SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
----
Filed by the Registrant
/ X /
----
----
Filed by a Party other than the Registrant
/ /
----
CHECK THE APPROPRIATE BOX:
----
/ / Preliminary Proxy Statement
- ----
----
/ / Preliminary Additional Materials
- ----
----
/ x / Definitive Proxy Statement
- ----
----
/ / Definitive Additional Materials
- ----
----
/ / Soliciting Material Pursuant to Sec. 240.14a-11(e) or
- ---- Sec. 240.14a-12
PUTNAM MANAGED HIGH YIELD TRUST
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
----
/ x / $125 per Exchange Act Rules 0-11(c)(1)(ii),
- ---- 14a-6(i)(1), or 14a-6(i)(2).
----
/ / $500 per each party to the controversy pursuant
- ---- to Exchange Act Rule 14a-6(i)(3).
----
/ / Fee computed on table below per Exchange Act Rules
- ---- 14a-6(i)(4) 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:
(4) Proposed maximum aggregate value of transaction:
----
/ / 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 MANAGED HIGH YIELD TRUST
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 3.
WHILE INVESTORS SOMETIMES FIND A PROXY STATEMENT INTIMIDATING, WE
ARE, IN FACT, ASKING FOR YOUR VOTE ON JUST A FEW MATTERS. SO WE
URGE YOU TO SPEND A FEW 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. . . . . . . . . . . . . . . . . . . .
. . . . .3
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 Putnam Managed High Yield Trust.
While you are, of course, welcome to join us at the fund's
meeting, most shareholders cast their vote by filling out and
signing the enclosed proxy or by calling 1-800-225-1581. We are
asking for your vote on these matters:
1. ELECTING TRUSTEES; AND
2. RATIFYING THE TRUSTEES' SELECTION OF PRICE WATERHOUSE LLP AS
INDEPENDENT AUDITORS OF THE FUND FOR ITS CURRENT FISCAL
YEAR.
Although we would like very much to have each shareholder attend
the 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 don't return their proxies, the 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.
Sincerely yours,
(signature of George Putnam)
George Putnam, Chairman
PUTNAM MANAGED HIGH YIELD TRUST
NOTICE OF A MEETING OF SHAREHOLDERS
THIS IS THE FORMAL AGENDA FOR THE 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 Managed High Yield Trust:
A Meeting of Shareholders of Putnam Managed High Yield Trust will
be held on February 2, 1995 at 2:00 pm, Boston time, on the
eighth floor of One Post Office Square, Boston, Massachusetts, to
consider the following:
1. ELECTING TRUSTEES. SEE PAGE 4.
2. RATIFYING THE SELECTION OF PRICE WATERHOUSE LLP AS AUDITORS
FOR THE FUND FOR THE CURRENT FISCAL YEAR. SEE PAGE 11.
3. TRANSACTING OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
By the Trustees
George Putnam, Chairman
William F. Pounds, Vice Chairman
Hans H. Estin Robert E. Patterson
John A. Hill Donald S. Perkins
Elizabeth T. Kennan George Putnam, III
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 11, 1994
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 MANAGED
HIGH YIELD TRUST for use at the Meeting of Shareholders to be
held on February 2, and, if the meeting is adjourned, at any
later meetings, for the purposes stated in the Notice of Meeting
(see previous page).
HOW DO THE FUND'S TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE ON
THESE PROPOSALS?
The Trustees recommend that you vote
1. For the election of all nominees and
2. For selecting Price Waterhouse LLP as independent auditors
for the fund.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on November 11,
1994, 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 11, 1994.
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
WHAT ARE THE TRUSTEES' RESPONSIBILITIES?
The fund's Trustees are responsible for the general oversight of
the fund's business, including the selection of the fund's
investment manager, principal distributor, shareholder servicing
agent, custodian, auditors, legal counsel, and other persons
engaged to provide services necessary for the operation of the
fund.
WHO ARE THE FUND'S TRUSTEES?
The 12 nominees for election as Trustees at the shareholder
meeting who receive the greatest number of votes will be elected
Trustees. All the nominees have been recommended by the
nominating committee, which consists solely of Trustees who are
not "interested persons" (as defined in the Investment Company
Act of 1940) of the fund or of Putnam Investment Management,
Inc., the fund's investment manager ("Putnam Management"). All
the nominees are presently Trustees of the fund, except for Mrs.
Baxter and Mr. Smith. Each of the current Trustees was elected
by the sole shareholder in May, 1993 except for Messrs. Estin,
Lasser and Putnam, III who were elected by the Trustees on July
8, 1993. All of the nominees of this fund are also Trustees of
all other Putnam funds.
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 in their discretion, or the
Trustees may vote to fix the number of Trustees at less than 12.
NOTE: Except as indicated, 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.
NOMINEES FOR TRUSTEES
JAMESON ADKINS BAXTER [Photograph of Jameson Baxter]
President, Baxter Associates, Inc. (consultants to management).
Prior to 1992, Vice President and Principal, Regency Group, Inc.
and Consultant, The First Boston Corporation. Also, Director,
Banta Corporation, Avondale Federal Savings Bank, and ASHTA
Chemicals, Inc. Chairman Emeritus of the Board of Trustees, Mount
Holyoke College. Member of Board of Governors, Good Shepherd
Hospital. Age, 51.
HANS H. ESTIN [Photograph of Hans Estin]
Vice Chairman, North American Management Corp. (a registered
investment adviser). Also, Director, The Boston Company, Inc.,
and Boston Safe Deposit and Trust Company. Member, Massachusetts
General Hospital. Trustee, New England Aquarium. Age, 66.
