Vote-By-Phone Solicitation Script for
Putnam Dividend Growth Fund
This script provides information to the shareholder and solicits
their vote by phone, to be confirmed by written confirmation.
Good Morning/Afternoon/Evening. May I please speak with (name of
shareholder)? I am representing Putnam Investments in Boston.
To verify that I am speaking with the shareholder of record, may
I confirm that you are (name of shareholder of record) and that
your address of record is (address of record)?
(If the person is unwilling to confirm this information, thank
them for their time and terminate the call.)
We noted that we have not yet received your vote. Do you have
any questions regarding the proposals I can clarify for you?
(If there are questions regarding the non-routine proposals,
please refer to the Q & A attached.)
Would you like to vote by phone?
(If not, ask the shareholder if they would like another ballot,
thank them for their time and terminate the call. If so, proceed
as follows:)
We previously sent you a letter describing our procedures for
voting your proxy ballot by telephone.
I will now read the information on the proxy card so that you can
provide us with your voting instructions.
Putnam Dividend Growth Fund
Proxy for a meeting of shareholders, September 7, 1995.
This proxy is solicited on behalf the Trustees of the Fund.
The shareholder hereby appoints George Putnam, Hans H. Estin and
William F. Pounds, and each of them separately, proxies, with
power of substitution, and hereby authorizes them to represent
and vote, as designated hereafter, at the meeting of shareholders
of Putnam Dividend Growth Fund, on September 7, 1995, at 2:00
p.m., Boston time, and at any adjournments thereof, all of the
shares of the Fund which the shareholder would be entitled to
vote if personally present.
This proxy when properly authorized will be voted in the manner
directed herein by the shareholder. In their discretion, the
proxies are authorized to vote upon such other matters as may
properly come before the meeting. The Trustees recommend a vote
FOR the following proposal:
1. Approving an Agreement and Plan of Reorganization providing
for the transfer of all of the assets of the Fund to Putnam
Growth and Income Fund II (the "Growth and Income Fund") in
exchange for shares of the Growth and Income Fund and the
assumption by the Growth and Income Fund of all of the
liabilities of the Fund, and the distribution of such shares
to the shareholders of the Fund in liquidation of the Fund.
How would you like to vote on this proposal?
For, Against or Abstain?
Thank you. Do you wish to send the entire message?
To repeat your instructions:
You voted: (For, Against, Abstain)
Is this correct?
Thank you. We will be sending you a written confirmation of your
vote. Please call us if the information on the confirmation is
incorrect.
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Q & A FOR PUTNAM DIVIDEND GROWTH FUND
On approximately June 23, 1995, a proxy statement was sent to
shareholders of Putnam Dividend Growth Fund. Listed below are
answers to the questions and concerns shareholders are likely to
have regarding the merger proposals for this fund, followed by
answers and information regarding each issue.
1. WHAT IS BEING PROPOSED?
The Trustees have approved the merger of your fund, Putnam
Dividend Growth Fund, into the Putnam Growth and Income Fund II.
The merger provides for the transfer of all of the assets of your
fund to Putnam Growth and Income Fund II in exchange for shares
of that fund. It also provides for the assumption by Putnam
Growth and Income Fund II of all of the liabilities of your fund.
The merger will result in the liquidation of your fund, followed
by the distribution of Growth and Income Fund II shares to
Dividend Growth Fund shareholders.
2. WHAT WILL HAPPEN TO MY SHARES OF THE DIVIDEND GROWTH FUND?
As a result of the merger, your fund will receive a number of
Class A and Class B Shares of Putnam Growth and Income Fund II
equal in value to the value to the Class A and Class B shares,
respectively, of your fund. Following the transfer, each Class A
and Class B shareholder of your fund will receive a number of
Class A and Class B shares, respectively, of Putnam Growth and
Income Fund II equal in value, at the date of the exchange, to
the value of your Dividend Growth Fund shares.
3. WHEN WOULD THE MERGER OCCUR?
If approved by the shareholders at their September 7, 1995
meeting, it is expected that the merger would occur as soon as
possible after that time.
4. WHY ARE THE TRUSTEES PROPOSING THE MERGER?
The Trustees of both funds recommend approval of the merger
because
(i) the merger offers shareholders of the Dividend Growth
Fund an opportunity to pursue similar investment objectives
with economies of scale that will result in lower expenses
and may result in improved investment performance over the
longer-term, and
(ii) the merger offers shareholders the option of owning
shares of a mutual fund with a greater opportunity for
growth of assets, which may over time further lower
expenses.
