SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
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Filed by the Registrant / X /
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Filed by a party other than the Registrant / /
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Check the appropriate box:
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/ / Preliminary Proxy Statement
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/ / Confidential, for Use of the Commission Only (as
- ---- permitted by Rule 14a-6(e) (2))
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/ X / Definitive Proxy Statement
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/ / Definitive Additional Materials
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/ / Soliciting Material Pursuant to Sec. 240.14a-11(c) or
- ---- Sec. 240.14a-12
PUTNAM EUROPE GROWTH FUND
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if
other than Registrant)
Payment of Filing Fee (Check the appropriate box):
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/ X / No fee required
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/ / Fee computed on table below per Exchange Act
- ---- Rule 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
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/ / Check box if any part of the fee is offset as
- ---- provided by Exchange Act Rule 0-11(a)(2) and identify
the filing for which the offsetting fee was paid
previously. Identify the previous filing by
registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
IMPORTANT INFORMATION
FOR SHAREHOLDERS IN
PUTNAM EUROPE GROWTH 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 pages 5 and 6 .
We urge you to spend a couple of minutes with the proxy
statement, fill out your proxy card, and return it to us. When
shareholders don't return their proxies in sufficient numbers, we
have to incur the expense of follow-up solicitations, which can
cost your fund money.
We want to know how you would like to vote and welcome your
comments. Please take a few moments with these materials and
return your proxy to us.
(PUTNAM LOGO APPEARS HERE)
BOSTON * LONDON * TOKYO
Table of contents
A Message from the Chairman. . . . . . . . . . . . . . . . . . .
. . . . .1
Notice of Shareholder Meeting. . . . . . . . . . . . . . . . . .
. . . . .2
Trustees' Recommendations. . . . . . . . . . . . . . . . . . . .
. 5
Proxy card enclosed
If you have any questions, please contact us at the special toll-
free number we have set up for you (1-800-225-1581) or call your
financial adviser.
A Message from the Chairman
(Photograph of George Putnam appears here)
Dear Shareholder:
I am writing to you to ask for your vote on important questions
that affect your investment in your fund. While you are, of
course, welcome to join us at your fund's meeting, most
shareholders cast their vote by filling out and signing the
enclosed proxy. We are asking for your vote on the following
matters:
1. Electing Trustees to oversee your fund;
2. Ratifying the selection by the Trustees of the independent
auditors of your fund for its current fiscal year;
3. Approving amendments to certain of your fund's fundamental
investment restrictions; and
4. Approving the elimination of certain of your fund's
fundamental investment restrictions.
Although we would like very much to have each shareholder attend
his or her fund's meeting, we realize this is not
possible. Whether or not you plan to be present, we need your
vote. We urge you to complete, sign, and return the enclosed
proxy card promptly. A postage-paid envelope is enclosed.
I'm sure that you, like most people, lead a busy life and are
tempted to put this proxy aside for another day. Please don't.
When shareholders do not return their proxies, their fund may
have to incur the expense of follow-up solicitations. All
shareholders benefit from the speedy return of proxies.
Your vote is important to us. We appreciate the time and
consideration that I am sure you will give this important matter.
If you have questions about the proposals, contact your financial
adviser or call a Putnam customer service representative at
1-800-225-1581.
Sincerely yours,
(signature of George Putnam)
George Putnam, Chairman
PUTNAM EUROPE GROWTH FUND
Notice of a Meeting of Shareholders
This is the formal agenda for your fund's shareholder meeting.
It tells you what matters will be voted on and the time and place
of the meeting, if you can attend in person.
To the Shareholders of Putnam Europe Growth Fund:
A Meeting of Shareholders of your fund will be held on
February 6, 1997 at 2:00 p.m., Boston time, on the eighth floor
of One Post Office Square, Boston, Massachusetts, to consider the
following:
1. Electing Trustees. See page 7 .
2. Ratifying the selection by the Trustees of the independent
auditors of your fund for its current fiscal year. See page
24 .
3.A. Approving an amendment to the fund's fundamental investment
restriction with respect to diversification. See page
25 .
3.B. Approving an amendment to the fund's fundamental investment
restriction with respect to investments in the voting
securities of a single issuer. See page 27 .
3.C. Approving an amendment to the fund's fundamental investment
restriction with respect to making loans. See page
29 .
3.D. Approving an amendment to the fund's fundamental investment
restriction with respect to investments in commodities. See
page 30 .
3.E. Approving an amendment to the fund's fundamental investment
restriction with respect to senior securities. See
page 31 .
4.A. Approving the elimination of the fund's fundamental
investment restriction with respect to investments in
securities of issuers in which management of the fund or
Putnam Investment Management owns securities. See
page 32 .
4.B. Approving the elimination of the fund's fundamental
investment restriction with respect to margin transactions.
See page 33 .
4.C. Approving the elimination of the fund's fundamental
investment restriction with respect to short sales. See
page 34 .
4.D. Approving the elimination of the fund's fundamental
investment restriction with respect to pledging assets. See
page 35 .
4.E. Approving the elimination of the fund's fundamental
investment restriction with respect to investments in
restricted securities. See page 37 .
4.F. Approving the elimination of the fund's fundamental
investment restriction with respect to investments in
certain oil, gas and mineral interests. See page 38 .
4.G. Approving the elimination of the fund's fundamental
investment restriction with respect to investing to gain
control of a company's management. See page 39 .
5. Transacting other business as may properly come before the
meeting.
By the Trustees
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson A. Baxter Robert E. Patterson
Hans H. Estin Donald S. Perkins
John A. Hill George Putnam, III
Ronald J. Jackson Eli Shapiro
Elizabeth T. Kennan A.J.C. Smith
Lawrence J. Lasser W. Nicholas Thorndike
WE URGE YOU TO MARK, SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN
THE POSTAGE-PAID ENVELOPE PROVIDED SO YOU WILL BE REPRESENTED AT
THE MEETING.
November 18 , 1996
Proxy Statement
This document will give you the information you need to vote on
the matters listed on the previous pages. Much of the
information in the proxy statement is required under rules of the
Securities and Exchange Commission ("SEC"); some of it is
technical. If there is anything you don't understand, please
contact us at our special toll-free number, 1-800-225-1581, or
call your financial adviser.
Who is asking for my vote?
The enclosed proxy is solicited by the Trustees of Putnam Europe
Growth Fund for use at the Meeting of Shareholders of the fund to
be held on February 6, 1997, 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 the election of all nominees;
2. For selecting Price Waterhouse LLP as the independent
auditors of your fund;
3.A. For amending the fund's fundamental investment restriction
with respect to diversification;
3.B. For amending the fund's fundamental investment restriction
with respect to investments in the voting securities of a
single issuer;
3.C. For amending the fund's fundamental investment restriction
with respect to making loans;
3.D. For amending the fund's fundamental investment restriction
with respect to investments in commodities;
3.E. For amending the fund's fundamental investment restriction
with respect to senior securities;
4.A. For eliminating the fund's fundamental investment
restriction with respect to investments in securities of
issuers in which management of the fund or Putnam Investment
Management owns securities;
4.B. For eliminating the fund's fundamental investment
restriction with respect to margin transactions;
4.C. For eliminating the fund's fundamental investment
restriction with respect to short sales;
4.D. For eliminating the fund's fundamental investment
restriction with respect to pledging assets;
4.E. For eliminating the fund's fundamental investment
restriction with respect to investments in restricted
securities;
4.F. For eliminating the fund's fundamental investment
restriction with respect to investments in certain oil, gas
and mineral interests; and
4.G. For eliminating the fund's fundamental investment
restriction with respect to investing to gain control of a
company's management.
Who is eligible to vote?
Shareholders of record at the close of business on
November 8, 1996, are entitled to be present and to vote at the
meeting or any adjourned meeting. The Notice of Meeting, the
proxy, and the Proxy Statement have been mailed to shareholders
of record on or about November 18 , 1996.
Each share is entitled to one vote. Shares represented by duly
executed proxies will be voted in accordance with shareholders'
instructions. If you sign the proxy, but don't fill in a vote,
your shares will be voted in accordance with the Trustees'
recommendations. If any other business is brought before the
meeting, your shares will be voted at the Trustees' discretion.
The Proposals
1. ELECTION OF TRUSTEES
Who are the nominees for Trustees?
The Nominating Committee of the Trustees recommends that the
number of Trustees be fixed at fourteen and that you vote for the
election of the nominees described below. Each nominee is
currently a Trustee of your fund and of the other Putnam funds.
The Nominating Committee of the Trustees consists solely of
Trustees who are not "interested persons" (as defined in the
Investment Company Act of 1940) of your fund or of Putnam
Investment Management, Inc., your fund's investment manager
("Putnam Management").
