s:\proxy\working\98cvmhyt
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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/ X / 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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/ / 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 CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
PUTNAM MANAGED HIGH YIELD TRUST
PUTNAM TAX-FREE HEALTH CARE 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 CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
PUTNAM MANAGED HIGH YIELD TRUST
PUTNAM TAX-FREE HEALTH CARE FUND
The document you hold in your hands contains your proxy statement
and proxy card. A proxy card is, in essence, a ballot. When you
vote your proxy, it tells us how to vote on your behalf on
important issues relating to your fund. If you complete and sign
the proxy, we'll vote it exactly as you tell us. If you simply
sign the proxy, we'll vote it in accordance with the Trustees'
recommendations on page 8.
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.................................... 5
Notice of Shareholder Meeting. . . . . . . . . . . . . . . . . .
. . . . .6
Trustees' Recommendations. . . . . . . . . . . . . . . . . . . .
. . . . .8
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) fixing the number of Trustees and electing your
fund's Trustees; (2) ratifying the selection of your fund's
independent auditors; and (3) approving an amendment to your
fund's fundamental investment restriction with respect to making
loans.
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 CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
PUTNAM MANAGED HIGH YIELD TRUST
PUTNAM TAX-FREE HEALTH CARE FUND
Notice of Annual 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 Convertible Opportunities and
Income Trust, Putnam Managed High Yield Trust and Putnam Tax-Free
Health Care Fund:
The Annual Meeting of Shareholders of your fund will be held on
December 3, 1998 at 2:00 p.m., Boston time, on the eighth floor
of One Post Office Square, Boston, Massachusetts, to consider the
following:
1. Fixing the number of Trustees and electing Trustees. See
page 9.
2. Ratifying the selection by the Trustees of the independent
auditor of your fund for its current fiscal year. See
page 28.
3. Approving an amendment to your fund's fundamental investment
restriction with respect to making loans. See page 29.
4. Transacting other business as may properly come before the
meeting.
By the Trustees
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson A. Baxter John H. Mullin, III
Hans H. Estin Robert E. Patterson
John A. Hill Donald S. Perkins
Ronald J. Jackson George Putnam, III
Paul L. Joskow A.J.C. Smith
Elizabeth T. Kennan W. Thomas Stephens
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.
September 14, 1998
Proxy Statement
This document will give you the information you need to vote on
the matters listed on the previous page. Much of the information
in the proxy statement is required under rules of the Securities
and Exchange Commission ("SEC"); some of it is technical. If
there is anything you don't understand, please contact us at our
special toll-free number, 1-800-225-1581, or call your financial
adviser.
Who is asking for my vote?
The enclosed proxy is solicited by the Trustees of Putnam
Convertible Opportunities and Income Trust, Putnam Managed High
Yield Trust and Putnam Tax-Free Health Care Fund for use at the
Annual Meeting of Shareholders of each fund to be held on
December 3, 1998, and, if your fund's meeting is adjourned, at
any later meetings, for the purposes stated in the Notice of
Annual Meeting (see page 6).
How do your fund's Trustees recommend that shareholders vote on
these proposals?
The Trustees recommend that you vote
1.a. (In the case of Putnam Managed High Yield Trust and Putnam
Tax-Free Health Care Fund) For fixing the number of Trustees
as proposed and the election of all nominees;
1.b. (In the case of Putnam Convertible Opportunities and Income
Trust) For fixing the number of Trustees as proposed and the
election of Class C nominees;
2. For ratifying the selection of PricewaterhouseCoopers LLP as
independent auditor of your fund; and
3. For amending your fund's fundamental investment restriction
with respect to making loans.
Who is eligible to vote?
Shareholders of record at the close of business on September 4,
1998 are entitled to be present and to vote at the meeting or any
adjourned meeting. The Notice of Annual Meeting, the proxy, and
the Proxy Statement are being mailed to shareholders of record on
or about September 14, 1998.
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 your
fund's meeting, your shares will be voted at the Trustees'
discretion.
Shareholders of each fund vote separately with respect to each
proposal. Voting by one fund does not affect any other fund.
The Proposals
I. ELECTION OF TRUSTEES
Who are the nominees for Trustees?
Putnam Managed High Yield Fund
Putnam Tax-Free Health Care Fund
The Nominating Committee of the Trustees of each fund makes
recommendations concerning the Trustees of that fund. The
nominating committee consists solely of Trustees who are not
"interested persons" (as defined in the Investment Company Act of
1940) of your fund or of Putnam Investment Management, Inc., your
fund's investment manager (Putnam Management").
The Nominating Committee of the Trustees of your fund recommends
that the number of Trustees be fixed at sixteen 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.
Putnam Convertible Opportunities and Income Trust
The Trustees of Putnam Convertible Opportunities and Income Trust
are classified into three classes of Trustees, as is reflected
below. Only the Class C Trustees, whose current terms expire at
the time of the Annual Meeting, are nominated for election. The
nominees for Class C Trustees are John H. Mullin, Donald S.
Perkins, George Putnam, A.J.C. Smith, W. Thomas Stephens and W.
Nicholas Thorndike, and each is described below. Each Class C
Trustee is also a Trustee of the other Putnam funds.
The Nominating Committee of the Trustees of your fund recommends
that the number of Trustees be fixed at sixteen and that you vote
for the election of each of the Class C nominees.
