SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
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Filed by the Registrant
/ X /
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Filed by a party other than the Registrant
/ /
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Check the appropriate box:
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/ / Preliminary Proxy Statement
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/ / Confidential, for Use of the Commission Only (as
- ---- permitted by Rule 14a-6(e) (2))
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/ X / Definitive Proxy Statement
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/ / Definitive Additional Materials
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/ / Soliciting Material Pursuant to Sec. 240.14a-11(c) or
- ---- Sec. 240.14a-12
PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
PUTNAM MANAGED HIGH YIELD TRUST
PUTNAM TAX-FREE HEALTH CARE 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):
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/ X / No fee required
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/ / Fee computed on table below per Exchange Act Rule 14a
- ---- 6(i)(1) and 0-11
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(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:
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/ / Fee paid previously with preliminary materials.
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/ / Check box if any part of the fee is offset as provided
- ---- by Exchange Act Rule 0-11(a)(2) and identify the
filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration
statement
number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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IMPORTANT INFORMATION
FOR SHAREHOLDERS IN
PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
PUTNAM MANAGED HIGH YIELD TRUST
PUTNAM TAX-FREE HEALTH CARE 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 page 3.
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
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Table of contents
A Message from the Chairman. . . . . . . . . . . . . . . .1
Notice of Shareholder Meeting. . . . . . . . . . . . . . .2
Trustees' Recommendations. . . . . . . . . . . . . . . .. 3
Proxy card enclosed
If you have any questions, please contact us at the special toll-
free number we have set up for you (1-800-225-1581) or call your
financial adviser.
<PAGE>
A Message from the Chairman
(Photograph of George Putnam appears here)
Dear Shareholder:
I am writing to you to ask for your vote on important questions
that affect your investment in your fund. While you are, of
course, welcome to join us at your fund's meeting, most
shareholders cast their vote by filling out and signing the
enclosed proxy. We are asking for your vote on the following
matters: (1) fixing the number of Trustees and electing Trustees
and (2) ratifying the selection of your fund's independent
auditors.
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,
/s/ George Putnam
(signature of George Putnam)
George Putnam, Chairman
<PAGE>
PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
PUTNAM MANAGED HIGH YIELD TRUST
PUTNAM TAX-FREE HEALTH CARE FUND
Notice of Annual 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 Convertible Opportunities and
Income Trust, Putnam Managed High Yield Trust and Putnam Tax-Free
Health Care Fund:
The Annual Meeting of Shareholders of your fund will be held on
December 4, 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 5.
2. Ratifying the selection by the Trustees of the independent
auditors of your fund for its current fiscal year. See
page 30.
3. 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. Thomas Stephens
Lawrence J. Lasser W. Nicholas Thorndike
WE URGE YOU TO MARK, SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN
THE POSTAGE-PAID ENVELOPE PROVIDED SO YOU WILL BE REPRESENTED AT
THE MEETING.
September 8, 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
Convertible Opportunities and Income Trust, Putnam Managed High
Yield Trust and Putnam Tax-Free Health Care Fund for use at the
Annual Meeting of Shareholders of each fund to be held on
December 4, 1997, and, if your fund's meeting is adjourned, at
any later meetings, for the purposes stated in the Notice of
Annual Meeting (see previous page).
How do your fund's Trustees recommend that shareholders vote on
these proposals?
The Trustees recommend that you vote
1.a. (In the case of Putnam Managed High Yield Trust and Putnam
Tax-Free Health Care Fund) For fixing the number of
Trustees as proposed and the election of all nominees;
1.b. (In the case of Putnam Convertible Opportunities and Income
Trust) For fixing the number of Trustees as proposed and
the election of Class B nominees; and
2. For ratifying the selection of the independent auditors of
your fund as indicated below:
Putnam Convertible Opportunities Coopers & Lybrand L.L.P.
and Income Trust
Putnam Managed High Yield Trust Price Waterhouse LLP
Putnam Tax-Free Health Care Fund
Who is eligible to vote?
