SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No.)
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e) (2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
PUTNAM GLOBAL EQUITY FUND
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rule 14a 6(i)(1) and 0-11
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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:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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IMPORTANT INFORMATION FOR SHAREHOLDERS IN
PUTNAM GLOBAL EQUITY 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 4.
We urge you to spend a couple of minutes with the proxy statement,
and either fill out your proxy card and return it to us via the mail,
or record your voting instructions via the Internet or by an
automated telephone voting service. 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]
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Table of contents
A Message from the Chairman................................................ (1)
Notice of Shareholder Meeting.............................................. (3)
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 advisor.
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A Message from the Chairman
Dear Shareholder:
[Photo of John Hill]
I am writing to you to ask for your vote on important questions that affect
your fund. While you are welcome to join us at your fund's meeting, most
shareholders cast their vote by either filling out and signing the enclosed
proxy card, by calling 1-888-221-0697 or by voting via the Internet at
www.proxyweb.com/Putnam. Instructions for voting are listed at the top of your
proxy card. We are asking for your vote on the following matters: (1) electing
your fund's Trustees; (2) approving a new management contract between your fund
and Putnam Investment Management, Inc. ("Putnam Management"), including an
increase in the management fee payable by your fund at current asset levels;
(3) approving an amendment to the fund's fundamental investment restriction
with respect to borrowing; (4) approving an amendment to the fund's fundamental
investment restriction with respect to making loans; and (5) ratifying the
selection of your fund's independent auditors.
A word about the management fee increase. A fee increase is proposed only after
a great deal of thought and analysis on the part of the Trustees and only if we
conclude that it is absolutely justified. Several years ago the Trustees
completed a study of the management fees, investment performance and expense
ratios of each of the Putnam funds. We also looked at comparable funds. This
comprehensive review resulted in fee increases for some funds and decreases for
others. After giving careful consideration to your fund's investment
performance in recent years, the Trustees are recommending the approval of a
new management fee schedule that is in line with fee schedules of similar
Putnam funds and competitive relative to comparable funds in the industry.
Under the proposed new management contract, instead of the current top rate of
0.70% of the fund's average annual net assets, the
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fund would pay Putnam Management a fee, computed and paid monthly, at the top
rate of 0.80%, based on the fund's average annual net assets. More information
about the proposed new management fee schedule is provided in Proposal 2, which
begins on page 21.
At the current level of assets, the new management fee will result in an
increase of approximately $0.10 in annual expenses for each $100 invested. The
Trustees believe that this proposal, the first since the fund's inception, will
provide Putnam Management with a fee that is fair and reasonable when compared
with the fees paid to other high-quality fund managers. We encourage you to
support the Trustees' recommendation.
Your vote is important to us. We urge you to record your voting instructions by
telephone, on the Internet or by completing, signing and returning the enclosed
proxy card promptly. A postage-paid envelope is enclosed for mailing, and
telephone and Internet voting instructions are listed at the top of your proxy
card.
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 advisor or call a Putnam customer service representative at
1-800-225-1581.
Sincerely yours,
/s/ John A. Hill
John A. Hill, Chairman
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PUTNAM GLOBAL EQUITY FUND
Notice of 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 Global Equity Fund:
The Meeting of Shareholders of your fund will be held on December 7, 2000 at
2:00 p.m., Boston time, on the eighth floor of One Post Office Square, Boston,
Massachusetts, to consider the following:
1. Electing your fund's Trustees. See page 6.
2. Approving a new management contract between your fund and Putnam Investment
Management, Inc., including an increase in the management fee payable by
the fund at current asset levels. See page 21.
3. Approving an amendment to the fund's fundamental investment restriction
with respect to borrowing. See page 30.
4. Approving an amendment to the fund's fundamental investment restriction
with respect to making loans. See page 32.
5. Ratifying the selection by the Trustees of the independent auditors of your
fund for its current fiscal year. See page 33.
By the Trustees
John A. Hill, Chairman
George Putnam, III, President
<TABLE>
<S> <C>
Jameson A. Baxter John H. Mullin, III
Hans H. Estin Robert E. Patterson
Ronald J. Jackson A.J.C. Smith
Paul L. Joskow W. Thomas Stephens
Elizabeth T. Kennan W. Nicholas Thorndike
Lawrence J. Lasser
</TABLE>
WE URGE YOU TO MARK, SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN THE
POSTAGE-PAID ENVELOPE PROVIDED OR RECORD YOUR VOTING INSTRUCTIONS BY TELEPHONE
OR VIA THE INTERNET SO YOU WILL BE REPRESENTED AT THE MEETING.
September 17, 2000
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Proxy Statement
> This document will give you the information you need to vote on the matters
listed on the previous page. 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 advisor.
> Who is asking for your vote?
The enclosed proxy is solicited by the Trustees of Putnam Global Equity
Fund for use at the Meeting of Shareholders of the fund to be held on
December 7, 2000, 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 electing your fund's Trustees. See page 6.
2. For approving a new management contract between your fund and Putnam
Investment Management, Inc., including an increase in the management fee
payable by the fund at current asset levels. See page 21.
3. For approving an amendment to the fund's fundamental investment restriction
with respect to borrowing. See page 30.
4. For approving an amendment to the fund's fundamental investment restriction
with respect to making loans. See page 32.
5. For ratifying the selection of PricewaterhouseCoopers LLP as the
independent auditors of your fund for its current fiscal year. See page 33.
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> Who is eligible to vote?
Shareholders of record at the close of business on September 8, 2000 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 are being mailed
on or about September 19, 2000.
Each share is entitled to one vote. Shares represented by duly executed
proxies will be voted in accordance with your 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
your fund's meeting, your shares will be voted at the Trustees' discretion.
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The Proposals
I. ELECTION OF TRUSTEES
> Who are the nominees for Trustees?
The Board Policy and Nominating Committee of the Trustees of your fund
makes recommendations concerning the Trustees of that fund. The Board
Policy and 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").
The Board Policy and Nominating Committee of the Trustees of your fund
recommends 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.
Nominees for Trustees
> Jameson Adkins Baxter
[Photo of Jameson Adkins Baxter]
Ms. Baxter, age 57, is the President of Baxter Associates, Inc., a
management consulting and private investment firm that 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,
Ryerson Tull 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; Member of the Board of Governors of Good Shepherd Hospital;
and Chair of the
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Nominees for Trustees
National Center for Non-profit Boards. Ms. Baxter is a graduate of Mount
Holyoke College.
> Hans H. Estin
[Photo of Hans H. Estin]
Mr. Estin, age 72, is a Chartered Financial Analyst and the Vice Chairman
of North American Management Corp., a registered investment advisor serving
individual clients and their families. Mr. Estin currently also serves as a
Corporation Member of The Schepens Eye Research Institute and as 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
[Photo of John A. Hill]
Mr. Hill, age 58, is Chairman of the Trustees. He is the Vice-Chairman and
Managing Director of First Reserve Corporation, a registered investment
advisor 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 Santa Fe Snyder
Corporation, an exploration and production company, TransMontaingne Oil
Company, a refined oil product pipeline and distribution company and
various private companies
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Nominees for Trustees
controlled by First Reserve Corporation. 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
[Photo of Ronald J. Jackson]
Mr. Jackson, age 56, retired as Chairman of the Board, President and Chief
Executive Officer of Fisher-Price, Inc., a major toy manufacturer, in 1993,
a position which he held since 1990. 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 is a graduate of Michigan
State University Business School.
> Paul L. Joskow*
[Photo of Paul L. Joskow]
Dr. Joskow, age 53, is Elizabeth and James Killian Professor of Economics
and Director of the Center for Energy and Environmental Policy Research at
the Massachusetts Institute of Technology. He has published five books and
numerous articles on topics in industrial organization, government
regulation of industry, and competition policy. Dr. Joskow currently serves
as a Director of the New England Electric System, a public utility holding
company, State Farm
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Nominees for Trustees
Indemnity Company, an automobile insurance company, and the Whitehead
Institute for Biomedical Research, a non-profit research institution. He
has been President of the Yale University Council since 1993.
Dr. Joskow is active in industry restructuring, environmental, energy,
competition, and privatization policies and has served as an advisor to
governments and corporations around the world.
