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 MANAGED HIGH YIELD TRUST
(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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/ / No fee required
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/ / Fee computed on table below per Exchange Act -
- ------- Rule 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11
(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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/ X / 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:
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<PAGE>
IMPORTANT INFORMATION
FOR SHAREHOLDERS IN
PUTNAM MANAGED HIGH YIELD TRUST
The document you hold in your hands contains your proxy statement
and proxy card. A proxy card is, in essence, a ballot. When you
vote your proxy, it tells us how to vote on your behalf on
important issues relating to your fund. If you complete and sign
the proxy, we'll vote it exactly as you tell us. If you simply
sign the proxy, we'll vote it in accordance with the Trustees'
recommendations on pages 4 and 5 .
We urge you to spend a couple of minutes with the proxy
statement, fill out your proxy card, and return it to us. When
shareholders don't return their proxies in sufficient numbers, we
have to incur the expense of follow-up solicitations, which can
cost your fund money.
We want to know how you would like to vote and welcome your
comments. Please take a few moments with these materials and
return your proxy to us.
(PUTNAM LOGO APPEARS HERE)
BOSTON * LONDON * TOKYO
<PAGE>
Table of contents
A Message from the Chairman. . . . . . . . . . . . . . . . . . . . . . . .1
Notice of Shareholder Meeting. . . . . . . . . . . . . . . . . . . . . . .2
Trustees' Recommendations. . . . . . . . . . . . . . . . . 4
Proxy card enclosed
If you have any questions, please contact us at the special toll-
free number we have set up for you (1-800-225-1581) or call your
financial adviser.
<PAGE>
A Message from the Chairman
(Photograph of George Putnam appears here)
Dear Shareholder:
I am writing to you to ask for your vote on important questions
that affect your investment in your fund. While you are, of
course, welcome to join us at your fund's meeting, most
shareholders cast their vote by filling out and signing the
enclosed proxy. We are asking for your vote on the following
matters:
1. Fixing the number of Trustees and electing Trustees to
oversee your fund;
2. Ratifying the selection by the Trustees of the independent
auditors of your fund for its current fiscal year;
3. Approving amendments to certain of your fund's fundamental
investment restrictions; and
4. Approving the elimination of certain of your fund's
fundamental investment restrictions.
Although we would like very much to have each shareholder attend
their fund's meeting, we realize this is not possible. Whether
or not you plan to be present, we need your vote. We urge you to
complete, sign, and return the enclosed proxy card promptly. A
postage-paid envelope is enclosed.
I'm sure that you, like most people, lead a busy life and are
tempted to put this proxy aside for another day. Please don't.
When shareholders do not return their proxies, their fund may
have to incur the expense of follow-up solicitations. All
shareholders benefit from the speedy return of proxies.
Your vote is important to us. We appreciate the time and
consideration that I am sure you will give this important matter.
If you have questions about the proposals, contact your financial
adviser or call a Putnam customer service representative at
1-800-225-1581.
Sincerely yours,
(signature of George Putnam)
George Putnam, Chairman
<PAGE>
PUTNAM MANAGED HIGH YIELD TRUST
Notice of a Meeting of Shareholders
This is the formal agenda for your fund's shareholder meeting.
It tells you what matters will be voted on and the time and place
of the meeting, if you can attend in person.
To the Shareholders of Putnam Managed High Yield Trust:
A Meeting of Shareholders of your fund will be held on
December 5, 1996 at 2:00 p.m., Boston time, on the eighth floor
of One Post Office Square, Boston, Massachusetts, to consider the
following:
1. Fixing the number of Trustees and electing Trustees. See
page
6 .
2. Ratifying the selection by the Trustees of the independent
auditors of your fund for its current fiscal year. See
page 22 .
3.A. Approving an amendment to the fund's fundamental investment
restriction with respect to diversification. See
page 23 .
3.B. Approving an amendment to the fund's fundamental investment
restriction with respect to investments in the voting
securities of a single issuer. See page 25 .
3.C. Approving an amendment to the fund's fundamental investment
restriction with respect to making loans. See
page 26 .
3.D. Approving an amendment to the fund's fundamental investment
restriction with respect to investments in commodities. See
page 27 .
4.A. Approving the elimination of the fund's fundamental
investment restriction with respect to investments in
securities of issuers in which management of the fund or
Putnam Investment Management owns securities. See
Page 29.
4.B. Approving the elimination of the fund's fundamental
investment restriction with respect to margin transactions.
See page 29 .
4.C. Approving the elimination of the fund's fundamental
investment restriction with respect to short sales. See
page 30 .
4.D. Approving the elimination of the fund's fundamental
investment restriction with respect to pledging assets. See
page 31 .
4.E. Approving the elimination of the fund's fundamental
investment restriction with respect to investments in
certain oil, gas and mineral interests. See
page 33 .
4.F. Approving the elimination of the fund's fundamental
investment restriction with respect to investing to
gain control of a company's management. See
page 34,
4.G. Approving the elimination of the fund's fundamental
investment restriction with respect to investments in
other investment companies. See page 35 .
5. Transacting other business as may properly come before the
meeting.
By the Trustees
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson A. Baxter
Robert E. Patterson
Hans H. Estin
Donald S. Perkins
John A. Hill
George Putnam, III
Ronald J. Jackson
Eli Shapiro
Elizabeth T. Kennan
A.J.C. Smith
Lawrence J. Lasser
W. Nicholas Thorndike
WE URGE YOU TO MARK, SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN
THE POSTAGE-PAID ENVELOPE PROVIDED SO YOU WILL BE REPRESENTED AT
THE MEETING.
October 18 , 1996<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 Managed
High Yield Trust for use at the Meeting of Shareholders of the
fund to be held on December 5, 1996, and, if your fund's meeting
is adjourned, at any later meetings, for the purposes stated in
the Notice of Meeting (see previous pages).
How do your fund's Trustees recommend that shareholders vote on
these proposals?