Shareholders of record at the close of business on September 5,
1997, are entitled to be present and to vote at the meeting or
any adjourned meeting. The Notice of Annual Meeting, the proxy,
and the Proxy Statement are being mailed to shareholders of
record on or about September 15, 1997.
<PAGE>
Each share is entitled to one vote. 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
The Nominating Committee of the Trustees of each fund makes
recommendations concerning the Trustees of that fund. The
Nominating Committee 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").
Who are the nominees for Trustees?
Putnam Managed High Yield Trust
Putnam Tax-Free Health Care Fund
The Nominating Committee recommends that the number of Trustees
be fixed at fourteen and that you vote for the election of all
the nominees described below. Each nominee is currently a
Trustee of your fund and of the other Putnam funds except for W.
Thomas Stephens who currently is not a Trustee of certain closed-
end Putnam funds. Mr. Stephens is scheduled to be elected as a
Trustee of those Putnam funds by the Trustees at their November
meeting.
Putnam Convertible Opportunities and Income Trust
The Trustees of Putnam Convertible Opportunities and Income Trust
are classified into three classes, as is reflected below. Only
the Class B Trustees, whose current terms expire at the time of
the Annual Meeting, are nominated for election. The nominees for
Class B Trustees are John A. Hill, Ronald J. Jackson, Elizabeth
T. Kennan, Robert E. Patterson and George Putnam, III, and each
is described below. Each Class B Trustee is also a Trustee of
the other Putnam Funds
The Nominating Committee recommends that the number of Trustees
be fixed at fourteen and that you vote for the election of each
of the Class B nominees.
<PAGE>
Jameson Adkins Baxter
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class A Trustee of Putnam Convertible Opportunities and Income
Trust
Ms. Baxter, age 54, 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 Financial Corp., 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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class A Trustee of Putnam Convertible Opportunities and Income
Trust
Mr. Estin, age 69, 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 Corporation Member of The
Schepens Eye Research Institute; 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.
<PAGE>
John A. Hill
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Nominee for Class B Trustee of Putnam Convertible Opportunities
and Income Trust
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, TransMontaingne Oil Company, a
refined oil product pipeline and distribution 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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Nominee for Class B Trustee of Putnam Convertible Opportunities
and Income Trust
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. Mr. Jackson is a graduate of Michigan
State University Business School.
Elizabeth T. Kennan
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Nominee for Class B Trustee of Putnam Convertible Opportunities
and Income Trust
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. 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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class A Trustee of Putnam Convertible Opportunities and Income
Trust
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 the United Way of Massachusetts Bay. He is a
Member of the Board of Overseers of the Museum of Fine Arts in
Boston, The Council on Foreign Relations, and a Member of the
Board of Governors and Executive Committee at the Investment
Company Institute. He is also a Trustee of the Beth
Israel\Deaconess Medical Center in Boston. Mr. Lasser is a
graduate of Antioch College and Harvard Business School.
Robert E. Patterson
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Nominee for Class B Trustee of Putnam Convertible Opportunities
and Income Trust
Mr. Patterson, age 52, 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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class C Trustee of Putnam Convertible Opportunities and Income
Trust
Mr. Perkins, age 70, 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, LaSalle Street Fund, Inc.
and LaSalle U.S. Realty Income and Growth Fund, Inc., real estate
investment trusts, Lucent Technologies Inc., Ryerson Tull, Inc.,
America's largest steel service corporation, 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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class A Trustee of Putnam Convertible Opportunities and Income
Trust
Dr. Pounds, age 69, 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., 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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class C Trustee of Putnam Convertible Opportunities and Income
Trust
Mr. Putnam, age 71, 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 Freeport-
McMoRan, Inc., Freeport Copper and Gold, Inc., McMoRan Oil and
Gas, Inc., mining and natural resources companies and Houghton
Mifflin Company, a major publishing company. 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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Nominee for Class B Trustee of Putnam Convertible Opportunities
and Income Trust
Mr. Putnam, age 46, 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 and The Boston Family Office,
L.L.C., a registered investment advisor that provides financial
services to individuals and families. 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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class C Trustee of Putnam Convertible Opportunities and Income
Trust
Mr. Smith, age 63, is the Chairman and Chief Executive Officer of
Marsh & McLennan Companies, Inc. He has been employed by Marsh &
McLennan and related companies in various capacities since 1961.
