VOTE BY PHONE CONFIRMATION LETTER
(WRITTEN)
VOTE CONFIRMATION
(Shareholder name & address of record)
PUTNAM INTERMEDIATE GOVERNMENT INCOME TRUST
Meeting of Shareholders October 9, 1997
Account:
Shares:
Votes Received: (list proposal as on proxy card)
(FOR) (AGAINST) (ABSTAIN)
Dear Shareholder:
In connection with the above-referenced Meeting of
Shareholders, this notice will confirm that your shares have
been voted as indicated above in accordance with your
telephone instructions. If any of the information is
incorrect, please call 1-800-735-3428 immediately, and in
any event no later than 5:00 P.M. Eastern Daylight Time, on
October 8, 1997.
Thank you for your cooperation.
Very truly yours,
(Solicitation Agent)
Vote-By-Phone Solicitation Script for
Putnam Intermediate Government Income Trust
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. I am
calling in connection with the upcoming shareholder meeting
for Putnam Intermediate Government Income Trust for which
you recently received a combined prospectus/proxy statement
requesting your vote.
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 proxy card. Do
you have any questions regarding the proposal being
presented at the meeting that I can clarify for you?
(If there are questions regarding the proposal, please refer
to the Q & A attached.)
Would you like to vote by telephone?
(If not, ask the shareholder if they would like another
proxy card, 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 shares by telephone.
I will now paraphrase the proxy card so that you can provide
us with your voting instructions. The proxy card generally
states the following:
By authorizing your shares to be voted at the meeting you
are appointing George Putnam, Hans H. Estin, and Robert E.
Patterson, and each of them separately, as proxies, with the
power of substitution, and authorizing them to represent and
vote your shares at the meeting of shareholders of Putnam
Intermediate Government Income Trust, on October 9, 1997 at
2:00 p.m., Boston time, and at any adjournments thereof.
When properly authorized, this proxy will be voted in the
manner directed by the shareholder. In their discretion,
the proxies are authorized to vote upon such other matters
as may properly come before the meeting.
The proxy card requests your vote on the following four
proposals.
1. The Trustees are recommending a vote in favor of
Proposal 1. That Proposal is to:
Approve an Agreement and Plan of Reorganization
providing for the transfer of all of the assets of Putnam
Intermediate Government Income Trust (which we'll call the
"Fund") to Putnam Master Intermediate Income Trust (which
we'll call the "Master Fund") in exchange for shares of the
Master Fund and the assumption by the Master Fund of all of
the liabilities of the Fund, and the distribution of such
shares to the shareholders of the Fund in complete
liquidation of the Fund.
How would you like to vote on this proposal? Would you like
to vote for the proposal, against the proposal, or would you
like to abstain from voting on this proposal?
Thank you.
2. The Trustees are recommending a vote in favor of
Proposal 2, for fixing the number of Trustees at 13 and
electing all of the nominees.
The nominees are:
J.A. Baxter, H.H. Estin, J.A. Hill, R.J. Jackson,
E.T. Kennan, L.J. Lasser, R.E. Patterson, D.S. Perkins, W.F.
Pounds, G. Putnam, G. Putnam, III, A.J.C Smith and W.N.
Thorndike.
How would you like to vote on this proposal? Would you like
to fix the number of Trustees at 13 and vote for all
nominees or would you like to withhold authority to vote for
all nominees? You may also vote for some nominees while
voting against others. If you would like to withhold
authority to vote for certain of the nominees, please state
those nominees' names now.
Thank you.
3. The Trustees are recommending a vote in favor of
Proposal 3. That proposal is to ratify the selection of
Price Waterhouse LLP as the independent auditors of the
Fund.
How would you like to vote on this proposal? Would you like
to vote for the proposal, against the proposal, or would you
like to abstain from voting on this proposal?
Thank you.
4. The Trustees are recommending a vote against Proposal 4.
That proposal is to convert the Fund from closed-end to open-
end status and authorize certain related amendments to the
Agreement and Declaration of Trust.
How would you like to vote on this proposal? Would you like
to vote for the proposal, against the proposal, or would you
like to abstain from voting on this proposal?
Thank you.
I will now repeat your instructions on the proposals:
You:
1. (Voted for, Voted against, Abstained from) the proposal
to approve the Agreement and Plan of Reorganization.