Jameson Adkins Baxter
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class A Trustee of Putnam Convertible Opportunities and Income
Trust
Ms. Baxter, age 55, 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 Financial Corp., 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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class A Trustee of Putnam Convertible Opportunities and Income
Trust
Mr. Estin, age 70, 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 Corporation Member of The
Schepens Eye Research Institute; 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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class B Trustee of Putnam Convertible Opportunities and Income
Trust
Mr. Hill, age 56, 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, TransMontaingne Oil Company, a refined oil product
pipeline and distribution 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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class B Trustee of Putnam Convertible Opportunities and Income
Trust
Mr. Jackson, age 54, 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 Trustee of Salem Hospital and
the Peabody Essex Museum. Mr. Jackson is a graduate of Michigan
State University Business School.
Paul L. Joskow*
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class A Trustee of Putnam Convertible Opportunities and Income
Trust
Dr. Joskow, 51, is Elizabeth and James Killian Professor of
Economics and former Chairman of the Department of Economics at
the Massachusetts Institute of Technology. He has published
three books and numerous articles on topics in industrial
organization, government regulation of industry, and competition
policy. Dr. Joskow currently serves as a Director of the New
England Electric System, a public utility holding company, State
Farm Indemnity Corporation, an automobile insurance company, and
the Whitehead Institute for Biological Research, a non-profit
research institution. He has been President of the Yale
University Counsel since 1993. Dr. Joskow is active on industry
restructuring, environmental, energy, competition, and
privatization policies and has served as an advisor to
governments and corporations around the world. He has been a
consultant to National Economic Research Associates, Inc. since
1972 on these and related issues.
Dr. Joskow is a graduate of Cornell University and Yale
University. He is a Fellow of the Econometric Society and the
American Academy of Arts and Sciences.
Elizabeth T. Kennan
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class B Trustee of Putnam Convertible Opportunities and Income
Trust
Ms. Kennan, age 60, 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 Bell Atlantic,
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.
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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class A Trustee of Putnam Convertible Opportunities and Income
Trust
Mr. Lasser, age 55, is a Vice President of your fund and each of
the other Putnam funds. He has been the President, Chief
Executive Officer and a Director of Putnam Investments, Inc. and
Putnam Management since 1985, having begun his career there in
1969.
Mr. Lasser currently also serves as a Director of Marsh &
McLennan Companies, Inc., the parent company of Putnam
Management, and the United Way of Massachusetts Bay. He is a
Member of the Board of Overseers of the Museum of Fine Arts in
Boston, The Council on Foreign Relations, and a Member of the
Board of Governors and Executive Committee at the Investment
Company Institute. He is also a Trustee of the Beth
Israel\Deaconess Medical Center in Boston and the Vineyard Open
Land Foundation. Mr. Lasser is a graduate of Antioch College and
Harvard Business School.
John H. Mullin, III
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Nominee for Class C Trustee of Putnam Convertible Opportunities
and Income Trust
Mr. Mullin, 57, is Chairman and CEO of Ridgeway Farm, a limited
liability company engaged in timber activities and farming.
Prior to establishing Ridgeway Farm, Mr. Mullin was a Managing
Director of Dillon, Read & Co. Inc., an investment banking firm.
Mr. Mullin currently serves as a Director of ACX Technologies,
Inc., a company engaged in the manufacture of industrial ceramics
and packaging products; Alex. Brown Realty, Inc., a real estate
investment company and The Liberty Corporation, a company engaged
in the life insurance and broadcasting industries. Mr. Mullin
previously served as a Director of Dillon, Read & Co. Inc.,
Adolph Coors Company, Crystal Brands, Inc., Fisher-Price, Inc.,
Mattel, Inc. and The Ryland Group, Inc. Mr. Mullin is a Trustee
Emeritus of Washington & Lee University where he served as
Chairman of the Investment Committee. Mr. Mullin is a graduate
of Washington & Lee University and The Wharton Graduate School at
the University of Pennsylvania.
Robert E. Patterson
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class B Trustee of Putnam Convertible Opportunities and Income
Trust
Mr. Patterson, age 53, is the President and a Trustee of Cabot
Industrial Trust, a publicly traded real estate investment trust.
Prior to February, 1998 he was Executive Vice President and
Director of Acquisitions of Cabot Partners Limited Partnership, a
registered investment adviser which managed real estate
investments for institutional investors. Prior to 1990, he was
the Executive Vice President of Cabot, Cabot & Forbes Realty
Advisors, Inc., the predecessor company of Cabot Partners. Prior
to that, he was a Senior Vice President of the Beal Companies, a
real estate management, investment and development company. He
has also worked as an attorney and held various positions in
state government, including the founding Executive Director of
the Massachusetts Industrial Finance Agency.
Mr. Patterson currently also serves as Chairman of the Joslin
Diabetes Center, a Trustee of SEA Education Association and a
Director of Brandywine Trust Company. Mr. Patterson is a
graduate of Harvard College and Harvard Law School.
Donald S. Perkins*
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Nominee for Class C Trustee of Putnam Convertible Opportunities
and Income Trust
Mr. Perkins, age 71, 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, LaSalle Street Fund, Inc.
and LaSalle U.S. Realty Income and Growth Fund, Inc., real estate
investment trusts, Lucent Technologies Inc., Nanophase
Technologies Inc., a producer of nano crystaline materials,
Ryerson Tull, Inc., America's largest steel service corporation,
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. 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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class A Trustee of Putnam Convertible Opportunities and Income
Trust
Dr. Pounds, age 70, 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., Management Sciences For Health, Inc. and Sun
Company, Inc. He is also a Trustee of the Museum of Fine Arts in
Boston; and a Fellow of The American Academy of Arts and
Sciences. He previously served as a Director of Fisher-Price,
Inc., General Mills, Inc., PerSeptive Biosystems, Inc., and an
Overseer of WGBH Educational Foundation. Dr. Pounds is a
graduate of Carnegie-Mellon University.