The Trustees recommend that you vote
1. For fixing the number of Trustees as proposed and the
election of all nominees;
2. For selecting Price Waterhouse LLP as the independent
auditors of your fund;
3.A. For amending the fund's fundamental investment restriction
with respect to diversification;
3.B. For amending the fund's fundamental investment restriction
with respect to investments in the voting securities of a
single issuer;
3.C. For amending the fund's fundamental investment restriction
with respect to making loans;
3.D. For amending the fund's fundamental investment restriction
with respect to investments in commodities;
4.A. For eliminating the fund's fundamental investment
restriction with respect to investments in securities of
issuers in which management of the fund or Putnam Investment
Management owns securities;
4.B. For eliminating the fund's fundamental investment
restriction with respect to margin transactions;
4.C. For eliminating the fund's fundamental investment
restriction with respect to short sales;
4.D. For eliminating the fund's fundamental investment
restriction with respect to pledging assets;
4.E. For eliminating the fund's fundamental investment
restriction with respect to investments in certain oil, gas
and mineral interests;
4.F. For eliminating the fund's fundamental investment
restriction with respect to investing to gain control
of a company's management; and
4.G. For eliminating the fund's fundamental investment
restriction with respect to investments in other
investment companies.
Who is eligible to vote?
Shareholders of record at the close of business on September 6,
1996, are entitled to be present and to vote at the meeting or
any adjourned meeting. The Notice of Meeting, the proxy, and the
Proxy Statement have been mailed to shareholders of record on or
about October 18 , 1996.
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
1. ELECTION OF TRUSTEES
Who are the nominees for Trustees?
The Nominating Committee of the Trustees recommends that the
number of Trustees be fixed at fourteen and that you vote for the
election of the nominees described below. Each nominee is
currently a Trustee of your fund and of the other Putnam funds.
The Nominating Committee of the Trustees consists solely of
Trustees who are not "interested persons" (as defined in the
Investment Company Act of 1940) of your fund or of Putnam
Investment Management, Inc., your fund's investment manager
("Putnam Management").
Jameson Adkins Baxter
[Insert Picture]
Ms. Baxter, age 53, is the President of Baxter Associates, Inc.,
a management and financial consulting firm which she founded in
1986. During that time, she was also a Vice President and
Principal of the Regency Group, Inc., and a Consultant to First
Boston Corporation, both of which are investment banking firms.
From 1965 to 1986, Ms. Baxter held various positions in
investment banking and corporate finance at First Boston.
Ms. Baxter currently also serves as a Director of Banta
Corporation, Avondale Federal Savings Bank, and ASHTA Chemicals,
Inc. She is also the Chairman Emeritus of the Board of Trustees
of Mount Holyoke College, having previously served as Chairman
for five years and as a Board member for thirteen years; an
Honorary Trustee and past President of the Board of Trustees of
the Emma Willard School; and Chair of the Board of Governors of
Good Shepherd Hospital. Ms. Baxter is a graduate of Mount
Holyoke College.
Hans H. Estin
[Insert Picture]
Mr. Estin, age 68, is a Chartered Financial Analyst and the Vice
Chairman of North American Management Corp., a registered
investment adviser serving individual clients and their families.
Mr. Estin currently also serves as a Director of The Boston
Company, Inc., a registered investment adviser which provides
administrative and investment management services to mutual funds
and other institutional investors, and Boston Safe Deposit and
Trust Company; a Corporation Member of Massachusetts General
Hospital; and a Trustee of New England Aquarium. He previously
served as the Chairman of the Board of Trustees of Boston
University and is currently active in various other civic
associations, including the Boys & Girls Clubs of Boston, Inc.
Mr. Estin is a graduate of Harvard College and holds honorary
doctorates from Merrimack College and Boston University.
John A. Hill
[Insert Picture]
Mr. Hill, age 54, is the Chairman and Managing Director of First
Reserve Corporation, a registered investment adviser investing in
companies in the world-wide energy industry on behalf of
institutional investors.
Prior to acquiring First Reserve in 1983, Mr. Hill held executive
positions with several investment advisory firms and held various
positions with the Federal government, including Associate
Director of the Office of Management and Budget and Deputy
Administrator of the Federal Energy Administration.
Mr. Hill currently also serves as a Director of Snyder Oil
Corporation, an exploration and production company which he
founded, Maverick Tube Corporation, a manufacturer of structural
steel, pipe and well casings, PetroCorp Incorporated, an
exploration and production company, Weatherford Enterra, Inc., an
oil field service company, various private companies controlled
by First Reserve Corporation, and various First Reserve Funds.
He is also a Member of the Board of Advisors of Fund Directions.
He is currently active in various business associations,
including the Economic Club of New York, and lectures on energy
issues in the United States and Europe. Mr. Hill is a graduate
of Southern Methodist University.
Ronald J. Jackson
[Insert Picture]
Mr. Jackson, age 52, was Chairman of the Board, President and
Chief Executive Officer of Fisher-Price, Inc., a major toy
manufacturer, from 1990 to 1993. He previously served as
President and Chief Executive Officer of Stride-Rite, Inc., a
manufacturer and distributor of footwear, from 1989 to 1990, and
as President and Chief Executive Officer of Kenner Parker Toys,
Inc., a major toy and game manufacturer, from 1985 to 1987.
Prior to that, he held various financial and marketing positions
at General Mills, Inc. from 1966 to 1985, including Vice
President, Controller and Vice President of Marketing for Parker
Brothers, a toy and game company, and President of Talbots, a
retailer and direct marketer of women's apparel.
Mr. Jackson currently serves as a 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 an
Overseer of the Peabody Essex Museum. He previously served as a
Director of a number of public companies including Fisher-Price,
Inc., Kenner Parker Toys, Inc., Stride-Rite, Inc., and Mattel,
Inc., a major toy manufacturer. Mr. Jackson is a graduate of
Michigan State University Business School.
