Vote-By-Phone Solicitation Script for
Putnam Arizona Tax Exempt Income Fund, Putnam Money Market Fund
and Putnam New York Tax Exempt Opportunities Fund
This script provides information to the shareholder and solicits
their vote by phone, to be confirmed by written confirmation.
Good Morning/Afternoon/Evening. May I please speak with (name of
shareholder)? I am representing Putnam Investments in Boston.
To verify that I am speaking with the shareholder of record, may
I confirm that you are (name of shareholder of record) and that
your address of record is (address of record)?
(If the person is unwilling to confirm this information, thank
them for their time and terminate the call.)
We noted that we have not yet received your vote. Do you have
any questions regarding the proposals I can clarify for you?
(If there are questions regarding the non-routine proposals,
please refer to the Q & A attached.)
Would you like to vote by phone?
(If not, ask the shareholder if they would like another ballot,
thank them for their time and terminate the call. If so, proceed
as follows:)
We previously sent you a letter describing our procedures for
voting your proxy ballot by telephone.
I will now read the information on the proxy card so that you can
provide us with your voting instructions.
Putnam (Name of Fund)
Proxy for a meeting of shareholders, July 13, 1995.
This proxy is solicited on behalf the Trustees of the Fund.
The shareholder hereby appoints George Putnam, Hans H. Estin and
William F. Pounds, and each of them separately, proxies, with
power of substitution, and hereby authorizes them to represent
and vote, as designated hereafter, at the meeting of shareholders
of Putnam (Name of Fund), on July 13, 1995, at 2:00 p.m., Boston
time, and at any adjournments thereof, all of the shares of the
Fund which the shareholder would be entitled to vote if
personally present.
This proxy when properly authorized will be voted in the manner
directed herein by the shareholder. In their discretion, the
proxies are authorized to vote upon such other matters as may
properly come before the meeting. The Trustees recommend a vote
FOR electing all of the nominees for Trustees and FOR the
following proposals:
1. (All Funds)
Election of Trustees.
The nominees are: Jameson Adkins Baxter, Hans H. Estin, John
A. Hill, Elizabeth T. Kennan, Lawrence J. Lasser, Robert E.
Patterson, Donald S. Perkins, William F. Pounds, George
Putnam, George Putnam III, A.J.C. Amith, and William N.
Thorndike.
How would you like to vote on this proposal?
For electing all of the nominees?
For electing all nominees other than the following
nominees? (specify nominees for whom voting authority
is withheld)
Withhold authority to vote for all nominees?
2. (All Funds)
Ratify the selection of (see below) as auditors.
Coopers & Lybrand L.L.P.: Putnam Arizona Tax Exempt
Income Fund
Price Waterhouse LLP: Putnam Money Market Fund
Putnam New York Tax Exempt
Opportunities Fund
How would you like to vote on this proposal?
For, Against or Abstain?
3. (Putnam Arizona Tax Exempt Income Fund and Putnam New York
Opportunities Fund only)
To eliminate the Fund's fundamental investment restriction
with respect to investments in investment companies.
How would you like to vote on this proposal?
For, Against or Abstain?
4. (Putnam Arizona Tax Exempt Income Fund, Putnam Money Market
Fund and Putnam New York Opportunities Fund only)
To amend the Fund's fundamental investment restriction with
respect to investments in restricted securities.
How would you like to vote on this proposal?
For, Against or Abstain?
5. (Putnam Money Market Fund only)
To amend the Fund's fundamental investment restriction with
respect to owning more than 10% of a class of securities of
any one company.
How would you like to vote on this proposal?
For, Against or Abstain?
Thank you. Do you wish to send the entire message?
To repeat your instructions:
You voted:
On proposal 1:
On proposal 2:
etc.
Is this correct?
Thank you. We will be sending you a written confirmation of your
vote. Please call us if the information on the confirmation is
incorrect.
scripz8<PAGE>
Q & A FOR PUTNAM ARIZONA TAX EXEMPT INCOME FUND, PUTNAM MONEY
MARKET FUND AND PUTNAM NEW YORK TAX EXEMPT OPPORTUNITIES FUND
On approximately May 4, 1995, a proxy statement was sent to
shareholders of the above-captioned funds. Listed below are
answers to the questions and concerns shareholders are likely to
have regarding non-routine proposals for these funds, followed by
answers and information regarding each issue.
WHAT, EXACTLY, ARE THE FUNDS PROPOSING?
Putnam Arizona Tax Exempt Income Fund and Putnam New York
Tax Exempt Opportunities Funds are seeking to eliminate
their fundamental investment restrictions regarding
investments in investment companies. The proposal would
permit these funds to invest in certain other registered
open-end investment companies.
All three funds are seeking to amend their fundamental
investment restrictions regarding investments in restricted
securities. The proposal would expand the ability of these
funds to invest in certain restricted securities.