George Putnam*
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Nominee for Class C Trustee of Putnam Convertible Opportunities
and Income Trust
Mr. Putnam, age 72, is the Chairman and President of your fund
and each 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 Freeport Copper
and Gold, Inc., a mining and natural resources company and
Houghton Mifflin Company, a major publishing company. He is also
a Trustee of Massachusetts General Hospital, McLean Hospital,
Vincent Memorial Hospital, WGBH Educational Foundation and the
Museum of Fine Arts in Boston; the New England Aquarium; an
Overseer of the Museum of Science in Boston, Northeastern
University and College of the Atlantic; 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]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Class B Trustee of Putnam Convertible Opportunities and Income
Trust
Mr. Putnam, age 47, 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 and The Boston Family Office,
L.L.C., a registered investment advisor that provides financial
advice to individuals and families. He is also a Trustee of the
Sea Education Association and St. Mark's School and an Overseer
of the New England Medical Center. Mr. Putnam is a graduate of
Harvard College, Harvard Business School and Harvard Law School.
A.J.C. Smith*
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Nominee for Class C Trustee of Putnam Convertible Opportunities
and Income Trust
Mr. Smith, age 64, 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 Educational Broadcasting Corporation, the
Economic Club of New York, the U.S. Chamber of Commerce, 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, an Associate of the
Society of Actuaries, a Member of the American Academy of
Actuaries, the International Actuarial Association and the
International Association of Consulting Actuaries.
W. Thomas Stephens
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Nominee for Class C Trustee of Putnam Convertible Opportunities
and Income Trust
Mr. Stephens, age 56, is the President and Chief Executive
Officer of MacMillan Bloedel Ltd. Mr. Stephens retired in 1996
as Chairman of the Board of Directors, President and Chief
Executive Officer of Johns Manville Corporation, an insulation
and roofing systems company. He also served as Executive Vice
President and Chief Financial Officer of Manville and in total
had 27 years of experience with Manville and its predecessor
companies.
Mr. Stephens serves as a Director for Qwest Communications, a
fiber optics manufacturer and New Century Energies, a public
utility company. Mr. Stephens is a Member of the Colorado Forum
and Trustee of the Denver Art Museum and The University of
Arkansas Advisory Council. He is currently a Visiting Professor
at the Graduate School of Business at the University of Colorado.
Mr. Stephens is a graduate of the University of Arkansas.
W. Nicholas Thorndike**
[Insert Picture]
* Nominee for Trustee of Putnam Managed High Yield Trust
* Nominee for Trustee of Putnam Tax-Free Health Care Fund
* Nominee for Class C Trustee of Putnam Convertible Opportunities
and Income Trust
Mr. Thorndike, age 65, 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 Courier Corporation, a book
binding and printing company. He is also a Trustee of Cabot
Industrial Trust, 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. Mr. Joskow is not
currently an "interested person" of your fund but could be
deemed by the Securities and Exchange Commission to be an
"interested person" on account of his consulting
relationship with National Economic Research Associates,
Inc. which is a wholly-owned subsidiary of Marsh & McLennan
Companies, Inc. 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 Messrs.
Mullin and Jackson who were elected by the Trustees in November
1997, all of the nominees of Putnam Managed High Yield Trust and
Putnam Tax-Free Health Care Fund were elected by the shareholders
in December 1997. The 16 nominees for election as Trustee of
each of Putnam Managed High Yield Trust and Putnam Tax-Free
Health Care Fund who receive the greatest number of votes will be
elected Trustees of that 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 fix the number of Trustees
at less than 16 for your fund.
As described above, only the Class C Trustees of Putnam
Convertible Opportunities and Income Trust, whose current terms
expire at the time of the shareholder meeting, are nominated for
election; the other Trustees of the fund will continue to serve
under their current terms. The terms for the Class A Trustees
will expire at the fund's 1999 annual meeting of shareholders and
the terms of the Class B Trustees will expire at the fund's 2000
annual meeting of shareholders. Each of the Class A Trustees was
elected by the shareholders in December 1996, except for Mr.
Jaskow who was elected by the Trustees in November 1997. Each of
the Class B Trustees was elected by shareholders in December
1997. Each of the Class C nominees were elected by the fund's
sole shareholder in April 1995, except for Messrs. Mullin and
Stephens who were elected by Trustees in November 1997 and
September of 1997, respectively. The six nominees of Putnam
Convertible Opportunities and Income Trust who receive the
greatest number of votes will be elected Class C Trustees of the
fund. Each Class C Trustee will be elected to a three year term
expiring at the fund's 2001 annual meeting of shareholders. Each
Trustee of Putnam Convertible Opportunities and Income Trust
serves until the expiration of his or her term and until his or
her successor is elected and qualified.
What are the Trustees' responsibilities?
Your fund's Trustees are responsible for the general oversight of
your fund's business and for assuring that your fund is managed
in the best interests of its shareholders. The Trustees
periodically review your fund's investment performance as well as
the quality of other services provided to your fund and its
shareholders by Putnam Management and its affiliates, including
administration, custody, and investor servicing. At least
annually, the Trustees review the fees paid to Putnam Management
and its affiliates for these services and the overall level of
your fund's operating expenses. In carrying out these
responsibilities, the Trustees are assisted by an independent
administrative staff and by your fund's auditors and legal
counsel, which are selected by the Trustees and are independent
of Putnam Management and its affiliates.
Do the Trustees have a stake in your fund?
The Trustees believe it is important that each Trustee have a
significant investment in the Putnam funds. The Trustees
allocate their investments among the more than 101 Putnam funds
based on their own investment needs. The Trustees' aggregate
investments in the Putnam funds total over $ million. The
table below lists each Trustee's current investments in the fund
and in the Putnam funds as a group based on beneficial ownership.