Elizabeth T. Kennan
[Insert Picture]
Ms. Kennan, age 58, is President Emeritus and Professor of Mount
Holyoke College. From 1978 through June 1995, she was President
of Mount Holyoke College. From 1966 to 1978, she was on the
faculty of Catholic University, where she taught history and
published numerous articles.
Ms. Kennan currently also serves as a Director of NYNEX
Corporation, a telecommunications company, Northeast Utilities,
the Kentucky Home Life Insurance Companies, and Talbots. She
also serves as a Member of The Folger Shakespeare Library
Committee. She is currently active in various educational and
civic associations, including the Committee on Economic
Development and the Council on Foreign Relations. Ms. Kennan is
a graduate of Mount Holyoke College, the University of Washington
and St. Hilda College at Oxford University and holds several
honorary doctorates.
Lawrence J. Lasser*
[Insert Picture]
Mr. Lasser, age 53, is the Vice President of your fund and the
other Putnam funds. He has been the President, Chief Executive
Officer and a Director of Putnam Investments, Inc. and Putnam
Management since 1985, having begun his career there in 1969.
Mr. Lasser currently also serves as a Director of Marsh &
McLennan Companies, Inc., the parent company of Putnam
Management, and INROADS/Central New England, Inc., a job market
internship program for minority high school and college students.
He is a Member of the Board of Overseers of the Museum of
Science, the Museum of Fine Arts and the Isabella Stewart Gardner
Museum in Boston. He is also a Trustee of the Beth Israel
Hospital and Buckingham, Browne and Nichols School. Mr. Lasser
is a graduate of Antioch College and Harvard Business School.
Robert E. Patterson
[Insert Picture]
Mr. Patterson, age 51, is the Executive Vice President and
Director of Acquisitions of Cabot Partners Limited Partnership, a
registered investment adviser which manages real estate
investments for institutional investors. Prior to 1990, he was
the Executive Vice President of Cabot, Cabot & Forbes Realty
Advisors, Inc., the predecessor company of Cabot Partners. Prior
to that, he was a Senior Vice President of the Beal Companies, a
real estate management, investment and development company. He
has also worked as an attorney and held various positions in
state government, including the founding Executive Director of
the Massachusetts Industrial Finance Agency.
Mr. Patterson currently also serves as Chairman of the Joslin
Diabetes Center and as a Director of Brandywine Trust Company.
Mr. Patterson is a graduate of Harvard College and Harvard Law
School.
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.
Eli Shapiro
[Insert Picture]
Dr. Shapiro, age 80, is the Alfred P. Sloan Professor of
Management, Emeritus at the Alfred P. Sloan School of Management
at the Massachusetts Institute of Technology, having served on
the faculty of the Sloan School for eighteen years. He
previously was also on the faculty of Harvard Business School,
The University of Chicago School of Business and Brooklyn
College. During his academic career, Dr. Shapiro authored
numerous publications concerning finance and related topics. He
previously served as the President and Chief Executive Officer of
the National Bureau of Economic Research and also provided
economic and financial consulting services to various clients.
Dr. Shapiro is a past Director of many companies, including
Nomura Dividend Income Fund, Inc., a privately held registered
investment company managed by Putnam Management, Reece
Corporation, a sewing machine manufacturer, Commonwealth
Mortgage, Dexter Corporation, a manufacturer of plastics and
related products, Avis Corporation, a car rental company,
Connecticut Bank and Trust Company, Connecticut National Gas
Corporation, the Federal Home Loan Bank of Boston, where he
served as Chairman from 1977 to 1989, Travelers' Corporation, an
insurance company, and Norlin Corporation, a musical instrument
manufacturer; and a past Trustee of Mount Holyoke College and the
Putnam funds (from 1984 to 1989).
Dr. Shapiro is a Fellow of The American Academy of Arts and
Sciences and is active in various professional and civic
associations, including the American Economic Association, the
American Finance Association and the Council on Foreign
Relations. Dr. Shapiro is a graduate of Brooklyn College and
Columbia University.
A.J.C. Smith*
[Insert Picture]
Mr. Smith, age 62, is the Chairman and Chief Executive Officer of
Marsh & McLennan Companies, Inc. He has been employed by Marsh &
McLennan and related companies in various capacities since 1961.
Mr. Smith is a Director of the Trident Corp., and he also serves
as a Trustee of the Carnegie Hall Society, the Central Park
Conservancy, The American Institute for Chartered Property
Underwriters, and is a Founder of the Museum of Scotland Society.
He was educated in Scotland and is a Fellow of the Faculty of
Actuaries in Edinburgh, a Fellow of the Canadian Institute of
Actuaries, a Fellow of the Conference of Actuaries in Public
Practice, an Associate of the Society of Actuaries, a Member of
the American Academy of Actuaries, the International Actuarial
Association and the International Association of Consulting
Actuaries.
W. Nicholas Thorndike**
[Insert Picture]
Mr. Thorndike, age 63, serves as a Director of various
corporations and charitable organizations, including Data General
Corporation, a computer and high technology company, Bradley Real
Estate, Inc., a real estate investment firm, Providence Journal
Co., a newspaper publisher and owner of television stations, and
Courier Corporation, a book binding and printing company. He is
also a Trustee of Eastern Utilities Associates, Massachusetts
General Hospital, where he previously served as chairman and
president, and Northeastern University.
Prior to December 1988, he was the Chairman of the Board and
Managing Partner of Wellington Management Company/Thorndike,
Doran, Paine & Lewis, a registered investment adviser which
manages mutual funds and institutional assets. He also
previously served as a Trustee of the Wellington Group of Funds
(now The Vanguard Group) and was the Chairman and a Director of
Ivest Fund, Inc. Mr. Thorndike is a graduate of Harvard College.
- ----------------------------
* Nominees who are or may be deemed to be "interested persons"
(as defined in the Investment Company Act of 1940) of your
fund, Putnam Management and Putnam Mutual Funds Corp.