Jameson Adkins Baxter
[Insert Picture]
Ms. Baxter, age 53, is the President of Baxter Associates, Inc.,
a management and financial consulting firm which she founded in
1986. During that time, she was also a Vice President and
Principal of the Regency Group, Inc., and a Consultant to First
Boston Corporation, both of which are investment banking firms.
From 1965 to 1986, Ms. Baxter held various positions in
investment banking and corporate finance at First Boston.
Ms. Baxter currently also serves as a Director of Banta
Corporation, Avondale Federal Savings Bank, and ASHTA Chemicals,
Inc. She is also the Chairman Emeritus of the Board of Trustees
of Mount Holyoke College, having previously served as Chairman
for five years and as a Board member for thirteen years; an
Honorary Trustee and past President of the Board of Trustees of
the Emma Willard School; and Chair of the Board of Governors of
Good Shepherd Hospital. Ms. Baxter is a graduate of Mount
Holyoke College.
Hans H. Estin
[Insert Picture]
Mr. Estin, age 68, is a Chartered Financial Analyst and the Vice
Chairman of North American Management Corp., a registered
investment adviser serving individual clients and their families.
Mr. Estin currently also serves as a Director of The Boston
Company, Inc., a registered investment adviser which provides
administrative and investment management services to mutual funds
and other institutional investors, and Boston Safe Deposit and
Trust Company; a Corporation Member of Massachusetts General
Hospital; and a Trustee of New England Aquarium. He previously
served as the Chairman of the Board of Trustees of Boston
University and is currently active in various other civic
associations, including the Boys & Girls Clubs of Boston, Inc.
Mr. Estin is a graduate of Harvard College and holds honorary
doctorates from Merrimack College and Boston University.
John A. Hill
[Insert Picture]
Mr. Hill, age 54, is the Chairman and Managing Director of First
Reserve Corporation, a registered investment adviser investing in
companies in the world-wide energy industry on behalf of
institutional investors.
Prior to acquiring First Reserve in 1983, Mr. Hill held executive
positions with several investment advisory firms and held various
positions with the Federal government, including Associate
Director of the Office of Management and Budget and Deputy
Administrator of the Federal Energy Administration.
Mr. Hill currently also serves as a Director of Snyder Oil
Corporation, an exploration and production company which he
founded, Maverick Tube Corporation, a manufacturer of structural
steel, pipe and well casings, PetroCorp Incorporated, an
exploration and production company, Weatherford Enterra, Inc., an
oil field service company, various private companies controlled
by First Reserve Corporation, and various First Reserve Funds.
He is also a Member of the Board of Advisors of Fund Directions.
He is currently active in various business associations,
including the Economic Club of New York, and lectures on energy
issues in the United States and Europe. Mr. Hill is a graduate
of Southern Methodist University.
Ronald J. Jackson
[Insert Picture]
Mr. Jackson, age 52, was Chairman of the Board, President and
Chief Executive Officer of Fisher-Price, Inc., a major toy
manufacturer, from 1990 to 1993. He previously served as
President and Chief Executive Officer of Stride-Rite, Inc., a
manufacturer and distributor of footwear, from 1989 to 1990, and
as President and Chief Executive Officer of Kenner Parker Toys,
Inc., a major toy and game manufacturer, from 1985 to 1987.
Prior to that, he held various financial and marketing positions
at General Mills, Inc. from 1966 to 1985, including Vice
President, Controller and Vice President of Marketing for Parker
Brothers, a toy and game company, and President of Talbots, a
retailer and direct marketer of women's apparel.
Mr. Jackson currently serves as a Director of Safety 1st, Inc., a
company which markets a wide range of child care and safety
products. He also serves as a Trustee of Salem Hospital and
the Peabody Essex Museum. He previously served as a
Director of a number of public companies including Fisher-Price,
Inc., Kenner Parker Toys, Inc., Stride-Rite, Inc., and Mattel,
Inc., a major toy manufacturer. Mr. Jackson is a graduate of
Michigan State University Business School.
Elizabeth T. Kennan
[Insert Picture]
Ms. Kennan, age 58, is President Emeritus and Professor of Mount
Holyoke College. From 1978 through June 1995, she was President
of Mount Holyoke College. From 1966 to 1978, she was on the
faculty of Catholic University, where she taught history and
published numerous articles.
Ms. Kennan currently also serves as a Director of NYNEX
Corporation, a telecommunications company, Northeast Utilities,
the Kentucky Home Life Insurance Companies, and Talbots. She
also serves as a Member of The Folger Shakespeare Library
Committee. She is currently active in various educational and
civic associations, including the Committee on Economic
Development and the Council on Foreign Relations. Ms. Kennan is
a graduate of Mount Holyoke College, the University of Washington
and St. Hilda College at Oxford University and holds several
honorary doctorates.
Lawrence J. Lasser*
[Insert Picture]
Mr. Lasser, age 54, is the Vice President of your fund and the
other Putnam funds. He has been the President, Chief Executive
Officer and a Director of Putnam Investments, Inc. and Putnam
Management since 1985, having begun his career there in 1969.
Mr. Lasser currently also serves as a Director of Marsh &
McLennan Companies, Inc., the parent company of Putnam
Management, and INROADS/Central New England, Inc., a job market
internship program for minority high school and college students.
He is a Member of the Board of Overseers of the Museum of
Science, the Museum of Fine Arts and the Isabella Stewart Gardner
Museum in Boston. He is also a Trustee of the Beth Israel
Hospital and Buckingham, Browne and Nichols School. Mr. Lasser
is a graduate of Antioch College and Harvard Business School.
Robert E. Patterson
[Insert Picture]
Mr. Patterson, age 51, is the Executive Vice President and
Director of Acquisitions of Cabot Partners Limited Partnership, a
registered investment adviser which manages real estate
investments for institutional investors. Prior to 1990, he was
the Executive Vice President of Cabot, Cabot & Forbes Realty
Advisors, Inc., the predecessor company of Cabot Partners. Prior
to that, he was a Senior Vice President of the Beal Companies, a
real estate management, investment and development company. He
has also worked as an attorney and held various positions in
state government, including the founding Executive Director of
the Massachusetts Industrial Finance Agency.
Mr. Patterson currently also serves as Chairman of the Joslin
Diabetes Center and as a Director of Brandywine Trust Company.
Mr. Patterson is a graduate of Harvard College and Harvard Law
School.
Donald S. Perkins*
[Insert Picture]
Mr. Perkins, age 69, is the retired Chairman of the Board of
Jewel Companies, Inc., a diversified retailer, where among other
roles he served as President, Chief Executive Officer and
Chairman of the Board from 1965 to 1980. He currently also
serves as a Director of various other public corporations,
including AON Corp., an insurance company, Cummins Engine
Company, Inc., an engine and power generator equipment
manufacturer and assembler, Current Assets L.L.C., a corporation
providing financial staffing services, Illinova and Illinois
Power Co., Inland Steel Industries, Inc., LaSalle Street Fund,
Inc., a real estate investment trust, Lucent Technologies Inc.,
Springs Industries, Inc., a textile manufacturer, and Time
Warner, Inc., one of the nation's largest media conglomerates.
He previously served as a Director of several other major public
corporations, including Corning Glass Works, Eastman Kodak
Company, Firestone Tire & Rubber Company and Kmart Corporation.
Mr. Perkins currently also serves as a Trustee and Vice Chairman
of Northwestern University and as a Trustee of the Hospital
Research and Education Trust. He is currently active in various
civic and business associations, including the Business Council
and the Civic Committee of the Commercial Club of Chicago, of
which he is the founding Chairman. Mr. Perkins is a graduate of
Yale University and Harvard Business School and holds an honorary
doctorate from Loyola University of Chicago.
William F. Pounds
[Insert Picture]
Dr. Pounds, age 68, is the Vice Chairman of your fund and of the
other Putnam funds. He has been a Professor of Management at the
Alfred P. Sloan School of Management at the Massachusetts
Institute of Technology since 1961 and served as Dean of that
School from 1966 to 1980. He previously served as Senior Advisor
to the Rockefeller Family and Associates and was a past Chairman
of Rockefeller & Co., Inc., a registered investment adviser which
manages Rockefeller family assets, and Rockefeller Trust Company.
Dr. Pounds currently also serves as a Director of IDEXX
Laboratories, Inc., EG&G, Inc., Perseptive Biosystems, Inc.,
Management Sciences For Health, Inc. and Sun Company, Inc. He is
also a Trustee of the Museum of Fine Arts in Boston; an Overseer
of WGBH Educational Foundation, and a Fellow of The American
Academy of Arts and Sciences. He previously served as a Director
of Fisher-Price, Inc. and General Mills, Inc. Dr. Pounds is a
graduate of Carnegie-Mellon University.