2. (Voted for the proposal for fixing the number of
Trustees at 13 and electing all of the nominees, Withheld
authority to vote for all nominees, Voted for all nominees
except withholding authority to vote for )
3. (Voted for, Voted against, Abstained from) the proposal
to ratify the selection of Price Waterhouse LLP as the
independent auditors of the Fund.
4. (Voted for, Voted against, Abstained from) the proposal
to convert the Fund from closed-end to open-end status and
to authorize certain related amendments to the Agreement and
Declaration of Trust.
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.
Q&A for Putnam Intermediate Government Income Trust
On or about July 30, 1997, a combined prospectus/proxy
statement was sent to shareholders of Putnam Intermediate
Government Income Trust. Listed below are answers to the
questions and concerns shareholders are likely to have
regarding proposal No. 1, the combination of Putnam
Intermediate Government Income Trust into Putnam Master
Intermediate Income Trust, followed by answers and
information regarding each issue.
1. What is being proposed?
The Trustees are recommending that shareholders approve the
combination of Putnam Intermediate Government Income Trust
with Putnam Master Intermediate Income Trust. The
combination will occur through the transfer of all of the
assets of Putnam Intermediate Government Income Trust to
Putnam Master Intermediate Income Trust in exchange for
shares of Putnam Master Intermediate Income Trust and for
the assumption by the Putnam Master Intermediate Trust of
all of the liabilities of the Putnam Intermediate Government
Income Trust. The completion of these transactions,
followed by the distribution of the Putnam Master
Intermediate Income Trust shares received by the Putnam
Intermediate Government Income Trust to its shareholders,
will result in the combination of the two funds' assets and
liabilities with shareholders of Putnam Intermediate
Government Income Trust becoming shareholders of Putnam
Master Intermediate Income Trust, and the liquidation of
Putnam Intermediate Government Income Trust.
2. What will happen to my shares of Putnam Intermediate
Government Income Trust?
If the combination is approved, your shares will, in effect,
be exchanged on a tax-free basis for shares of Putnam Master
Intermediate Income Trust with an equal aggregate net asset
value on the date of the transaction. The market values of
the shares may differ.
3. When would the combination occur?
If approved by the shareholders at their October 9, 1997
meeting, it is expected that the combination would occur on
or about October 27, 1997.
4. Why are the Trustees proposing the transaction?
Putnam Intermediate Government Income Trust's investment
policies limit the fund to purchasing U.S. and foreign
government securities. The Trustees believe that the
broader and more flexible investment policies of Putnam
Master Intermediate Income Trust offer the potential for
both increased yield and improved returns and, through
additional diversification, greater stability of net asset
value. Although past performance is no guarantee of future
performance, Putnam Master Intermediate Income Trust's
performance record is superior to that of Putnam
Intermediate Government Income Trust. In addition, the
combination of the two funds offers the prospect of lower
expenses for shareholders of both funds. Finally, the
Trustees also believe that the larger fund resulting from
the combination may attract greater investor interest, which
may lead to lower share trading discount levels in the
market price of Putnam Master Intermediate Income Trust's
shares following the combination.
5. How do the investment objectives, policies and
restrictions of the two funds compare?
Both funds seek, with equal emphasis, high current income
and relative stability of net asset value, by investing in a
diversified portfolio of fixed income securities having a
dollar-weighted average maturity of from three to ten years.
While both funds invest substantially all of their assets in
fixed-income securities, Putnam Master Intermediate Income
Trust invests in a wider range of such securities. Putnam
Intermediate Government Income Trust invests in two sectors
of the fixed income market, U.S. government securities and
foreign government securities. By comparison, Putnam Master
Intermediate Income Trust invests in three sectors, a U.S.
high grade sector, a high yield sector and an international
sector. The funds both have different credit quality
limitations with Putnam Master Intermediate Income Trust
having significantly greater flexibility to invest in lower-
rated securities. Putnam Master Intermediate Income Trust
may invest up to 65% of its assets in below investment grade
bonds, of which may be, up to 5% of its assets in securities
rated below Caa or CCC. Putnam Intermediate Government
Income Trust is limited to investing no more than 15% in
below investment grade bonds. The combined prospectus/proxy
statement contains a detailed comparison of the investment
policies and risks associated with investments in Putnam
Master Intermediate Income Trust.
