposal is approved, the fund would have no formal
restriction with respect to engaging in margin transactions.
However, 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 SEC
guidelines which prohibit 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 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.
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.
In a typical short sale, the fund would borrow securities from a
broker that it anticipates will decline in value in order to sell to
a third party. The fund becomes obligated to return securities of
the same issue and quantity at some future date, and it realizes a
loss to the extent the securities increase in value and a profit to
the extent the securities decline in value (after including any
associated costs). Since the value of a particular security can
increase without limit the fund could potentially realize losses
greater than the value of the securities at the time they are sold
short. These losses would generally be offset to the extent the
fund owns or has the right to acquire securities of the same issue
as, and in equal amount to, the securities sold short (a short sale
against the box). The fund would collateralize its short position
by delivering to the broker an amount equal to the proceeds of the
short sale and an additional margin amount as required by law. In
addition, to the extent the fund engage in short sales against the
box, the fund will maintain in a segregated account
cash,
U.S.
government
securities or other liquid high grade debt obligations
equal to the current market value of the securities sold short minus
the margin amount delivered to the broker. The value of the
segregated account is marked to market daily to reflect any changes
in value of the fund's short position.
REQUIRED VOTE. Approval of this proposal requires the affirmative
vote of the lesser of (1) more than 50% of the outstanding 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.
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) and then only to secure borrowings permitted by
restriction 2 above. Collateral arrangements with respect to
margin for futures contracts and options are not deemed to be
pledges or other encumbrances for purposes of this
restriction."
[Restriction
2 allows the fund to borrow money
in amounts of up to 15% of the value of its total assets for
temporary or emergency
purposes.]
This proposal would remove all restrictions on the fund's ability to
pledge assets. Putnam Management recommended the proposal to the
Trustees because it believes that the fund's current limits on
pledging may conflict with the fund's ability to borrow money for
temporary or emergency purposes. This conflict arises because
lenders may require borrowers such as the fund to pledge assets in
order to collateralize the amount borrowed. Often, these collateral
requirements are for amounts larger than the principal amount of the
loan. If the fund needed to borrow the maximum amount permitted by
it policies (currently 15% of its total assets), it might be
possible that a bank would require collateral in excess of 15% of
the fund's total assets. Therefore, the limit on pledging assets
may have the effect of reducing the amount that the fund may borrow
in these situations.
Pledging assets does entail certain risks. To the extent that the
fund pledges its assets, the fund may have less flexibility in
liquidating its assets. If a large portion of the fund's assets
were involved, the fund's ability to meet other 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 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.
<PAGE>
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 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.
To the extent the fund invests in restricted securities, the fund
may encounter difficulty in determining the fair value of such
securities. The fund also may be unable to sell such securities at
a time when it may otherwise be desirable to do so or may have to
sell them at less than fair market 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 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.
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 relating to investments in oil, gas and mineral
interests 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 the Trustees eliminate this
restriction because it is unnecessary in light of current regulatory
requirements; the 1940 Act does not require that the fund have such
a restriction. Putnam Management also believes that eliminating the
restriction will enhance the fund's investment flexibility, although
Putnam Management has no current intention of causing the fund to
invest in such interests.
Investments in oil, gas and other mineral leases, rights or royalty
contracts and in securities which derive their value in part from
such instruments, entail certain risks. The prices of these
investments are subject to substantial fluctuations, and may be
affected by unpredictable economic and political circumstances such
as social, political, or military disturbances, the taxation and
regulatory policies of various governments, the activities and
policies of OPEC (an organization of major oil producing countries),
the existence of cartels in such industries, the discovery of new
reserves and the development of new techniques for producing,
refining and transporting such materials and related products, the
development of new technology, energy conservation practices, and
the development of alternative energy sources and alternative uses
for such materials and related products. In addition, in order to
enforce its rights in the event of a default of an issuer of these
securities, the fund may be required to participate in various legal
proceedings or take possession of and manage assets securing the
issuer's obligations. This could increase the fund's operating
expenses and adversely affect the yield on its shares.
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.
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 invests. These rights may include the
right to actively oppose management of such companies or to support
the management of such companies.
Putnam Management believes that this ability will allow the fund
maximum flexibility to protect the value of its investments through
influencing management of companies in which it invests. Putnam
Management believes that the fund should be allowed to freely
communicate its views as a shareholder on matters of policy to
management, the board of directors, and shareholders of a company
when a policy may affect the value of the fund's investment. These
activities may include the fund, either individually or with others,
seeking changes in a company's goals, management, or board of
directors, seeking the sale of some or all of a company's assets, or
voting to participate in or oppose a takeover effort with respect to
a company. Although Putnam Management believes that the fund
currently may engage in many if not all of these activities without
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 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.