Mr. Smith is a Director of the Trident Corp., and he also serves
as a Trustee of the Carnegie Hall Society, the Central Park
Conservancy, the Educational Broadcasting Corporation, the
Economic Club of New York, the U.S. Chamber of Commerce, 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, 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. Thomas Stephens
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class C Trustee of Putnam Convertible Opportunities and Income
Trust
Mr. Stephens, age 55, retired in 1996 as Chairman of the Board of
Directors, President and Chief Executive Officer of Johns
Manville Corporation, an insulation and roofing systems company.
He also served as Executive Vice President and Chief Financial
Officer of Manville and in total had 27 years of experience with
Manville and its predecessor companies.
Mr. Stephens serves as a Director for Mail-Well Inc., a supplier
of envelopes and high-quality printing services, Qwest
Communications, a fiber optics manufacturer, The Eagle Picher
Trust, a trust established to fund the settlement of asbestos-
related claims, and New Century Energies, a public utility
company. Mr. Stephens is a Member of the Colorado Forum and
Trustee of the Denver Art Museum and The University of Arkansas
Advisory Council. He is currently a Visiting Professor at the
Graduate School of Business at the University of Colorado. Mr.
Stephens is a graduate of the University of Arkansas.
<PAGE>
W. Nicholas Thorndike**
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class C Trustee of Putnam Convertible Opportunities and Income
Trust
Mr. Thorndike, age 64, 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 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.
All the nominees of Putnam Managed High Yield Trust and Putnam
Tax-Free Health Care Fund were elected by the shareholders in
March 1996 except for Messrs. Jackson and Stephens who were
elected by the Trustees in May 1996, and September 1997,
respectively. The 14 nominees for election as Trustees of each
of Putnam Managed High Yield Trust and Putnam Tax-Free Health
Care Fund who receive the greatest number of votes will be
elected Trustees of that fund. The Trustees serve until their
successors are elected and qualified.
As described above, only the Class B Trustees of Putnam
Convertible Opportunities and Income Trust, whose current terms
expire at the time of the shareholder meeting, are nominated for
election; the other Trustees of the fund will continue to serve
under their current terms. The terms for the Class A Trustees
will expire at the fund's 1999 annual meeting of shareholders and
the terms of the Class C Trustees will expire at the fund's 1998
annual meeting of shareholders. Each of the Class B nominees and
Class C Trustees were elected by the fund's sole shareholder in
April 1995, except for Messrs. Jackson and Stephens who were
elected by the Trustees in May 1996 and September 1997,
respectively. Each of the Class A Trustees were elected by the
shareholders in December 1996. The five nominees of Putnam
Convertible Opportunities and Income Trust who receive the
greatest number of votes will be elected Class B Trustees of the
fund. Each Class B Trustee will be elected to a three year term
expiring at the fund's 2000 annual meeting of shareholders. Each
Trustee of Putnam Convertible Opportunities and Income Trust
serves until the expiration of his or her term and until his or
her successor is elected and qualified.
Each of the nominees has agreed to serve as a Trustee if elected.
If any of the nominees is unavailable for election at the time of
the meeting, which is not anticipated, the Trustees may vote for
other nominees at their discretion, or the Trustees may recommend
that the shareholders fix the number of Trustees at less than 14
for your fund.
