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 VARIABLE TRUST
(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:
The proxy statement
This proxy statement can help you decide how you want to vote on
important issues relating to the Putnam funds in which you invest
through your insurance contract. When you complete and sign your ballot,
your insurance company will vote the Putnam fund shares corresponding to
your insurance contract exactly as you have indicated. If you simply
sign the ballot, your insurance company will vote in accordance with the
Trustees' recommendations on pages ___ and ___ of the proxy statement.
The Trustees recommend that shareholders vote in favor of the proposals
described in this document and listed on your ballot.
Please take a few moments and decide how you want to vote. When
shareholders don't return their ballots in sufficient numbers,
follow-up solicitations are required, which cost your fund money.
You can vote by returning your ballot in the envelope provided. Or you
can call our toll-free number, or go to the Web. See your ballot
for the Web address. If you have any questions, please call
1-877-832-6360 or call your financial advisor.
Table of contents
A Message from the Chairman .......... 1
Notice of Shareholder Meeting ......... __
Trustees' Recommendations ............___
PROXY CARD ENCLOSED
If you have any questions, please contact us at 1-800-521-0538 or call
your insurance company.
A Message from the Chairman
Dear Investor:
As you know, you are an investor in the Putnam Funds through a variable
annuity or life insurance contract (a "Contract"). I am writing to you to
ask you to instruct your insurance company as to how to vote on important
matters that affect your investment in the Putnam funds, including the
election of Trustees and, for certain funds, the additional matters
indicated on page __.
As you may know, the SEC recently adopted rules designed to enhance the
independence and effectiveness of mutual fund trustees. Although trustees
do not manage fund portfolios, they play an important role in protecting
fund shareholders and investors, and are responsible for approving the fees
paid to the fund's investment adviser and its affiliates, reviewing
overall fund expenses, selecting the fund's auditors, monitoring conflicts
of interests, overseeing the fund's compliance with federal securities
laws and voting proxies relating to the fund's portfolio securities.
Your fund's Trustees believe that these responsibilities are best carried
out by a board that is independent of the fund's investment adviser both
in fact and in spirit. The new SEC rules effectively require most funds to
have a board of trustees whose independent trustees (i.e., trustees who
are not "interested persons" of the fund or its investment adviser)
constitute at least 75% of the board and whose chairman is independent.
Your fund has met both of these requirements since July 1, 2000. We
strongly supported these rules when initially proposed by the SEC and are
pleased that other fund families will soon also be held to these standards.
It is also noteworthy that your fund's Trustees have been strong
proponents of other reforms in the mutual fund industry. We supported new
SEC rules requiring funds to make their proxy voting records available to
shareholders, and the Putnam funds were one of the first major fund
families to begin disclosing their proxy voting guidelines. We also were
one of the first mutual fund boards to end the practice of using fund
brokerage commissions to reward brokers for selling fund shares. In the
proxy statement, you will also notice that your fund's independent
Trustees have nominated three new individuals to serve as Trustees of your
fund. Two of the three new nominees are independent, and all three have had
outstanding careers as leaders in the investment management industry.
We need your instructions and urge you to instruct your insurance company
as to how to vote the shares of the funds relating your Contract via the
Internet or by completing, signing and returning the enclosed proxy card(s)
promptly. Internet voting instructions are listed at the top of your
ballot.
I'm sure that you, like most people, lead a busy life and are tempted to
put this ballot aside for another day. Please don't. When investors fail
to provide voting instructions, their fund may have to incur the expense of
follow-up solicitations. All investors benefit from the speedy return of
ballots.
Your vote is important to us. We appreciate the time and consideration I am
sure you will give these important matters. If you have questions about the
proposals, please call a Putnam customer service representative at
1-800-521-0538 or contact your insurance company.
Sincerely yours,
John A. Hill, Chairman
Notice of a Meeting of Shareholders
To the Shareholders of:
PUTNAM VT AMERICAN GOVERNMENT INCOME FUND
PUTNAM VT CAPITAL APPRECIATION FUND
PUTNAM VT CAPITAL OPPORTUNITIES FUND
PUTNAM VT DISCOVERY GROWTH FUND
PUTNAM VT DIVERISIFED INCOME FUND
PUTNAM VT EQUITY INCOME FUND
PUTNAM VT THE GEORGE PUTNAM FUND OF BOSTON
PUTNAM VT GLOBAL ASSET ALLOCATION FUND
PUTNAM VT GLOBAL EQUITY FUND
PUTNAM VT GROWTH AND INCOME FUND
PUTNAM VT GROWTH OPPORTUNITIES FUND
PUTNAM VT HEALTH SCIENCES FUND
PUTNAM VT HIGH YIELD FUND
PUTNAM VT INCOME FUND
PUTNAM VT INTERNATIONAL EQUITY FUND
PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND
PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND
PUTNAM VT INVESTORS FUND
PUTNAM VT MID CAP VALUE FUND
PUTNAM VT MONEY MARKET FUND
PUTNAM VT NEW OPPORTUNITIES FUND
PUTNAM VT NEW VALUE FUND
PUTNAM VT OTC & EMERGING GROWTH FUND
PUTNAM VT RESEARCH FUND
PUTNAM VT SMALL CAP VALUE FUND
PUTNAM VT UTILITIES GROWTH AND INCOME FUND
PUTNAM VT VISTA FUND
PUTNAM VT VOYAGER FUND
This is the formal agenda for your fund's shareholder meeting. It tells
you what proposals will be voted on and the time and place of the
meeting.