Dr. Joskow is a graduate of Cornell University and Yale University. He is a
Fellow of the Econometric Society and the American Academy of Arts and
Sciences.
> Elizabeth T. Kennan
[Photo of Elizabeth T. Kennan]
Dr. Kennan, age 62, is President Emeritus 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, published numerous articles, and directed the post-doctoral
programs in Patristic and Medieval Studies. Dr. Kennan currently serves as
a director of Northeast Utilities, Talbots and Cambus-Kenneth Bloodstock, a
corporation involved in thoroughbred horse breeding and farming. She is a
member of The Folger Shakespeare Library Committee and a trustee of
Franklin Pierce College. Dr. Kennan previously served as a director of Bell
Atlantic Corporation, Chastain Real Estate, and Kentucky Home Life
Insurance. Active in various educational and civic associations, Dr. Kennan
is a graduate of Mount Holyoke College, the University of Washington, and
St. Hilda's College, Oxford University. She holds several honorary
doctorates.
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Nominees for Trustees
> Lawrence J. Lasser*
[Photo of Lawrence J. Lasser]
Mr. Lasser, age 57, is a Vice President of your fund and each of 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. He is a Member of
the Board of Directors of the United Way of Massachusetts Bay, a Member of
the Board of Governors of the Investment Company Institute, a Trustee of
the Museum of Fine Arts, Boston, a Trustee and Member of the Finance and
Executive Committees of the Beth Israel Deaconess Medical Center, Boston
and a Member of the CareGroup Board of Managers Investment Committee, the
Council on Foreign Relations, and the Commercial Club of Boston. Mr. Lasser
is a graduate of Antioch College and Harvard Business School.
> John H. Mullin, III
[Photo of John H. Mullin, III]
Mr. Mullin, age 59, is Chairman and CEO of Ridgeway Farm, a limited
liability company engaged in timber activities and farming. Prior to
establishing Ridgeway Farm in 1989, Mr. Mullin was a Managing Director of
Dillon, Read & Co. Inc., an investment banking firm.
Mr. Mullin currently serves as a Director of ACX Technologies, Inc., a
company engaged in the manufacture of packaging products, Alex. Brown
Realty, Inc., a real estate investment company, Carolina Power and Light, a
public utility company, and The Liberty Corporation, a company engaged in
the life insurance and broadcasting industries. Mr. Mullin previously
served as a Director of Dillon, Read & Co.
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Nominees for Trustees
Inc., Adolph Coors Company, Crystal Brands, Inc., Fisher-Price, Inc.,
Mattel, Inc. and The Ryland Group, Inc. Mr. Mullin is a Trustee Emeritus of
Washington & Lee University where he served as Chairman of the Investment
Committee. Mr. Mullin is a graduate of Washington & Lee University and The
Wharton Graduate School at the University of Pennsylvania.
> Robert E. Patterson
[Photo of Robert E. Patterson]
Mr. Patterson, age 55, is the President and a Trustee of Cabot Industrial
Trust, a publicly traded real estate investment trust. Prior to February,
1998 he was Executive Vice President and Director of Acquisitions of Cabot
Partners Limited Partnership, a registered investment advisor which managed
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, a Trustee of SEA Education Association and a Director of Brandywine
Trust Company. Mr. Patterson is a graduate of Harvard College and Harvard
Law School.
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Nominees for Trustees
> George Putnam, III*
[Photo of George Putnam, III]
Mr. Putnam, age 49, is the President of your fund and each of the other
Putnam funds. He is also 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 advisor 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 Boston Family Office,
L.L.C., a registered investment advisor that provides financial advice to
individuals and families. He is also a Trustee of the SEA Education
Association and St. Mark's School. Mr. Putnam is a graduate of Harvard
College, Harvard Business School and Harvard Law School.
> A.J.C. Smith*
[Photo of A.J.C. Smith]
Mr. Smith, age 66, is the Chairman of Marsh & McLennan Companies, Inc. From
May 1992 to November 1999, he served as the company's Chairman and Chief
Executive Officer. He has been employed by Marsh & McLennan and related
companies in various capacities since 1961. Mr. Smith is a Director of the
Trident Corp.; a Trustee of the Carnegie Hall Society, the Central Park
Conservancy, the Educational Broadcasting Corporation, the Economic Club of
New York, and the U.S. Chamber of Commerce; a Member of the Board of
Overseers of the Joan and Sanford I. Weill Graduate School of Medical
Sciences of Cornell University; and 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
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Nominees for Trustees
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
[Photo of W. Thomas Stephens]
Mr. Stephens, age 58, was, until 1999, the President and Chief Executive
Officer of MacMillan Bloedel Limited, a forest products and building
materials company. In 1996, Mr. Stephens retired as Chairman of the Board
of Directors, President and Chief Executive Officer of Johns Manville
Corporation.
Mr. Stephens serves as a Director for Qwest Communications, a
communications company, New Century Energies, a public utility company,
TransCanada Pipelines, and Fletcher Challenge Canada, a paper manufacturer.
Mr. Stephens has B.S. and M.S. degrees from the University of Arkansas.
> W. Nicholas Thorndike
[Photo of W. Nicholas Thorndike]
Mr. Thorndike, age 67, serves as a Director of various corporations and
charitable organizations, including 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 Cabot Industrial Trust and Northeastern University, a member of
the Advisory Board of New England Electric Systems, and an Honorary Trustee
of Massachusetts General Hospital, where he previously served as chairman
and president. Prior to December 1988, Mr. Thorndike was the Chairman of
the Board and Managing Partner of Wellington Management Company/Thorndike,
Doran, Paine & Lewis, a registered
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Nominees for Trustees
investment advisor that 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 Retail Management, Inc. ("Putnam Retail Management"), the principal
underwriter for all the open-end Putnam funds and an affiliate of Putnam
Management. Messrs. Lasser, Putnam, III, and Smith are deemed "interested
persons" by virtue of their positions as officers or affiliates of your
fund, or directors of Putnam Management, Putnam Retail Management, or Marsh
& McLennan Companies, Inc., the parent company of Putnam Management and
Putnam Retail Management.
Mr. Joskow is not currently an "interested person" of your fund but could
be deemed by the Securities and Exchange Commission to be an "interested
person" on account of his prior consulting relationship with National
Economic Research Associates, Inc. a wholly-owned subsidiary of Marsh &
McLennan Companies, Inc., which was terminated as of August 31, 1998.
The balance of the nominees are not "interested persons."
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.
The address for each of the current Trustees and each of the nominees is
One Post Office Square, Boston, Massachusetts 02109.
--------------------
> 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
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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 114 Putnam funds based on their own investment needs.
The Trustees' aggregate investments in the Putnam funds total over $31
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.
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Share Ownership by Trustees
Number of shares owned as of June 30, 2000 of:
<TABLE>
<CAPTION>
Year first All Putnam Putnam
elected as funds Global
Trustee of the (including Equity
Trustees Putnam funds notional shares)(1)(2) Fund
------------------------------------------------------------------------------
<S> <C> <C> <C>
Jameson A. Baxter 1994 162,597(3) 1,276
Hans H. Estin 1972 36,025(4) 165(4)
John A. Hill 1985 245,629 6,779
Ronald J. Jackson 1996 166,078(3) 3,495
Paul L. Joskow 1997 54,803 99
Elizabeth T. Kennan 1992 27,645(4) 463
Lawrence J. Lasser 1992 522,035(3) 2,217
John H. Mullin, III 1997 81,687 1,997
Robert E Patterson 1984 91,831 1,412
George Putnam, III 1984 517,251(3) 1,049
A.J.C. Smith 1986 46,509(3) 100
W. Thomas Stephens 1997 139,591(3) 131
W. Nicholas Thorndike 1992 85,583 165
------------------------------------------------------------------------------
</TABLE>
(1) These holdings do not include shares of Putnam money market funds.
(2) Notional shares represent economic interests in a fund acquired by Trustees
pursuant to the terms of the Trustee Compensation Deferral Plan. They do
not have any voting power.
(3) Includes shares over which the Trustee has shared investment and voting
power.
(4) Includes shares held in a trust over which the Trustee has investment and
voting power.