On June 25, 1996, Marion Finkel (the "Plaintiff"), a shareholder
of Putnam Convertible Opportunities and Income Trust, filed a
class action suit in the United States District Court for the
Southern District of New York (the "District Court") against the
fund, its Trustees (other than Mr. Jackson, who had only recently
been elected and Mr. Stephens, who was elected in September,
1997), certain fund officers, and the underwriters involved in
the fund's initial public offering (collectively, the
"Defendants"). The Plaintiff's complaint alleges (i) that
statements in the fund's prospectus regarding the possibility
that the fund's shares may trade at a discount and the actions
that might be taken to address the situation constituted material
misrepresentations in violation of Section 11 of the Securities
Act of 1933, and (ii) that by failing to take action to address
the discount the fund breached a contractual commitment to
purchasers of fund shares. The complaint seeks unspecified money
damages or rescission of the purchase price paid for fund shares
(less any income received) and costs and expenses incurred by the
Plaintiff and other class members in this litigation. On
September 30,1996, the Defendants filed a motion to dismiss the
suit on the grounds that it failed to state any legal basis for
liability.
On February 10, 1997, the District Court granted the Defendants'
motion to dismiss the suit and on July 1, 1997, the Disctrict
Court denied the Plaintiff's motion to reargue the Defendants'
motion to dismiss. On July 15, 1997, the Plaintiff filed an
appeal of the District Court's decisions in favor of the
Defendants with the United States Court of Appeals for the Second
Circuit.
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 $60 million. The
table below lists each Trustee's current investments in the fund
and in the Putnam funds as a group based on beneficial ownership.
Except as otherwise noted, each Trustee has sole voting power and
sole investment power with respect to his or her shares.
Share Ownership by Trustees
Year first Number of
elected as shares of
Trustee of all Putnam
the Putnam funds owned
funds as of 7/31/97 (1)
- -----------------------------------------------------------------
Jameson A. Baxter 1994 49,801
Hans H. Estin 1972 29,717
John A. Hill 1985 143,259
Ronald J. Jackson 1996 125,593
Elizabeth T. Kennan 1992 26,649
Lawrence J. Lasser 1992 566,424
Robert E. Patterson 1984 64,242
Donald S. Perkins 1982 177,271
William F. Pounds 1971 327,673
George Putnam 1957 1,770,231
George Putnam, III 1984 312,262
A.J.C. Smith 1986 51,946
W. Thomas Stephens 1997 ---(2)
W. Nicholas Thorndike 1992 82,082
- -----------------------------------------------------------------
(1) These holdings do not include shares of Putnam money market
funds.
(2) Mr. Stephens was elected as a Trustee in September 1997.
Share Ownership by Trustees
Number of Shares owned as of July 31, 1997 of:
Putnam Convertible Putnam Managed Putnam Tax-Free
Opportunities and High Yield Health Care
Trustee Income Trust Trust Fund
- -----------------------------------------------------------------
Jameson A. Baxter 281 378 357
Hans H. Estin 208 132 123
John A. Hill 1,600 100 100
Ronald J. Jackson 200(1) 200(1) 200(1)
Elizabeth T. Kennan 113(2) 246(3) 232(4)
Lawrence J. Lasser 100 100 100
Robert E. Patterson 200 200 100
Donald S. Perkins 150 420 899
William F. Pounds 200 500 335
George Putnam 20,419(5) 1,037 909
George Putnam, III20,500(6) 500 500
A.J.C. Smith 100(7) 200(7) 200(7)
W. Thomas Stephens (8) (8) (8)
W. Nicholas Thorndike113 144 131
- -----------------------------------------------------------------
(1) Mr. Jackson has shared investment power and shared voting
power with respect to such shares.
(2) Ms. Kennan is the custodian of a trust which owns all of
these shares and in which she has no economic interest.
(3) Ms. Kennan is the custodian of a trust which owns 146 of
these shares and in which she has no economic interest.
(4) Ms. Kennan is the custodian of a trust which owns 132 of
these shares and in which she has no economic interest.
(5) Mr. Putnam has shared investment power and shared voting
power with respect to 20,000 of these shares
(6) Mr. Putnam, III has shared investment power and shared
voting power with respect to 20,000 of these shares.