A Meeting of Shareholders of each fund that is a series of Putnam
Variable Trust (the "Trust") will be held on December 9, 2004 at 11:00
a.m., Boston time, at the principal offices of the funds on the eighth
floor of One Post Office Square, Boston, Massachusetts 02109, to
consider the following:
1. Electing the Trust's nominees for Trustees;
2.A. Approving an amendment to certain funds' fundamental investment
restrictions with respect to borrowing;
2.B. Approving an amendment to certain funds' fundamental investment
restrictions with respect to making loans;
2.C. Approving an amendment to the funds' fundamental investment
restrictions with respect to diversification of investments;
2.D. Approving an amendment to a fund's investment objective and
3. Approving an amendment to the Trust's Agreement and Declaration of
Trust.
By the Trustees
John A. Hill, Chairman
George Putnam, III, President
Jameson A. Baxter
Charles B. Curtis
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
John H. Mullin, III
Robert E. Patterson
A.J.C. Smith
W. Thomas Stephens
We urge you to mark, sign, date and mail the enclosed ballot in the
postage-paid envelope provided or record your voting instructions via
the Internet so that you will be represented at the meeting.
October ____,2004
1. Election of Trustees. All funds.
2.A. Approving an amendment to certain funds' fundamental investment
restrictions with respect to borrowing. Putnam VT Diversified Income
Fund, Putnam VT Global Asset Allocation Fund, Putnam VT Growth and
Income Fund, Putnam VT High Yield Fund, Putnam VT Income Fund, Putnam VT
International Equity Fund, Putnam VT International Growth and Income
Fund, Putnam VT International New Opportunities Fund, Putnam VT Money
Market Fund, Putnam VT New Opportunities Fund, Putnam VT New Value Fund,
Putnam VT Utilities Growth and Income Fund, Putnam VT Vista Fund, and
Putnam VT Voyager Fund
2.B. Approving an amendment to certain funds' fundamental investment
restrictions with respect to making loans. Putnam VT American Government
Income Fund, Putnam VT Capital Appreciation Fund, Putnam VT Capital
Opportunities Fund, Putnam VT Discovery Growth Fund, Putnam VT Equity
Income Fund, Putnam VT The George Putnam Fund of Boston, Putnam VT Global
Equity Fund, Putnam VT Growth Opportunities Fund, Putnam VT Health Sciences
Fund, Putnam VT Investors Fund, Putnam VT Mid Cap Value Fund, Putnam VT OTC
& Emerging Growth Fund, Putnam VT Research Fund, and Putnam VT Small Cap
Value Fund
2.C. Approving an amendment to certain funds' fundamental investment
restrictions with respect to diversification of investments. All funds.
2. D. Approving an amendment to a fund's investment objective. Putnam VT
Equity Income Fund
3. Approving an amendment to the Trust's Agreement and Declaration of
Trust. All funds.
Proxy statement
This document will give you the information you need to vote on the
proposals. Much of the information 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
toll-free number,1-800-521-0538,or call your financial advisor.
Who is asking for your vote?
The enclosed proxy is solicited by the Trustees of Putnam Variable Trust
(the "Trust") for use at the Meeting of Shareholders of each fund of the
Trust to be held on December 9, 2004, and, if your fund's meeting is
adjourned, at any later meetings, for the purposes stated in the Notice of
Meeting (see previous pages). The Notice of Meeting, the proxy and the
proxy statement are being mailed on or about October ____, 2004.
How do your fund's Trustees recommend that shareholders vote on these
proposals?
The Trustees recommend that you vote
1. For electing the Trust's nominees for Trustees;
2.A. For approving an amendment to certain funds' fundamental investment
restrictions with respect to borrowing;
2.B. For approving an amendment to certain funds' fundamental investment
restrictions with respect to making loans;
2.C. For approving an amendment to the funds' fundamental investment
restrictions with respect to diversification of investments;
2.D. For approving an amendment to a fund's investment objective and
3. For approving an amendment to the Trust's Agreement and Declaration of
Trust.