<PAGE>
FURTHER INFORMATION ABOUT VOTING AND THE 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). 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.
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.,
77 Water Street, New York, New York 10005, to aid in the
solicitation of instructions for nominee accounts, for a fee not to
exceed $5,000, plus reasonable out-of-pocket expenses for mailing
and phone costs.
REVOCATION OF PROXIES. Proxies, including proxies given by
telephone, may be revoked at any time before they are voted by a
written revocation received by the Clerk of your fund, by properly
executing a later-dated proxy or by attending the meeting and voting
in person.
DATE FOR RECEIPT OF SHAREHOLDERS' PROPOSALS FOR THE NEXT ANNUAL
MEETING. It is anticipated that your fund's next annual meeting of
shareholders will be held in June, 1998. Shareholder proposals must
be received by your fund before November 9, 1997, to be included in
your fund's proxy statement for the next annual meeting.
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 those 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 adjournment those
proxies which they are entitled to vote in favor of such proposals.
They will vote against 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 TO YOU UPON REQUEST,
WITHOUT CHARGE, 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.
FUND INFORMATION
LIMITATION OF TRUSTEE LIABILITY. The Agreement and Declaration of
Trust of your fund provides that the fund will indemnify its
Trustees and officers against liabilities and expenses incurred in
connection with litigation in which they may be involved because of
their offices with the fund, except if it is determined in the
manner specified in the Agreement and Declaration of Trust that they
have not acted in good faith in the reasonable belief that their
actions were in the best interests of the fund or that such
indemnification would relieve any officer or Trustee of any
liability to the fund or its shareholders arising by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties. Your fund, at its expense, provides
liability insurance for the benefit of its Trustees and officers.
AUDIT AND NOMINATING COMMITTEES. The voting members of the Audit
Committee of your fund include only Trustees who are not "interested
persons" of the fund or by reason of any affiliation with Putnam
Investments and its affiliates. The Audit Committee currently
consists of Messrs. Estin (Chairman), Jackson, Perkins (without
vote), Putnam, III (without vote), Smith (without vote), and Ms.
Kennan. The Nominating Committee consists only of Trustees who are
not "interested persons" of your fund or Putnam Management. The
Nominating Committee currently consists of Dr. Pounds and Ms. Kennan
(Co-chairpersons), Mrs. Baxter, and Messrs. Estin, Hill, Jackson,
Patterson, and Thorndike.
OFFICERS AND OTHER INFORMATION. In addition to George Putnam and
Lawrence J. Lasser, the officers of your fund are as follows:
YEAR FIRST
ELECTED TO
NAME (AGE) OFFICE OFFICE
- ---------- ------ -----------
Charles E. Porter (58) Executive Vice President 1989
Patricia C. Flaherty (50) Senior Vice President 1993
John D. Hughes (61) Senior Vice President &
Treasurer 1989
Gordon H. Silver (49) Vice President 1990
Peter Carman (55) Vice President 1994
Brett C. Browchuk (34) Vice President 1994
Thomas V. Reilly (50) Vice President 1993
Jeanne L. Mockard* (33) Vice President 1993
William N. Shiebler** (55)Vice President 1991
John R. Verani (57) Vice President 1990
Paul M. O'Neil (43) Vice President 1992
Beverly Marcus (52) Clerk 1989
- -----------------------------------------------------------------------------
* Portfolio manager
** President of Putnam Mutual Funds
<PAGE>
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., Messrs. Putnam, George Putnam, III, Lasser
and Smith (nominees for Trustees of the fund), as well as the
officers of the 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 FEBRUARY 28, 1997
Net assets $
Common shares outstanding and
authorized to vote shares
Preferred shares outstanding and
authorized to vote shares
5% BENEFICIAL OWNERSHIP OF YOUR FUND AS OF FEBRUARY 28, 1997
Persons beneficially owning more than 5%
of common shares None
Persons beneficially owning more than 5%
of preferred shares None
<PAGE>
PUTNAMINVESTMENTS
THE PUTNAM FUNDS
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581
<PAGE>
PUTNAMINVESTMENTS
THIS IS YOUR PROXY CARD.
PLEASE VOTE THIS PROXY, SIGN IT BELOW, AND RETURN IT PROMPTLY IN THE
ENVELOPE PROVIDED. YOUR VOTE IS IMPORTANT.