6. How do the risks of investing in the funds compare?
The risks related to Putnam Master Intermediate Income
Trust's portfolio securities are greater than the risks of
those held by Putnam Intermediate Government Income Trust.
Putnam Master Intermediate Income Trust invests a
substantial portion of its assets in corporate fixed income
securities and lower-rated, higher risk securities. The
broader diversification of Putnam Master Intermediate Income
Trust is intended to reduce overall portfolio risk, although
there can be no assurance that this diversification will be
effective. A more detailed description of certain risks
associated with an investment in Putnam Master Intermediate
Income Trust is contained in the combined prospectus/proxy
statement.
7. How do the fees and expenses of the two funds compare,
and what are they estimated to be following the combination?
The funds currently have the same management fee rates,
while Putnam Intermediate Government Income Trust has
slightly lower other expenses. The combined fund is
expected to have lower management fees and total fund
operating expenses than are currently being paid by either
fund.
8. Are there any federal income tax consequences as a
result of the proposed transaction?
No. As a result of the transaction, no gain or loss will be
recognized by Putnam Intermediate Government Income Trust or
its shareholders for federal income tax purposes.
9. Will my dividends be affected by the transaction?
The frequency of your dividends should not change, since
both funds pay a monthly dividend from net investment
income and distribute any net realized capital gains at
least annually. However, the amount of these distributions
will reflect the investment policies and dividend policies
of Putnam Master Intermediate Income Trust. Information
regarding the dividends paid by Putnam Master Intermediate
Income Trust in recent years is included in the "Financial
Highlights" in the combined prospectus/proxy statement.
Both funds have adopted a dividend reinvestment plan
pursuant to which each participating shareholder may have
all income and distributions of capital gains automatically
invested in additional shares of the relevant fund.
10. Will I still be able to participate in a dividend
reinvestment plan?
Yes. If you currently participate in Putnam Intermediate
Government Income Trust's dividend reinvestment plan, you
will be automatically enrolled in the dividend reinvestment
plan of Putnam Master Intermediate Income Trust, which is
similar to Putnam Intermediate Government Income Trust's
plan.
11. Do the procedures for purchasing and selling shares of
the two funds differ?
No. The procedures for purchasing and selling shares of
each fund are identical. The funds' shares currently may be
bought and sold at prevailing market prices on the New York
Stock Exchange. Shares may also be purchased through each
fund's dividend reinvestment plan.
12. Will the number of shares I own change?
Yes, but the total net asset value of the shares of Putnam
Master Intermediate Income Trust you receive will, at the
time of the transaction, equal the total net asset value of
the shares of the Putnam Intermediate Government Income
Trust that you then hold. Even though the net asset value
per share of each fund is different, the total net asset
value of a shareholder's holdings will not change as a
result of the combination. Of course, the newly issued
shares of Putnam Master Intermediate Trust may trade at a
discount from net asset value, which might be greater or
less than the trading discount of a shareholder's Putnam
Intermediate Government Income Trust shares.
13. Will the market value of my investment change?
The funds will continue to be traded on the New York Stock
Exchange until the time of the transaction, and may at times
trade at a market price greater or less than net asset
value. In recent years, shares of both funds have traded at
a discount to net asset value. Depending on market
conditions immediately prior to the exchange, shares of
Putnam Master Intermediate Income Trust may trade at a
greater or smaller discount to net asset value than shares
of Putnam Intermediate Government Income Trust. This could
result in the shares received in the combination having a
market value that is greater or less than they currently
have.
14. How will I be notified of the outcome of the
transaction?
If the proposed transaction is approved by shareholders, you
will receive confirmation after the reorganization is
completed, indicating your new account number. If the
transaction is not approved, you will be notified, and the
results of the meeting will be provided in the next annual
report of Putnam Intermediate Government Income Trust.
15. What do I do with my certificate?
(If shareholder holds certificate shares, add the
following):
If you hold certificates for your Putnam Intermediate
Government Income Trust shares, you should return them to
the fund. Failure to do so will affect your ability to take
certain actions with respect to the shares you receive in
the transaction, including selling the shares.