Putnam Money Market Fund is seeking to amend its
fundamental investment restrictions regarding investments in
a class of securities of a single issuer.
1. INVESTMENTS IN INVESTMENT COMPANIES:
WHAT ARE THE ISSUES REGARDING INVESTMENTS IN OPEN-END
INVESTMENT COMPANIES?
Your fund seeks the change to provide maximum flexibility
for it to take advantage of securities that might be
structured using a pass-through entity. Many of these
securities did not exist when your fund's prospectus was
originally written, and others may be developed in the
future.
WHY MIGHT THESE PASS-THROUGH ENTITIES BE CONSIDERED
"INVESTMENT COMPANIES"?
Because such securities represent investment in an
underlying pool of securities, they technically fall under
the definition of investment companies as defined by the
Investment Company Act of 1940. If the proposal is
approved, the Trustees intend to adopt a more flexible
nonfundamental investment restriction that would only
prohibit investments in mutual funds such as the fund. Such
a restriction could be revised or eliminated by the Trustees
without a shareholder vote.
WHAT IS AN EXAMPLE?
Certain municipal securities such as secondary residual
interest bonds, sometimes known as inverse floaters. The
credit support for these securities is a tax exempt bond
that has been purchased by a trust or other pass-through
entity, which in turn sells two "secondary" securities: one
that bears a floating short-term interest rate, and the
other that bears interest according to a formula based on a
stated rate less that floating short-term rate.
Even though adding these securities to a portfolio could
involve duplication of some fees and expenses, Putnam
Management believes they may provide attractive investment
opportunities that would be consistent with your fund s
objectives and policies.
2A. INVESTMENTS IN RESTRICTED SECURITIES (ARIZONA AND NEW YORK
OPPORTUNITIES FUNDS ONLY):
WHAT ARE THE ISSUES REGARDING INVESTMENTS IN RESTRICTED
SECURITIES?
Your fund seeks the change to permit it to invest a greater
portion of its assets in securities that are restricted as
to resale. Essentially, your fund seeks to increase its
flexibility to the extent permitted under recent Securities
and Exchange Commission (SEC) guidelines.
WHAT IS A "RESTRICTED SECURITY"?
A restricted security is one that is subject to a
restriction on its transfer. A common example of such a
security is one that has not been registered with the SEC
and that is not sold to the general public. Such
unregistered securities are frequently purchased by large
institutional investors who generally have experience
trading restricted securities.
WHY DOES MY FUND INVEST IN THESE SECURITIES?
While Putnam Management believes the use of restricted
securities can pose some risks and that their use should
therefore be limited, Putnam Management also believes that
restricted securities can provide many attractive investment
opportunities for your fund, especially since the
institutional markets for many of these securities in recent
years have continued to increase in size and have become
more liquid.
WHAT ARE SOME OF THE RISKS ASSOCIATED WITH INVESTMENTS IN
RESTRICTED SECURITIES?
The SEC has long taken the position that mutual funds such
as your fund should limit investments in illiquid securities
because such securities may present problems of accurate
valuation and because a fund owning a high percentage of
such securities may have difficulty disposing of them in
satisfying redemption requests in a timely fashion.
In general, illiquid securities have included restricted
securities and those securities for which there is no
readily available market. The SEC recently revised its
position to permit mutual funds to invest up to 15% of their
assets in illiquid securities.
In addition, the SEC has adopted a rule that facilitates the
trading of certain restricted securities among institutional
investors and has stated that such securities may be treated
as liquid securities by a mutual fund if its trustees
determine they are, in fact, liquid.
Putnam Management believes that the fact that a security may
be restricted will not necessarily adversely affect its
liquidity or the ability of the fund to determine its value.
As institutional markets develop, your fund would be
constrained by its current investment restriction even
though the institutional restricted securities markets could
provide both readily ascertainable values for restricted
securities and the ability to reduce an investment to cash
in order to satisfy fund share redemption orders on a timely
basis.
WHAT CHANGES ARE BEING PROPOSED AND WHY?
There are two parts to the current proposal:
Part 1 The SEC recently revised its requirement, which
previously stated that mutual funds like your fund should
not invest more than 10% of assets in illiquid securities,
including restricted securities. The requirement now states
that they may invest up to 15% of net assets in these
securities. While your fund previously limited investments
in these securities to 5% of its net assets, the proposal
would allow it to invest up to 15% of its net assets in
these securities, in line with the new SEC limits.
Part 2 In recognition of the increased size and
liquidity of the institutional markets for unregistered
securities, the SEC has also adopted a rule that states that
restricted securities traded under the rule may be treated
as liquid, for purposes of investment limitations, if the
trustees of a mutual fund like your fund determine that the
securities are, in fact, liquid or readily convertible to
cash.
Putnam Management believes that updating your fund's policy
with respect to the trading of these securities so it is as
flexible as the new SEC regulations permit will allow your
fund to benefit from the increasing number of investment
opportunities available in the institutional markets.