As of June 30, 2000, the Trustees and officers of Putnam Global Equity Fund
owned a total of 21,080 shares, comprising less than 1% of the outstanding
shares of such fund on that date.
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> 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:
o by carefully reviewing your fund's investment performance on an individual
basis with your fund's managers;
o by also carefully reviewing the quality of the various other services
provided to the funds and their shareholders by Putnam Management and its
affiliates;
o by discussing with senior management of Putnam Management steps being taken
to address any performance deficiencies;
o by conducting an in-depth review of the fees paid by your fund and by
negotiating with 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;
o by reviewing brokerage costs and fees, allocations among brokers, soft
dollar expenditures and similar expenses of each fund;
o 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
o 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.
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> 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 Contract
Committee, which reviews all the contractual arrangements with Putnam
Management and its affiliates; the Communication, Service and Marketing
Committee, which reviews the quality of services provided by your fund's
investor servicing agent and custodian; the Brokerage and Custody
Committee, which reviews matters relating to custody of securities, best
execution, brokerage costs and allocations and new investment techniques;
the Audit Committee, which reviews procedures for the valuation of
securities, the funds' accounting policies and the adequacy of internal
controls and supervises the engagement of the funds' auditors; the Board
Policy and Nominating Committee, which is composed of non-interested
Trustees and which reviews the compensation of the Trustees and their
administrative staff, supervises the engagement of the funds' independent
counsel and selects nominees for election as Trustees; the Closed-end Funds
and Variable Trust Committee, which is responsible for reviewing special
issues applicable to such funds, and the Pricing Committee, which reviews
procedures for the valuation of securities.
Each Trustee generally attends at least two formal committee meetings
during each regular meeting of the Trustees. During 1999, the average
Trustee participated in approximately 40 committee and board meetings and
is expected to attend approximately the same number during 2000. 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 your
fund's performance is reviewed in detail at least twice a year. The
Contract Committee typically meets on
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several additional occasions during the year to carry out its
responsibilities. Other committees, including an Executive Committee, may
also meet on special occasions as the need arises.
> What are the Trustees paid for their services?
Each Trustee of your fund 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 Board
Policy and Nominating Committee, which consists solely of Trustees not
affiliated with Putnam Management, estimates that committee and Trustee
meeting time, together with the appropriate preparation, requires the
equivalent of at least three business days per Trustee meeting. The
following table shows the fees paid to each Trustee by the fund for its
most recent fiscal year and the fees paid to each Trustee by all of the
Putnam funds during calendar year 1999:
19
<PAGE>
PUTNAM GLOBAL EQUITY FUND
Compensation Table
<TABLE>
<CAPTION>
Estimated
Pension or annual
retirement benefits
benefits from all
Aggregate accrued as Putnam Total
compensation part of funds compensation
from the fund upon from all
Trustee fund(1) expenses retirement(2) Putnam funds(3)
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jameson A. Baxter $1,538 $262 $ 95,000 $191,000(4)
Hans H. Estin 1,501 618 95,000 190,000
John A. Hill 1,602 309 115,000 239,750(4)(5)
Ronald J. Jackson 1,540 319 95,000 193,500(4)
Paul L. Joskow 1,501 113 95,000 191,000(4)
Elizabeth T. Kennan 1,501 390 95,000 190,000
Lawrence J. Lasser 1,494 298 95,000 189,000
John H. Mullin, III 1,580 169 95,000 196,000(4)
Robert E. Patterson 1,499 208 95,000 190,250
George Putnam, III 1,501 141 95,000 190,000
A.J.C. Smith 1,488 444 95,000 188,000
W. Thomas Stephens 1,426 158 95,000 188,000(4)
W. Nicholas Thorndike 1,482 547 95,000 190,000
-----------------------------------------------------------------------------------
</TABLE>
(1) Includes an annual retainer and an attendance fee for each meeting
attended.
(2) 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 1999.
(3) As of December 31, 1999, there were 114 funds in the Putnam family.
(4) Includes compensation deferred pursuant to a Trustee Compensation Deferral
Plan.
(5) Includes additional compensation for service as Vice Chairman of the Putnam
funds. Mr. Hill became Chairman of the Board of Trustees effective July 1,
2000.
20
<PAGE>
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 by the funds 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 compensated by the funds. 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 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 38.
2. APPROVAL OF A NEW MANAGEMENT CONTRACT
The Trustees recommend that shareholders approve a new management contract
with Putnam Management, the fund's investment manager, which will result in
an increase in the management fees payable by the fund to Putnam Management
at current asset levels and will change the fee computation and payment
schedule from quarterly to monthly. The proposed contract, which is
attached as Exhibit A, is identical to the existing contract in all other
substantive respects. As discussed in more detail below, the proposal would
replace the current fee,
21
<PAGE>
which begins at 0.70% of net assets per annum with a fee rate that
gradually decreases as the fund increases in size starting at 0.80% for the
first $500 million of net assets and ending at 0.47% of net assets above
$55 billion. Further information about both the current and proposed
management contract, the termination and renewal procedures, the services
provided by Putnam Management and its affiliates, and information
concerning brokerage and related matters can be found under "Additional
Information Relating to Management Contract Approval" on page 40.
> What do management fees pay for?
Management fees pay Putnam Management for the services it provides in
conducting the day-to-day operations of the fund. These include providing
the personnel, equipment, and office facilities necessary for the
management of the fund's investment portfolio, determining the fund's daily
net asset value, maintaining the accounts and records of the fund,
preparation of reports to shareholders, compliance with regulatory
requirements, and general administration of the fund's affairs.
> Why did Putnam Management recommend a new management fee schedule to the
Trustees?
In recent years, Putnam Management has noted a general increase in the
complexity of the investment process and in the competition for talented
investment personnel. Putnam Management recommended the new management fee
schedule to help ensure that Putnam Management receives fees for its
services that are competitive with fees paid to high-quality investment
managers by other mutual funds. Putnam Management believes that maintaining
competitive management fees will, over the longer term, enable it to
continue to provide high-quality management services to your fund and to
the other funds in the Putnam group. Putnam Management also notes that your
fund's current management fee schedule has not been changed since the
fund's inception and is lower than the fees paid to managers of many
competitive funds.
22
<PAGE>
Several years ago, the Trustees undertook a comprehensive review of the
management fees paid by the Putnam funds. This review was conducted largely
through the Contract Committee of the Trustees, which consists solely of
independent Trustees who have no financial interest in Putnam Management.
As a result of this review, the Trustees and Putnam Management reached
agreement on a system of model fee schedules for the various types of funds
in the Putnam group. These model fee schedules have now been implemented
for most of the Putnam funds. The proposed new fee schedule for the fund is
identical to that which has been implemented for most other Putnam funds
investing substantially in stocks of companies worldwide.
The Trustees and Putnam Management also reached a general understanding
that these model fee schedules should be implemented for a particular fund
only following consideration of the fund's comparative investment
performance and expense levels. After reviewing comparative data on
competitive funds in recent years and noting, among other things, the
fund's strong relative performance, the Trustees concluded that it would be
appropriate to implement a model fee schedule for your fund at this time.
The Trustees have indicated that they will continue to look closely at the
fund's comparative performance and expense levels in their future annual
reviews of the fund's management contract.
> What factors did the Trustees consider?
The Trustees placed primary emphasis upon the nature and quality of the
services being provided by Putnam Management, including, in particular, the
strong relative investment performance of the fund in recent years. In this
regard, the Trustees also considered the relative complexity of managing
the fund, and a comparison of recent management fees and other expenses
paid by the fund with those of similar funds managed by other investment
advisers.
23
<PAGE>
The Trustees also considered, among other things, information provided by
Putnam Management regarding the profitability of its current and proposed
management fee arrangements with the fund (without regard to costs incurred
by Putnam Management and its affiliates in connection with the marketing of
shares), the benefits to Putnam Management and its affiliates resulting
from the fact that affiliates of Putnam Management currently serve as
shareholder servicing agent, distributor, and custodian for each of the
Putnam funds pursuant to separate contractual arrangements, and Putnam
Management's placing of portfolio transactions to recognize research and
brokerage services.