Except as otherwise noted, each Trustee has sole voting power and
sole investment power with respect to his or her shares.
Share Ownership by Trustees
Year first
elected as Number of shares
Trustee of of all Putnam
the Putnam funds owned as
Trustees funds of 7/28/98 (1)
- -----------------------------------------------------------------
- -------------------------
Jameson A. Baxter 1994
Hans H. Estin 1972
John A. Hill 1985
Ronald J. Jackson 1996
Paul L. Joskow 1997 (2)
Elizabeth T. Kennan 1992
Lawrence J. Lasser 1992
John H. Mullin, III 1997 (2)
Robert E. Patterson 1984
Donald S. Perkins 1982
William F. Pounds 1971
George Putnam 1957
George Putnam, III 1984
A.J.C. Smith 1986
W. Thomas Stephens 1997
W. Nicholas Thorndike 1992
- -----------------------------------------------------------------
- -------------------------
(1) These holdings do not include shares of Putnam money market
funds.
(2) Elected as a Trustee in November 1997.
Share Ownership by Trustees
Number of shares owned as of July
28, 1998 of:
Putnam Convertible Putnam Managed
Putnam Tax-Free
Opportunities and High Yield
Health Care
Income Trust Trust Fund
Trustee
- -----------------------------------------------------------------
- -------------------------
Jameson A. Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin, III
Robert E. Patterson
Donald S. Perkins
William F. Pounds
George Putnam
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
- -----------------------------------------------------------------
- -------------------------
As of July 28, 1998, the Trustees and officers of Putnam
Convertible Opportunities and Income
Trust, Putnam Managed High Yield Trust and Putnam Tax-Free Health
Care Fund total of ,
and shares, respectively, of each fund comprising less
than 1% of the outstanding shares
of such fund on that date.
What are some of the ways in which the Trustees represent
shareholder
interests?
The Trustees believe that, as substantial investors in the Putnam
funds, their interests are closely aligned with those of
individual
shareholders. Among other ways, the Trustees seek to represent
shareholder interests:
by carefully reviewing your fund's investment performance
on an
individual basis with your fund's managers;
by also carefully reviewing the quality of the various
other
services provided to the funds and their shareholders by
Putnam
Management and its affiliates;
by discussing with senior management of Putnam Management
steps
being taken to address any performance deficiencies;
by reviewing the fees paid to Putnam Management to ensure
that
such fees remain reasonable and competitive with those of
other
mutual funds, while at the same time providing Putnam
Management sufficient resources to continue to provide
high
quality services in the future;
by monitoring potential conflicts between the funds and
Putnam
Management and its affiliates to ensure that the funds
continue
to be managed in the best interests of their shareholders;
and
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 currently
include: the Committee of Independent Trustees, which conducts
an
annual review of all contractual arrangements with Putnam
Management
and its affiliates; the Contract Committee, which reviews such
matters
on an interim basis during the course of the year; the
Communication
and Service Committee, which reviews the quality of services
provided
by your fund's investor servicing agent and custodian; the
Pricing,
Brokerage and Special Investments Committee, which reviews
matters
relating to valuation of securities, best execution, brokerage
costs
and allocations and new investment techniques; the Audit
Committee,
which reviews accounting policies and the adequacy of internal
controls and supervises the engagement of the funds' auditors;
the
Compensation, Legal, Administrative Affairs Committee, which
reviews
the compensation of the Trustees and their administrative staff
and
supervises the engagement of the funds' independent counsel; the
Nominating Committee, which is responsible for selecting nominees
for
election as Trustees and the Closed-end Fund Committee, which is
responsible for reviewing special issues applicable to closed-end
funds such as your fund.
Each Trustee generally attends at least two formal committee
meetings
during each regular meeting of the Trustees. During 1997, 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 Committee of Independent Trustees and the Contract
Committee typically meet on several additional occasions during
the
year to carry out their 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 the other Putnam
funds.
The Trustees periodically review their fees to assure that such
fees
continue to be appropriate in light of their responsibilities as
well
as in relation to fees paid to trustees of other mutual fund
complexes. The Compensation Committee, which consists solely of
Trustees not affiliated with Putnam Management, estimates that
Committee and Trustee meeting time together with the appropriate
preparation requires the equivalent of at least three business
days
per Trustee meeting. The following table shows the fees paid to
each
Trustee by each fund for its most recent fiscal year and the fees
paid
to each Trustee by all of the Putnam funds during calendar year
1997:
PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
COMPENSATION TABLE
Pension or
Estimated Total
Aggregate retirement
annual benefits compensation
compensation benefits accrued
from all from all
from the as part of
Putnam funds Putnam
Trustees fund(1) fund expenses upon
retirement(2) funds(3)
Jameson A. Baxter $ 650 $ 140
$87,500 $176,000 (4)
Hans H. Estin 648 333
87,500 175,000
John A. Hill 648 125
87,500 175,000 (4)
Ronald J. Jackson 650 62
87,500 176,000 (4)
Paul L. Joskow (5) 209 2
87,500 25,500
Elizabeth T. Kennan 645 174
87,500 174,000
Lawrence J. Lasser 634 130
87,500 172,000
John H. Mullin, III (5) 209 3
87,500 25,500
Robert E. Patterson 650 100
87,500 176,000
Donald S. Perkins 650 360
87,500 176,000
William F. Pounds (6) 666 373
98,000 201,000
George Putnam 646 379
87,500 175,000
George Putnam, III 642 66
87,500 174,000
A.J.C. Smith 636 223
87,500 170,000
W. Thomas Stephens 325 3
87,500 53,000 (4)
W. Nicholas Thorndike 650 249
87,500 176,000
(1) Includes an annual retainer and an attendance fee for each
meeting attended.