George Putnam*
[Insert Picture]
Mr. Putnam, age 70, is the Chairman and President of your fund
and of the other Putnam funds. He is the Chairman and a Director
of Putnam Management and Putnam Mutual Funds Corp. and a Director
of Marsh & McLennan, their parent company. Mr. Putnam is the son
of the founder of the Putnam funds and Putnam Management and has
been employed in various capacities by Putnam Management since
1951, including Chief Executive Officer from 1961 to 1973. He is
a former Overseer and Treasurer of Harvard University; a past
Chairman of the Harvard Management Company; and a Trustee
Emeritus of Wellesley College and Bradford College.
Mr. Putnam currently also serves as a Director of The Boston
Company, Inc., Boston Safe Deposit and Trust Company, Freeport-
McMoRan, Inc., Freeport Copper and Gold, Inc., McMoRan Oil and
Gas, Inc., mining and natural resources companies, General Mills,
Inc., Houghton Mifflin Company, a major publishing company, and
Rockefeller Group, Inc., a real estate manager. He is also a
Trustee of Massachusetts General Hospital, McLean Hospital,
Vincent Memorial Hospital, WGBH Educational Foundation and the
Museum of Fine Arts and the Museum of Science in Boston; the New
England Aquarium; an Overseer of Northeastern University; and a
Fellow of The American Academy of Arts and Sciences. Mr. Putnam
is a graduate of Harvard College and Harvard Business School and
holds honorary doctorates from Bates College and Harvard
University.
George Putnam, III*
[Insert Picture]
Mr. Putnam, age 45, is the President of New Generation Research,
Inc., a publisher of financial advisory and other research
services relating to bankrupt and distressed companies, and New
Generation Advisers, Inc., a registered investment adviser which
provides advice to private funds specializing in investments in
such companies. Prior to founding New Generation in 1985, Mr.
Putnam was an attorney with the Philadelphia law firm Dechert
Price & Rhoads.
Mr. Putnam currently also serves as a Director of the
Massachusetts Audubon Society. He is also a Trustee of the Sea
Education Association and St. Mark's School and an Overseer of
the New England Medical Center. Mr. Putnam is a graduate of
Harvard College, Harvard Business School and Harvard Law School.
Eli Shapiro
[Insert Picture]
Dr. Shapiro, age 80, is the Alfred P. Sloan Professor of
Management, Emeritus at the Alfred P. Sloan School of Management
at the Massachusetts Institute of Technology, having served on
the faculty of the Sloan School for eighteen years. He
previously was also on the faculty of Harvard Business School,
The University of Chicago School of Business and Brooklyn
College. During his academic career, Dr. Shapiro authored
numerous publications concerning finance and related topics. He
previously served as the President and Chief Executive Officer of
the National Bureau of Economic Research and also provided
economic and financial consulting services to various clients.
Dr. Shapiro is a past Director of many companies, including
Nomura Dividend Income Fund, Inc., a privately held registered
investment company managed by Putnam Management, Reece
Corporation, a sewing machine manufacturer, Commonwealth
Mortgage, Dexter Corporation, a manufacturer of plastics and
related products, Avis Corporation, a car rental company,
Connecticut Bank and Trust Company, Connecticut National Gas
Corporation, the Federal Home Loan Bank of Boston, where he
served as Chairman from 1977 to 1989, Travelers' Corporation, an
insurance company, and Norlin Corporation, a musical instrument
manufacturer; and a past Trustee of Mount Holyoke College and the
Putnam funds (from 1984 to 1989).
Dr. Shapiro is a Fellow of The American Academy of Arts and
Sciences and is active in various professional and civic
associations, including the American Economic Association, the
American Finance Association and the Council on Foreign
Relations. Dr. Shapiro is a graduate of Brooklyn College and
Columbia University.
A.J.C. Smith*
[Insert Picture]
Mr. Smith, age 62, is the Chairman and Chief Executive Officer of
Marsh & McLennan Companies, Inc. He has been employed by Marsh &
McLennan and related companies in various capacities since 1961.
Mr. Smith is a Director of the Trident Corp., and he also serves
as a Trustee of the Carnegie Hall Society, the Central Park
Conservancy, The American Institute for Chartered Property
Underwriters, and is a Founder of the Museum of Scotland Society.
He was educated in Scotland and is a Fellow of the Faculty of
Actuaries in Edinburgh, a Fellow of the Canadian Institute of
Actuaries, a Fellow of the Conference of Actuaries in Public
Practice, an Associate of the Society of Actuaries, a Member of
the American Academy of Actuaries, the International Actuarial
Association and the International Association of Consulting
Actuaries.
W. Nicholas Thorndike**
[Insert Picture]
Mr. Thorndike, age 63, serves as a Director of various
corporations and charitable organizations, including Data General
Corporation, a computer and high technology company, Bradley Real
Estate, Inc., a real estate investment firm, Providence Journal
Co., a newspaper publisher and owner of television stations, and
Courier Corporation, a book binding and printing company. He is
also a Trustee of Eastern Utilities Associates, Massachusetts
General Hospital, where he previously served as chairman and
president, and Northeastern University.
Prior to December 1988, he was the Chairman of the Board and
Managing Partner of Wellington Management Company/Thorndike,
Doran, Paine & Lewis, a registered investment adviser which
manages mutual funds and institutional assets. He also
previously served as a Trustee of the Wellington Group of Funds
(now The Vanguard Group) and was the Chairman and a Director of
Ivest Fund, Inc. Mr. Thorndike is a graduate of Harvard College.
- ----------------------------
* Nominees who are or may be deemed to be "interested persons"
(as defined in the Investment Company Act of 1940) of your
fund, Putnam Management and Putnam Mutual Funds Corp.
("Putnam Mutual Funds"), the principal underwriter for all
the open-end Putnam funds and an affiliate of Putnam
Management. Messrs. Putnam, Lasser, and Smith are deemed
"interested persons" by virtue of their positions as
officers or shareholders of your fund, or directors of
Putnam Management, Putnam Mutual Funds or Marsh & McLennan
Companies, Inc., the parent company of Putnam Management and
Putnam Mutual Funds. Mr. George Putnam, III, Mr. Putnam's
son, is also an "interested person" of your fund, Putnam
Management and Putnam Mutual Funds. Mr. Perkins may be
deemed to be an "interested person" of your fund because of
his service as a director of a certain publicly held company
that includes registered broker-dealer firms among its
subsidiaries. Neither your fund nor any of the other Putnam
funds currently engages in any transactions with such firms
except that certain of such firms act as dealers in the
retail sale of shares of certain Putnam funds in the
ordinary course of their business. The balance of the
nominees are not "interested persons."
** In February 1994 Mr. Thorndike accepted appointment as a
successor trustee of certain private trusts in which he has
no beneficial interest. At that time he also became
Chairman of the Board of two privately owned corporations
controlled by such trusts, serving in that capacity until
October 1994. These corporations filed voluntary petitions
for relief under Chapter 11 of the U.S. Bankruptcy Code in
August 1994.
Except as indicated above, the principal occupations and business
experience of the nominees for the last five years have been with
the employers indicated, although in some cases they have held
different positions with those employers. Except for
Dr. Shapiro and Mr. Jackson, all the nominees were elected by the
shareholders in July 1994. Dr. Shapiro and Mr. Jackson
were elected by the other Trustees in April 1995 and May 1996,
respectively. As indicated above, Dr. Shapiro also
previously served as a Trustee of the Putnam funds from 1984 to
1989. The 14 nominees for election as Trustees at the
shareholder meeting of your fund who receive the greatest number
of votes will be elected Trustees of your fund. The Trustees
serve until their successors are elected and qualified. Each of
the nominees has agreed to serve as a Trustee if elected. If any
of the nominees is unavailable for election at the time of the
meeting, which is not anticipated, the Trustees may vote for
other nominees at their discretion, or the Trustees may
recommend that the shareholders fix the number of Trustees
at less than 14 for your fund.
What are the Trustees' responsibilities?
Your fund's Trustees are responsible for the general oversight of
your fund's business and for assuring that your fund is managed
in the best interests of its shareholders. The Trustees
periodically review your fund's investment performance as well as
the quality of other services provided to your fund and its
shareholders by Putnam Management and its affiliates, including
administration, custody, distribution and investor servicing. At
least annually, the Trustees review the fees paid to Putnam
Management and its affiliates for these services and the overall
level of your fund's operating expenses. In carrying out these
responsibilities, the Trustees are assisted by an independent
administrative staff and by your fund's auditors and legal
counsel, which are selected by the Trustees and are independent
of Putnam Management and its affiliates.
Do the Trustees have a stake in your fund?
The Trustees believe it is important that each Trustee have a
significant investment in the Putnam funds. The Trustees
allocate their investments among the more than 99 Putnam funds
based on their own investment needs. The Trustees' aggregate
investments in the Putnam funds total over $48 million.