Information about certain of the factors considered by the Trustees is set
forth below and in the section "Additional Information Relating to
Management Contract Approval" on page 40.
Following consideration of these and the other factors described above, the
Trustees of your fund, including all of the independent Trustees,
unanimously approved the proposed new contract.
> How has the fund performed?
As part of any decision regarding management fees, shareholders should
consider how the fund has performed. The table that follows shows the
relative performance on an average annual basis of the different classes of
the fund over various periods and during the life of the fund. The table
also provides information concerning the Morgan Stanley Capital
International (MSCI) World Index, a broad measure of market performance.
Average Annual Total Returns (for periods ending June 30, 2000)
<TABLE>
<CAPTION>
Class A Class B Class C Class M MSCI World
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Inception Date 7/1/94 7/1/94 2/1/99 7/3/95 7/1/94*
1 year 29.03% 30.92% 34.87% 31.49% 12.19%
3 years 23.77% 24.76% 25.45% 24.27% 14.94%
5 years 23.65% 24.18% 24.35% 23.80% 17.07%
Life of fund 22.18% 22.61% 22.64% 22.25% 15.98%
-------------------------------------------------------------------------------------
</TABLE>
* Life Return of the MSCI World Index is from inception of Class A Shares.
24
<PAGE>
Both class A and class M share performance reflect the current maximum
initial sales charges; both class B and class C share performance reflect
the maximum applicable deferred sales charge if shares had been redeemed on
6/30/00. For periods before the inception of class C shares (2/1/99) and
class M shares (7/3/95), performance shown for those classes in the table
is based upon performance of Class A shares of the fund adjusted to reflect
the appropriate sales charge and the higher 12b-1 fees paid by class C and
class M shares. The MSCI World Index is an unmanaged index of approximately
1,482 equity securities listed on the stock exchanges of the United States,
Europe, Canada, Australia, New Zealand and the Far East. Securities indexes
assume reinvestment of all distributions and interest payments and do not
take into account brokerage fees or taxes. Securities in the fund do not
match those in the indexes and performance of the fund will differ. Past
performance is not indicative of future performance. More recent returns
may be more or less than those shown.
> How has the fund performed in comparison to similar funds?
Another way of evaluating the performance of your fund is to compare it to
other global equity funds. In reviewing the fund's relative performance,
your Trustees compared it to a list, developed by Putnam Management with
review and oversight by the Trustees, of other funds with similar
investment objectives and strategies. When evaluated in that group, the
total return of the Class A shares of the fund ranks as follows:
<TABLE>
<CAPTION>
For periods ended June 30, 2000
----------------------------------------------------
<S> <C> <C> <C> <C>
1 year top 10% 2 out of 19 funds
3 years top 10% 2 out of 19 funds
5 years top 6% 1 out of 16 funds
----------------------------------------------------
</TABLE>
25
<PAGE>
> What is the effect of the new management fee schedule?
Under the new management contract, the annual management fee paid by your
fund to Putnam Management would be amended as follows:
> Proposed Fee*
0.80% of the first $500 million;
0.70% of the next $500 million;
0.65% of the next $500 million;
0.60% of the next $5 billion;
0.575% of the next $5 billion;
0.555% of the next $5 billion;
0.54% of the next $5 billion;
0.53% of the next $5 billion;
0.52% of the next $5 billion;
0.51% of the next $5 billion;
0.50% of the next $5 billion;
0.49% of the next $5 billion;
0.48% of the next $8.5 billion; and
0.47% above $55 billion
> Existing Fee*
0.70% of the first $500 million;
0.60% of the next $500 million;
0.55% of the next $500 million;
0.50% of the next $5 billion
0.475% of the next $5 billion;
0.455% of the next $5 billion;
0.44% of the next $5 billion; and
0.43% thereafter.
* Based on average net assets
26
<PAGE>
Based on average net assets of the fund for the fiscal year ended February
29, 2000 of approximately $948 million, the effective annual management fee
rate under the proposed fee schedule would be 0.75% as compared to 0.65%
under the existing schedule. This represents an increase of approximately
$0.10 in annual expenses for each $100 invested in the fund. Like the
current management fee schedule, the new management fee schedule provides
for lower management fee rates as the fund's net assets increase.
For its fiscal year ended February 29, 2000, the fund paid management fees
to Putnam Management of $6,178,098. If the proposed new management contract
had been in effect for the year, the fund would have paid fees of
$7,102,574, which is an increase of approximately 15.0%.
The following tables summarize the expenses incurred by the fund in the
most recent fiscal year under the current fee schedule and also restates
these expenses to show what the expenses would have been, had the proposed
fee schedule been in effect.
27
<PAGE>
(Current)
Annual fund operating expenses
(expenses that are deducted from fund assets)
<TABLE>
<CAPTION>
Total Annual
Fund
Management Distribution Other Operating
Fees (12b-1) Fees Expenses Expenses
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.65% 0.32% 0.23% 1.20%
Class B 0.65% 1.00% 0.23% 1.88%
Class C 0.65% 1.00% 0.23% 1.88%
Class M 0.65% 0.75% 0.23% 1.63%
----------------------------------------------------------------------
</TABLE>
(Proposed)
<TABLE>
<CAPTION>
Total Annual
Fund
Management Distribution Other Operating
Fees (12b-1) Fees Expenses Expenses
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.75% 0.32% 0.23% 1.30%
Class B 0.75% 1.00% 0.23% 1.98%
Class C 0.75% 1.00% 0.23% 1.98%
Class M 0.75% 0.75% 0.23% 1.73%
----------------------------------------------------------------------
</TABLE>
> Examples
Your investment of $10,000 would incur the following expenses, assuming 5%
annual return and, except as indicated, redemption at the end of each
period:
(Current)
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $690 $934 $1,197 $1,946
Class B $691 $891 $1,216 $2,024*
Class B (no redemption) $191 $591 $1,016 $2,024*
Class C $291 $591 $1,016 $2,201
Class C (no redemption) $191 $591 $1,016 $2,201
Class M $510 $846 $1,205 $2,215
-----------------------------------------------------------------------
</TABLE>
28
<PAGE>
(Proposed)
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $700 $963 $1,247 $2,053
Class B $701 $921 $1,268 $2,131*
Class B (no redemption) $201 $621 $1,068 $2,131*
Class C $301 $621 $1,068 $2,306
Class C (no redemption) $201 $621 $1,068 $2,306
Class M $520 $876 $1,256 $2,319
-----------------------------------------------------------------------
</TABLE>
* Reflects the conversion of class B shares to class A shares, which pay
lower 12b-1 fees. Conversion occurs no more than eight years after
purchase.
The examples do not represent actual past or future expense levels. Actual
expenses may be greater or less than those shown. Federal regulations
require the examples to assume a 5% annual return, but actual annual return
varies.
> What percentage of shareholders' votes are required to pass the proposal?
Approval of the new management contract will require the "yes" vote of a
"majority of the outstanding voting securities" of the fund, as provided in
the Investment Company Act of 1940. For this purpose, this means the "yes"
vote of the lesser of (1) more than 50% of the outstanding shares of the
fund or (2) 67% or more of the shares present at the meeting, if more than
50% of the outstanding shares are present at the meeting in person or by
proxy. If the shareholders do not approve the new contract, the existing
management contract will continue in effect.
The Trustees believe that the proposed new management fee is fair and
reasonable and in the best interests of the shareholders. Accordingly, the
Trustees recommend that shareholders vote for approval of the proposed new
contract.
29
<PAGE>
3. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO
BORROWING.
The Trustees are recommending that the fund's fundamental investment
restriction with respect to borrowing be revised to reflect the standard
restriction expected to be used by other Putnam funds and to grant the fund
the maximum flexibility permitted by the Investment Company Act of 1940, as
amended (the "1940 Act"). Under the 1940 Act, the fund may borrow up to 33
1/3% of its total assets. The fund's current restriction is more
restrictive, and states that the fund may not:
"Borrow money in excess of 10% of the value (taken at the lower of
cost or current value) of the fund's total assets (not including the
amount borrowed) at the time the borrowing is made, and then only from
banks as a temporary measure to facilitate the meeting of redemption
requests (not for leverage) which might otherwise require the untimely
disposition of portfolio investments or for extraordinary or emergency
purposes. Such borrowings will be repaid before any additional
investments are purchased."