JOHN A. HILL [Photograph of John Hill]
Chairman and Managing Director, First Reserve Corporation (a
registered investment adviser). Prior to 1989, General Partner,
Meridien Capital Corporation (a venture capital investment firm).
Also, Director, Snyder Oil Corporation, Maverick Tube
Corporation, PetroCorp Incorporated, various private companies
controlled by First Reserve Corporation, and various First
Reserve Funds. Age, 52.
ELIZABETH T. KENNAN [photograph of Elizabeth Kennan]
President, Mount Holyoke College. Also, Director, NYNEX
Corporation, Northeast Utilities, the Kentucky Home Life
Insurance Companies, and Talbots. Trustee, University of Notre
Dame. Age, 56.
NOMINEES FOR TRUSTEES
LAWRENCE J. LASSER* [Photograph of Lawrence Lasser]
President, Chief Executive Officer, and Director of Putnam
Investments, Inc., and Putnam Management. Vice President of the
Putnam funds. Director, Marsh & McLennan Companies, Inc., and
INROADS/Central New England Inc. Member, Board of Overseers,
Museum of Science, Museum of Fine Arts, and Isabella Stewart
Gardner Museum, Boston. Also, Trustee, Beth Israel Hospital and
Buckingham, Browne and Nichols School. Age, 52.
ROBERT E. PATTERSON [Photograph of Robert Patterson]
Executive Vice President of Cabot Partners Limited Partnership (a
registered investment adviser). Also, Vice Chairman, Joslin
Diabetes Center. Director, Brandywine Trust Company. From May
1987 to October 1990, Executive Vice President of Cabot, Cabot &
Forbes Realty Advisors, Inc. (predecessor of Cabot Partners
Limited Partnership). Age, 49.
DONALD S. PERKINS [Photograph of Donald Perkins]
Director of various corporations, including American Telephone &
Telegraph Company, AON Corp., Cummins Engine Company, Inc.,
Illinois Power Co., Inland Steel Industries, Inc., K mart
Corporation, LaSalle Street Fund, Inc., Springs Industries, Inc.,
and Time Warner Inc. Also, Trustee and Vice Chairman,
Northwestern University. Chairman, The Hospital Research and
Education Trust. Member, The Business Council. Founding Chairman,
the Civic Committee of the Commercial Club of Chicago. Age, 67.
WILLIAM F. POUNDS [Photograph of William Pounds]
Vice Chairman. Professor of Management, Alfred P. Sloan School of
Management, Massachusetts Institute of Technology. Director,
IDEXX Laboratories, Inc., M/A-COM, Inc., EG&G, Inc., Perseptive
Biosystems, Inc., Management Sciences For Health, Inc., and Sun
Company, Inc. Also, Trustee, Museum of Fine Arts, Boston, and
Overseer, WGBH Educational Foundation. Age, 66.
GEORGE PUTNAM* [Photograph of George Putnam]
Chairman and President of the Putnam funds. Chairman and Director
of Putnam Management and Putnam Mutual Funds Corp. Also,
Director, The Boston Company, Inc., Boston Safe Deposit and Trust
Company, Freeport-McMoRan, Inc., General Mills, Inc., Houghton
Mifflin Company, Marsh & McLennan Companies, Inc., and
Rockefeller Group, Inc. Trustee, Massachusetts General Hospital,
McLean Hospital, Vincent Memorial Hospital, WGBH Educational
Foundation, The Colonial Williamsburg Foundation, and Museum of
Fine Arts, Boston. Age, 68.
GEORGE PUTNAM, III* [Photograph of George Putnam, III]
President, New Generation Research, Inc. (publisher of financial
information). Director, World Environment Center and
Massachusetts Audubon Society. Trustee, Sea Education Association
and St. Mark's School. Also, Overseer, New England Medical
Center. Age, 43.
A.J.C. SMITH* [Photograph of A.J.C. Smith]
Chairman and Chief Executive Officer, Marsh & McLennan Companies,
Inc. Also, Trustee of The American Institute for Chartered
Property Casualty Underwriters, the Central Park Conservancy, and
the Carnegie Hall Society. Age, 60.
NOMINEES FOR TRUSTEES
W. NICHOLAS THORNDIKE [Photograph of W. Nicholas Thorndike]
Director of various corporations and charitable organizations,
including Providence Journal Co. and Courier Corporation. Also,
Trustee, Bradley Real Estate Trust, Eastern Utilities Associates,
Massachusetts General Hospital, and Northeastern University.
Prior to December 1988, Chairman of the Board and Managing
Partner of Wellington Management Company/Thorndike, Doran, Paine
& Lewis (a registered investment adviser). Age, 61.
* Nominees who are "interested persons" (as defined in the
Investment Company Act of 1940) of the 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" of the fund, Putnam Management,
and Putnam Mutual Funds by virtue of their positions as officers
or shareholders of the 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 the fund, Putnam Management, and Putnam Mutual Funds.
The balance of the nominees are not "interested persons."
Nominees for Trustees
Jameson Adkins Baxter [Photograph of Jameson Baxter]
President, Baxter Associates, Inc. (consultants to management).
Prior to 1992, Vice President and Principal, Regency Group, Inc.
and Consultant, The First Boston Corporation. Also, Director,
Banta Corporation, Avondale Federal Savings Bank, and ASHTA
Chemicals, Inc. Chairman Emeritus of the Board of Trustees, Mount
Holyoke College. Member of Board of Governors, Good Shepherd
Hospital. Age, 51.
HANS H. ESTIN [Photograph of Hans Estin]
Vice Chairman, North American Management Corp. (a registered
investment adviser). Also, Director, The Boston Company, Inc.,
and Boston Safe Deposit and Trust Company. Member, Massachusetts
General Hospital. Trustee, New England Aquarium. Age, 66.