The table below lists each Trustee's current investments in the
fund and in the Putnam funds as a group.
Share Ownership by Trustees
Year first Number of
Number of
elected as shares of
shares of
Trustee of the fund
all Putnam
the Putnam owned as of
funds owned as
Trustees funds 9/30/96(1)
of 9/30/96(2)
- -----------------------------------------------------------------
- ----------------
Jameson A. Baxter 1994 551
35,991
Hans H. Estin 1972 336
27,467
John A. Hill 1985 7,045
127,131
Ronald J. Jackson 1996 965
66,402
Elizabeth T. Kennan 1992 491
29,939
Lawrence J. Lasser 1992 38,922(3)
444,265
Robert E. Patterson 1984 1,385
59,066
Donald S. Perkins 1982 2,736
164,173
William F. Pounds 1971 33,741
350,849
George Putnam 1957 4,365
1,652,602
George Putnam, III 1984 265
289,044
Eli Shapiro 1995 (4) -0-
88,717
A.J.C. Smith 1986 112
46,915
W. Nicholas Thorndike 1992 104
80,855
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(1) Except as noted below, each Trustee has sole
investment power and
sole voting power with respect to his or her shares
of the fund.
(2) These holdings do not include shares of Putnam
money market funds.
(3) Mr. Lasser has sole investment power and shared voting
power with respect to
38,835 of these shares, which are held for his
individual account in the Putnam
Investments, Inc. Profit Sharing Retirement Plan.
(4) Dr. Shapiro previously served as a Trustee of
the Putnam funds from 1984 to
1989.
As of September 30, 1996 , the Trustees and
officers of the fund owned a total of 111,699 shares
of the fund, comprising 1.19% of its outstanding
shares on that date. A total of 50,455 of these
shares are held by certain "interested" Trustees and
officers of your fund and Putnam Management in their Putnam
Investments, Inc. Profit Sharing Retirement Plan accounts.
Each individual accountholder has sole investment power and
shared voting power with respect to his/her account.
What are some of the ways in which the Trustees represent
shareholder interests?
The Trustees believe that, as substantial investors in the Putnam
funds, their interests are closely aligned with those of
individual shareholders. Among other ways, the Trustees seek to
represent shareholder interests:
- by carefully reviewing your fund's investment
performance on an individual basis with your fund's
managers;
- by also carefully reviewing the quality of the various
other services provided to the funds and their
shareholders by Putnam Management and its affiliates;
- by discussing with senior management of Putnam
Management steps being taken to address any performance
deficiencies;
- by reviewing the fees paid to Putnam Management to
ensure that such fees remain reasonable and competitive
with those of other mutual funds, while at the same
time providing Putnam Management sufficient resources
to continue to provide high quality services in the
future;
- by monitoring potential conflicts between the funds and
Putnam Management and its affiliates to ensure that the
funds continue to be managed in the best interests of
their shareholders;
- by also monitoring potential conflicts among funds to
ensure that shareholders continue to realize the
benefits of participation in a large and diverse family
of funds.
How often do the Trustees meet?
The Trustees meet each month (except August) over a two-day
period to review the operations of your fund and of the other
Putnam funds. A portion of these meetings is devoted to meetings
of various Committees of the board which focus on particular
matters. These include: the Contract Committee, which reviews
all contractual arrangements with Putnam Management and its
affiliates; the Communication and Service Committee, which
reviews the quality of services provided by your fund's investor
servicing agent, custodian and distributor; the Pricing,
Brokerage and Special Investments Committee, which reviews
matters relating to valuation of securities, best execution,
brokerage costs and allocations and new investment techniques;
the Audit Committee, which reviews accounting policies and the
adequacy of internal controls and supervises the engagement of
the funds' auditors; the Compensation, Administration and Legal
Affairs Committee, which reviews the compensation of the Trustees
and their administrative staff and supervises the engagement of
the funds' independent counsel; and the Nominating Committee,
which is responsible for selecting nominees for election as
Trustees.
Each Trustee generally attends at least two formal committee
meetings during such monthly meeting of the Trustees. During
1995, the average Trustee participated in approximately 40
committee and board meetings. In addition, the Trustees meet in
small groups with Chief Investment Officers and Portfolio
Managers to review recent performance and the current investment
climate for selected funds. These meetings ensure that each
fund's performance is reviewed in detail at least twice a year.
The Contract Committee typically meets on several additional
occasions during the year to carry out its responsibilities.
Other Committees, including an Executive Committee, may also meet
on special occasions as the need arises.
What are the Trustees paid for their services?
Each Trustee receives a fee for his or her
services. Each Trustee also receives fees for serving as Trustee
of 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 Trustees
meet monthly over a two-day period, except in August. The
Compensation Committee, which consists solely of Trustees not
affiliated with Putnam Management and is responsible for
recommending Trustee compensation, 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 year each Trustee
was first elected a Trustee of the Putnam funds, the fees
paid to each Trustee by the fund for the fiscal 1996 and the
fees paid to each Trustee by all of the Putnam funds
during calendar year 1995 :
Compensation Table+
Trustees
Aggregate
compensation
from the
fund(1)
Pension or
retirement
benefits
accrued as
part of the
fund
expenses(2)
Estimated
annual
benefits from
all Putnam
funds upon
retirement(3)
Total
compensation
from all
Putnam
funds (4)</
R>
James A.
Baxter/1994
$1,093
$0
$71,676
$150,854
Hans H. Estin/1972
1,086
0
70,043
150,854
John A. Hill/1985(5)
1,076
0
70,043
149,854
Ronald J.
Jackson/1996(6)
91
0
N/A
N/A
Elizabeth T.
Kennan/1992
1,086
0
69,709
148,854
Lawrence J.
Lasser/1992
1,077
0
70,043
150,854
Robert E.
Patterson/1984
1,146
0
71,043
152,854
Donald S.
Perkins/1982
1,080
0
69,376
150,854
William F. Pounds/1971
1,104(7)
0
70,543
149,854
George Putnam/1957
1,086
0
70,043
150,854
George Putnam,
III/1984
1,086
0
70,043
150,854
Eli Shapiro ,
III/1995(8)
1,152
0
47,686
95,372
A.J.C. Smith/1986
1,077
0
68,252
149,854
W. Nicholas
Thorndike/1992
1,142
0
71,043
152,854
(1)
Includes an annual retainer and an attendance fee for each
meeting attended.
(2) The Trustees approved a Retirement Plan for Trustees
of the Putnam funds on
October 1, 1996. Prior to that date, voluntary
retirement benefits were paid to
certain retired Trustees, and no such benefits were
accrued as part of fund
expenses.
(3) Assumes that each Trustee retires after at least five
years of service.
Estimated benefits for each are based on amounts paid to
such Trustee for the
three most recent calendar years (or, for
Trustees who have not
served as Trustees for the three most recent calendar
years, the average amount
paid to each Trustee for such years).
(4) As of December 31, 1995, there were 99 funds in
the Putnam family.
(5) Includes compensation deferred pursuant to a Trustee
Compensation Deferral Plan.
The total amount of deferred compensation payable by
the Putnam funds to Mr. Hill
as of December 31, 1995, was $51,141. Information on
deferred compensation
includes income earned on such accounts.
(6)
Elected as Trustee in May 1996.
(7)
Includes additional compensation for services as Vice
Chairman of the Putnam
funds.
(8)
Elected as a Trustee in April 1995.
Under a Retirement Plan for Trustees of the Putnam
funds (the "Plan"),
each Trustee who retires with at least five years of
service as a Trustee of the
funds is entitled to receive an annual retirement benefit
equal to one-half of the
average annual compensation paid to such Trustee for the last
three years of service
prior to retirement. This retirement benefit is payable during a
Trustee's lifetime,
beginning the year following retirement, for a number of years
equal to such Trustee's
years of service. A death benefit is also available under the
Plan which assures that the
Trustee and his or her beneficiaries will receive benefit
payments for the lesser of an
aggregate period of (i) ten years or (ii) such Trustee's total
years of service.
The Plan administrator (a committee comprised of Trustees that
are not "interested
persons" of the fund, as defined in the Investment Company Act of
1940) may terminate or
amend the Plan at any time, but no termination or amendment will
result in a reduction in
the amount of benefits (i) currently being paid to a Trustee at
the time of such
termination or amendment, or (ii) to which a current Trustee
would have been entitled to
receive had he or she retired immediately prior to such
termination or amendment.
For additional information about your fund, including further
information about its
Trustees and officers, please see "Further Information About Your
Fund," on page
44 .