("Putnam Mutual Funds"), the principal underwriter for all
the open-end Putnam funds and an affiliate of Putnam
Management. Messrs. Putnam, Lasser, and Smith are deemed
"interested persons" by virtue of their positions as
officers or shareholders of your fund, or directors of
Putnam Management, Putnam Mutual Funds or Marsh & McLennan
Companies, Inc., the parent company of Putnam Management and
Putnam Mutual Funds. Mr. George Putnam, III, Mr. Putnam's
son, is also an "interested person" of your fund, Putnam
Management and Putnam Mutual Funds. Mr. Perkins may be
deemed to be an "interested person" of your fund because of
his service as a director of a certain publicly held company
that 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
March 1996. Mr. Jackson was elected by the other Trustees in May
1996. As indicated above, Dr. Shapiro also previously served as
a Trustee of the Putnam funds from 1984 to 1989. The 14 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 14 for your fund.
What are the Trustees' responsibilities?
Your fund's Trustees are responsible for the general oversight of
your fund's business and for assuring that your fund is managed
in the best interests of its shareholders. The Trustees
periodically review your fund's investment performance as well as
the quality of other services provided to your fund and its
shareholders by Putnam Management and its affiliates, including
administration, custody and investor servicing. At least
annually, the Trustees review the fees paid to Putnam Management
and its affiliates for these services and the overall level of
your fund's operating expenses. In carrying out these
responsibilities, the Trustees are assisted by an independent
administrative staff and by your fund's auditors and legal
counsel, which are selected by the Trustees and are independent
of Putnam Management and its affiliates.
Do the Trustees have a stake in your fund?
The Trustees believe it is important that each Trustee have a
significant investment in the Putnam funds. The Trustees
allocate their investments among the more than 99 Putnam funds
based on their own investment needs. The Trustees' aggregate
investments in the Putnam funds total over $47 million. The
table below lists each Trustee's current investments in the fund
and in the Putnam funds as a group.<PAGE>
Share Ownership by Trustees
Number of shares of
Year first elected Number of shares of all Putnam funds
as Trustee of Putnam the fund owned as of owned as of
Trustees funds June 28, 1996* June 28, 1996**
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Jameson A. Baxter 1994 300 24,102
Hans H. Estin 1972 119 26,270
John A. Hill 1985 100 123,624
Ronald J. Jackson 1996 200 (1) 12,209
Elizabeth T. Kennan 1992 232 27,475
Lawrence J. Lasser 1992 100 451,608
Robert E. Patterson 1984 200 60,322
Donald S. Perkins 1982 420 160,110
William F. Pounds 1971 500 348,913
George Putnam 1957 937 1,516,577
George Putnam, III 1984 500 287,830
Eli Shapiro 1995*** -- 80,677
A.J.C. Smith 1986 200 (2) 35,339
W. Nicholas Thorndike 1992 130 79,113
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
* Each Trustee has sole investment power and sole voting power with respect
to his or
her shares of the fund.
** These holdings do not include shares of Putnam money market funds.
*** Dr. Shapiro previously served as a Trustee of the Putnam funds from 1984
to 1989.
(1) Mr. Jackson has shared investment power and shared voting power with
respect to
his shares of the fund.
(2) Mr. Smith has shared investment power and shared voting power with respect
to his
shares of the fund.
As June 28, 1996, the Trustees and officers of the fund owned a total of
3,938 shares of
the fund, comprising less than 1% of its outstanding shares 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;
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 such monthly meeting of the Trustees. During
1995, the average Trustee participated in approximately 40
committee and board meetings. In addition, the Trustees meet in
small groups with Chief Investment Officers and Portfolio
Managers to review recent performance and the current investment
climate for selected funds. These meetings ensure that each
fund's performance is reviewed in detail at least twice a year.
The Contract Committee typically meets on several additional
occasions during the year to carry out its responsibilities.
Other Committees, including an Executive Committee, may also meet
on special occasions as the need arises.
What are the Trustees paid for their services?
Your fund pays each Trustee a fee for his or her services. Each
Trustee also receives fees for serving as Trustee of the other
Putnam funds. The Trustees periodically review their fees to
assure that such fees continue to be appropriate in light of
their responsibilities as well as in relation to fees paid to
trustees of other mutual fund complexes. The fees paid to each
Trustee by your fund and by all of the Putnam funds are shown
below:
<PAGE>
Compensation Table+
Trustees
Aggregate
Compensation from
the Fund*
Total
compensation
from all Putnam
funds**
Jameson A. Baxter
$700
$150,854
Hans H. Estin
695
150854
John A. Hill
688
149854
Elizabeth T. Kennan
695
148854
Lawrence J. Lasser
690
150854
Robert E. Patterson
730
152854
Donald S. Perkins
691
150854
William F. Pounds
700
***
149854
George Putnam
695
150854
George Putnam III
695
150854
Eli Shapiro
*** *
734
95372
A.J.C. Smith
688
149854
W. Nicholas Thorndike
730
152854
+ Ronald J. Jackson became a Trustee of the fund effective May
3, 1996 and received no compensation from the fund or the
other Putnam funds in 1995.
* Includes an annual retainer and an attendance fee for each
meeting attended.
** Reflects total payments received from all Putnam funds in
the most recent calendar year. As of December 31, 1995,
there were 99 funds in the Putnam family.
*** Includes additional compensation for services as Vice
Chairman of the Putnam Funds.
**** Elected as a Trustee in April 1995.
Your fund's Trustees have approved Retirement Guidelines for
Trustees of the Putnam funds. These guidelines provide generally
that a Trustee who retires after reaching age 72 and who has at
least 10 years of continuous service will be eligible to receive
a retirement benefit from each Putnam fund for which he or she
served as a Trustee. The amount and form of such benefit is
subject to determination annually by the Trustees and, unless
otherwise determined by the Trustees, will be an annual cash
benefit payable for life equal to one-half of the Trustee
retainer fees paid by each fund at the time of retirement.