(2) Assumes that each Trustee retires at the normal retirement
date. Estimated benefits for
each Trustee are based on Trustee fee rates in effect
during calendar 1997.
(3) As of December 31, 1997, there were 101 funds in the
Putnam family.
(4) Includes compensation deferred pursuant to a Trustee
Compensation Deferral Plan.
(5) Elected as a Trustee in November 1997.
(6) Includes additional compensation for service as Vice
Chairman of the Putnam funds.
PUTNAM MANAGED HIGH YIELD TRUST
COMPENSATION TABLE
Pension or
Estimated Total
Aggregate retirement
annual benefits compensation
compensation benefits accrued
from all from all
from the as part of
Putnam funds Putnam
Trustees fund(1) fund expenses upon
retirement(2) funds(3)
Jameson A. Baxter $ 799 $ 150
$87,500 $176,000 (4)
Hans H. Estin 788 330
87,500 175,000
John A. Hill 792 124
87,500 175,000 (4)
Ronald J. Jackson 793 72
87,500 176,000 (4)
Paul L. Joskow (5) 260 6
87,500 25,500
Elizabeth T. Kennan 793 174
87,500 174,000
Lawrence J. Lasser 792 131
87,500 172,000
John H. Mullin, III (5) 260 9
87,500 25,500
Robert E. Patterson 812 99
87,500 176,000
Donald S. Perkins 799 357
87,500 176,000
William F. Pounds (6) 821 371
98,000 201,000
George Putnam 799 376
87,500 175,000
George Putnam, III 799 66
87,500 174,000
A.J.C. Smith 781 222
87,500 170,000
W. Thomas Stephens 350 8
87,500 53,000 (4)
W. Nicholas Thorndike 807 250
87,500 176,000
(1) Includes an annual retainer and an attendance fee for each
meeting attended.
(2) Assumes that each Trustee retires at the normal retirement
date. Estimated benefits for
each Trustee are based on Trustee fee rates in effect
during calendar 1997.
(3) As of December 31, 1997, there were 101 funds in the
Putnam family.
(4) Includes compensation deferred pursuant to a Trustee
Compensation Deferral Plan.
(5) Elected as a Trustee in November 1997.
(6) Includes additional compensation for service as Vice
Chairman of the Putnam funds.
<1TABLE>
PUTNAM TAX-FREE HEALTH CARE FUND
COMPENSATION TABLE
Pension or
Estimated Total
Aggregate retirement
annual benefits compensation
compensation benefits accrued
from all from all
from the as part of
Putnam funds Putnam
Trustees fund(1) fund expenses upon
retirement(2) funds(3)
Jameson A. Baxter $ 758 $ 131
$87,500 $176,000 (4)
Hans H. Estin 749 288
87,500 175,000
John A. Hill 752 108
87,500 175,000 (4)
Ronald J. Jackson 753 62
87,500 176,000 (4)
Paul L. Joskow (5) 255 5
87,500 25,500
Elizabeth T. Kennan 753 152
87,500 174,000
Lawrence J. Lasser 752 114
87,500 172,000
John H. Mullin, III (5) 255 7
87,500 25,500
Robert E. Patterson 770 86
87,500 176,000
Donald S. Perkins 758 312
87,500 176,000
William F. Pounds (6) 800 324
98,000 201,000
George Putnam 758 330
87,500 175,000
George Putnam, III 758 57
87,500 174,000
A.J.C. Smith 743 194
87,500 170,000
W. Thomas Stephens 345 7
87,500 53,000 (4)
W. Nicholas Thorndike 766 219
87,500 176,000
(1) Includes an annual retainer and an attendance fee for each
meeting attended.
(2) Assumes that each Trustee retires at the normal retirement
date. Estimated benefits for
each Trustee are based on Trustee fee rates in effect
during calendar 1997.
(3) As of December 31, 1997, there were 101 funds in the
Putnam family.
(4) Includes compensation deferred pursuant to a Trustee
Compensation Deferral Plan.
(5) Elected as a Trustee in November 1997.
(6) Includes additional compensation for service as Vice
Chairman of the Putnam funds.
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 "Fund
Information," on page 32.
Putnam Investments
Putnam Investment Management, Inc. and its affiliate, Putnam
Fiduciary Trust Company, your fund's investor servicing agent and
custodian, are owned by Putnam Investments, Inc., One Post Office
Square, Boston, Massachusetts 02109, a holding company that is,
except for a minority stake owned by employees, in turn 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
brokerage, consulting, and investment management businesses.
2. RATIFICATION OF INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP, One Post Office Square, Boston,
Massachusetts 02109, independent accountants, has been selected
by
the Trustees as the independent auditors of your fund for the
current fiscal years.
Among the country's preeminent accounting firms, this firm also
serves as the auditor for all 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 its fees.
A majority of the votes on the matter is necessary to ratify the
selection of auditors. Voting by one fund does not affect any
other
fund. A representative of the independent auditors is expected
to
be present at the meeting to make statements and to respond to
appropriate questions.
Effective July 1, 1998, Coopers & Lybrand L.L.P. and Price
Waterhouse
LLP combined their businesses and practices and began
doing business as PricewaterhouseCoopers LLP.
3.