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 June 5, 1997, for
PUTNAM DIVIDEND INCOME FUND. (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 Dividend Income Fund on June 5, 1997, 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 THE OTHER PROPOSAL. IN THEIR DISCRETION, THE
PROXIES WILL ALSO BE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS THAT
MAY PROPERLY 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 of you should sign. When signing as
executor, administrator, attorney, trustee, or guardian, or as
custodian for a minor, please give your full title as such. If you
are signing for a corporation, please sign the full corporate name
and indicate the signer's office. If you are a partner, sign in the
partnership name.
- --------------------------------------------------------------------
Shareholder sign here Date
- --------------------------------------------------------------------
Co-owner sign here Date
- --------------------------------------------------------------------
Please fold at perforation before detaching
<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 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, A.J.C. Smith, W.N. Thorndike.
/ / FOR fixing the number of Trustees and electing all the
nominees (EXCEPT AS MARKED TO THE CONTRARY BELOW.)
TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE NOMINEES,
WRITE THOSE NOMINEES' NAMES BELOW:
-------------------------------------------------------------
/ / WITHHOLD authority to vote for all nominees
2. PROPOSAL TO RATIFY FOR AGAINST ABSTAIN
THE SELECTION OF / / / / / /
COOPERS & LYBRAND L.L.P.
AS THE INDEPENDENT AUDITORS
FOR YOUR FUND.
3. AMEND THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO:
3.A. INVESTMENTS IN THE VOTING / / / / / /
SECURITIES OF A SINGLE
ISSUER.
3.B. MAKING LOANS. / / / / / /
3.C. INVESTMENTS IN / / / / / /
COMMODITIES.
4. ELIMINATE THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH
RESPECT TO:
4.A. INVESTMENTS IN SECURITIES / / / / / /
of issuers in which
management of the fund or
Putnam Investment Management
owns securities.
4.B. MARGIN TRANSACTIONS. / / / / / /
4.C. SHORT SALES. / / / / / /
4.D. PLEDGING ASSETS. / / / / / /
4.E. Investments in restricted / / / / / /
securities.
4.F. Investments in oil, / / / / / /
gas and mineral interests.
4.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 June 5, 1997, for
PUTNAM DIVIDEND INCOME FUND. (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 Dividend Income Fund on June 5, 1997, 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 THE OTHER PROPOSALS. IN THEIR DISCRETION, THE
PROXIES WILL ALSO BE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS THAT
MAY PROPERLY 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 of you should sign. When signing as
executor, administrator, attorney, trustee, or guardian, or as
custodian for a minor, please give your full title as such. If you
are signing for a corporation, please sign the full corporate name
and indicate the signer's office. If you are a partner, sign in the
partnership name.
- --------------------------------------------------------------------
Shareholder sign here Date
- --------------------------------------------------------------------
Co-owner sign here Date
- --------------------------------------------------------------------
Please fold at perforation before detaching
<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 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, A.J.C.
Smith, W.N. Thorndike.
/ / FOR fixing the number of Trustees and electing all the
nominees (EXCEPT AS MARKED TO THE CONTRARY BELOW.)
TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE NOMINEES,
WRITE THOSE NOMINEES' NAMES BELOW:
-------------------------------------------------------------
/ / WITHHOLD authority to vote for all nominees
2. PROPOSAL TO RATIFY FOR AGAINST ABSTAIN
THE SELECTION OF / / / / / /
COOPERS & LYBRAND L.L.P.
AS THE INDEPENDENT AUDITORS
FOR YOUR FUND.
3. AMEND THE FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO:
3.A. INVESTMENTS IN THE VOTING / / / / / /
SECURITIES OF A SINGLE
ISSUER.
3.B. MAKING LOANS. / / / / / /
3.C. INVESTMENTS IN / / / / / /
COMMODITIES.
4. ELIMINATE THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION WITH
RESPECT TO:
4.A. INVESTMENTS IN SECURITIES / / / / / /
of issuers in which
management of the fund or
Putnam Investment Management
owns securities.
4.B. MARGIN TRANSACTIONS. / / / / / /
4.C. SHORT SALES. / / / / / /
4.D. PLEDGING ASSETS. / / / / / /
4.E. Investments in restricted / / / / / /
securities.
4.F. Investments in oil, / / / / / /
gas and mineral interests.
4.G. INVESTING TO GAIN CONTROL / / / / / /
OF A COMPANY'S MANAGEMENT.