Putnam Investments
Putnam Investment Management, Inc. and its affiliates, Putnam
Mutual Funds, the principal
underwriter for shares of your fund and Putnam Fiduciary Trust
Company, your fund's
investor servicing agent and custodian, are wholly owned by
Putnam Investments, Inc., One
Post Office Square, Boston, Massachusetts 02109, a holding
company that is in turn wholly
owned by Marsh & McLennan Companies, Inc., which has executive
offices at 1166 Avenue of
the Americas, New York, New York 10036. Marsh & McLennan
Companies, Inc. and its
operating subsidiaries are professional services firms with
insurance and reinsurance
brokering, consulting, and investment management businesses.
2. SELECTION OF INDEPENDENT AUDITORS
Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts,
independent accountants,
has been selected by the Trustees as the auditor of your fund for
the current fiscal year.
Among the country's preeminent accounting firms, this firm also
serves as the auditor for
approximately half of the other funds in the Putnam family. It
was selected primarily on
the basis of its expertise as auditors of investment companies,
the quality of its audit
services, and the competitiveness of the fees charged for these
services.
A majority of the votes on the matter is necessary to ratify the
selection of auditors. A
representative of the independent auditors is expected to be
present at the meeting to
make statements and to respond to appropriate questions.
PROPOSALS 3 AND 4
As described in the following proposals, the Trustees are
recommending that shareholders
approve a number of changes to
your
fund's fundamental investment restrictions, including
the elimination of certain of these restrictions. The purpose of
these changes is to
standardize the investment restrictions of all of the Putnam
funds, including your
fund
where appropriate, and in certain cases to increase the fund's
investment flexibility. By
having standard investment restrictions for all Putnam funds,
Putnam Management will be
able to more easily monitor each fund's compliance with its
investment policies. Many of
these changes will have little practical effect on the way the
fund is managed given the
fund's current investment objective and
policies.
Several
of the proposals request that certain fundamental restrictions
be
eliminated . These fundamental restrictions were
originally adopted to comply with
state securities law requirements, but are no longer applicable
to the fund due to
recently enacted federal legislation that effectively eliminated
the ability of states to
impose investment limitations on registered investment
companies like the fund.
In light of this development, Putnam Management believes that
these restrictions
are unnecessary and should be eliminated.
The adoption of any of these proposals is not contingent on the
adoption of any other
proposal.
3.A. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO
DIVERSIFICATION
The Trustees are recommending that the fund's fundamental
investment restriction with
respect to the diversification of its investments be revised to
reflect the standard
restriction expected to be used by other Putnam funds and to
grant the fund the maximum
investment flexibility permitted by the Investment Company Act of
1940, as amended (the
"1940 Act"). Under the 1940 Act, the fund, as a diversified
fund, generally may not, with
respect to 75% of its total assets, invest more than 5% of its
total assets in the
securities of any one issuer (except U.S. government securities).
The remaining 25% of
the fund's total assets is not subject to this restriction.
The fund's current restriction is more restrictive, and states
that the fund may not:
"Invest in securities of any issuer if, immediately after
such investment, more
than 5% of the total assets of the fund (taken at current
value) would be invested
in the securities of such issuer; provided that this
limitation does not apply to
obligations issued or guaranteed as to interest or
principal by the U.S. government
or its agencies or instrumentalities."
The proposed amended fundamental investment restriction is set
forth below.
"The fund may not ...
With respect to 75% of its total assets, invest in the
securities of any
issuer if, immediately after such
investment,
more than 5% of the total
assets of the fund (taken at current value) would be
invested in the
securities of such issuer; provided that this limitation
does not apply to
obligations issued or guaranteed as to interest or
principal by the U.S.
government or its agencies or instrumentalities."
If the proposed change is approved, the fund will be able to
invest up to 25% of its total
assets in the securities of any one issuer. The amended
restriction would continue to
exclude from its limitations U.S. government securities.
Following the amendment, the
fund would continue to be a diversified investment company for
purposes of the 1940 Act.
Putnam Management believes that this enhanced flexibility could
assist the fund in
achieving its investment objective. However, during times when
Putnam Management invests
a higher percentage of the fund's assets in one or more issuers,
the value of the fund's
shares may fluctuate more widely than the value of shares of a
portfolio investing in a
larger number of issuers.
Required Vote. Approval of this proposal requires the
affirmative vote
of
the lesser of
(1) more than 50% of the outstanding shares of the fund, or (2)
67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund
are present at the meeting in person or by proxy.
3.B. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO INVESTMENTS
IN THE VOTING SECURITIES OF A SINGLE ISSUER
The Trustees are recommending that the fund's fundamental
investment restriction with
respect to investments in the voting securities of a single
issuer be revised to reflect
the standard restriction expected to be used by other Putnam
funds and to grant the fund
the maximum flexibility permitted under the 1940 Act. The 1940
Act prohibits a
diversified fund such as the fund from investing, with respect to
75% of its total assets,
in the voting securities of an issuer if as a result it would own
more than 10% of the
outstanding voting securities of that issuer. The fund's current
investment restriction,
which is more restrictive than the 1940 Act, states that the fund
may not:
"Acquire more than 10% of the voting securities of any
issuer."
The proposed amended fundamental investment restriction is set
forth below.
"The fund may not ...
With respect to 75% of its total assets, acquire more than
10% of the
outstanding voting securities of any issuer."
Putnam Management believes that limiting this restriction to 75%
of the fund's total
assets will enhance the fund's investment flexibility. Putnam
Management has advised the
Trustees that the current restriction could prevent the fund from
investing in certain
opportunities to the fullest extent that Putnam Management
believes would best serve the
fund's investment objective.
The amendment enables the fund to purchase more than 10% of the
voting securities of an
issuer with respect to 25% of the fund's total assets.
To
the extent the fund
individually or with other funds and accounts managed by Putnam
Management or its
affiliates were to own all or a major portion of the outstanding
voting securities of a
particular issuer, under adverse market or economic conditions or
in the event of adverse
changes in the financial condition of the issuer the fund could
find it more difficult to
sell these voting securities when Putnam Management believes it
advisable to do so, or may
be able to sell the securities only at prices significantly lower
than if they were more
widely held. In addition, certain of the companies in which the
fund may invest a greater
portion of its assets following the amendment could have
relatively small equity market
capitalizations (e.g., under $1 billion). Such companies often
have limited product
lines, markets or financial resources. The securities of these
companies may trade less
frequently and in limited volume, and only in the
over-the-counter market or on a regional
securities exchange. As a result, these securities may fluctuate
in value more than those
of larger, more established companies. Under such circumstances,
it may also be more
difficult to determine the fair value of such securities for
purposes of computing the
fund's net asset value.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the fund, or (2)
67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund
are present at the meeting in person or by proxy.
3.C. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO MAKING LOANS
The Trustees are recommending that the fund's fundamental
investment restriction with
respect to making loans be revised to reflect the standard
restriction expected to be used
by other Putnam funds. The current restriction states that the
fund may not:
"Make loans, except by purchase of debt obligations in
which the fund may invest
consistent with its investment policies, or by entering
into repurchase agreements
with respect to not more than 25% of its total assets
(taken at current value)."
The proposed amended fundamental investment restriction is set
forth below.
"The fund may not ...
Make loans, except by purchase of debt obligations in which
the fund may
invest consistent with its investment policies, by
entering into repurchase
agreements,
or by lending its portfolio securities
."
Following the amendment, the fund may, consistent with its
investment objective and
policies and applicable law, enter into repurchase agreements and
securities loans without
limit. Putnam Management believes that this increased
investment flexibility could
assist the fund in achieving its investment objective.
When the fund enters into a repurchase agreement, it typically
purchases a security for a
relatively short period (usually not more than one week), which
the seller agrees to
repurchase at a fixed time and price, representing the fund's
cost plus interest. When
the fund enters into a securities loan, it lends certain of its
portfolio securities to
broker-dealers or other parties and typically receives an
interest payment in return.
These transactions must be fully collateralized at all times, but
involve some risk to the
fund if the other party should default on its obligation. If the
other party in these
transactions should become involved in bankruptcy or insolvency
proceedings, it is
possible that the fund may be treated as an unsecured creditor
and be required to return
the underlying collateral to the other party's estate.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the fund, or (2)
67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund
are present at the meeting in person or by proxy.
3.D. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO INVESTMENTS
IN COMMODITIES
The Trustees are recommending that the fund's fundamental
investment restriction with
respect to investments in commodities be revised to reflect the
standard restriction
expected to be used by other Putnam funds. The current
restriction states that the fund
may not:
"Purchase or sell commodities or commodity contracts,
except that the fund may
write and purchase financial futures contracts and related
options."
The proposed amended fundamental investment restriction is
set forth below.
"The fund may not ...
Purchase or sell commodities or commodity contracts, except
that the fund
may purchase and sell financial futures contracts and
options and may enter
into foreign exchange contracts and other financial
transactions not
involving physical commodities."