(7) Mr. Smith has shared investment power and shared voting
power with respect to such shares.
(8) Mr. Stephens was elected as a Trustee in September 1997. As
of July 31, 1997, the Trustees and officers of Putnam
Convertible Opportunities and Income Trust, Putnam Managed High
Yield Trust and Putnam Tax-Free Health Care Fund owned a total of
44,183, 4,157 and 4,187 shares, respectively, of the funds,
comprising 1.19% of the outstanding shares of Putnam Convertible
Opportunities and Income Trust and less than 1% of the
outstanding shares of Putnam Managed High Yield Trust and Putnam
Tax-Free Health Care Fund on that date.
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 currently include: the Committee of Independent
Trustees, which conducts an annual review of all contractual
arrangements with Putnam Management and its affiliates; the
Contract Committee, which reviews such matters on an interim
basis during the course of the year; the Communication and
Service Committee, which reviews the quality of services provided
by your fund's investor servicing agent, custodian and
distributor; 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, Legal, Administration Committee, which reviews the
compensation of the Trustees and their administrative staff and
supervises the engagement of the funds' independent counsel; the
Nominating Committee, which is responsible for selecting nominees
for election as Trustees, and the Closed-end Fund Committee,
which is responsible for reviewing special issues applicable to
closed-end funds such as your fund.
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 Committee of Independent Trustees and the Contract Committee
typically meet on several additional occasions during the year to
carry out their 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 tables show the fees paid to each Trustee by each
fund for fiscal 1997 and the fees paid to each Trustee by all of
the Putnam funds during calendar year 1996:
PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
COMPENSATION TABLE
Pension or Estimated Total
Aggregate retirement annual benefits compensation
compensation benefits accrued from all from all
from the as part of Putnam funds Putnam
fund(1) fund expenses(2) upon retirement(3) funds(4)
Trustees
________________________________________________________________
Jameson A. Baxter $791 $112 $85,646 $172,291(5)
Hans H. Estin 784 395 85,646 171,291
John A. Hill 785 148 85,646 170,791(5)
Ronald J. Jackson(6) 616 9 85,646 94,807(5)
Elizabeth T. Kennan 788 268 85,646 171,291
Lawrence J. Lasser 786 201 85,646 169,791
Robert E. Patterson 832 118 85,646 182,291
Donald S. Perkins 791 430 85,646 170,291
William F. Pounds(7) 812 396 98,146 197,291
George Putnam 791 454 85,646 171,291
George Putnam, III 791 78 85,646 171,291
A.J.C. Smith 779 264 85,646 169,791
W. Thomas Stephens(8) 0 0 0 0
W. Nicholas Thorndike 828 386 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.
(6) Elected as a Trustee in May 1996.
(7) Includes additional compensation for service as Vice Chairman
of the Putnam funds.
(8) Elected as a Trustee in September 1997.
<PAGE>
PUTNAM MANAGED HIGH YIELD TRUST
COMPENSATION TABLE
Pension or Estimated Total
Aggregate retirement annual benefits compensation
compensation benefits accrued from all from all
from the as part of Putnam funds Putnam
Trusteesfund(1) fund expenses(2) upon retirement(3) funds(4)
Jameson A. Baxter $799 $147 $85,646 $172,291(5)
Hans H. Estin 788 483 85,646 171,291
John A. Hill 792 180 85,646 170,791(5)
Ronald J. Jackson(6)793 24 85,646 94,807(5)
Elizabeth T. Kennan 793 314 85,646 171,291
Lawrence J. Lasser 792 235 85,646 169,791
Robert E. Patterson 812 145 85,646 182,291
Donald S. Perkins 799 525 85,646 170,291
William F. Pounds(7)821 494 98,146 197,291
George Putnam 799 554 85,646 171,291
George Putnam, III 799 95 85,646 171,291
A.J.C. Smith 781 323 85,646 169,791
W. Thomas Stephens(8) 0 0 0 0
W. Nicholas Thorndike 807 451 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.
(6) Elected as a Trustee in May 1996.