JOHN A. HILL [Photograph of John Hill]
Chairman and Managing Director, First Reserve Corporation (a
registered investment adviser). Prior to 1989, General Partner,
Meridien Capital Corporation (a venture capital investment firm).
Also, Director, Snyder Oil Corporation, Maverick Tube
Corporation, PetroCorp Incorporated, various private companies
controlled by First Reserve Corporation, and various First
Reserve Funds. Age, 52.
ELIZABETH T. KENNAN [photograph of Elizabeth Kennan]
President, Mount Holyoke College. Also, Director, NYNEX
Corporation, Northeast Utilities, the Kentucky Home Life
Insurance Companies, and Talbots. Trustee, University of Notre
Dame. Age, 56.
NOMINEES FOR TRUSTEES
LAWRENCE J. LASSER* [Photograph of Lawrence Lasser]
President, Chief Executive Officer, and Director of Putnam
Investments, Inc., and Putnam Management. Vice President of the
Putnam funds. Director, Marsh & McLennan Companies, Inc., and
INROADS/Central New England Inc. Member, Board of Overseers,
Museum of Science, Museum of Fine Arts, and Isabella Stewart
Gardner Museum, Boston. Also, Trustee, Beth Israel Hospital and
Buckingham, Browne and Nichols School. Age, 52.
ROBERT E. PATTERSON [Photograph of Robert Patterson]
Executive Vice President of Cabot Partners Limited Partnership (a
registered investment adviser). Also, Vice Chairman, Joslin
Diabetes Center. Director, Brandywine Trust Company. From May
1987 to October 1990, Executive Vice President of Cabot, Cabot &
Forbes Realty Advisors, Inc. (predecessor of Cabot Partners
Limited Partnership). Age, 49.
DONALD S. PERKINS [Photograph of Donald Perkins]
Director of various corporations, including American Telephone &
Telegraph Company, AON Corp., Cummins Engine Company, Inc.,
Illinois Power Co., Inland Steel Industries, Inc., K mart
Corporation, LaSalle Street Fund, Inc., Springs Industries, Inc.,
and Time Warner Inc. Also, Trustee and Vice Chairman,
Northwestern University. Chairman, The Hospital Research and
Education Trust. Member, The Business Council. Founding Chairman,
the Civic Committee of the Commercial Club of Chicago. Age, 67.
WILLIAM F. POUNDS [Photograph of William Pounds]
Vice Chairman. Professor of Management, Alfred P. Sloan School of
Management, Massachusetts Institute of Technology. Director,
IDEXX Laboratories, Inc., M/A-COM, Inc., EG&G, Inc., Perseptive
Biosystems, Inc., Management Sciences For Health, Inc., and Sun
Company, Inc. Also, Trustee, Museum of Fine Arts, Boston, and
Overseer, WGBH Educational Foundation. Age, 66.
GEORGE PUTNAM* [Photograph of George Putnam]
Chairman and President of the Putnam funds. Chairman and Director
of Putnam Management and Putnam Mutual Funds Corp. Also,
Director, The Boston Company, Inc., Boston Safe Deposit and Trust
Company, Freeport-McMoRan, Inc., General Mills, Inc., Houghton
Mifflin Company, Marsh & McLennan Companies, Inc., and
Rockefeller Group, Inc. Trustee, Massachusetts General Hospital,
McLean Hospital, Vincent Memorial Hospital, WGBH Educational
Foundation, The Colonial Williamsburg Foundation, and Museum of
Fine Arts, Boston. Age, 68.
GEORGE PUTNAM, III* [Photograph of George Putnam, III]
President, New Generation Research, Inc. (publisher of financial
information). Director, World Environment Center and
Massachusetts Audubon Society. Trustee, Sea Education Association
and St. Mark's School. Also, Overseer, New England Medical
Center. Age, 43.
A.J.C. SMITH* [Photograph of A.J.C. Smith]
Chairman and Chief Executive Officer, Marsh & McLennan Companies,
Inc. Also, Trustee of The American Institute for Chartered
Property Casualty Underwriters, the Central Park Conservancy, and
the Carnegie Hall Society. Age, 60.
NOMINEES FOR TRUSTEES
W. NICHOLAS THORNDIKE [Photograph of W. Nicholas Thorndike]
Director of various corporations and charitable organizations,
including Providence Journal Co. and Courier Corporation. Also,
Trustee, Bradley Real Estate Trust, Eastern Utilities Associates,
Massachusetts General Hospital, and Northeastern University.
Prior to December 1988, Chairman of the Board and Managing
Partner of Wellington Management Company/Thorndike, Doran, Paine
& Lewis (a registered investment adviser). Age, 61.
* Nominees who are "interested persons" (as defined in the
Investment Company Act of 1940) of the 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" of the fund, Putnam Management,
and Putnam Mutual Funds by virtue of their positions as officers
or shareholders of the 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 the fund, Putnam Management, and Putnam Mutual Funds.
The balance of the nominees are not "interested persons."
DO THE TRUSTEES HAVE A STAKE IN THE 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 80 Putnam funds
based on their own investment needs. The table below lists the
Trustees' current investments in the fund and in the Putnam funds
as a group.