Several retired Trustees are currently receiving benefits
pursuant to the Guidelines and it is anticipated that the current
Trustees will receive similar benefits upon their retirement. A
Trustee who retired in calendar 1995 and was eligible to receive
benefits under these Guidelines would have received an annual
benefit of $66,749, based upon the aggregate retainer fees paid
by the Putnam funds for such year. The Trustees reserve the
right to amend or terminate such Guidelines and the related
payments at any time, and may modify or waive the foregoing
eligibility requirements when deemed appropriate.
For additional information about your fund, including further
information about its Trustees and officers, please see "Further
Information About Your Fund," on page 39 .
Putnam Investments
Putnam Investment Management, Inc. and its affiliate, Putnam
Fiduciary Trust Company, your fund's investor servicing agent and
custodian, are wholly owned by Putnam Investments, Inc., One Post
Office Square, Boston, Massachusetts 02109, a holding company
that is in turn wholly owned by Marsh & McLennan Companies, Inc.,
which has executive offices at 1166 Avenue of the Americas, New
York, New York 10036. Marsh & McLennan Companies, Inc. and its
operating subsidiaries are professional services firms with
insurance and reinsurance brokering, consulting, and investment
management businesses.
2. SELECTION OF INDEPENDENT AUDITORS
Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts,
independent accountants, has been selected by the Trustees as the
auditor of your fund for the current fiscal year. Among the
country's preeminent accounting firms, this firm also serves as
the auditor for approximately half of the other funds in the
Putnam family. It was selected primarily on the basis of its
expertise as auditors of investment companies, the quality of its
audit services, and the competitiveness of the fees charged for
these services.
A majority of the votes on the matter is necessary to ratify the
selection of auditors. A representative of the independent
auditors is expected to be present at the meeting to make
statements and to respond to appropriate questions.
PROPOSALS 3 AND 4.
As described in the following proposals, the Trustees are
recommending that shareholders approve a number of changes to
your
fund's fundamental investment restrictions, including the
elimination of certain of these restrictions. The purpose of
these changes is to standardize the investment restrictions of
all of the Putnam funds, including your
fund where appropriate,
and in certain cases to increase the fund's investment
flexibility. By having standard investment restrictions for all
Putnam funds, Putnam Management will be able to more easily
monitor each fund's compliance with its investment policies.
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.
3.A. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO DIVERSIFICATION
The Trustees are recommending that the fund's fundamental
investment restriction with respect to the diversification of its
investments be revised to reflect the standard restriction
expected to be used by other Putnam funds .
The fund's current restriction states that the fund may not:
"With respect to 50% of its total assets, invest in securities
of any issuer if, immediately after such investment, more than
5% of the total assets of the fund (taken at current value)
would be invested in the securities of such issuer; provided
that this limitation does not apply to securities of the U.S.
government or its agencies or instrumentalities."
The proposed amended fundamental investment restriction is set
forth below.
"The fund may not . . .
With respect to 50% of its total assets, invest in the
securities of any issuer if, immediately after such investment,
more than 5% of the total assets of the fund (taken at current
value) would be invested in the securities of such issuer;
provided that this limitation does not apply to obligations
issued or guaranteed as to interest or principal by the U.S.
government or its agencies or instrumentalities."
The amended restriction clarifies, consistent with the
Internal Revenue Code of 1986, as amended (the "Code") and
the Investment Company Act of 1940, as amended (the "1940 Act"),
that U.S. government securities include obligations issued or
guaranteed as to interest or principal by the U.S. government or
its agencies or instrumentalities , and would have no effect on
the fund's investments .
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund are present at the meeting in
person or by proxy.
3.B. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO INVESTMENTS IN THE VOTING SECURITIES OF A SINGLE
ISSUER
The Trustees are recommending that the fund's fundamental
investment restriction with respect to investments in the voting
securities of a single issuer be revised to reflect the standard
restriction expected to be used by other Putnam funds and to
grant the fund the maximum flexibility permitted under the 1940
Act and the Code. Generally, the Code prohibits a
non-diversified fund such as the fund from investing, with
respect to 50% 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 applicable
tax rules, 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 50% of its total assets, acquire more than
10% of the outstanding voting securities of any issuer."
The amendment enables the fund to purchase more than 10% of the
voting securities of an issuer with respect to 50% of the fund's
total assets. Since the fund invests primarily in fixed-income
securities, which are not typically voting securities, this
proposal will have little practical effect on the fund.
Nevertheless, Putnam Management believes it would be in the best
interest of the fund to conform the policy to provide the fund
with maximum flexibility should circumstances change.
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 voting securities when Putnam Management believes it
advisable to do so, or may be able to sell the securities only at
prices significantly lower than if they were more widely held.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund are present at the meeting in
person or by proxy.
3.C. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO MAKING LOANS
The Trustees are recommending that the fund's fundamental
investment restriction with respect to making loans be revised to
reflect the standard restriction expected to be used by other
Putnam funds . The current restriction states that the
fund may not:
"Make loans, except by purchase of debt obligations in which
the Fund may invest consistent with its investment policies, by
entering into repurchase agreements with respect to not more
than 25% of its total assets (taken at current value), or
through the lending of its portfolio securities with respect to
not more than 25% of its total assets."
The proposed amended fundamental investment restriction is set
forth below.
"The fund may not ...
Make loans, except by purchase of debt obligations in which
the fund may invest consistent with its investment policies,
by
entering into repurchase agreements,
or by lending its
portfolio securities
."
Following the amendment, the fund may, consistent with its
investment objective and policies and applicable law, enter into
repurchase agreements and securities loans without limit.
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 shares of the fund, or (2) 67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund are present at the meeting in
person or by proxy.
3.D. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO INVESTMENTS IN COMMODITIES
The Trustees are recommending that the fund's fundamental
investment restriction with respect to investments in commodities
be revised to reflect the standard restriction expected to be
used by other Putnam funds. The current restriction states that
the fund may not:
"Purchase or sell commodities or commodity contracts, except
that it may purchase or sell financial futures contracts or
options."
The proposed amended fundamental restriction is set forth below.
"The fund may not ...