(7) Includes compensation for service as Vice Chairman of the
Putnam funds.
(8) Elected as a Trustee in September 1997.
<PAGE>
PUTNAM TAX-FREE HEALTH CARE FUND
COMPENSATION TABLE
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)
Jameson A. Baxter $758 $168 $85,646 $172,291(5)
Hans H. Estin 749 570 85,646 171,291
John A. Hill 752 213 85,646 170,791(5)
Ronald J. Jackson()753 21 85,646 94,807(5)
Elizabeth T. Kennan753 379 85,646 171,291
Lawrence J. Lasser 752 284 85,646 169,791
Robert E. Patterson770 171 85,646 182,291
Donald S. Perkins 758 621 85,646 170,291
William F. Pounds(7)800 578 98,146 197,291
George Putnam 758 655 85,646 171,291
George Putnam, III 758 112 85,646 171,291
A.J.C. Smith 743 381 85,646 169,791
W. Thomas Stephens(8) 0 0 0 0
W. Nicholas Thorndike766 544 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.
(6) Elected as a Trustee in May 1996.
(7) Includes compensation for service as Vice Chairman of the
Putnam funds.
(8) Elected as a Trustee in September 1997.
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 "Fund
Information," on page 34.
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
Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts
02110, independent accountants, has been selected by the Trustees
as the independent auditors of Putnam Managed High Yield Trust
and Putnam Tax-Free Health Care Fund for their current fiscal
years.
Coopers & Lybrand L.L.P., One Post Office Square, Boston,
Massachusetts 02109, independent accountants, has been selected
by the Trustees as the independent auditors of Putnam Convertible
Opportunities and Income Trust for its current fiscal year.
Among the country's preeminent accounting firms, these firms
together also serve as the auditors for all of the other funds in
the Putnam family. Each 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 each of the
independent auditors is expected to be present at the meeting to
make statements and to respond to appropriate questions.
Further Information About Voting and the Meeting Quorum and
Methods of Tabulation. The shareholders of each fund vote
separately on the proposals presented for their fund. In the
case of each fund, 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.
Simultaneous meetings. The meeting of shareholders of your fund
is called to be held at the same time as the meetings of
shareholders of certain of the other Putnam funds. It is
anticipated that all meetings will be held simultaneously. If
any shareholder at the meeting objects to the holding of a
simultaneous meeting and moves for an adjournment of the meeting
to a time promptly after the simultaneous meetings, the persons
named as proxies will vote in favor of such adjournment.
<PAGE>
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. Each fund has retained at
its expense Management Information Services Corp., 61 Accord Park
Drive, Norwell, MA 02061, to aid in the solicitation of
instructions for registered and nominee accounts, for a fee not
to exceed $2,500 per fund 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 each fund's next annual meeting
of shareholders will be held in December 1998. Shareholder
proposals must be received by your fund before May 19, 1998, 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 each fund provides that the fund will indemnify its
Trustees and officers against liabilities and expenses incurred
in connection with litigation in which they may be involved
because of their offices with the fund, except if it is
determined in the manner specified in the Agreement and
Declaration of Trust that they have not acted in
good faith in the reasonable belief that their actions were in
the best interests of the fund or that such indemnification would
relieve any officer or Trustee of any liability to the fund or
its shareholders arising by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of his or her
duties. Your fund, at its expense, provides liability insurance
for the benefit of its Trustees and officers.
Audit and Nominating Committees. The voting members of the Audit
Committee of your fund include only Trustees who are not
"interested persons" of the fund by reason of any affiliation
with Putnam Investments and its affiliates. The Audit Committee
currently consists of Messrs. Estin (Chairman), 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), Ms. Baxter, and Messrs.
Estin, Hill, Jackson, Patterson, Stephens and Thorndike.