SHARE OWNERSHIP BY TRUSTEES AND NOMINEES
Number of Number of
shares shares of all
Year first of the Putnam funds
Trustees and elected as fund owned as owned as
Nominees Trustee of 9/30/94* of 9/30/94+
- -----------------------------------------------------------------
JAMESON ADKINS BAXTER 1993 300
24,189
HANS H. ESTIN 1993 100 29,568
JOHN A. HILL 1993 100 167,402
ELIZABETH T. KENNAN 1993 100 (1) 15,469
LAWRENCE J. LASSER 1993 100 294,144
ROBERT E. PATTERSON 1993 200 54,788
DONALD S. PERKINS 1993 420 257,131
WILLIAM F. POUNDS 1993 500 373,629
GEORGE PUTNAM 1993 785 1,255,067
GEORGE PUTNAM, III 1993 500 65,527
A.J.C. SMITH -- 200 30,444
W. NICHOLAS THORNDIKE 1993 109 55,150
- -----------------------------------------------------------------
(1) In addition, Mrs. Kennan is the custodian of a trust for her
son which owns 111 shares of the fund.
* As of September 30, 1994, the Trustees, nominees and officers
of the fund owned a total of 3,414 shares of the fund comprising
less than 1% of the outstanding shares of the fund on that date.
With respect to all of these shares, the Trustees, nominees and
officers individually have sole investment power and sole voting
power.
+ These holdings do not include shares of Putnam money market
funds.
HOW OFTEN DO THE TRUSTEES MEET AND WHAT ARE THEY PAID?
The tables below show the number of meetings of the Trustees and
certain committees during the past fiscal year, as well as the
fees paid to the Trustees for their services. The fund pays the
fees of all the Trustees. 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.
MEETINGS OF THE TRUSTEES
For the Fiscal Year Ended May 31, 1994
- --------------------------------------------------------------
Full Board of Trustees meetings 11
Audit Committee meetings 3
Nominating Committee meetings 2
- ---------------------------------------------------------------
Trustee's Fees
- ---------------------------------------------------------------
Annual retainer fee per Trustee $810
Additional attendance fee per
Trustees' meeting $9
Aggregate fees paid to all Trustees for the
year* $8,452
- ---------------------------------------------------------------
*Includes both annual fees and fees for attendance at Trustees'
meetings and certain committee meetings.
For additional information about the fund, including further
information about its Trustees and officers and about Putnam
Management, the fund's investment adviser, please see "Further
Information About Putnam Investment Management, Inc.," on page
14.
2. SELECTION OF INDEPENDENT AUDITORS
Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts,
independent accountants, has been selected by the Trustees as
auditors of the fund for the current fiscal year. One of 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.
FURTHER INFORMATION ABOUT VOTING AND THE SHAREHOLDER MEETING
QUORUM AND METHODS OF TABULATION. A majority of the shares
entitled to vote -- present in person or represented by proxy --
constitutes a quorum for the transaction of business with respect
to any proposal at the meeting (unless otherwise noted in the
proxy statement). Shares represented by proxies that reflect
abstentions and "broker non-votes" (i.e., shares held by brokers
or nominees as to which (i) instructions have not been received
from the beneficial owners or the persons entitled to vote and
(ii) the broker or nominee does not have the discretionary voting
power on a particular matter) will be counted as shares that are
present and entitled to vote on the matter for purposes of
determining the presence of a quorum. Votes cast by proxy or in
person at the meeting will be counted by persons appointed by the
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 the 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 the fund and employees of Putnam Management,
Putnam Fiduciary Trust Company, and Putnam Mutual Funds may
solicit proxies in person or by telephone. The 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. The 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. The 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.
Persons holding shares as nominees will upon request be
reimbursed for their reasonable expenses in soliciting
instructions from their principals. The fund has retained at its
expense Management Information Services Corp, 61 Accord Park
Drive, Norwell, Massachusetts 02061, to aid in the solicitation
instructions for nominee accounts, for a fee not to exceed $2,500
plus reasonable out-of-pocket expenses.
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 the 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 the fund's next annual meeting
of shareholders will be held in October 1996. Shareholder
proposals to be included in the fund's proxy statement for the
next annual meeting must be received by the fund before March 31,
1996.
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 any such adjournment those
proxies required to be voted against any of such proposals. The
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. A copy of the fund's annual report for
its most recent fiscal year, including financial statements, has
previously been mailed to shareholders.
FURTHER INFORMATION ABOUT PUTNAM INVESTMENT MANAGEMENT, INC.
PUTNAM INVESTMENT MANAGEMENT, INC. and its affiliate, Putnam
Fiduciary Trust Company, the 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. A certified balance sheet of Putnam
Management is attached to this Proxy Statement as Exhibit A.
The directors of Putnam Management are George Putnam, Lawrence J.
Lasser, and Gordon H. Silver. Mr. Lasser is the principal
executive officer of Putnam Management. The principal
occupations of Messrs. Putnam, Lasser, and Silver are as officers
and directors of Putnam Management and certain of its corporate
affiliates. The address of Putnam Management and the business
address of the directors and officers of Putnam Management is One
Post Office Square, Boston, Massachusetts 02109.
In addition to its services to the fund, Putnam Management acts
as investment adviser or subadviser of other publicly owned
investment companies having differing investment objectives.
Putnam Management is also affiliated with The Putnam Advisory
Company, Inc., which together with its subsidiaries furnishes
investment advice to domestic and foreign institutional clients
and mutual funds. Another affiliate, Putnam Fiduciary Trust
Company, provides investment advice to institutional clients
under its banking and fiduciary powers. The advisory fees
charged by such firms to their institutional clients are
generally at lower rates than those charged the Putnam funds.
The services performed and responsibilities assumed by these
firms for such clients are, however, not as extensive as those
performed or assumed by Putnam Management for the Putnam funds.
Some officers and directors of Putnam Management, including some
who are officers of the fund, serve as officers or directors of
some of these affiliates. Putnam Management may also enter into
other businesses.