5. HOW DO THE INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS OF
THE TWO FUNDS COMPARE?
The merger would combine two funds with very similar overall
investment strategies. The Dividend Growth Fund seeks current
income and capital growth with equal emphasis, while Putnam
Growth and Income Fund II seeks capital growth as its primary
objective, with current income as a secondary objective. The
proxy statement contains a detailed comparison of the investment
policies and risks associated with investments in Putnam Growth
and Income Fund II.
Despite the differences in investment policies, the funds have
similar investment styles. In fact, the portfolio manager of the
Dividend Growth Fund, Anthony Kreisel, is the manager of Putnam
Growth and Income Fund II. Given the similarities between the
investment objectives and policies and the management styles of
the funds, the merger will not materially affect the general
strategy or style in which a shareholder's investment will be
managed.
Notwithstanding the difference in investment policies, Putnam
Growth and Income Fund II's SEC yield as of May 16, 1995 (2.02%
and 1.38% for Class A and B shares, respectively) is comparable
to the Dividend Growth Fund's current SEC yield as of the same
date (1.89% and 1.21% for Class A and B shares, respectively.)
6. HOW DO THE RISKS OF INVESTING IN THE FUNDS COMPARE?
As discussed in the prospectus/proxy statement, because the funds
share similar investment objectives and policies, the risks of an
investment in each fund are essentially the same, except that the
risks associated with investments in Putnam Growth and Income
Fund II in securities rated below investment-grade. These lower-
rated securities made up less than 2% of that fund's portfolio as
of March 31, 1995.
7. HOW DO THE MANAGEMENT FEES AND OTHER EXPENSES OF THE TWO FUNDS
COMPARE, AND WHAT ARE THEY ESTIMATED TO BE FOLLOWING THE MERGER?
As shown in the tables in the proxy statement, the funds
currently have nearly identical management fees and Putnam Growth
and Income Fund II has lower estimated total expenses than the
Dividend Growth Fund. Putnam Management believes the expenses of
Putnam Growth and Income Fund II immediately following the merger
(1.24% and 1.99% for Class A and Class B shareholders,
respectively) will be lower than the expenses the Dividend Growth
Fund would likely pay if the merger did not take place (currently
projected to be 1.36% and 2.12% for Class A and Class B
shareholders, respectively).
This decrease in projected annual expenses following the merger
is due to efficiencies associated with operating a fund the size
of Putnam Growth and Income Fund II, which following the merger
will be more than twice the size of the Dividend Growth Fund.
Over the longer term, this decrease in expenses payable by former
Dividend Growth Fund shareholders may also result in an increase
in the total return on their investment.
8. ARE THERE ANY FEDERAL INCOME TAX CONSEQUENCES AS A RESULT OF
THE PROPOSED MERGER?
No. As a result of the merger, no gain or loss will be
recognized by the Dividend Growth Fund or its shareholders for
federal income tax purposes.
9. DO THE DISTRIBUTION POLICIES OF THE TWO FUNDS DIFFER?
No. Each of the Funds distributes any net investment income at
least quarterly, and any net realized capital gains at least
annually.
(IF SHAREHOLDER HOLDS CERTIFICATED SHARES, ADD THE
FOLLOWING:
Putnam Growth and Income Fund II will not permit
shareholders holding Dividend Growth Fund certificates at
the time of the merger to receive cash dividends or other
distributions, receive certificates for shares, exchange
shares for shares of other investment companies managed by
Putnam Management, or pledge or redeem shares until those
certificates for Dividend Growth Fund shares have been
surrendered. If the certificates have been lost, before
shareholders can receive cash dividends or other
distributions, an adequate surety bond must be posted.
If a shareholder is not, for that reason, permitted to
receive cash dividends or other distributions on shares,
Putnam Growth and Income Fund II will pay all such dividends
and distributions in additional shares, even if the
shareholder may have previously chosen to receive dividends
and distributions on Dividend Growth Fund shares in cash.)
10. DO THE PROCEDURES FOR PURCHASING, REDEEMING AND EXCHANGING
SHARES OF THE TWO FUNDS DIFFER?