Officers and other information. In addition to George Putnam and
Lawrence J. Lasser, the officers of each fund are as follows:
<PAGE>
PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
Year first
elected to
Name (age) Office office
- -----------------------------------------------------------------
Charles E. Porter (59) Executive Vice President 1995
Patricia C. Flaherty (50) Senior Vice President 1995
John D. Hughes (62) Senior Vice President
& Treasurer 1995
Gordon H. Silver (50) Vice President 1995
Gary N. Coburn (51) Vice President 1995
William J. Curtin (37) Vice President 1996
Thomas V. Reilly (50) Vice President 1995
Edward T. Shadek* (36) Vice President 1997
Jennifer E. Leichter* (36) Vice
President 1995
William N. Shiebler** (55) Vice
President 1995
John R. Verani (58) Vice President 1995
Paul M. O'Neil (44) Vice President 1995
Beverly Marcus (53) Clerk 1995
- -----------------------------------------------------------------
* Portfolio manager
** President of Putnam Mutual Funds
PUTNAM MANAGED HIGH YIELD TRUST
Year first
elected to
Name (age) Office office
- -----------------------------------------------------------------
Charles E. Porter (59) Executive Vice President 1993
Patricia C. Flaherty (50) Senior Vice President 1993
John D. Hughes (62) Senior Vice President
& Treasurer 1993
Gordon H. Silver (50) Vice President 1993
Gary N. Coburn (51) Vice President 1993
William J. Curtin (37) Vice President 1996
Jennifer E. Leichter* (36) Vice
President 1993
Edward H. D'Alelio (45) Vice President 1993
William N. Shiebler** (55) Vice
President 1993
John R. Verani (58) Vice President 1993
Paul M. O'Neil (44) Vice President 1993
Beverly Marcus (53) Clerk 1993
- -----------------------------------------------------------------
* Portfolio manager
** President of Putnam Mutual Funds
<PAGE>
PUTNAM TAX-FREE HEALTH CARE FUND
Year first
elected to
Name (age) Office office
- -----------------------------------------------------------------
Charles E. Porter (59) Executive Vice President 1992
Patricia C. Flaherty (50) Senior Vice President 1992
John D. Hughes (62) Senior Vice President
& Treasurer 1992
Gordon H. Silver (50) Vice President 1992
Gary N. Coburn (51) Vice President 1992
William J. Curtin (37) Vice President 1996
Blake Anderson (40) Vice President 1994
Triet M. Nguyen* (40) Vice President 1997
Jerome J. Jacobs (39) Vice President 1996
William N. Shiebler** (55) Vice
President 1992
John R. Verani (58) Vice President 1992
Paul M. O'Neil (44) Vice President 1992
Beverly Marcus (53) Clerk 1992
- -----------------------------------------------------------------
* Portfolio manager
** President of Putnam Mutual Funds
All of the officers of your fund are employees of Putnam
Management or its affiliates. Because of their positions with
Putnam Management or its affiliates or their ownership of stock
of Marsh & McLennan Companies, Inc., Messrs. Putnam, Putnam, III,
Lasser and Smith (each a nominee for Trustee of Putnam Managed
High Yield Trust and Putnam Tax-Free Health Care Fund, and,
except in the case of Mr. Putnam, III, who is a nominee for
Trustee of Putnam Convertible Opportunities and Income Trust, a
Trustee of Putnam Convertible Opportunities and Income Trust.),
as well as the officers of your fund, will benefit from the
management fees, custodian fees, and investor servicing fees paid
or allowed by the fund.
Assets and shares outstanding of each fund
as of August 29, 1997
Net assets:
Putnam Convertible Opportunities and Income
Trust $103,477,391
Putnam Managed High Yield Trust $109,075,088
Putnam Tax-Free Health Care Fund $204,008,081
Shares outstanding and authorized to vote:
Putnam Convertible Opportunities and Income
Trust 3,704,000 shares
Putnam Managed High Yield Trust 7,507,107 shares
Putnam Tax-Free Health Care Fund 13,807,168 shares
5% beneficial ownership as of August 29, 1997
Putnam Convertible Opportunities and Income Trust None
Putnam Managed High Yield Trust None
Putnam Tax-Free Health Care Fund None
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.