THE MANAGEMENT CONTRACT. Putnam Management serves as investment
manager of the fund pursuant to a Management Contract. The
management fee payable under the Contract is based on the
following annual rates: 0.55% of the first $500 million of the
average net asset value of the fund, 0.48% of the next $500
million, 0.44% of the next $500 million, and 0.40% of any excess
over $1.5 billion. Management fees are payable quarterly, based
on the average net assets of the fund as determined at the close
of each business week. Such fees are in addition to the
compensation of Trustees and certain officers and other expenses
borne by the fund. The compensation payable to Putnam Management
is subject to reduction or reimbursement to the extent that
expenses of the fund in any fiscal year exceed the limits on
investment company expenses imposed by any statute or regulatory
authority in any jurisdiction where shares of the fund are
qualified for offer and sale. The term "expenses" is defined in
the statutes and regulations of such jurisdictions and, generally
speaking, excludes brokerage commissions, taxes, interest and
extraordinary expenses. The fee payable to Putnam Management is
also subject to reduction by the amount of certain possible
commissions, fees, brokerage or similar payments received by
Putnam Mutual Funds, less expenses approved by the Trustees of
the fund, in respect of purchases and sales of the fund's
portfolio investments. The fees paid to Putnam Management in the
most recent fiscal year are shown below in "Further information
about the fund."
Under the Contract, subject to such policies as the Trustees may
determine, Putnam Management, at its expense, furnishes
continuously an investment program for the fund and makes
investment decisions on behalf of the fund and places all orders
for the purchase and sale of the fund's portfolio securities.
Putnam Management may place fund portfolio transactions with
broker-dealers that furnish Putnam Management, without cost to
it, certain brokerage and research services of value to Putnam
Management and its affiliates in advising the fund and other
clients. In so doing, Putnam Management may cause the fund to
pay greater brokerage commissions than it might otherwise pay.
See "Brokerage and research services" below.
The Contract provides that Putnam Management shall not be subject
to any liability to the fund or to any shareholder of the fund
for any act or omission in the course of or connected with
rendering services thereunder in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard
of its obligations and duties.
The Contract may be terminated without penalty upon 30 days'
written notice by Putnam Management, by the Trustees of the fund,
or by the affirmative vote of the holders of a "majority of the
outstanding voting securities" of the fund (as defined in the
Investment Company Act of 1940). It may be amended only by an
affirmative vote of the holders of a majority of the outstanding
voting securities of the fund and by a majority of the Trustees
who are not "interested persons" of the fund or Putnam
Management.
The Contract will terminate automatically if it is assigned, or
unless its continuance is approved at least annually by either
the Trustees or shareholders of the fund and in either case by a
majority of the Trustees who are not "interested persons" of
Putnam Management or the fund.
ADMINISTRATIVE SERVICES CONTRACT. Under an Administrative
Services Contract between the fund and Putnam Management, Putnam
Management, at its own expense and subject to the control of the
Trustees, manages, supervises, and conducts the non-investment
related affairs and business of the fund, furnishes office space
and equipment, and provides bookkeeping and clerical services
(including determination of the fund's net asset value, but
excluding transfer agency services). As compensation for the
services rendered, facilities furnished, and expenses borne by
Putnam Management under the Administrative Services Contract, the
fund pays Putnam Management a quarterly fee based on the fund's
average net asset value (determined as described below) at the
annual rate of 0.20% of the first $500 million of the average net
asset value of the fund, 0.17% of the next $500 million, 0.16% of
the next $500 million, and 0.15% of any excess over $1.5 billion
of such average net asset value.
Under the terms and conditions of the Administrative Services
Contract, in addition to the fee paid to Putnam Management, the
fund also pays, or reimburses Putnam Management for, the
compensation and related expenses of certain officers of the fund
and their assistants. Currently, the fund is reimbursing Putnam
Management for a portion of the compensation and related expenses
of certain officers of the fund who provide certain
administrative services to the fund and the other Putnam funds,
each of which bears an allocated share of the costs. The
aggregate amount of all such payments and reimbursements is
determined annually by the Trustees, and the amount paid in the
most recent fiscal year is set forth in "Further information
about the fund." Putnam Management pays all other salaries of
officers of the fund. The fund pays all expenses not assumed by
Putnam Management including, without limitation, auditing, legal,
custodial, investor servicing agent and shareholder reporting
expenses.
The Administrative Services Contract provides that Putnam
Management shall not be subject to any liability to the fund or
to any shareholder of the fund for any act or omission in the
course of or connected with rendering services to the fund in the
absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of its duties on the part of Putnam
Management.
INVESTMENT DECISIONS. Investment decisions for the fund and for
the other investment advisory clients of Putnam Management and
its affiliates are made with a view to achieving each client's
respective investment objectives. Investment decisions are the
product of many factors in addition to basic suitability for the
particular client involved. Thus, a particular security may be
bought and sold for some clients even though it could have been
bought or sold for other clients at the same time. Likewise, a
particular security may be bought for some clients when other
clients are selling the security. In some cases, one client may
sell a particular security to another client. When two or more
clients simultaneously purchase or sell the same security, each
day's transactions in the security are, insofar as possible,
averaged as to price and allocated between the clients in a
manner which in the opinion of Putnam Management is equitable to
each and in accordance with the total amount of the security
being purchased or sold by each. There may be circumstances when
purchases or sales of portfolio securities for one or more
clients will have an adverse effect on other clients.