No. The procedures for purchasing and redeeming shares of the
Dividend Growth Fund and shares of Putnam Growth and Income Fund
II, and for exchanging such shares of each fund for shares of
other Putnam funds, are identical.
The Dividend Growth Fund currently offers two classes of shares
and Putnam Growth and Income Fund II currently offers three
classes of shares. Shares of both funds may be purchased either
through investment dealers which have sales agreements with
Putnam Mutual Funds Corp. or directly through Putnam Mutual Funds
at prices based on net asset value, plus varying sales charges,
depending on the class and number of shares purchased.
Reinvestments of distributions by the funds are made at net asset
value for all classes of shares.
Any day the New York Stock Exchange is open, shares of both funds
may be redeemed at net asset value, either directly to a fund or
through an investment dealer.
After a ten-day holding period, shares of either fund may be
exchanged for shares of the same class of other Putnam Funds.
11. HOW WILL I BE NOTIFIED OF THE OUTCOME OF THE MERGER?
If the merger is approved by the shareholders, shareholders will
receive a confirmation after the reorganization is completed,
indicating your new account number. If the merger is not
approved, you will receive noitification in the Dividend Growth
Fund's next annual report and will continue to receive statements
for the fund.
12. WILL THE NUMBER OF SHARES I OWN CHANGE?
Yes, but the total value of the shares of Putnam Growth and
Income Fund II you receive will be equal in value to the value of
your shares of the Dividend Growth Fund. Even though the net
asset value per share of each fund is different, the total value
of a your holdings will not change as a result of the merger.
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<PAGE>
PUTNAM DIVIDEND GROWTH FUND
Instruction to Callers
Hello, Mr./Ms. (Shareholder). My name is ( ). I am calling
from D.F.
King and Co., Inc. We are assisting Putnam Dividend Growth Fund
in
regard to its shareholder meeting to be held on September 7,
1995. Do
you have a moment/Is this a good time to talk for a few minutes?
1. Have you received the fund's proxy material dated June 5,
1995?
a. If No: Confirm current address (if the shareholder has a
new
address, input appropriate command into computer).
Inform shareholder that a new set of material will
be
mailed.
Ask the shareholder to review the material upon
receipt and vote his/her shares by signing, dating
and mailing the proxy card in the return envelope
provided. Inform the shareholder that the Board
of
Trustees unanimously recommends a vote for the
proposal on the meeting agenda. Thank the
shareholder for his/her time. (End phone call.)
Input appropriate command into computer.
b. If Yes: Have you reviewed the material?
i. If No: Ask the shareholder to review the material at
the earliest convenience and vote his/her
shares by signing, dating and mailing the
proxy
card in the return envelope provided. Inform
the shareholder that the Board of Trustees
unanimously recommends a vote for the
proposal
on the meeting agenda. Thank the shareholder
for his/her time. (End phone call.)
ii. If Yes: Do you have any questions?
A. If Yes: Answer the questions using the proxy
materials
or the attached Q & A. After answering
all
questions, ask the shareholder to vote
his/her
shares by signing, dating and mailing
the
enclosed proxy card in the return
envelope
provided. Inform the shareholder that
the Board
of Trustees unanimously recommends a
vote for
the proposals on the meeting agenda.
Thank the
shareholder for his/her time. (End
phone call.)
<PAGE>
B. If No: Ask the shareholder to please take a moment
to
vote his/her shares by signing, dating and
mailing the proxy card in the return envelope
provided. Inform the shareholder that the
Board
of Trustees unanimously recommend a vote for
the
proposals on the meeting agenda. Thank the
shareholder for his/her time. (End phone
call.)
----------------------------
(Instructions for leaving a message on an answering
machine)
Hello, my name is ( ). I am calling from D.F. King & Co., Inc.
We are
assisting Putnam Dividend Growth Fund in regard to its
shareholder
meeting to be held on September 7, 1995. You should have
received
proxy materials dated June 5, 1995. At your earliest convenience
please sign, date and mail the proxy card in the return envelope
provided. If you have not received your proxy materials, or have
questions or need assistance, please call D.F. King at 1-800-xxx-
xxxx between 10:00 a.m. and 5:00 p.m., Eastern Time. If you have
already mailed your proxy card, please disregard this message and
accept our thanks.
b29call