The proposed fundamental investment restriction is set forth below.
"The fund may not...
Borrow money in excess of 33 1/3% of the value of its total assets
(not including the amount borrowed) at the time the borrowing is
made."
If the proposed change is approved, the fund will be able to borrow up to
the 1940 Act limit. The fund will no longer be restricted to borrowing only
for redemption requests or for extraordinary or emergency purposes, and
would not be limited to borrowing only from banks. The new restriction
would not prohibit the fund from borrowing for leveraging purposes,
although Putnam Management currently has no intention of
30
<PAGE>
borrowing for such purposes. If the fund were to borrow money for the
purposes of leverage, its net assets would tend to increase or decrease at
a greater rate with market changes than if leverage were not used.
Putnam Management believes that this enhanced flexibility could assist the
fund in achieving its investment objective. In circumstances in which the
fund's available cash is not sufficient to meet, among other things,
shareholder redemptions, Putnam Management believes that it may be
advantageous at times for the fund to borrow money instead of raising cash
by selling its portfolio securities, which could be disruptive to the
fund's investment strategy.
In a separate proposal (see Proposal 4 below), shareholders of the fund are
being asked to approve an amendment to the fund's restriction on making
loans. The proposed revisions would, subject to the limitations discussed
below, permit the fund to participate in a proposed "interfund lending
program," which would allow the fund, through a master loan agreement, to
lend available cash to and borrow from other Putnam funds. As stated above,
the fund may currently borrow money only from banks. When the fund borrows
money from a bank, it typically pays interest on such borrowing at a higher
rate than the rate available from investments in repurchase agreements. The
fund would be able to borrow money under the interfund lending program only
if the rate on the loan is more favorable to the fund than the interest
rates otherwise available for short-term bank loans, in addition to being
more favorable to the lending fund than available repurchase agreement
rates. Putnam Management believes that the ability to engage in such
borrowing transactions will allow the fund to pay lower interest rates on
its borrowings. The fund could, in certain circumstances, have its loan
recalled by a lending fund on one day's notice. In these circumstances, the
fund might have to borrow from a bank at a higher interest rate if loans
were not available from other Putnam funds.
31
<PAGE>
Since the Putnam funds may be considered affiliated parties, interfund
lending may be prohibited by the 1940 Act and would be implemented only
upon receipt of an exemptive order of the Securities and Exchange
Commission.
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. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO
MAKING LOANS.
The Trustees are recommending that the fund's fundamental investment
restriction with respect to making loans be revised to reflect the standard
restriction expected to be used by other Putnam funds and to clarify that
the fund is permitted (subject to the limitations discussed above) to
participate in the proposed interfund lending program described in Proposal
3. 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 (taken at current value)."
The proposed 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 (including without
limitation debt obligations
32
<PAGE>
issued by other Putnam funds), by entering into repurchase agreements,
or by lending its portfolio securities."
If the proposal is approved, the fund would be able to participate in an
interfund lending program and make loans to other Putnam funds. As stated
in Proposal 3, the fund would only make loans under the program if it could
receive an interest rate higher than those available for repurchase
agreements. There is a risk that the fund could experience a delay in
obtaining prompt repayment of a loan and, unlike repurchase agreements, the
fund would not necessarily have received collateral for its loan. A delay
in obtaining prompt payment could cause the fund to miss an investment
opportunity or to incur costs to borrow money to replace the delayed
payment.
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.
5. RATIFICATION OF INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts
02110, independent accountants, has been selected by the Trustees as the
independent auditors of your fund for the current fiscal year. Among the
country's preeminent accounting firms, this firm also serves as the auditor
for various other funds in the Putnam family. It was selected primarily on
the basis of its expertise as auditors of investment companies, the quality
of its audit services, and the competitiveness of its fees.
A majority of the votes on the matter is necessary to ratify the selection
of auditors. A representative of the independent auditors is expected to be
present at the meeting to make statements and to respond to appropriate
questions.
33
<PAGE>
Further Information About Voting and the Meeting
Quorum and Methods of Tabulation. A majority of the shares entitled to
vote--present in person or represented by proxy--constitutes a quorum for
the transaction of business with respect to any proposal at the meeting
(unless otherwise noted in the proxy statement). Shares represented by
proxies that reflect abstentions and "broker non-votes" (i.e., shares held
by brokers or nominees as to which (i) instructions have not been received
from the beneficial owners or the persons entitled to vote and (ii) the
broker or nominee does not have the discretionary voting power on a
particular matter) will be counted as shares that are present and entitled
to vote on the matter for purposes of determining the presence of a quorum.
Votes cast by proxy or in person at the meeting will be counted by persons
appointed by your fund as tellers for the meeting.
The tellers will count the total number of votes cast "for" approval of the
proposals for purposes of determining whether sufficient affirmative votes
have been cast. With respect to the election of Trustees and selection of
auditors, neither abstentions nor broker non-votes have any effect on the
outcome of the proposal. With respect to any other proposals, abstentions
and broker non-votes have the effect of a negative vote on the proposal.
Other business. The Trustees know of no other business to be brought before
the meeting. However, if any other matters properly come before the
meeting, it is their intention that proxies that do not contain specific
restrictions to the contrary will be voted on such matters in accordance
with the judgment of the persons named as proxies in the enclosed form of
proxy.
Solicitation of proxies. In addition to soliciting proxies by mail,
Trustees of your fund and employees of Putnam
34
<PAGE>
Management, Putnam Fiduciary Trust Company, and Putnam Retail Management
may solicit proxies in person or by telephone. Your fund may also arrange
to have a proxy solicitation firm call you to record your voting
instructions by telephone. The telephone voting procedure is designed to
authenticate shareholders' identities, to allow them 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.
Shareholders also have the opportunity to submit their voting instructions
via the Internet by utilizing a program provided by a third party vendor
hired by Putnam Management, or by telephone "touch-tone" voting. The giving
of such a proxy will not affect your right to vote in person should you
decide to attend the meeting. To vote via the Internet, or by telephone
"touch-tone" voting, you will need the 14-digit "control" number that
appears on your proxy card. To use the Internet, please access the Internet
address found on your proxy card on the World Wide Web. To record your
voting instructions by touch-tone telephone, call toll-free 1-888-221-0697.
The Internet and touch-tone telephone voting procedures are
35
<PAGE>
designed to authenticate shareholder identities, to allow shareholders to
give their voting instructions, and to confirm that shareholders'
instructions have been recorded properly. Shareholders voting via the
Internet should understand that there may be costs associated with Internet
access, such as usage charges from Internet access providers and telephone
companies, that must be borne by the shareholders.
Your fund's Trustees have adopted a general policy of maintaining
confidentiality in the voting of proxies. Consistent with this policy, your
fund may solicit proxies from shareholders who have not voted their shares
or who have abstained from voting.
Persons holding shares as nominees will upon request be reimbursed for
their reasonable expenses in soliciting instructions from their principals.
Your fund has retained at its expense D.F. King & Co., Inc., 77 Water
Street, New York, New York, 10005, to aid in the solicitation instructions
for nominee accounts, for a fee not to exceed $[ ] plus reasonable
out-of-pocket expenses for mailing and phone costs.
Revocation of proxies. Proxies, including proxies given by telephone or
over the Internet, may be revoked at any time before they are voted either
(i) by a written revocation received by the Associate Clerk of your fund,
(ii) by properly executing a later-dated proxy, (iii) by recording
later-dated voting instructions via the Internet or (iv) by attending the
meeting and voting in person.
Date for receipt of shareholders' proposals for subsequent meetings of
shareholders. Your fund does not hold regular shareholder annual meetings,
but may from time to time schedule special meetings. In accordance with the
regulations of the SEC, in order to be eligible for inclusion in the fund's
proxy statement for such a meeting, a shareholder proposal must be received
a reasonable time before the fund prints and mails its proxy statement. The
Nominating Committee will also consider nominees recommended by
shareholders
36
<PAGE>
of the fund to serve as Trustees, provided that shareholders submit their
recommendations within a reasonable time before the fund prints and mails
its proxy statement. Also, SEC rules permit management to exercise
discretionary authority to vote on shareholder proposals not included in
the fund's proxy statement if the proponent has not notified the fund of
the proposal a reasonable time before the fund mails its proxy statement.