Under the revised restriction, the fund will continue to be able
to engage in a variety of
transactions involving the use of financial futures and options
and foreign currencies, as
well as various other financial transactions to the extent
consistent with its investment
objective and policies. Although the fund may already engage in
many of these activities,
Putnam Management believes that the revised language more clearly
sets forth the fund's
policy. The addition of financial transactions not involving
physical commodities is
intended to give the fund maximum flexibility to invest in a
variety of financial
instruments that could technically be considered commodities, but
which do not involve the
direct purchase or sale of physical commodities, which is the
intended focus of the
restriction.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the fund, or (2)
67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund
are present at the meeting in person or by proxy.
3.E. AMENDING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH
RESPECT TO SENIOR
SECURITIES
The Trustees are recommending that the fund's fundamental
investment restriction with
respect to the issuance of senior securities be revised to
reflect the standard
restriction expected to be used by other Putnam funds and to make
it clear that the fund
is not restricted from borrowing money consistent with its
investment policies.
Generally, a "senior security" is a security which has priority
over any other security as
to distribution of assets or dividends and technically includes
all indebtedness over 5%
of the fund's assets. The current restriction states that the
fund may not:
"Issue any class of securities which is senior to the
fund's shares of beneficial
interest."
The proposed amended fundamental investment restriction is set
forth below:
"The fund may not . . .
"Issue any class of securities which is senior to the
fund's shares of beneficial
interest, except for permitted borrowings."
Although Putnam Management believes that the fund may currently
borrow money to the
maximum extent permitted by its existing policies (up to 10% of
its total assets) without
violating its current restriction, it believes that amending the
restriction will avoid
any possible ambiguity.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the fund, or (2)
67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund
are present at the meeting in person or by proxy.
4.A. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO
INVESTMENTS IN SECURITIES OF ISSUERS IN WHICH MANAGEMENT OF
THE FUND OR PUTNAM
INVESTMENT MANAGEMENT OWNS SECURITIES
The Trustees are recommending eliminating the fund's fundamental
investment restriction
which prevents the fund from investing in the securities of
issuers in which management of
the fund or Putnam Management owns a certain percentage of
securities . The
restriction states that the fund may not:
"Invest in securities of any issuer if, to the knowledge of
the fund, officers and
Trustees of the fund and officers and directors of Putnam
Management who
beneficially own more than 0.5% of the shares or securities
of that issuer together
own more than 5%."
The fund originally adopted this restriction to comply with
certain state securities law
requirements which are no longer applicable to the fund.
If the fund would be able to invest in the securities
of any issuer without
regard to ownership in such issuer by management of the fund or
Putnam Management, except
to the extent prohibited by the fund's investment policies or the
1940 Act. Putnam
Management believes that this enhanced flexibility could assist
the fund in achieving its
investment objective.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the fund, or (2)
67% or more of the shares
of the fund present at the meeting if
more
than 50% of the outstanding shares of the fund
are present at the meeting in person or by proxy.
4.B. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO MARGIN
TRANSACTIONS
The Trustees are recommending that the fund's fundamental
investment restriction with
respect to margin transactions be eliminated . "Margin
transactions" involve the
purchase of securities with money borrowed from a broker, with
cash or eligible securities
being used as collateral against the loan. The
restriction states that the fund
may not:
"Purchase securities on margin, except such short-term
credits as may be necessary
for the clearance of purchases and sales of securities, and
except that it may make
margin payments in connection with futures contracts and
options."
The fund originally adopted this restriction to comply with
certain state securities law
requirements which are no longer applicable to the fund.
If this proposal is approved, the fund would have
no formal restriction with
respect to engaging in margin transactions. However, the
fund's potential use
of margin transactions beyond transactions in financial futures
and options and for the
clearance of purchases and sales of securities, including the use
of margin in ordinary
securities transactions, is currently limited by SEC guidelines
which prohibit margin
transactions because they create senior securities. The fund's
ability to engage in
margin transactions is also limited by its investment policies,
which generally permit the
fund to borrow money only in limited circumstances.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the fund, or (2)
67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund
are present at the meeting in person or by proxy.
4.C. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO SHORT
SALES
The Trustees are recommending that the fund's fundamental
investment restriction with
respect to short sales be eliminated . The restriction
states that the fund may
not:
"Make short sales of securities or maintain a short sale
position for the account
of the fund unless at all times when a short position is
open it owns an equal
amount of such securities or owns securities which, without
payment of any further
consideration, are convertible into or exchangeable for
securities of the same
issue as, and at least equal in amount to, the securities
sold short."
The fund originally adopted this restriction to comply with
certain state securities
law requirements which are no longer applicable to the
fund.
If this proposal is approved, the fund would be able to
engage in short sales other
than those "against the box" (in which the fund owns or has the
right to acquire at no
added cost securities identical to those sold short). However,
Putnam Management does not
currently intend to engage in these types of short sales on
behalf of the fund
.
In a typical short sale, the fund borrows securities from a
broker that it anticipates
will decline in value in order to sell to a third party. The
fund becomes obligated to
return securities of the same issue and quantity at some future
date, and it realizes a
loss to the extent the securities increase in value and a profit
to the extent the
securities decline in value (after including any associated
costs). Since the value of a
particular security can increase without limit, the fund could
potentially realize losses
with respect to short sales which are not "against the
box" that are significantly
greater than the value of the securities at the time they are
sold short.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the fund, or (2)
67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund
are present at the meeting in person or by proxy.
4.D. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO PLEDGING
ASSETS
The Trustees are recommending that the fund's fundamental
investment restriction which
limits the fund's ability to pledge its assets be eliminated .
The restriction
states that the fund may not:
"Pledge, hypothecate, mortgage or otherwise encumber its
assets in excess of 15% of
its total assets (taken at current value) and then only to
secure borrowings
permitted by restriction 1 above. (The deposit of
underlying securities and other
assets in escrow and collateral arrangements with respect
to margin for financial
futures contracts or options are not deemed to be pledges
or other encumbrances.)"
[Restriction 1 permits the fund to borrow money in an
amount equal to up to 10% of
its total assets for certain limited purposes.]
The fund originally adopted this restriction to comply with
certain state securities law
requirements which are no longer applicable to the fund.
If this proposal is approved, the fund would no longer have a
policy limiting its
pledging activity. Putnam Management believes that
this enhanced flexibility
could assist the fund in achieving its investment objective.
Further, Putnam Management
believes that the fund's current limits on pledging may conflict
with the fund's ability
to borrow money to meet redemption requests or for extraordinary
or emergency purposes.
This conflict arises because banks may require borrowers such as
the fund to pledge assets
in order to collateralize the amount borrowed. These collateral
requirements are
typically for amounts at least equal to, and often larger than,
the principal amount of
the loan. If the fund needed to borrow the maximum amount
permitted by its policies
(currently 10% of its total assets), it might be possible that a
bank would require
collateral in excess of 15% of the fund's total assets. Thus,
the current restriction
could have the effect of reducing the amount that the fund may
borrow in these situations.
Pledging assets does entail certain risks. To the extent that
the fund pledges its
assets, the fund may have less flexibility in liquidating its
assets. If a large portion
of the fund's assets were involved, the fund's ability to meet
redemption requests or
other obligations could be delayed.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the fund, or (2)
67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund
are present at the meeting in person or by proxy.
4.E.
ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO
INVESTMENTS IN RESTRICTED SECURITIES
The Trustees are recommending that the fund's fundamental
investment restriction which
limits the fund's investments in securities subject to
restrictions on resale, which are
known as "restricted securities," be eliminated. The current
fundamental investment
restriction states that the fund may not:
"Purchase securities the disposition of which is restricted
under federal
securities laws, if, as a result, such investments would
exceed 15% of the value of
the fund's net assets, excluding restricted securities that
have been determined by
the Trustees of the fund (or the person designated by them
to make such
determinations) to be readily marketable."
Putnam Management believes the restriction is unnecessary in
light of current regulatory
requirements, which prohibit the fund from investing more than
15% of its net assets in
any combination of (a) securities which are not readily
marketable, (b) securities
restricted as to resale (excluding securities determined by the
Trustees of the fund (or
the person designated by the Trustees of the fund to make such
determinations) to be
readily marketable), and (c) repurchase agreements maturing in
more than seven days.
These requirements are currently reflected in the fund's
nonfundamental policy with
respect to illiquid investments. Eliminating the fundamental
restriction would therefore
provide the fund with maximum flexibility to respond quickly to
legal, regulatory and
market developments regarding illiquid investments. If the
restriction were no longer
required, the Trustees could modify or eliminate the restriction
to increase the fund's
investment flexibility without the need for shareholder approval.