Purchase or sell commodities or commodity contracts, except
that the fund may purchase and sell financial futures
contracts and options and may enter into foreign exchange
contracts and other financial transactions not involving
physical commodities."
Under the revised restriction, the fund will continue to be able
to engage in a variety of transactions involving the use of
financial futures and options, as well as various other financial
transactions to the extent consistent with its investment
objective and policies. Although the fund may already engage in
many of these activities, Putnam Management believes that the
revised language more clearly sets forth the fund's policy. The
addition of financial transactions not involving 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.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund are present at the meeting in
person or by proxy.
4.A. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTMENTS IN SECURITIES OF ISSUERS IN
WHICH MANAGEMENT OF THE FUND OR PUTNAM INVESTMENT MANAGEMENT
OWNS SECURITIES
The Trustees are recommending eliminating the fund's fundamental
investment restriction which prevents the fund from investing in
the securities of issuers in which management of the fund or
Putnam Management owns a certain percentage of securities
. The current restriction states that the fund may not:
"Invest in securities of any issuer, if, to the knowledge of
the Fund, officers and Trustees of the Fund and officers and
directors of Putnam who beneficially own more than 0.5% of the
securities of that issuer together own more than 5% of such
securities."
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.
By eliminating the restriction, the fund would be able to invest
in the securities of any issuer without regard to ownership in
such issuer by management of the fund or Putnam Management,
except to the extent prohibited by the fund's investment policies
or the 1940 Act.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at the meeting if
more
than 50% of the
outstanding shares of the fund 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, options, and
other financial instruments."
Putnam Management recommended that this restriction be eliminated
because it is unnecessary in light of current regulatory
requirements; the 1940 Act does not require the fund to have such
a restriction. If the restriction were removed, the fund would
be able to engage in margin transactions to the extent consistent
with its investment policies and the 1940 Act.
The fund's potential use of margin transactions beyond
transactions in financial futures and options and for the
clearance of purchases and sales of securities, including the use
of margin in ordinary securities transactions, is currently
limited by the 1940 Act and SEC guidelines. 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 shares of the fund, or (2) 67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund 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
for the account of the fund unless at all times when a short
position is open it owns an equal amount of such securities or
owns securities which, without payment of any further
consideration, are convertible into or exchangeable for
securities of the same issue as, and in equal amount to, the
securities sold short."
Putnam Management recommended that this restriction be eliminated
because it is unnecessary in light of current regulatory
requirements; the 1940 Act does not require the fund to have such
a restriction. Given the fund's investment policies, Putnam
Management does not intend to engage in short sales on behalf of
the fund. Nevertheless, Putnam Management believes it is in the
best interest of the fund to eliminate the policy to provide the
fund with maximum flexibility should circumstances change.
In a typical short sale, the fund borrows 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 with respect to short sales in which
the fund does not own or have the right to acquire at no added
cost securities identical to those sold short that are
significantly greater than the value of the securities at the
time they are sold short.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund 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 the lower
of cost and current value) in connection with borrowings
permitted by restriction 2 above ." [Restriction 2
referred to in this restriction allows the fund to borrow money
in amounts up to 10% of the value of its total assets for
certain limited purposes.]
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.
This proposal would remove all restrictions on the fund's ability
to pledge assets. Putnam Management believes that the enhanced
flexibility could assist the fund in achieving its investment
objective. Further, Putnam Management believes that the fund's
current limits on pledging may conflict with the fund's ability
to borrow money for extraordinary or emergency purposes. This
conflict arises because banks may require borrowers such as the
fund to pledge assets in order to collateralize the amount
borrowed. These collateral requirements are typically for
amounts at least equal to, and often larger than, the principal
amount of the loan. If the fund needed to borrow the maximum
amount permitted by its policies (currently 10% of its total
assets), it might be possible that a bank would require
collateral in excess of 15% of the fund's total assets. Thus,
the current restriction could have the effect of reducing the
amount that the fund may borrow in these situations.
Pledging assets does entail certain risks. To the extent that
the fund pledges its assets, the fund may have less flexibility
in liquidating its assets. If a large portion of the fund's
assets were involved, the fund's ability to meet certain
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 shares of the fund, or (2) 67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund are present at the meeting in
person or by proxy.
4.E. ELIMINATING
THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTMENTS IN CERTAIN OIL, GAS AND
MINERAL
INTERESTS
The Trustees are recommending that the fund's fundamental
investment restriction
with respect
to investments in oil, gas
and mineral leases, rights or royalty contracts be eliminated.
The current restriction states that the fund may not:
"Buy or sell oil, gas, or other mineral leases, rights, or
royalty contracts, although it may purchase securities of
issuers which deal in, represent interests in, or are
secured by interests in such leases, rights, or contracts,
and it may acquire or dispose of such leases, rights, or
contracts acquired through the exercise of its rights as a
holder of debt obligations secured thereby."
Putnam Management recommended that this restriction be eliminated
because it is unnecessary in light of current regulatory
requirements; the 1940 Act does not require the fund to have such
a restriction. Given the fund's investment policies, this
proposal will have little practical effect on the fund.
Nevertheless, Putnam Management believes the restriction should
be eliminated to provide the fund with maximum flexibility should
circumstances change.
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 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 fund's net asset value.
Required
vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund are present at the meeting in
person or by proxy.
4.F. 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 "make
investments for the purpose of gaining control of a company's
management" be eliminated. Eliminating the restriction would
make it clear that the fund can freely exercise its rights as a
shareholder of the various companies in which it may invest,
which activities could at times fall under the technical
definition of control under the securities laws . These
rights may include the right to actively oppose or support the
management of such companies and to communicate views with
respect to various matters . Since the fund invests primarily
in fixed-income securities, this proposal will not impact the
majority of the fund's investments. Nevertheless, Putnam
Management believes it would be in the best interest of the fund
to eliminate the restriction.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund are present at the meeting in
person or by proxy.
4.G.
ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTMENTS IN OTHER INVESTMENT COMPANIES
The Trustees are recommending that the fund's fundamental
investment restriction with respect to investments in other
investment companies be eliminated. The current restriction
states that the fund may not:
"Invest in the securities of registered open-end investment
companies, except as they may be acquired as part of a
merger or consolidation or acquisition of assets."
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. By eliminating the restriction, the fund would
have the ability to invest in investment vehicles (including
registered open-end investment companies) to the extent
consistent with applicable law and the fund's investment
policies. Such entities may involve duplication of some fees and
expenses, but may also provide attractive investment
opportunities. Putnam Management believes that this
enhanced flexibility could assist the fund in meeting its
objective.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund are present at the meeting in
person or by proxy.
Further Information About Voting and the Shareholder Meeting
Quorum and Methods of Tabulation. A majority of the shares
entitled to vote -- present in person or represented by proxy --
constitutes a quorum for the transaction of business with respect
to any proposal at the meeting (unless otherwise noted in the
proxy statement). Shares represented by proxies that reflect
abstentions and "broker non-votes" (i.e., shares held by brokers
or nominees as to which (i) instructions have not been received
from the beneficial owners or the persons entitled to vote and
(ii) the broker or nominee does not have the discretionary voting
power on a particular matter) will be counted as shares that are
present and entitled to vote on the matter for purposes of
determining the presence of a quorum. Votes cast by proxy or in
person at the meeting will be counted by persons appointed by
your fund as tellers for the meeting.
The tellers will count the total number of votes cast "for"
approval of the proposals for purposes of determining whether
sufficient affirmative votes have been cast. With respect to the
election of Trustees and selection of auditors, neither
abstentions nor broker non-votes have any effect on the outcome
of the proposal. With respect to any other proposals,
abstentions and broker non-votes have the effect of a negative
vote on the proposal.
Other business. The Trustees know of no other business to be
brought before the meeting. However, if any other matters
properly come before the meeting, it is their intention that
proxies that do not contain specific restrictions to the contrary
will be voted on such matters in accordance with the judgment of
the persons named as proxies in the enclosed form of proxy.
Simultaneous meetings. The meeting of shareholders of your fund
is called to be held at the same time as the meetings of
shareholders of certain of the other Putnam funds. It is
anticipated that all meetings will be held simultaneously. If
any shareholder at the meeting objects to the holding of a
simultaneous meeting and moves for an adjournment of the meeting
to a time promptly after the simultaneous meetings, the persons
named as proxies will vote in favor of such adjournment.
Solicitation of proxies. In addition to soliciting proxies by
mail, Trustees of your fund and employees of Putnam Management,
Putnam Fiduciary Trust Company, and Putnam Mutual Funds may
solicit proxies in person or by telephone. Your fund may also
arrange to have votes recorded by telephone. The telephone
voting procedure is designed to authenticate shareholders'
identities, to allow shareholders to authorize the voting of
their shares in accordance with their instructions and to confirm
that their instructions have been properly recorded. Your fund
has been advised by counsel that these procedures are consistent
with the requirements of applicable law. If these procedures
were subject to a successful legal challenge, such votes would
not be counted at the meeting. Your fund is unaware of any such
challenge at this time. Shareholders would be called at the
phone number Putnam Investments has in its records for their
accounts, and would be asked for their Social Security number or
other identifying information. The shareholders would then be
given an opportunity to authorize proxies to vote their shares at
the meeting in accordance with their instructions. To ensure
that the shareholders' instructions have been recorded correctly,
they will also receive a confirmation of their instructions in
the mail. A special toll-free number will be available in case
the information contained in the confirmation is incorrect.
Your fund's Trustees have adopted a general policy of maintaining
confidentiality in the voting of proxies. Consistent with this
policy, your fund may solicit proxies from shareholders who have
not voted their shares or who have abstained from voting.
Persons holding shares as nominees will upon request be
reimbursed for their reasonable expenses in soliciting
instructions from their principals. Your fund has retained at
its expense D.F. King & Co., Inc., 77 Water Street, New York, New
York 10005, to aid in the solicitation of instructions for
nominee accounts, for a fee not to exceed $2,500 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 next annual
meeting. It is anticipated that your fund's next annual meeting
of shareholders will be held in December, 1997. Shareholder
proposals to be included in your fund's proxy statement for the
next annual meeting must be received by your fund before June 20,
1997.
Adjournment. If sufficient votes in favor of any of the
proposals set forth in the Notice of the Meeting are not received
by the time scheduled for the meeting, the persons named as
proxies may propose adjournments of the meeting for a period or
periods of not more than 60 days in the aggregate to permit
further solicitation of proxies with respect to any of such
proposals. Any adjournment will require the affirmative vote of
a majority of the votes cast on the question in person or by
proxy at the session of the meeting to be adjourned. The persons
named as proxies will vote in favor of such adjournment those
proxies which they are entitled to vote in favor of such
proposals. They will vote against such adjournment those proxies
required to be voted against such proposals. Your fund pays the
costs of any additional solicitation and of any adjourned
session. Any proposals for which sufficient favorable votes have
been received by the time of the meeting may be acted upon and
considered final regardless of whether the meeting is adjourned
to permit additional solicitation with respect to any other
proposal.
Financial information. Your fund will furnish, without charge,
to you upon request a copy of the fund's annual report for its
most recent fiscal year, and a copy of its semiannual report for
any subsequent semiannual period. Such requests may be directed
to Putnam Investor Services, P.O. Box 41203, Providence, RI
02940-1203 or 1-800-225-1581.
Further Information About Your Fund
Limitation of Trustee liability. The Agreement and Declaration
of Trust of your fund provides that the fund will indemnify its
Trustees and officers against liabilities and expenses incurred
in connection with litigation in which they may be involved
because of their offices with the fund, except if it is
determined in the manner specified in the Agreement and
Declaration of Trust that they have not acted in good faith in
the reasonable belief that their actions were in the best
interests of the fund or that such indemnification would relieve
any officer or Trustee of any liability to the fund or its
shareholders arising by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties.