All shareholder proposals must also comply with other requirements of the
SEC's rules and the fund's declaration of trust.
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 that 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 and
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.
37
<PAGE>
Fund Information
Putnam Investments. Putnam Investment Management, Inc., the fund's
investment manager, and its affiliates, Putnam Retail Management, Inc., the
fund's principal underwriter, and Putnam Fiduciary Trust Company, the
fund's investor servicing agent and custodian (collectively, the "Putnam
companies"), are owned by Putnam Investments, Inc., a holding company that
is, except for a minority stake owned by employees, in turn owned by Marsh
& McLennan Companies, Inc., a leading professional services firm that
includes risk and insurance services, investment management and consulting
businesses. The address of the executive offices of Marsh & McLennan
Companies, Inc. is 1166 Avenue of the Americas, New York, New York 10036.
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 Committee and Board Policy and Nominating Committee. The members of
the Audit Committee of your fund include only Trustees who are not
"interested persons" of the fund or Putnam Management. The Audit Committee
currently consists of Dr. Kennan and Messrs. Estin, Mullin and Stephens
(Chairman). The Board Policy and Nominating
38
<PAGE>
Committee consists only of Trustees who are not "interested persons" of
your fund or Putnam Management. The Board Policy and Nominating Committee
currently consists of Dr. Kennan (Chairperson), Messrs. Hill, Patterson and
Thorndike.
Officers and other information. 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 Retail Management, Messrs. 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, distribution fees, custodian
fees, and investor servicing fees paid or allowed by the fund. In addition
to George Putnam, III and Lawrence J. Lasser, the officers of the fund are
as follows:
<TABLE>
<CAPTION>
Year first
elected to
Name (age) Office office
------------------------------------------------------------------
<S> <C> <C>
Charles E. Porter (62) Executive Vice President 1989
Patricia C. Flaherty (53) Senior Vice President 1993
John D. Hughes (65) Senior Vice President
& Treasurer 1988
Gordon H. Silver (53) Vice President 1990
Omid Kamshad* (38) Vice President 1998
Justin M. Scott* (43) Vice President 1998
Michael K. Arends* (46) Vice President 1999
Stephen S. Oler* (39) Vice President 1999
Michael P. Stack* (41) Vice President 1998
Paul C. Warren* (39) Vice President 1998
Richard A. Monaghan** (46) Vice President 1998
John R. Verani (61) Vice President 1988
------------------------------------------------------------------
</TABLE>
* One of the fund's portfolio managers
** President of Putnam Retail Management
39
<PAGE>
Additional Information Relating to Management Contract Approval
In addition to the services it provides to your fund, Putnam Management
acts as investment adviser or subadviser of other publicly owned investment
companies having different investment objectives. For the names of such
funds having investment objectives similar to those of your fund and the
current rates of Putnam Management's annual fees as adviser or subadviser
of such funds, see Exhibit B in this Proxy Statement.
Putnam Management is also affiliated with The Putnam Advisory Company,
Inc., which together with its subsidiaries furnishes investment advice to
domestic and foreign institutional clients and foreign mutual funds.
Another affiliate, Putnam Fiduciary Trust Company, provides investment
advice to institutional clients under its banking and fiduciary powers. The
advisory fees charged by such firms to their institutional clients are
generally at lower rates than those charged to the Putnam funds. The
services performed and responsibilities assumed by these firms for such
clients are, however, not as extensive as those performed or assumed by
Putnam Management for the Putnam funds.
Some officers and directors of Putnam Management, including some who are
officers of your fund, serve as officers or directors of some of these
affiliates. Putnam Management may also enter into other business.
The Management Contract. Putnam Management serves as investment manager of
your fund pursuant to a Management Contract. The management fee payable
under the contract is described above in Proposal 2. The fees paid to
Putnam Management in the most recent fiscal year are shown on page 43.
Under the contract, subject to such policies as the Trustees may determine,
Putnam Management, at its expense, furnishes continuously an investment
program for your fund and makes
40
<PAGE>
investment decisions on behalf of your fund. Subject to the control of the
Trustees, Putnam Management manages, supervises, and conducts the other
affairs and business of your fund, furnishes office space and equipment,
provides bookkeeping and clerical services (including determination of your
fund's net asset value, but excluding shareholder accounting services) and
places all orders for the purchase and sale of your fund's portfolio
securities. Putnam Management may place fund portfolio transactions with
broker-dealers that furnish Putnam Management, without cost to it, certain
brokerage and research services of value to Putnam Management and its
affiliates in advising your fund and other clients. In so doing, Putnam
Management may cause your fund to pay greater brokerage commissions than it
might otherwise pay.
Your fund also pays, or reimburses Putnam Management for, the compensation
and related expenses of certain officers of your fund and their assistants.
Currently, your fund reimburses Putnam Management for a portion of the
compensation and related expenses of certain officers of your fund who
provide certain administrative services to your fund and the other Putnam
funds, each of which bears an allocated share of the costs. The aggregate
amount of all such payments and reimbursements is determined annually by
the Trustees, and the amount paid in the most recent fiscal year is set
forth on page 43. Putnam Management pays all other salaries of officers of
your fund. Your fund pays all expenses not assumed by Putnam Management
including, without limitation, auditing, legal, custodial, investor
servicing agent, and shareholder reporting expenses.
The contract provides that Putnam Management shall not be subject to any
liability to your fund or to any shareholder of your fund for any act or
omission in the course of or connected with rendering services thereunder
in the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations and duties.
41
<PAGE>
The contract may be terminated without penalty upon 30 days' written notice
by Putnam Management, by the Trustees, or by the affirmative vote of the
holders of a "majority of the outstanding voting securities" of the fund
(as defined in the Investment Company Act of 1940). It may be amended only
by an affirmative vote of the holders of a majority of the outstanding
voting securities of the fund and by a majority of the Trustees who are not
"interested persons" of the fund or Putnam Management.
The contract will terminate automatically if it is assigned, or unless its
continuance is approved at least annually by either the Trustees or
Shareholders of the fund and in either case by a majority of the Trustees
who are not "interested persons" of Putnam Management or your fund.
Payments to Affiliates of Putnam Management. Putnam Fiduciary Trust Company
is the fund's investor servicing agent and custodian. The investor
servicing fees and custodian fees paid by the fund to Putnam Fiduciary
Trust Company in the fund's most recent fiscal year are set forth below.
The fund has adopted distribution plans to pay for the marketing of fund
shares and for services provided to shareholders. The plans provide for
payments at annual rates (based on average net assets) of up to 0.65% of
the fund's net assets on class A shares and 1.00% on class B, class C and
class M shares. The Trustees currently limit payments on class A shares to
an amount sufficient to compensate investment dealers, up to an annual rate
of 0.50% of average net assets. The Trustees currently limit payments on
class M shares to 0.75% of average net assets.
Payments under the plans compensate Putnam Retail Management for services
provided and expenses incurred by it in promoting the sale of the shares of
your fund, reducing redemptions or maintaining or improving services
provided to shareholders by Putnam Retail Management or by dealers.
42
<PAGE>
The fees paid to Putnam Retail Management under the plans in your fund's
most recent fiscal year are set forth in "Payments to Affiliates." A
substantial portion of payments made to Putnam Retail Management under
these plans is used to pay or reimburse Putnam Retail Management for
payment of service fees paid to investment dealers for their ongoing
services to shareholders.
<TABLE>
<CAPTION>
Management Contract
-------------------
<S> <C>
The management contract dated June 20, 1996 was initially
approved by the shareholders of Putnam Global Equity Fund
(formerly Putnam Diversified Equity Trust) on May 23, 1994
and was most recently approved by the Trustees on [date].