To the extent the fund invests in illiquid investments, the fund
may encounter difficulty
in determining the fair value of such securities for purposes of
computing net asset
value. In addition, the fund could encounter difficulty
satisfying redemption requests
within seven days if it could not readily dispose of its illiquid
investments.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the fund, or (2)
67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund
are present at the meeting in person or by proxy.
4.F. ELIMINATING
THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT
TO
INVESTMENTS IN CERTAIN OIL, GAS AND MINERAL
INTERESTS
The Trustees are recommending that the fund's fundamental
investment restriction
with
respect
to investments in oil, gas and mineral leases, rights or royalty
contracts be
eliminated . The restriction states that the fund may
not:
"Buy or sell oil, gas, or other mineral leases, rights, or
royalty contracts,
although it may purchase securities of issuers which deal
in, represent interests
in, or are secured by interests in such leases, rights, or
contracts, and it may
acquire or dispose of such leases, rights, or contracts
acquired through the
exercise of its rights as a holder of debt obligations
secured thereby."
The fund originally adopted this restriction to comply
with certain state
securities law requirements which are no longer applicable to the
fund.
If this proposal is approved, the fund would be able to
make investments directly
in oil, gas and mineral interests .
Investments in oil, gas and other
mineral leases, rights or royalty contracts and in securities
which derive their value in
part from such instruments, entail certain risks. The prices of
these
investments are subject to substantial fluctuations, and may be
affected by unpredictable
economic and political circumstances such as social, political or
military disturbances,
the taxation and regulatory policies of various governments, the
activities and policies
of OPEC (an organization of major oil producing countries), the
existence of cartels in
such industries, the discovery of new reserves and the
development of new techniques for
producing, refining and transporting such materials and related
products, the development
of new technology, energy conservation practices, and the
development of alternative
energy sources and alternative uses for such materials and
related products. In addition,
in order to enforce its rights in the event of a default of an
issuer of these securities,
the fund may be required to participate in various legal
proceedings or take possession of
and manage assets securing the issuer's obligations. This could
increase the fund's
operating expenses and adversely affect the fund's net asset
value.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the fund, or (2)
67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund
are present at the meeting in person or by proxy.
4.G. ELIMINATING THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH RESPECT TO INVESTING
TO GAIN CONTROL OF A COMPANY'S MANAGEMENT
The Trustees are recommending that the fund's fundamental
investment restriction which
states that the fund may not "make investments for the purpose of
gaining control of a
company's management" be eliminated. Eliminating the restriction
would make it clear that
the fund can freely exercise its rights as a shareholder of the
various companies in which
it may invest, which activities could at times fall under the
technical definition of
control under the securities laws. These rights may include the
right to actively oppose
or support the management of such companies. Putnam Management
believes it would be in
the best interest of the fund to eliminate the restriction.
Putnam Management believes that eliminating this restriction will
allow the fund maximum
flexibility to protect the value of its investments through
influencing management of
companies in which it may invest. Putnam Management believes
that the fund should be
allowed to freely communicate its views as a shareholder on
matters of policy to
management, the board of directors, and other shareholders when a
policy may affect the
value of the fund's investment. Activities in which the fund may
engage might include the
fund, either individually or with others, seeking changes in a
company's goals,
management, or board of directors, seeking the sale of some or
all of a company's assets,
or voting to participate in or oppose a takeover effort with
respect to a company.
Although Putnam Management believes that the fund currently may
engage in such activities
without necessarily violating this restriction, it believes that
eliminating the
restriction will eliminate any potential obstacle to the fund in
protecting its interests
as a shareholder.
This area of corporate activity is highly prone to litigation,
and whether or not the
restriction is eliminated, the fund could be drawn into lawsuits
related to these
activities. The fund will direct its efforts toward those
instances where Putnam
Management believes the potential for benefit to the fund
outweighs potential litigation
risks.
Required vote. Approval of this proposal requires the
affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the fund, or (2)
67% or more of the shares
of the fund present at the meeting if more than 50% of the
outstanding shares of the fund
are present at the meeting in person or by proxy.
Further Information About Voting and the Shareholder Meeting
Quorum and Methods of Tabulation. Thirty percent of the shares
entitled to vote --
present in person or represented by proxy --constitutes a quorum
for the transaction of
business with respect to any proposal at the meeting (unless
otherwise noted in the proxy
statement). Shares represented by proxies that reflect
abstentions and "broker non-votes"
(i.e., shares held by brokers or nominees as to which (i)
instructions have not been
received from the beneficial owners or the persons entitled to
vote and (ii) the broker or
nominee does not have the discretionary voting power on a
particular matter) will be
counted as shares that are present and entitled to vote on the
matter for purposes of
determining the presence of a quorum. Votes cast by proxy or in
person at the meeting
will be counted by persons appointed by your fund as tellers for
the meeting.
The tellers will count the total number of votes cast "for"
approval of the proposals for
purposes of determining whether sufficient affirmative votes have
been cast. With respect
to the election of Trustees and selection of auditors, neither
abstentions nor broker non-
votes have any effect on the outcome of the proposal. With
respect to any other
proposals, abstentions and broker non-votes have the effect of a
negative vote on the
proposal.
Other business. The Trustees know of no other business to be
brought before the meeting.
However, if any other matters properly come before the meeting,
it is their intention that
proxies that do not contain specific restrictions to the contrary
will be voted on such
matters in accordance with the judgment of the persons named as
proxies in the enclosed
form of proxy.
Simultaneous meetings. The meeting of shareholders of your fund
is called to be held at
the same time as the meetings of shareholders of certain of the
other Putnam funds. It is
anticipated that all meetings will be held simultaneously. If
any shareholder at the
meeting objects to the holding of a simultaneous meeting and
moves for an adjournment of
the meeting to a time promptly after the simultaneous meetings,
the persons named as
proxies will vote in favor of such adjournment.
Solicitation of proxies. In addition to soliciting proxies by
mail, Trustees of your fund
and employees of Putnam Management, Putnam Fiduciary Trust
Company and Putnam Mutual Funds
may solicit proxies in person or by telephone. Your fund may
also arrange to have votes
recorded by telephone. The telephone voting procedure is
designed to authenticate
shareholders' identities, to allow shareholders to authorize the
voting of their shares in
accordance with their instructions and to confirm that their
instructions have been
properly recorded. Your fund has been advised by counsel that
these procedures are
consistent with the requirements of applicable law. If these
procedures were subject to a
successful legal challenge, such votes would not be counted at
the meeting. Your fund is
unaware of any such challenge at this time. Shareholders would
be called at the phone
number Putnam Investments has in its records for their accounts,
and would be asked for
their Social Security number or other identifying information.
The shareholders would
then be given an opportunity to authorize proxies to vote their
shares at the meeting in
accordance with their instructions. To ensure that the
shareholders' instructions have
been recorded correctly, they will also receive a confirmation of
their instructions in
the mail. A special toll-free number will be available in case
the information contained
in the confirmation is incorrect.
Your fund's Trustees have adopted a general policy of maintaining
confidentiality in the
voting of proxies. Consistent with this policy, your fund may
solicit proxies from
shareholders who have not voted their shares or who have
abstained from voting.
Persons holding shares as nominees will upon request be
reimbursed for their reasonable
expenses in soliciting instructions from their principals. Your
fund has retained at its
expense D.F. King & Co., Inc., 77 Water Street, New York, New
York 10005, to aid in the
solicitation of instructions for registered and nominee accounts,
for a fee not to exceed
$5,000 plus reasonable out-of-pocket expenses for mailing
and phone costs.
Revocation of proxies. Proxies, including proxies given by
telephone, may be revoked at
any time before they are voted by a written revocation received
by the Clerk of your fund,
by properly executing a later-dated proxy or by attending the
meeting and voting in
person.
Date for receipt of shareholders' proposals for subsequent
meetings of shareholders. Your
fund's Agreement and Declaration of Trust does not provide for
annual meetings of
shareholders, and your fund does not currently intend to hold
such a meeting in 1997.
Shareholder proposals for inclusion in the proxy statement for
any subsequent meeting must
be received by your fund within a reasonable period of time prior
to any such meeting.
Adjournment. If sufficient votes in favor of any of the
proposals set forth in the Notice
of the Meeting are not received by the time scheduled for the
meeting, the persons named
as proxies may propose adjournments of the meeting for a period
or periods of not more
than 60 days in the aggregate to permit further solicitation of
proxies with respect to
any of such proposals. Any adjournment will require the
affirmative vote of a majority of
the votes cast on the question in person or by proxy at the
session of the meeting to be
adjourned. The persons named as proxies will vote in favor of
such adjournment those
proxies which they are entitled to vote in favor of such
proposals. They will vote
against such adjournment those proxies required to be voted
against such proposals. Your
fund pays the costs of any additional solicitation and of any
adjourned session. Any
proposals for which sufficient favorable votes have been received
by the time of the
meeting may be acted upon and considered final regardless of
whether the meeting is
adjourned to permit additional solicitation with respect to any
other proposal.