BROKERAGE AND RESEARCH SERVICES. Transactions on U.S. stock
exchanges, commodities markets and futures markets, and other
agency transactions involve the payment by the fund of negotiated
brokerage commissions. Such commissions vary among different
brokers. A particular broker may charge different commissions
according to such factors as the difficulty and size of the
transaction. Transactions in foreign investments often involve
the payment of fixed brokerage commissions, which may be higher
than those in the United States. There is generally no stated
commission in the case of securities traded in the
over-the-counter markets, but the price paid by the fund usually
includes an undisclosed dealer commission or markup. In
underwritten offerings, the price paid by the fund includes a
disclosed, fixed commission or discount retained by the
underwriter or dealer.
It has for many years been a common practice in the investment
advisory business for advisers of investment companies and other
institutional investors to receive "brokerage and research
services" (as defined in the Securities Exchange Act of 1934, as
amended (the "1934 Act")) from broker-dealers that execute
portfolio transactions for the clients of such advisers and from
third parties with which such broker-dealers have arrangements.
Consistent with this practice, Putnam Management receives
brokerage and research services and other similar services from
many broker-dealers with which Putnam Management places the
fund's portfolio transactions and from third parties with which
these broker-dealers have arrangements. These services include
such matters as general economic and market reviews, industry and
company reviews, evaluations of investments, recommendations as
to the purchase and sale of investments, newspapers, magazines,
pricing services, quotation services, news services, and personal
computers utilized by Putnam Management's managers and analysts.
Where the services referred to above are not used exclusively by
Putnam Management for research purposes, Putnam Management, based
upon its own allocations of expected use, bears the portion of
the cost of these services that directly relates to their
non-research use. Some of these services are of value to Putnam
Management and its affiliates in advising various of their
clients (including the fund), although not all of these services
are necessarily useful and of value in managing the fund. The
management fee paid by the fund is not reduced because Putnam
Management and its affiliates receive these services even though
Putnam Management might otherwise be required to purchase some of
these services for cash.
Putnam Management places all orders for the purchase and sale of
portfolio investments for the fund and buys and sells investments
for the fund through a substantial number of brokers and dealers.
In so doing, Putnam Management uses its best efforts to obtain
for the fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher brokerage
commissions as described below. In seeking the most favorable
price and execution, Putnam Management, having in mind the fund's
best interests, considers all factors it deems relevant,
including, by way of illustration, price, the size of the
transaction, the nature of the market for the security or other
investment, the amount of the commission, the timing of the
transaction taking into account market prices and trends, the
reputation, experience, and financial stability of the
broker-dealer involved, and the quality of service rendered by
the broker-dealer in other transactions.
As permitted by Section 28(e) of the 1934 Act, and by the
Management Contract, Putnam Management may cause the fund to pay
a broker-dealer that provides "brokerage and research services"
(as defined in the 1934 Act) to Putnam Management an amount of
disclosed commission for effecting securities transactions on
stock exchanges and other transactions for the fund on an agency
basis in excess of the commission which another broker-dealer
would have charged for effecting that transaction. Putnam
Management's authority to cause the fund to pay any such greater
commissions is also subject to such policies as the Trustees may
adopt from time to time. Putnam Management does not currently
intend to cause the fund to make such payments except to the
extent necessary, in its judgment, to obtain the overall best net
price and execution for the fund's portfolio transactions. It is
the position of the staff of the Securities and Exchange
Commission that Section 28(e) does not apply to the payment of
such greater commissions in "principal" transactions.
Accordingly, Putnam Management will use its best efforts to
obtain the most favorable price and execution available with
respect to such transactions, as described above.
The Management Contract provides that commissions, fees,
brokerage, or similar payments received by Putnam Management or
an affiliate in connection with the purchase and sale of
portfolio investments of the fund, less any direct expenses
approved by the Trustees, shall be recaptured by the fund through
a reduction of the fee payable by the fund under the Management
Contract. Putnam Management seeks to recapture for the fund
soliciting dealer fees on the tender of the fund's portfolio
securities in tender or exchange offers. Any such fees which may
be recaptured are likely to be minor in amount.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking
the most favorable price and execution available and such other
policies as the Trustees may determine, Putnam Management may
consider sales of shares of the fund (and, if permitted by law,
of the other Putnam funds) as a factor in the selection of
broker-dealers to execute portfolio transactions for the fund.
PAYMENTS TO AN AFFILIATE OF PUTNAM MANAGEMENT. Putnam Fiduciary
Trust Company is the fund's investor servicing agent and
custodian. The investor servicing fees and custodian fees paid
to Putnam Fiduciary Trust Company in the fund's most recent
fiscal year are set forth below under "Further information about
the fund."
FURTHER INFORMATION ABOUT THE FUND
TRUSTEE COMPENSATION. Each Trustee of the fund receives an
annual fee, and an additional fee for each Trustees' meeting
attended. Trustees who are not "interested persons" of Putnam
Management and who serve on committees of the Trustees receive
additional fees for attendance at certain committee meetings.
The annual fee paid, the number of Trustees' meetings held, and
the aggregate fees paid to all Trustees are set forth in the
section on Trustees' compensation under Proposal 1.
The fund's Trustees have approved Retirement Guidelines for
Trustees of the Putnam funds. These guidelines provide generally
that a Trustee who retires after reaching age 72 and who has at
least 10 years of continuous service will be eligible to receive
a retirement benefit from each Putnam fund for which he or she
served as a Trustee. The amount and form of such benefit is
subject to determination annually by the Trustees and, except as
otherwise determined by the Trustees, will be an annual cash
benefit equal to one-half of the Trustee retainer paid by the
fund at the time of retirement. Several retired Trustees of the
fund are currently receiving retirement benefits pursuant to
these Guidelines and it is anticipated that the current Trustees
of the fund will receive similar benefits upon their retirement.