2B. INVESTMENTS IN RESTRICTED SECURITIES (MONEY MARKET FUND
ONLY):
WHAT ARE THE ISSUES REGARDING INVESTMENTS IN RESTRICTED
SECURITIES?
Your fund seeks the change to permit it to invest a greater
portion of its assets in securities that are restricted as
to resale. Essentially, your fund seeks to increase its
flexibility to the extent permitted under recent Securities
and Exchange Commission (SEC) guidelines.
WHAT IS A "RESTRICTED SECURITY"?
A restricted security is one that is subject to a
restriction on its transfer. A common example of such a
security is one that has not been registered with the SEC
and that is not sold to the general public. Such
unregistered securities are frequently purchased by large
institutional investors who generally have experience
trading restricted securities.
WHY DOES MY FUND INVEST IN THESE SECURITIES?
While Putnam Management believes the use of restricted
securities can pose some risks and that their use should
therefore be limited, Putnam Management also believes that
restricted securities can provide many attractive investment
opportunities for your fund, especially since the
institutional markets for many of these securities in recent
years have continued to increase in size and have become
more liquid.
WHAT ARE SOME OF THE RISKS ASSOCIATED WITH INVESTMENTS IN
RESTRICTED SECURITIES?
The SEC has long taken the position that mutual funds such
as your fund should limit investments in illiquid securities
because such securities may present problems of accurate
valuation and because a fund owning a high percentage of
such securities may have difficulty disposing of them in
satisfying redemption requests in a timely fashion.
In general, illiquid securities have included restricted
securities and those securities for which there is no
readily available market. The SEC has a policy that permits
money market mutual funds to invest up to 10% of their
assets in illiquid securities.
In addition, the SEC has adopted a rule that facilitates the
trading of certain restricted securities among institutional
investors and has stated that such securities may be treated
as liquid securities by a mutual fund if its trustees
determine they are, in fact, liquid.
Putnam Management believes that the fact that a security may
be restricted will not necessarily adversely affect its
liquidity or the ability of the fund to determine its value.
As institutional markets develop, your fund would be
constrained by its current investment restriction even
though the institutional restricted securities markets could
provide both readily ascertainable values for restricted
securities and the ability to reduce an investment to cash
in order to satisfy fund share redemption orders on a timely
basis.
WHAT CHANGES ARE BEING PROPOSED AND WHY?
There are two parts to the current proposal:
Part 1 The SEC permits money market mutual funds like
your fund to invest up to 10% of their assets in illiquid
securities, including restricted securities. While your fund
previously limited investments in these securities to 5% of
its net assets, the proposal would allow it to invest up to
10% of its net assets in these securities, in line with
current SEC limits.
Part 2 In recognition of the increased size and
liquidity of the institutional markets for unregistered
securities, the SEC has also adopted a rule that states that
restricted securities, including certain unregistered high
quality commercial paper, traded under the rule may be
treated as liquid, for purposes of investment limitations,
if the trustees of a mutual fund like your fund determine
that the securities are, in fact, liquid or readily
convertible to cash.
Putnam Management believes that updating your fund's policy
with respect to the trading of these securities so it is as
flexible as the new SEC regulations permit will allow your
fund to benefit from the increasing number of investment
opportunities available in the institutional markets.
3. POLICY ON INVESTMENTS IN SECURITIES OF A SINGLE ISSUER
(MONEY MARKET FUND ONLY):
FIRST OF ALL, WHAT IS A "SINGLE ISSUER" AND WHAT IS A
"CLASS" OF SECURITIES?
A single issuer is an individual company that issues
securities for public sale. Sometimes a company will issue
different classes of securities, such as common stock and
preferred stock, or voting and nonvoting stock, or equity
securities (stocks) and debt securities (bonds).
WHAT ARE THE TRUSTEES RECOMMENDING?
Basically, the Trustees are asking that your fund be allowed
to invest in a greater percentage of a single class of a
company's securities.
The fund's fundamental investment restriction currently
prohibits the purchase of any security if the fund would
then own more than 10% of a company's
- voting securities; or
- single class of securities.
The Trustees recommend that the fund amend its identical
fundamental investment restriction so that it can invest in
any amount of any class of securities issued by the company,
so long as the fund does not own more than 10% of the
company's outstanding voting securities.
WHY ARE THEY SEEKING THE CHANGE?
As new types of securities have been developed, Putnam
Management has informed the Trustees that the fund's current
restriction has become too broad and unnecessarily
restrictive. The proposed changes would provide flexibility
to help the fund achieve its investment objective.
In some instances, the current restriction could hinder
desirable investments in desirable non-voting money market
instruments, which often are issued as one of several
classes of an issuer's securities).
The proposed change would bring the fund's investment
policies into conformity with those of most other Putnam
funds.