Financial information. Your fund will furnish, without charge,
to you upon request a copy
of the fund's annual report for its most recent fiscal year, and
a copy of its semiannual
report for any subsequent semiannual period. Such requests may
be directed to Putnam
Investor Services, P.O. Box 41203, Providence, RI 02940-1203 or
1-800-225-1581.
Further Information About Your Fund
Limitation of Trustee liability. The Agreement and Declaration
of Trust of your fund
provides that the fund will indemnify its Trustees and officers
against liabilities and
expenses incurred in connection with litigation in which they may
be involved because of
their offices with the fund, except if it is determined in the
manner specified in the
Agreement and Declaration of Trust that they have not acted in
good faith in the
reasonable belief that their actions were in the best interests
of the fund or that such
indemnification would relieve any officer or Trustee of any
liability to the fund or its
shareholders arising by reason of willful misfeasance, bad faith,
gross negligence or
reckless disregard of his or her duties. Your fund, at its
expense, provides liability
insurance for the benefit of its Trustees and officers.
Audit and Nominating Committees. The voting members of the Audit
Committee of your fund
include only Trustees who are not "interested persons" of the
fund by reason of any
affiliation with Putnam Investments and its affiliates. The
Audit Committee currently
consists of Messrs. Estin (Chairman), Perkins (without vote),
Putnam, III (without vote),
Shapiro, Smith (without vote), and Ms. Kennan. The Nominating
Committee consists only of
Trustees who are not "interested persons" of your fund or Putnam
Management. The
Nominating Committee currently consists of Dr. Pounds and Ms.
Kennan (Co-chairpersons),
Ms. Baxter, and Messrs. Estin, Hill, Jackson, Patterson, Shapiro,
and Thorndike.
Officers and other information. In addition to George Putnam and
Lawrence J. Lasser, the
officers of your fund are as follows:
Year
first
elected
to
Name (age) Office office
- -----------------------------------------------------------------
Charles E. Porter (58) Executive Vice President
1990
Patricia C. Flaherty (49) Senior Vice President
1993
John D. Hughes (61) Senior Vice President &
Treasurer
1990
Gordon H. Silver (49) Vice President
1990
Brett C. Browchuk (33) Vice President
1995
Anthony W. Regan (57) Vice President
1990
Omid Kamshad* (34) Vice President
1996
Mark D. Pollard*(37) Vice President
1996
Tim Ferguson (39) Vice President
1996
William N. Shiebler**(54) Vice President
1991
John R. Verani (57) Vice President
1990
Paul M. O'Neil (43) Vice President
1992
Beverly Marcus (52) Clerk
1990
- -----------------------------------------------------------------
* One of the fund's portfolio managers
** President of Putnam Mutual Funds
All of the officers of your fund are employees of Putnam
Management or its affiliates.
Because of their positions with Putnam Management or its
affiliates or their ownership of
stock of Marsh & McLennan Companies, Inc., the parent corporation
of Putnam Management and
Putnam Mutual Funds, Messrs. Putnam, George Putnam, III, Lasser
and Smith (nominees for
Trustees of your fund), as well as the officers of your fund,
will benefit from the
management fees, distribution fees, underwriting commissions,
custodian fees, and investor
servicing fees paid or allowed by the fund.
Assets and shares outstanding of your fund as of November
1, 1996
Net assets
$283,363,600
Class A shares outstanding
and authorized to vote
9,771,812 shares
Class B shares outstanding
and authorized to vote
7,070,319 shares
Class M shares outstanding
and authorized to vote
373,443 shares
5% beneficial ownership of your fund as of September 30,
1996
Persons beneficially owning more than 5%
of the fund's class A shares
(1) Merrill Lynch Pierce Fenner & 499,357
shares or 5.40%
Smith, Inc.
Mutual Fund Operations
3rd Floor
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
Persons beneficially owning more than 5%
of the fund's class B shares
(1) Merrill Lynch Pierce Fenner & 472,684
shares or 7.00%
Smith, Inc.
Mutual Fund Operations
3rd Floor
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
Persons beneficially owning more than 5%
None
of the fund's class M shares
PUTNAMINVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581
PUTNAMINVESTMENTS
This is your PROXY CARD.
Please vote this proxy, sign it below, and return it promptly in
the envelope provided.
Your vote is important.
HAS YOUR ADDRESS CHANGED?
Please use this form to notify us of any change in address or
telephone number or to
provide us with your comments. Detach this form from the proxy
ballot and return it with
your signed proxy in the enclosed envelope.
Street
- -----------------------------------------------------------------
City State Zip
- -----------------------------------------------------------------
Telephone
- -----------------------------------------------------------------
DO YOU HAVE ANY COMMENTS?
- -----------------------------------------------------------------
--- ---------------------------------------------------
- -----------
------ ------------------------------------------------
- -----------
DEAR SHAREHOLDER:
Your vote is important. Please help us to eliminate the expense
of follow-up mailings by
signing and returning this proxy as soon as possible. A
postage-paid envelope is enclosed
for your convenience.
THANK YOU!
PUTNAM EUROPE GROWTH FUND
Meeting of Shareholders to be held on February 6, 1997
.
This proxy is solicited on behalf of the Trustees of the fund.
The undersigned shareholder hereby appoints George Putnam, Hans
H. Estin, and Robert E. Patterson, and each of them separately,
Proxies, with power of substitution, and hereby authorizes them
to represent and to vote, as designated below, at the meeting of
shareholders of Putnam Europe Growth Fund on February 6, 1997, at
2:00 p.m., Boston time, and at any adjournments thereof, all of
the shares of the fund that the undersigned shareholder would be
entitled to vote if personally present.
If you complete and sign the proxy, we'll vote it exactly as you
tell us. If you simply sign the proxy, it will be voted FOR
electing Trustees as set forth in Proposal 1 and FOR each of the
other Proposals listed below. In their discretion, the Proxies
will also be authorized to vote upon such other matters that may
properly come before the meeting.
Note: If you have questions on any of the proposals, please call
1-800-225-1581.
PLEASE BE SURE TO SIGN AND DATE THIS PROXY.
Please sign your name exactly as it appears on this card. If you
are a joint owner, each owner should sign. When signing as
executor, administrator, attorney, trustee, or guardian, or as
custodian for a minor, please give your full title as such. If
you are signing for a corporation, please sign the full corporate
name and indicate the signer's office. If you are a partner,
sign in the partnership name.
THE TRUSTEES RECOMMEND A VOTE FOR ELECTING ALL OF THE NOMINEES
FOR TRUSTEES AND FOR THE OTHER PROPOSALS LISTED BELOW.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: /
X /
FOR COMMENTS
ON REVERSE
RETURN BOTH
PORTIONS.
- -----------------------------------------------------------------
IF NO
COMMENTS,
RETURN THIS
PORTION ONLY.
PUTNAM EUROPE GROWTH FUND
For address changes and/or comments,
please write them on the back where
indicated.
1. Proposal to elect Trustees
The nominees for Trustees are: J.A. Baxter, H.H. Estin, J.A.
Hill, R.J. Jackson, E.T. Kennan, L.J. Lasser, R.E.
Patterson, D.S. Perkins, W.F. Pounds, G. Putnam, G. Putnam,
III, E. Shapiro, A.J.C. Smith and W.N. Thorndike.
/ / FOR ALL
/ / WITHHOLD ALL
/ / FOR ALL EXCEPT
To withhold authority to vote for one or more of the nominees,
write those nominees' names below:
- -----------------------------------------------------------------
- --
PROPOSAL TO:
2. Ratify the selection FOR AGAINST ABSTAIN
of Price Waterhouse
LLP as the / / / / / /
independent auditors
of your fund.
3. Amend the fund's
fundamental investment
restriction with respect
to:
A. Diversification. / / / / / /
B. Investments in the voting/ / / /
/ /
securities of a single
issuer.
C. Making loans. / / / / / /
D. Investments in / / / / / /
commodities.
E. Senior securities. / / / / / /
4. Eliminate the fund's
fundamental investment
restriction with respect
to:
A. Investments in securities / / / / / /
of issuers in which
management of the fund
or Putnam Investment
Management owns securities.
B. Margin transactions. / / / / / /
C. Short sales. / / / / / /
D. Pledging assets. / / / / / /
E. Investments in / / / / / /
restricted securities.
F. Investments in certain / / / / / /
oil, gas and mineral
interests.
G. Investing to gain / / / / / /
control of a company's
management.
--------------------------------------------------------------
Signature Date
- --------------------------------------------------------------
Signature (Joint Owner) Date
lipsett/106290.111/proxys/europe4.wpf