The Trustees of the fund reserve the right to amend or terminate
such Guidelines and the related payments at any time, and may
modify or waive the foregoing eligibility requirements when
deemed appropriate.
The Agreement and Declaration of Trust of the 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. The 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 the fund include only Trustees who are not
"interested persons" of the fund or Putnam Management. The Audit
Committee recommends to the Trustees the independent public
accountants to be selected as auditors for the fund. It also
reviews the performance, scope of work, and compensation of such
auditors, and reviews with such auditors the quality, accounting
controls, procedures, and adequacy of the accounting services
rendered to the fund by Putnam Management and by the fund's
investor servicing agent and custodian. The Audit Committee
reports to the Trustees the results of its inquiries. The Audit
Committee currently consists of Messrs. Estin (Chairman),
Perkins, Putnam, III (without vote), and Mrs. Kennan. If elected
as a Trustee, Mr. Smith (without vote) is proposed to be added to
the Audit Committee.
The Nominating Committee consists only of Trustees who are not
"interested persons" of the fund or Putnam Management. It
recommends to the Trustees persons to be elected as Trustees and
as Chairman, Vice Chairman, President, and certain other officers
of the fund. The Nominating Committee will consider individuals
proposed by a shareholder for election as a Trustee.
Shareholders wishing to submit the name of any individual must
submit in writing a brief description of the proposed nominee's
business experience and other information relevant to the
qualifications of the individual to serve as a Trustee of the
fund. The Nominating Committee currently consists of Mrs. Kennan
and Dr. Pounds (Co-chairpersons), and Messrs. Estin, Hill,
Patterson, Perkins and Thorndike. If elected as a Trustee, Mrs.
Baxter is proposed to be added to the Nominating Committee.
In addition to George Putnam and Lawrence J. Lasser, the officers
of the fund are Patricia C. Flaherty, Senior Vice President,
Charles E. Porter, Executive Vice President, Gordon H. Silver,
Gary N. Coburn, Edward H. D'Alelio, Jennifer E. Leichter, the
fund's portfolio manager, William N. Shiebler, President of
Putnam Mutual Funds, John R. Verani and Paul M. O'Neil, each of
whom serves as a Vice President, John D. Hughes, Vice President
and Treasurer, and Beverly Marcus, Clerk of the fund. All of the
officers of the 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,
Messrs. Putnam, Putnam, III, Lasser and Smith (nominees for
Trustees of the fund), as well as the officers of the fund, will
benefit from the management fees, custodian fees, and investor
servicing fees paid or allowed by the fund.
ASSETS OF THE FUND
SHARES OUTSTANDING
- -----------------------------------------------------------------
Net assets of the fund as of
September 30, 1994 $96,748,408
Shares of the fund outstanding and
authorized to vote as of
September 30, 1994 7,507,107 shares
Persons beneficially owning more than 5%
of the fund's shares as of
September 30, 1994 None
FOR THE FISCAL YEAR ENDED MAY 31, 1994
MANAGEMENT CONTRACT
- -----------------------------------------------------------------
The management contract dated June 4,
1993, was approved by the sole
shareholder on that date and was last
approved by the Trustees on
January 7, 1994.
Management and Administrative Services
fees paid to Putnam Management $743,865
Reimbursement paid by the fund to Putnam
Management for compensation and related
expenses including employee benefit plan
contributions for the fund's Executive Vice
President (Charles E. Porter), Senior Vice
President (Patricia C. Flaherty), Clerk
(Beverly Marcus), and their assistants $6,935
PAYMENTS TO AN AFFILIATE
- -----------------------------------------------------------------
Investor servicing and custodian fees paid
to Putnam Fiduciary Trust Company (after
application of credits, if any) $149,224
BROKERAGE*
- -----------------------------------------------------------------
Total fund payments to broker-dealers as
commissions on agency transactions None
Total fund payments to broker-dealers as
commissions on underwritten transactions $1,072,723
*The fund placed agency and underwritten transactions having an
approximate aggregate dollar value of $3,015,220 (1.39% of the
fund's agency and underwritten transactions, on which
approximately $14,875 of commissions were paid) with brokers and
dealers to recognize research, statistical and quotation services
Putnam Management considered to be particularly useful to it and
its affiliates.
EXHIBIT A
PUTNAM INVESTMENT MANAGEMENT, INC.
BALANCE SHEET
DECEMBER 31, 1993
ASSETS:
Cash $ 300
Investments (note 2) 50,000
Investment management fees receivable 60,817,927
Accounts receivable from affiliates (note 6) 1,819,578
Prepaid expenses and other assets 2,759,786
Property and equipment - net (notes 2 & 3) 5,105,571
------------
TOTAL ASSETS $70,553,162
============
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Accounts payable and accrued
expenses (note 5) $ 20,704,486
Accounts payable to affiliate 916
------------
TOTAL LIABILITIES 20,705,402
------------
STOCKHOLDER'S EQUITY:
Common stock - $1 par value; authorized
and outstanding, 1,000 shares 1,000
Paid-in surplus 4,696,665
Retained earnings 45,150,095
------------
TOTAL STOCKHOLDER'S EQUITY 49,847,760
------------
TOTAL LIABILITIES AND STOCKHOLDER'S
EQUITY $70,553,162
============
See notes to balance sheet.
PUTNAM INVESTMENT MANAGEMENT, INC.
NOTES TO BALANCE SHEET
1. CORPORATE AFFILIATION
Putnam Investment Management, Inc. (the Company) is a
wholly-owned subsidiary of Putnam Investments, Inc., (the
Parent), which is a wholly-owned subsidiary of Marsh &
McLennan Companies, Inc. (MMC).