Proxy for a meeting of shareholders to be held on December 4,
1997 for Putnam Convertible Opportunities and Income Trust.
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 Convertible Opportunities and Income Trust
on December 4, 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.
PLEASE BE SURE TO SIGN AND DATE THIS PROXY.
Please sign your name exactly as it appears on this card. If you
are a joint owner, each owner should sign. When signing as
executor, administrator, attorney, trustee, or guardian, or as
custodian for a minor, please give your full title as such. If
you are signing for a corporation, please sign the full corporate
name and indicate the signer's office. If you are a partner,
sign in the partnership name.
- -----------------------------------------------------------------
Shareholder sign here Date
- -----------------------------------------------------------------
Co-owner sign here Date
<PAGE>
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
offollow-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>
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 Class B Trustees as
set forth in Proposal 1 and FOR Proposal 2. In their discretion,
the Proxies will also be authorized to vote upon such other
matters that may properly come before the meeting.
Please mark your choices / X / in blue or black ink. Do not use
red ink.
THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES
AND ELECTING ALL OF THE NOMINEES FOR CLASS B TRUSTEES AND FOR
PROPOSAL 2.
1. Proposal to elect Trustees
The nominees for Trustees are: J.A. Hill, R.J. Jackson, E.T.
Kennan, R.E. Patterson and G. Putnam, III.
/ / 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
of your fund.
Note: If you have questions on any of the Proposals,
please
call 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.
Proxy for a meeting of shareholders to be held on December 4,
1997 for Putnam Managed High Yield Trust.
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 Managed High Yield Trust on December 4,
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.
PLEASE BE SURE TO SIGN AND DATE THIS PROXY.
Please sign your name exactly as it appears on this card. If you
are a joint owner, each owner should sign. When signing as
executor, administrator, attorney, trustee, or guardian, or as
custodian for a minor, please give your full title as such. If
you are signing for a corporation, please sign the full corporate
name and indicate the signer's office. If you are a partner,
sign in the partnership name.
- -----------------------------------------------------------------
Shareholder sign here Date
- -----------------------------------------------------------------
Co-owner sign here Date
<PAGE>
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>
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 Proposal 2. In their discretion, the
Proxies will also be authorized to vote upon such other matters
that may properly come before the meeting.
Please mark your choices / X / in blue or black ink. Do not use
red ink.
THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES
AND ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR PROPOSAL 2.
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.T. Stephens and 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 / / / / / /
Price Waterhouse LLP
as the independent auditors
of your fund.
Note: If you have questions on any of the Proposals,
please call 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.
Proxy for a meeting of shareholders to be held on December 4,
1997 for Putnam Tax-Free Health Care Fund.
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 Tax-Free Health Care Fund on December 4,
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.
PLEASE BE SURE TO SIGN AND DATE THIS PROXY.
Please sign your name exactly as it appears on this card. If you
are a joint owner, each owner should sign. When signing as
executor, administrator, attorney, trustee, or guardian, or as
custodian for a minor, please give your full title as such. If
you are signing for a corporation, please sign the full corporate
name and indicate the signer's office. If you are a partner,
sign in the partnership name.
- -----------------------------------------------------------------
Shareholder sign here Date
- -----------------------------------------------------------------
Co-owner sign here Date
<PAGE>
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
offollow-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>
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 Proposal 2. In their discretion, the
Proxies will also be authorized to vote upon such other matters
that may properly come before the meeting.
Please mark your choices / X / in blue or black ink. Do not use
red ink.
THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES
AND ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR PROPOSAL 2.
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.T. Stephens and 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 / / / / / /
Price Waterhouse LLP
as the independent auditors
of your fund.
Note: If you have questions on any of the Proposals,
please call 1-800-225-1581.