AMENDING YOUR FUND'S FUNDAMENTAL INVESTMENT RESTRICTION
WITH
RESPECT TO MAKING LOANS
The Trustees are recommending that your fund's fundamental
investment restriction with respect to making loans be revised to
reflect the standard restriction expected to be used by other
Putnam
funds and to clarify that the fund is permitted to participate in
a
proposed "interfund lending program". The current restriction of
each fund states that the fund may not:
"Make loans, except by purchase of debt obligations in
which
the fund may invest consistent with its investment
policies,
by entering into repurchase agreements, or by lending its
portfolio securities."
The proposed fundamental investment restriction for your fund is
set
forth below.
"The fund may not ...
Make loans, except by purchase of debt obligations in
which
the fund may invest consistent with its investment
policies
(including without limitation debt obligations issued by
other Putnam funds), by entering into repurchase
agreements,
or by lending its portfolio securities."
If the proposal is approved, your fund would be able to
participate
in
an interfund lending
program that would allow the fund, through a
master loan agreement, from time to time to lend available cash
to
other Putnam funds to meet such funds' temporary or emergency
borrowing needs. By the terms of the program, a borrowing fund
would be obligated to repay a lending fund. As such, the lending
fund could be viewed in such a circumstance as effectively
"purchasing" a debt obligation of such a borrowing fund.
A fund
would only make loans under the program if it could receive an
interest rate higher than those available for repurchase
agreements.
There is a risk that a fund could experience a delay in obtaining
prompt repayment of a loan and, unlike repurchase agreements, a
fund
would not necessarily have received collateral for its loan. A
delay in obtaining prompt payment could cause a fund to miss an
investment opportunity or to incur costs to borrow money to
replace
the delayed
payment.
Since the Putnam funds may be considered affiliated parties,
interfund lending may be prohibited by the Investment Company Act
of
1940 and would be implemented only upon receipt of an exemptive
order of the Securities and Exchange Commission.
Required vote. Approval of this proposal requires the
affirmative
vote of the lesser of (1) more than 50% of the outstanding shares
of
the fund, or (2) 67% or more of the shares of the fund present at
the meeting if more than 50% of the outstanding shares are
present
at the meeting in person or by proxy. Voting by one fund does
not
affect the other fund.
Further Information About Voting and the Meeting
Quorum and Methods of Tabulation. The shareholders of each fund
vote separately with respect to each proposal. In the case of
each
fund, a majority of the shares entitled to vote -- present in
person
or represented by proxy -- constitutes a quorum for the
transaction
of business with respect to any proposal at the meeting (unless
otherwise noted in the proxy statement). Shares represented by
proxies that reflect abstentions and "broker non-votes" (i.e.,
shares held by brokers or nominees as to which (i) instructions
have
not been received from the beneficial owners or the persons
entitled
to vote and (ii) the broker or nominee does not have the
discretionary voting power on a particular matter) will be
counted
as shares that are present and entitled to vote on the matter for
purposes of determining the presence of a quorum. Votes cast by
proxy or in person at the meeting will be counted by persons
appointed by your fund as tellers for the meeting.
The tellers will count the total number of votes cast "for"
approval
of the proposals for purposes of determining whether sufficient
affirmative votes have been cast. With respect to the election
of
Trustees and selection of auditors, neither abstentions nor
broker
non-votes have any effect on the outcome of the proposal. With
respect to the proposal to amend the fund's fundamental
investment
restriction with respect to making loans, 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. Each fund has retained at its own 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 the fee listed below, plus reasonable out-of-pocket expenses
for
mailing and phone costs.
Putnam Convertible Opportunities and Income Trust $ 2,875
Putnam Managed High Yield Trust $ 2,875
Putnam Tax-Free Health Care Fund $ 3,250
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 the next annual
meeting. It is anticipated that each fund's next annual meeting
of
shareholders will be held in 1999. Shareholder proposals must
be
received by your fund before , 1999, to be included in your
fund's proxy statement for the next annual 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 those proposals. Any adjournment will require
the
affirmative vote of a majority of the votes cast on the question
in
person or by proxy at the session of the meeting to be adjourned.
The persons named as proxies will vote in favor of adjournment
those
proxies which they are entitled to vote in favor of such
proposals.
They will vote against adjournment those proxies required to be
voted against such proposals. Your fund pays the costs of any
additional solicitation and of any adjourned session. Any
proposals
for which sufficient favorable votes have been received by the
time
of the meeting may be acted upon and considered final regardless
of
whether the meeting is adjourned to permit additional
solicitation
with respect to any other proposal.
Financial information. Your fund will furnish to you upon
request,
without charge, a copy of the fund's annual report for its most
recent fiscal year, and a copy of its semiannual report for any
subsequent semiannual period. Such requests may be directed to
Putnam Investor Services, P.O. Box 41203, Providence, RI
02940-1203
or 1-800-225-1581.
Fund Information
Limitation of Trustee liability. The Agreement and Declaration
of
Trust of each fund provides that the fund will indemnify its
Trustees and officers against liabilities and expenses incurred
in
connection with litigation in which they may be involved because
of
their offices with the fund, except if it is determined in the
manner specified in the Agreement and Declaration of Trust that
they
have not acted in good faith in the reasonable belief that their
actions were in the best interests of the fund or that such
indemnification would relieve any officer or Trustee of any
liability to the fund or its shareholders arising by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties. Your fund, at its expense,
provides
liability insurance for the benefit of its Trustees and officers.
Audit 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), Jackson, Perkins (without
vote), Putnam, III (without vote), 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,
Joskow, Mullin, Patterson, Perkins, Stephens and Thorndike.