The Company's primary business is to provide investment
advisory services to Putnam-sponsored mutual funds. In
connection with providing these services, the Company
receives a management fee which is based upon the average
net asset value of the respective fund to which the services
are provided.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
Investments consist of time deposits held by an affiliate.
Investments are recorded at the lower of cost or market.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Office and
data processing equipment are depreciated using the straight-line
method over their estimated useful lives of four to ten years.
Leasehold improvements are amortized using the straight-line
method over ten years or the period covered by the lease,
whichever is less. Additions, renewals and betterments of
property and equipment are capitalized. Expenditures for
maintenance and repairs are charged to income when incurred.
3. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
Office and data processing equipment $ 3,610,612
Less accumulated depreciation (2,244,442)
------------
1,366,170
------------
Leasehold improvements 6,051,063
Less accumulated amortization (2,311,662)
------------
3,739,401
------------
Property and equipment - net $ 5,105,571
============
4. INCOME TAXES
In accordance with the provisions of STATEMENT OF
FINANCIAL ACCOUNTING STANDARDS NO. 109 - ACCOUNTING FOR
INCOME TAXES, the Company records a current liability or
asset for the estimated taxes payable or refundable on tax
returns for the current year and a deferred tax liability or
asset for the estimated future tax effects attributable to
temporary differences.
The Company, through MMC, files its federal tax return
as a member of a consolidated group. The Parent allocates
its current and deferred tax provision or benefit to the
Company in a manner which is representative of how the
Company would compute its provision as a separate entity.
Under an agreement with the Parent, the Company pays
the Parent each month for the amount of its net current and
deferred tax provision. If the Company has a net tax
benefit, the Parent pays the Company that amount. The
Parent then assumes responsibility for the payment of all
taxes in accordance with federal, state and local laws. As
a result of this agreement, the Company has no current or
deferred tax liability or asset reflected in its balance
sheet at December 31, 1993.
5. EMPLOYEE BENEFIT PLANS
PROFIT SHARING PLAN
The Company, the Parent and affiliates sponsor a
profit-sharing plan (the Plan) covering substantially all
employees, providing for annual contributions as determined
by the Board of Directors. Contributions payable to the
Plan at December 31, 1993 were $557,000.
RETIREE HEALTH CARE PLAN
MMC provides a health care plan which covers all
eligible retirees of the Company and its affiliates. The
Parent subsidizes a portion of the cost of the plan. The
Parent allocates its cost of the plan to the Company and its
affiliates in a manner which management believes reflects
the actual cost of the plan on an accrual basis.
6. RELATED PARTY TRANSACTIONS
The Company shares office facilities and personnel with
other wholly-owned subsidiaries of the Parent. Accordingly,
the related costs of such arrangements have been allocated
among the various subsidiaries in a manner which management
believes is representative of the actual costs incurred.
Accounts receivable from affiliates primarily
represents advances made to the Parent in connection with the
Parent's cash management policy.
In 1993 the Company paid a dividend of $100,000,000 to
the Parent.
INDEPENDENT AUDITORS' REPORT
Putnam Investment Management, Inc.
We have audited the accompanying balance sheet of Putnam
Investment Management, Inc. (a wholly-owned subsidiary of Putnam
Investments, Inc.) as of December 31, 1993. This financial
statement is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the balance sheet is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the balance sheet. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
balance sheet presentation. We believe that our audit of the
balance sheet provides a reasonable basis for our opinion.
In our opinion, such balance sheet presents fairly, in all
material respects, the financial position of Putnam Investment
Management, Inc. at December 31, 1993 in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE
February 10, 1994
Boston, Massachusetts
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 BALLOT, SIGN IT ON THE OTHER SIDE, AND RETURN IT
PROMPTLY IN THE ENVELOPE PROVIDED. YOUR VOTE IS IMPORTANT
Please fold at perforation before detaching.
Proxy for a meeting of shareholders, February 2, 1995, 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 William F. Pounds, 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 February 2, 1995, at 2:00 pm,
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 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 PROPOSAL 2. THE PROXIES WILL
ALSO
BE AUTHORIZED TO VOTE UPON OTHER MATTERS THAT MAY COME BEFORE THE
MEETING.
Please sign your name exactly as it appears on this card. If you
are
a joint owner, each of you should sign. When signing as an
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.
Please be sure to sign and date this proxy.
_________________________________________________________________
Shareholder sign here Date
_________________________________________________________________
Co-owner sign here
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!
Please fold at perforation before detaching
THE TRUSTEES RECOMMEND A VOTE FOR ELECTING ALL OF THE NOMINEES
FOR TRUSTEES AND FOR THE PROPOSAL LISTED BELOW:
PLEASE MARK YOUR CHOICES / X / IN BLUE OR BLACK INK.
1. PROPOSAL TO ELECT TRUSTEES
The nominees for Trustees are: J.A. Baxter, H.H. Estin, J.A.
Hill, E.T. Kennan, L.J. Lasser, R.E. Patterson, D.S. Perkins,
W.F. Pounds, G. Putnam, G. Putnam, III, A.J.C. Smith, W.N.
Thorndike.
/ / FOR electing all the nominees
(EXCEPT AS MARKED TO THE CONTRARY BELOW)
To withhold authority to vote for one or more of the
nominees,
write those nominees' names here:
__________________________________________________________
/ / WITHHOLD authority to vote for all nominees
2. PROPOSAL TO RATIFY FOR AGAINST ABSTAIN
THE SELECTION OF / / / / / /
PRICE WATERHOUSE
LLP AS AUDITORS
NOTE: A vote to abstain has the same effect as an "against" vote.
If
you have questions on any of the proposals, please call
1-800-225-
1581.