Management Fee paid by the fund to Putnam
Management $ 6,178,098
---------------
Reimbursement paid by your fund to Putnam
Management for compensation and related
expenses including employee benefit plan
contributions for your fund's Executive Vice
President (Charles E. Porter), Senior Vice
President (Patricia C. Flaherty), and their
assistants $ 13,868
---------------
Payment to Affiliates
---------------------
Payments under Distribution
Plans to Putnam Retail Management $ 6,630,986
---------------
Investor servicing and custodian fees paid to
Putnam Fiduciary Trust Company (before
application of credits, if any) $ 1,664,413
---------------
Net Assets and Shares Outstanding as of June 30, 2000:
------------------------------------------------------
Net Assets:
Class A $645,078,993.03
Class B $684,934,020.12
Class C $ 36,949,942.04
Class M $ 58,283,244.97
Shares Outstanding and Authorized to Vote:
------------------------------------------
Class A 35,911,262.810
Class B 38,526,219.980
Class C 2,050,782.572
Class M 3,249,429.575
</TABLE>
43
<PAGE>
<TABLE>
<CAPTION>
5% Beneficial Ownership of the Fund as of June 30, 2000:
--------------------------------------------------------
<S> <C> <C>
Edward D. Jones & Co.*
700 Maryville Center Drive
St. Louis, Missouri 63041
Class A 3,587,033 9.90%
Class C 144,025 7.00%
Class M 304,060 9.30%
Merrill, Lynch, Pierce,
Fenner & Smith, Inc.*
4800 Deer Lake Drive
Jacksonville, Florida 32216
Class C 401,478 5.10%
</TABLE>
--------------------
* Shares held of record on behalf of its customers, but not
beneficially.
44
<PAGE>
Exhibit A
The Fund was formerly known as Putnam Diversified Equity Trust, and changed
its name to Putnam Global Equity Fund on July 30, 1999. The proposed new
management contract follows, with additions underscored and deletions
stricken through:
PUTNAM GLOBAL EQUITY FUND
Management Contract
Management Contract dated as of December 7, 2000 between PUTNAM GLOBAL
EQUITY FUND, a Massachusetts business trust (the "Fund"), and PUTNAM
INVESTMENT MANAGEMENT, INC., a Massachusetts corporation (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO FUND.
(a) The Manager, at its expense, will furnish continuously an investment
program for the Fund, will determine what investments shall be purchased,
held, sold or exchanged by the Fund and what portion, if any, of the assets
of the Fund shall be held uninvested and shall, on behalf of the Fund, make
changes in the Fund's investments. Subject always to the control of the
Trustees of the Fund and except for the functions carried out by the
officers and personnel referred to in Section 1(d), the Manager will also
manage, supervise and conduct the other affairs and business of the Fund
and matters incidental thereto. In the performance of its duties, the
Manager will comply with the provisions of the Agreement and Declaration of
Trust and By-Laws of the Fund and its stated investment objectives,
policies and restrictions, and will use its best efforts to safeguard and
promote the welfare of the Fund and to comply with other policies which the
Trustees may from time to time determine and shall exercise the same care
and diligence expected of the Trustees.
(b) The Manager, at its expense, except as such expense is paid by the Fund
as provided in Section 1(d), will furnish (1) all
45
<PAGE>
necessary investment and management facilities, including salaries of
personnel, required for it to execute its duties faithfully; (2) suitable
office space for the Fund; and (3) administrative facilities, including
bookkeeping, clerical personnel and equipment necessary for the efficient
conduct of the affairs of the Fund, including determination of the Fund's
net asset value, but excluding shareholder accounting services. Except as
otherwise provided in Section 1(d), the Manager will pay the compensation,
if any, of the officers of the Fund.
(c) The Manager, at its expense, shall place all orders for the purchase
and sale of portfolio investments for the Fund's account with brokers or
dealers selected by the Manager. In the selection of such brokers or
dealers and the placing of such orders, the Manager shall use its best
efforts to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In
using its best efforts to obtain for the Fund the most favorable price and
execution available, the Manager, bearing in mind the Fund's best interests
at all times, shall consider all factors it deems relevant, including by
way of illustration, price, the size of the transaction, the nature of the
market for the security, the amount of the commission, the timing of the
transaction taking into account market prices and trends, the reputation,
experience and financial stability of the broker or dealer involved and the
quality of service rendered by the broker or dealer in other transactions.
Subject to such policies as the Trustees of the Fund may determine, the
Manager shall not be deemed to have acted unlawfully or to have breached
any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage
and research services to the Manager an amount of commission for effecting
a portfolio investment transaction in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction,
if the Manager determines in good
46
<PAGE>
faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker or
dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Fund and to other
clients of the Manager as to which the Manager exercises investment
discretion. The Manager agrees that in connection with purchases or sales
of portfolio investments for the Fund's account, neither the Manager nor
any officer, director, employee or agent of the Manager shall act as a
principal or receive any commission other than as provided in Section 3.
(d) The Fund will pay or reimburse the Manager for the compensation in
whole or in part of such officers of the Fund and persons assisting them as
may be determined from time to time by the Trustees of the Fund. The Fund
will also pay or reimburse the Manager for all or part of the cost of
suitable office space, utilities, support services and equipment
attributable to such officers and persons, as may be determined in each
case by the Trustees of the Fund. The Fund will pay the fees, if any, of
the Trustees of the Fund.
(e) The Manager shall pay all expenses incurred in connection with the
organization of the Fund and the initial public offering and sale of its
shares of beneficial interest, provided that upon the issuance and sale of
such shares to the public pursuant to the offering, and only in such event,
the Fund shall become liable for, and to the extent requested reimburse the
Manager for, registration fees payable to the Securities and Exchange
Commission and for an additional amount not exceeding $125,000 as its
agreed share of such expenses.
(f) The Manager shall not be obligated to pay any expenses of or for the
Fund not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
47
<PAGE>
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Fund may be a shareholder, director, officer or employee
of, or be otherwise interested in, the Manager, and in any person
controlled by or under common control with the Manager, and that the
Manager and any person controlled by or under common control with the
Manager may have an interest in the Fund. It is also understood that the
Manager and any person controlled by or under common control with the
Manager have and may have advisory, management, service or other contracts
with other organizations and persons, and may have other interests and
business.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's services
rendered, for the facilities furnished and for the expenses borne by the
Manager pursuant to paragraphs (a), (b), (c) and (e) of Section 1, a fee,
computed and paid [quarterly] monthly at the annual rate of:
(a) 0.80% of the first $500 million of the average net asset value of the
Fund;
(b) 0.70% of the next $500 million of such average net asset value;
(c) 0.65% of the next $500 million of such average net asset value;
(d) 0.60% of the next $5 billion of such average net asset value;
(e) 0.575% of the next $5 billion of such average net asset value;
(f) 0.555% of the next $5 billion of such average net asset value;
(g) 0.54% of the next $5 billion of such average net asset value;
48
<PAGE>
(h) 0.53% of the next $5 billion of such average net asset value;
(i) 0.52% of the next $5 billion of such average net asset value;
(j) 0.51% of the next $5 billion of such average net asset value;
(k) 0.50% of the next $5 billion of such average net asset value;
(l) 0.49% of the next $5 billion of such average net asset value;
(m) 0.48% of the next $8.5 billion of such average net asset value; and
(n) 0.47% above $55 billion of such average net asset value.
Such average net asset value shall be determined by taking an average of
all of the determinations of such net asset value during such month at the
close of business on each business day during such month while this
Contract is in effect. Such fee shall be payable for each month within 15
days after the close of such month and shall commence accruing as of the
date of the initial issuance of shares of the Fund to the public.
The fees payable by the Fund to the Manager pursuant to this Section 3
shall be reduced by any commissions, fees, brokerage or similar payments
received by the Manager or any affiliated person of the Manager in
connection with the purchase and sale of portfolio investments of the Fund,
less any direct expenses approved by the Trustees incurred by the Manager
or any affiliated person of the Manager in connection with obtaining such
payments.