Officers and other information. In addition to George Putnam and
Lawrence J. Lasser, the officers of each fund are as follows:
Putnam Convertible Opportunities and Income Trust
Year
first
elected
to
Name (age) Office office
- -----------------------------------------------------------------
- --
Charles E. Porter (60) Executive Vice President 1995
Patricia C. Flaherty (51) Senior Vice President 1995
John D. Hughes (63) Senior Vice President
& Treasurer 1995
Gordon H. Silver (51) Vice President 1995
Ian C. Ferguson (41) Vice President 1997
Brett C. Browchuk (35) Vice President 1995
Thomas V. Reilly (51) Vice President 1995
Charles G. Pohl* (37) Vice President 1998
Edward T. Shadek, Jr. (37) Vice President 1997
William N. Shiebler** (56) Vice President 1995
John R. Verani (59) Vice President 1995
Beverly Marcus (54) Clerk 1995
- -----------------------------------------------------------------
- --
* The fund's portfolio manager
** President of Putnam Mutual Funds
Putnam Managed High Yield Trust
Year
first
elected
to
Name (age) Office office
- -----------------------------------------------------------------
- --
Charles E. Porter (60) Executive Vice President 1993
Patricia C. Flaherty (51) Senior Vice President 1993
John D. Hughes (63) Senior Vice President
& Treasurer 1993
Gordon H. Silver (51) Vice President 1993
Ian C. Ferguson (41) Vice President 1998
William J. Curtin (38) Vice President 1996
Edward H. D'Alelio (46) Vice President 1993
Jennifer E. Leichter* (37) Vice President 1993
William N. Shiebler** (56) Vice President 1993
John R. Verani (59) Vice President 1993
Beverly Marcus (54) Clerk 1993
- -----------------------------------------------------------------
- --
* The fund's portfolio manager
** President of Putnam Mutual Funds
Putnam Tax-Free Health Care Fund
Year
first
elected
to
Name (age) Office office
- -----------------------------------------------------------------
- --
Charles E. Porter (60) Executive Vice President 1992
Patricia C. Flaherty (51) Senior Vice President 1993
John D. Hughes (63) Senior Vice President
& Treasurer 1992
Gordon H. Silver (51) Vice President 1992
Ian C. Ferguson (41) Vice President 1998
William J. Curtin (38) Vice President 1996
Jerome J. Jacobs (40) Vice President 1996
Blake E. Anderson* (41) Vice President 1997
William N. Shiebler** (56) Vice President 1992
John R. Verani (59) Vice President 1992
Beverly Marcus (54) Clerk 1992
- -----------------------------------------------------------------
- --
* The fund's portfolio manager
** President of Putnam Mutual Funds
All of the officers of your fund are employees of Putnam
Management
or its affiliates. Because of their positions with Putnam
Management or its affiliates or their ownership of stock of Marsh
&
McLennan Companies, Inc., Messrs. Putnam, 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, custodian
fees,
and investor servicing fees paid or allowed by the fund.
Assets and shares outstanding of your fund
as of August 28, 1998
Net assets:
Putnam Convertible Opportunities and Income Trust $
Putnam Managed High Yield Trust $
Putnam Tax-Free Health Care Fund $
Shares outstanding and authorized
to vote:
Putnam Convertible Opportunities and Income Trust
Putnam Managed High Yield Trust
Putnam Tax-Free Health Care Fund
5% beneficial ownership as of August 28, 1998:
Putnam Convertible Opportunities and Income Trust
Putnam Managed High Yield Trust
Putnam Tax-Free Health Care Fund
PUTNAMINVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Toll-free 1-800-225-1581
PUTNAMINVESTMENTS
Logo
This is your PROXY CARD.
Please vote this proxy, sign it below, and return it promptly in
the
envelope provided. Your vote is important.
PUTNAM CONVERTIBLE OPPORTUNITIES AND INCOME TRUST
Proxy for a meeting of shareholders to be held on December 3,
1998
for Putnam Convertible Opportunities and Income Trust.
This proxy is solicited on behalf of the Trustees of the fund.
The undersigned shareholder hereby appoints George Putnam, Hans
H.
Estin, and Robert E. Patterson, and each of them separately,
Proxies, with power of substitution, and hereby authorizes them
to
represent and to vote, as designated below, at the meeting of
shareholders of Putnam Convertible Opportunities and Income Trust
on
December 3, 1998, at 2:00 p.m., Boston time, and at any
adjournments
thereof, all of the shares of the fund that the undersigned
shareholder would be entitled to vote if personally present.
If you complete and sign the proxy, we'll vote it exactly as you
tell us. If you simply sign the proxy, it will be voted FOR
fixing
the number of Trustees and electing Trustees as set forth in
Proposal 1 and FOR each of the other Proposals. 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.
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!
THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES
AND
ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE OTHER
PROPOSALS LISTED BELOW:
Please vote by filling in the appropriate boxes below.
1. Proposal to elect Trustees
The nominees for Class C Trustees are: J.H. Mullin, D.S.
Perkins, G. Putnam, A.J.C. Smith, W.T. Stephens and W.N.
Thorndike.
/ / FOR fixing the number of Trustees and electing all the
nominees (except as marked to the contrary below)
To withhold authority to vote for one or more of the
nominees, write the names of the nominee(s) below:
------------------------------------------------------------
/ / WITHHOLD authority to vote for all nominees
FOR AGAINST ABSTAIN
2. Proposal to ratify / / / / / /
the selection of
PricewaterhouseCoopers LLP
as the independent
auditors of your fund.
3. Approve an amendment / / / / / /
to the fund's funda-
mental investment
restriction with
respect to making loans.
- -----------------------------------------------------------------
Shareholder sign here Date
- -----------------------------------------------------------------
Co-owner sign here Date
HAS YOUR ADDRESS CHANGED?