Your fund, at its expense, provides liability insurance for the
benefit of its Trustees and officers.
Audit and Nominating Committees. The voting members of the Audit
Committee of your fund include only Trustees who are not
"interested persons" of the fund by reason of any affiliation
with Putnam Investments and its affiliates. The Audit Committee
currently consists of Messrs. Estin (Chairman), Perkins (without
vote), Putnam, III (without vote), Shapiro, Smith (without vote),
and Ms. Kennan. The Nominating Committee consists only of
Trustees who are not "interested persons" of your fund or Putnam
Management. The Nominating Committee currently consists of Dr.
Pounds and Ms. Kennan (Co-chairpersons), Ms. Baxter, and Messrs.
Estin, Hill, Jackson, Patterson, Shapiro, and Thorndike.
Officers and other information. In addition to George Putnam and
Lawrence J. Lasser, the officers of your fund are as follows:
Name (age)
Office
Year
first
elected
to office
Charles E. Porter (58)
Executive Vice President
1993
Patricia C. Flaherty
(49)
Senior Vice President
1993
John D. Hughes (61)
Senior Vice President &
Treasurer
1993
Gordon H. Silver (49)
Vice President
1993
Gary N. Coburn (50)
Vice President
1993
Edward H. D'Alelio
(44)
Vice President
1993
Jennifer E. Leichter*
(35)
Vice President
1993
William N. Shiebler**
(54)
Vice President
1993
John R. Verani (57)
Vice President
1993
Paul M. O'Neil (43)
Vice President
1993
Beverly Marcus (52)
Clerk
1993
* The fund's portfolio manager
** President of Putnam Mutual Funds
All of the officers of your fund are employees of Putnam
Management or its affiliates. Because of their positions with
Putnam Management or its affiliates or their ownership of stock
of Marsh & McLennan Companies, Inc., the parent corporation of
Putnam Management and Putnam Mutual Funds, Messrs. Putnam, George
Putnam, III, Lasser and Smith (nominees for Trustees of your
fund), as well as the officers of your fund, will benefit from
the management fees, underwriting commissions, custodian
fees, and investor servicing fees paid or allowed by the fund.
Assets and shares outstanding of your fund
as of September 6, 1996
Net Assets
$102,112,146
Common shares outstanding
and authorized to vote
7,507,107 shares
5% beneficial ownership of your fund
as of August 30, 1996
Persons beneficially owning more than 5%
of the fund's Common shares
(
1)
Smith Barney, Inc.
333 West 34th Street
New York, New York 1001
1,590,995 shares
or 21.22%
(2)
Merrill Lynch, Pierce Fenner & Smith,
Inc.
4 Corporate Place
Corporate Park 287
Piscataway, New Jersey 08855
1,002,222 shares
or 13.37%
(3)
PaineWebber, Inc.
1000 Harbor Boulevard
Weehawken, New Jersey 07087
793,982 shares
or 10.59%
(4)
A.G. Edwards & Sons, Inc.
One North Jefferson Street
St. Louis, Missouri 63103
408,071 shares
or 5.44%
<PAGE>
PUTNAMINVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581<PAGE>
PUTNAM INVESTMENTS
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 December 5,
1996 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 5,
1996, at 2:00 p.m., Boston time, and at any adjournments thereof,
all of the shares of the fund that the undersigned shareholder
would be entitled to vote if personally present.
If you complete and sign the proxy, we'll vote it exactly as you
tell us. If you simply sign the proxy, it will be voted FOR
fixing the number of Trustees and electing Trustees as set forth
in Proposal 1 and FOR Proposals 2, 3.A.-3.D. and 4.A.-4.G. 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 owner should sign. When signing as
executor, administrator, attorney, trustee, or guardian, or as
custodian for a minor, please give your full title as such. If
you are signing for a corporation, please sign the full corporate
name and indicate the signer's office. If you are a partner,
sign in the partnership name.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Shareholder sign here Date
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Co-owner sign here Date
<PAGE>
THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES
AND ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE OTHER
PROPOSALS LISTED BELOW.
Please mark your choices / X / in blue or black ink.
1. Proposal to fix the number of and elect Trustees
The nominees for Trustees are: J.A. Baxter, H.H. Estin, J.A.
Hill, R.J. Jackson, E.T. Kennan, L.J. Lasser, R.E.
Patterson, D.S. Perkins, W.F. Pounds, G. Putnam, G. Putnam,
III, E. Shapiro, A.J.C. Smith and W.N. Thorndike.
/ / FOR fixing the number of Trustees and electing all the
nominees (except as indicated to the contrary below)
/ / WITHHOLD authority to vote for all nominees
To withhold authority to vote for one or more of the nominees,
write those nominees' names below:
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
PROPOSAL TO:
2.
Ratify the selection
of Price Waterhouse
LLP as the independent
auditors of your fund.
FOR
/ /
AGAINST
/ /
ABSTAIN
/ /
3.
Amend the fund's
fundamental investment
restriction with
respect to:
A.
Diversification.
/ /
/ /
/ /
B.
Investments in the
voting securities of a
single issuer.
/ /
/ /
/ /
C.
Making loans.
/ /
/ /
/ /
D.
Investments in
commodities.
/ /
/ /
/ /
4.
Eliminate the fund's
fundamental investment
restriction with
respect to:
A.
Investments in
securities of issuers
in which management of
the fund or Putnam
Investment Management
owns securities.
/ /
/ /
/ /
B.
Margin transactions.
/ /
/ /
/ /
C.
Short sales.
/ /
/ /
/ /
D.
Pledging assets.
/ /
/ /
/ /
E.
Investments in oil,
gas and mineral
interests.
/ /
/ /
/ /
F.
Investing to gain
control of a company's
management.
/ /
/ /
/ /
G.
Investments in other
investment companies.
/ /
/ /
/ /
<PAGE>
lipsett/106290.111/proxys/manhigh4.wpf</
R>