In the event that expenses of the Fund for any fiscal year should exceed
the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the
Fund are qualified for offer or sale, the compensation due the Manager for
such fiscal year shall be
49
<PAGE>
reduced by the amount of excess by a reduction or refund thereof. In the
event that the expenses of the Fund exceed any expense limitation which the
Manager may, by written notice to the Fund, voluntarily declare to be
effective subject to such terms and conditions as the Manager may prescribe
in such notice, the compensation due the Manager shall be reduced, and, if
necessary, the Manager shall assume expenses of the Fund to the extent
required by the terms and conditions of such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be
amended unless such amendment be approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote,
cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Fund who are not interested
persons of the Fund or of the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall remain
in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this Contract by not more
than sixty days' nor less than thirty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Fund or the shareholders by the affirmative
vote of a majority of the outstanding shares of the Fund, and (ii) a
majority of the Trustees of the Fund who are not
50
<PAGE>
interested persons of the Fund or of the Manager, by vote cast in person at
a meeting called for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this Contract,
then this Contract shall automatically terminate at the close of business
on the second anniversary of its execution, or upon the expiration of one
year from the effective date of the last such continuance, whichever is
later.
Action by the Fund under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority of
the outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 will be without the
payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares of the Fund" means the affirmative vote, at a duly
called and held meeting of shareholders of the Fund, (a) of the holders of
67% or more of the shares of the Fund present (in person or by proxy) and
entitled to vote at such meeting, if the holders of more than 50% of the
outstanding shares of the Fund entitled to vote at such meeting are present
in person or by proxy, or (b) of the holders of more than 50% of the
outstanding shares of the Fund entitled to vote at such meeting, whichever
is less.
For the purposes of this Contract, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 (the "1940 Act") and
the Rules and Regulations thereunder, subject, however, to such exemptions
as may be granted by the Securities and Exchange Commission under said Act;
the term "specifically approve at least annually" shall be construed in a
manner consistent with the 1940 Act, and the Rules and Regulations
thereunder; and the term "brokerage and research services" shall have
51
<PAGE>
the meaning given in the Securities Exchange Act of 1934 and the Rules and
Regulations thereunder.
7. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Fund or
to any shareholder of the Fund, for any act or omission in the course of,
or connected with, rendering services hereunder.
8. TERMINATION OF PRIOR CONTRACT.
This Contract shall become effective as of its date, and supersedes the
Management Contract dated June 20, 1996.
9. LIMITATION OF LIABILITY OF THE TRUSTEES, OFFICERS, AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Fund is on file
with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Fund as Trustees and not individually and that the
obligations of or arising out of this instrument are not binding upon any
of the Trustees, officers or shareholders individually but are binding only
upon the assets and property of the Fund.
IN WITNESS WHEREOF, PUTNAM GLOBAL EQUITY FUND and PUTNAM INVESTMENT
MANAGEMENT, INC. have each caused this instrument to be signed in duplicate
on its behalf by its President or a Vice President thereunto duly
authorized, all as of the day and year first above written.
52
<PAGE>
PUTNAM GLOBAL EQUITY FUND TRUST
By: __________________________________________
Charles E. Porter
Executive Vice President
PUTNAM INVESTMENT MANAGEMENT, INC.
By: __________________________________________
Gordon H. Silver
Senior Managing Director
53
<PAGE>
Exhibit B
<TABLE>
<CAPTION>
Name of Fund
(Net assets as of Management Fee Rate
June 30, 2000) for each listed fund
---------------------- -----------------------------------------------
<S> <C>
Asia Pacific Growth 0.80% of the first $500 million of net assets;
(522,103,603) 0.70% of the next $500 million;
Europe Growth 0.65% of the next $500 million;
(2,060,731,784) 0.60% of the next $5 billion;
Global Growth 0.575% of the next $5 billion;
(8,648,309,862) 0.555% of the next $5 billion;
International Growth 0.54% of the next $5 billion;
(12,439,384,389) 0.53% of the next $5 billion;
VT Asia Pacific 0.52% of the next $5 billion;
(178,623,787) 0.51% of the next $5 billion;
VT Global Growth 0.50% of the next $5 billion;
(2,809,631,660) 0.49% of the next $5 billion;
VT International 0.48% of the next $5 billion; and
Growth
(843,169,449) 0.47% above $55 billion.
</TABLE>
54
<PAGE>
[PUTNAM INVESTMENTS LOGO]
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581
62705 8/00
<PAGE>
FOR YOUR CONVENIENCE YOU MAY RECORD YOUR VOTING INSTRUCTIONS VIA THE INTERNET OR
BY RETURNING THIS PROXY CARD BY MAIL
Your vote is very important. If you choose to record your voting instructions
via the Internet, visit the website at www.proxyweb.com/Putnam. To record your
voting instructions by touch-tone telephone, please call 1-888-221-0697 and
follow the recorded instructions.
To record your voting instructions on the Internet
1. Read the proxy statement.
2. Go to www.proxyweb.com/Putnam.
3. Enter the 14-digit control number printed on your proxy card.
4. Follow the instructions on the site.
Voting instructions received via the Internet will be immediately confirmed if
you provide your e-mail address.
If you submit your voting instructions on the Internet or by touch-tone
telephone, do not return your proxy card.
This is your PROXY CARD.
To vote by mail, please record your voting instructions on this proxy card, sign
it below, and return it promptly in the envelope provided. Your vote is
important.
PLEASE FOLD AT PERFORATION BEFORE DETACHING
Proxy for a meeting of shareholders to be held on December 7, 2000 for Putnam
Global Equity Fund.
This proxy is solicited on behalf of the Trustees of the fund.
The undersigned shareholder hereby appoints John A. Hill, Hans H. Estin, and
Robert E. Patterson, and each of them separately, Proxies, with power of
substitution, and hereby authorizes them to represent such shareholder and to
vote, as designated below, at the meeting of shareholders of Putnam Global
Equity Fund on December 7, 2000, 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.
-1-
<PAGE>
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
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 card and
return it with your signed proxy in the enclosed envelope.
Name
-------------------------------------------------------------------------------
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 card or by recording your voting
instructions via the Internet as soon as possible. A postage-paid envelope is
enclosed for your convenience.
THANK YOU!
-2-
<PAGE>
PLEASE FOLD AT PERFORATION BEFORE DETACHING
If you complete and sign the proxy, we'll vote exactly as you tell us. The
Proxies are authorized to vote in their discretion upon any matters as may
properly come before the meeting or at any adjournments of the meeting. If you
simply sign the proxy, or fail to provide your voting instructions on a
proposal, the Proxies will vote FOR all Proposals.
Please vote by filling in the appropriate boxes below.
THE TRUSTEES RECOMMEND A VOTE FOR ELECTING ALL NOMINIEES:
<TABLE>
<S> <C> <C> <C>
1. Proposal to fix the number of Trustees and elect all FOR WITHHOLD
nominess. electing all the authority to
nominees (except vote for all
The nominees for Trustees are: J.A. Baxter, H.H. Estin, J.A. as marked to the nominees
Hill, R.J. Jackson, P.L. Joskow, E.T. Kennan, L.J. Lasser, J.H. contrary below)
Mullin, III, R.E. Patterson, G. Putnam, III, A.J.C. Smith, W.T.
Stephens and W.N. Thorndike. / / / /
</TABLE>
To withhold authority to vote for one or more of the nominees, write the
name(s) of the nominee(s) below:
---------------------------------------------
THE TRUSTEES RECOMMEND A VOTE FOR PROPOSAL 2:
<TABLE>
<S> <C> <C> <C> <C>
2. Proposal to approve a new management contract between your FOR AGAINST ABSTAIN
fund and Putnam Investment Management, Inc.
/ / / / / /
THE TRUSTEES RECOMMEND A VOTE FOR PROPOSAL 3:
3. Proposal to approve an amendment to the fund's fundamental FOR AGAINST ABSTAIN
investment restriction with respect to borrowing.
/ / / / / /
THE TRUSTEES RECOMMEND A VOTE FOR PROPOSAL 4:
4. Proposal to approve an amendment to the fund's fundamental FOR AGAINST ABSTAIN
investment restriction with respect to making loans.
/ / / / / /
THE TRUSTEES RECOMMEND A VOTE FOR PROPOSAL 5:
5. Proposal to ratify the selection of
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
PricewaterhouseCoopers FOR AGAINST ABSTAIN
LLP as the independent auditors of your fund.
/ / / / / /
</TABLE>
Note: If you have questions on any of the proposals, please call 1-800-225-1581.
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