Please use this form to notify us of any change in address or
telephone number or to provide us with your comments. Detach
this
form from the proxy ballot and return it with your signed proxy
in
the enclosed envelope.
Street
- -----------------------------------------------------------------
City State Zip
- -----------------------------------------------------------------
Telephone
- -----------------------------------------------------------------
DO YOU HAVE ANY COMMENTS?
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
PUTNAMINVESTMENTS Logo
This is your PROXY CARD.
Please vote this proxy, sign it below, and return it promptly in
the
envelope provided. Your vote is important.
PUTNAM MANAGED HIGH YIELD TRUST
Proxy for a meeting of shareholders to be held December 3, 1998
for
Putnam Managed High Yield Trust.
This proxy is solicited on behalf of the Trustees of the fund.
The undersigned shareholder hereby appoints George Putnam, Hans
H.
Estin, and Robert E. Patterson, and each of them separately,
Proxies, with power of substitution, and hereby authorizes them
to
represent and to vote, as designated below, at the meeting of
shareholders of Putnam Managed High Yield Trust on December 3,
1998,
at 2:00 p.m., Boston time, and at any adjournments thereof, all
of
the shares of the fund that the undersigned shareholder would be
entitled to vote if personally present.
If you complete and sign the proxy, we'll vote it exactly as you
tell us. If you simply sign the proxy, it will be voted FOR
fixing
the number of Trustees and electing Trustees as set forth in
Proposal 1 and FOR each of the other Proposals. 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.
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!
THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES
AND
ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE OTHER
PROPOSALS LISTED BELOW:
Please vote by filling in the appropriate boxes below.
1. Proposal to elect Trustees
The nominees for Trustees are: J.A. Baxter, H.H. Estin, J.A.
Hill, R.J. Jackson, P.L. Joskow, E.T. Kennan, L.J. Lasser,
J.H. Mullin, R.E Patterson, D.S. Perkins, W.F. Pounds, G.
Putnam, G. Putnam, III, A.J.C. Smith, W.T. Stephens and W.N.
Thorndike.
/ / FOR fixing the number of Trustees and electing all the
nominees (except as marked to the contrary below)
To withhold authority to vote for one or more of the
nominees, write the names of the nominee(s) below:
------------------------------------------------------------
/ / WITHHOLD authority to vote for all nominees
FOR AGAINST ABSTAIN
2. Proposal to ratify / / / / / /
the selection of
PricewaterhouseCoopers LLP
as the independent
auditors of your fund.
3. Approve an amendment / / / / / /
to the fund's funda-
mental investment
restriction with
respect to making loans.
- -----------------------------------------------------------------
Shareholder sign here Date
- -----------------------------------------------------------------
Co-owner sign here Date
HAS YOUR ADDRESS CHANGED?
Please use this form to notify us of any change in address or
telephone number or to provide us with your comments. Detach
this
form from the proxy ballot and return it with your signed proxy
in
the enclosed envelope.
Street
- -----------------------------------------------------------------
City State Zip
- -----------------------------------------------------------------
Telephone
- -----------------------------------------------------------------
DO YOU HAVE ANY COMMENTS?
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
PUTNAMINVESTMENTS Logo
This is your PROXY CARD.
Please vote this proxy, sign it below, and return it promptly in
the
envelope provided. Your vote is important.
PUTNAM TAX-FREE HEALTH CARE FUND
Proxy for a meeting of shareholders to be held on December 3,
1998
for Putnam Tax-Free Health Care Fund.
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 Tax-Free Health Care Fund on December 3,
1998, at 2:00 p.m., Boston time, and at any adjournments thereof,
all of the shares of the fund that the undersigned shareholder
would
be entitled to vote if personally present.
If you complete and sign the proxy, we'll vote it exactly as you
tell us. If you simply sign the proxy, it will be voted FOR
fixing
the number of Trustees and electing Trustees as set forth in
Proposal 1 and FOR each of the other Proposals. 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.
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!
THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES
AND
ELECTING ALL OF THE NOMINEES FOR TRUSTEES AND FOR THE OTHER
PROPOSALS LISTED BELOW:
Please vote by filling in the appropriate boxes below.
1. Proposal to elect Trustees
The nominees for Trustees are: J.A. Baxter, H.H. Estin, J.A.
Hill, R.J. Jackson, P.L. Joskow, E.T. Kennan, L.J. Lasser,
J.H. Mullin, R.E Patterson, D.S. Perkins, W.F. Pounds, G.
Putnam, G. Putnam, III, A.J.C. Smith, W.T. Stephens and W.N.
Thorndike.
/ / FOR fixing the number of Trustees and electing all the
nominees (except as marked to the contrary below)
To withhold authority to vote for one or more of the
nominees, write the names of the nominee(s) below:
------------------------------------------------------------
/ / WITHHOLD authority to vote for all nominees
FOR AGAINST ABSTAIN
2. Proposal to ratify / / / / / /
the selection of
PricewaterhouseCoopers LLP
as the independent
auditors of your fund.
3. Approve an amendment / / / / / /
to the fund's funda-
mental investment
restriction with
respect to making loans.
- -----------------------------------------------------------------
Shareholder sign here Date
- -----------------------------------------------------------------
Co-owner sign here Date
HAS YOUR ADDRESS CHANGED?
Please use this form to notify us of any change in address or
telephone number or to provide us with your comments. Detach
this
form from the proxy ballot and return it with your signed proxy
in
the enclosed envelope.
Street
- -----------------------------------------------------------------
City State Zip
- -----------------------------------------------------------------
Telephone
- -----------------------------------------------------------------
DO YOU HAVE ANY COMMENTS?