Please see the table beginning on page ___ for a list of the affected funds
for each proposal.
Who is eligible to vote?
Shareholders of record of each affected fund at the close of business on
September 20, 2004 are entitled to be present and to vote at the meeting
or any adjourned meeting.
As of that date, certain insurance companies (collectively, the
"Insurance Companies") were shareholders of record of each of the
funds. Each Insurance Company will vote shares of the fund or funds
held by it in accordance with voting instructions received from variable
annuity contract and variable life insurance policy owners
(collectively, the "Contract Owners") for whose accounts the shares are
held. Accordingly, this proxy statement is also intended to be used by
the Insurance Companies in obtaining these voting instructions from
Contract Owners.
In the event that a Contract Owner gives no instructions, the relevant
Insurance Company will vote the shares of the appropriate fund
attributable to the Contract Owner in the same proportion as shares of
that fund for which it has received instructions.
The Proposals
I.ELECTION OF TRUSTEES
Who are the nominees for Trustees?
The Board Policy and Nominating Committee of the Trustees of the Trust
makes recommendations concerning the nominees for Trustees of the Trust.
The Board Policy and Nominating Committee consists solely of Trustees
who are not "interested persons" (as defined in the Investment Company
Act of 1940, as amended (the "1940 Act")) of your fund or Putnam
Investment Management, LLC, your fund's investment manager ("Putnam
Management"). Those Trustees who are not "interested persons" of your
fund or Putnam Management are referred to as "Independent Trustees"
throughout this proxy statement.
The Board Policy and Nominating Committee has fixed the number of
Trustees of the Trust at 14 and recommends that you vote for the
election of the nominees described in the following pages.
The 14 nominees for election as Trustees at the shareholder meeting of
your fund who receive the greatest number of votes from shareholders
will be elected as Trustees of the Trust.
The nominees for Trustees and their backgrounds are shown in the
following pages. This information includes each nominee's name, date of
birth, principal occupation(s) during the past five years and other
information about the nominee's professional background, including other
directorships the nominee holds. Each Trustee oversees all of the Putnam
funds and serves until the election and qualification of his or her
successor, or until he or she sooner dies, resigns or is removed. Each
nominee other than Ms. Drucker and Messrs. Haldeman and Worley currently
serves as a Trustee of the Trust. The address of all of the Trustees and
nominees is One Post Office Square, Boston, Massachusetts 02109. At
December 31, 2003,there were 101 Putnam funds.
Jameson A. Baxter (9/6/43),
Trustee since 1994-----------------------------------------------------------
Ms. Baxter is the President of Baxter Associates, Inc., a private
investment firm that she founded in 1986.
Ms. Baxter serves as a Director of ASHTA Chemicals, Inc., Banta Corporation
(a printing and digital imaging firm), Ryerson Tull, Inc.(a steel service
corporation), Advocate Health Care and BoardSource, formerly the National
Center for Nonprofit Boards. She is Chairman Emeritus of the Board of
Trustees, Mount Holyoke College, having served as Chairman for five years
and as a board member for thirteen years. Until 2002, Ms. Baxter was a
Director of Intermatic Corporation (a manufacturer of energy control
products).
Ms. Baxter has held various positions in investment banking and corporate
finance, including Vice President and Principal of the Regency Group, and
Vice President of and Consultant to First Boston Corporation. She is a
graduate of Mount Holyoke College.
Charles B. Curtis (4/27/40),
Trustee since 2001-----------------------------------------------------------
Mr. Curtis is President and Chief Operating Officer of the Nuclear Threat
Initiative (a private foundation dealing with national security issues)and
serves as Senior Advisor to the United Nations Foundation.
Mr. Curtis is a member of the Council on Foreign Relations and the Trustee
Advisory Council of the Applied Physics Laboratory, Johns Hopkins
University. Until 2003,Mr.Curtis was a member of the Electric Power
Research Institute Advisory Council and the University of Chicago Board of
Governors for Argonne National Laboratory. Prior to 2002, Mr. Curtis was a
Member of the Board of Directors of the Gas Technology Institute and the
Board of Directors of the Environment and Natural Resources Program
Steering Committee, John F. Kennedy School of Government, Harvard
University. Until 2001, Mr. Curtis was a member of the Department of
Defense Policy Board and Director of EG&G Technical Services, Inc.(a fossil
energy research and development support company).
From August 1997 to December 1999,Mr.Curtis was a Partner at Hogan &
Hartson L.L.P., a Washington, D.C.law firm. Prior to May 1997,Mr. Curtis
was Deputy Secretary of Energy. He served as Chairman of the Federal Energy
Regulatory Commission from 1977 to 1981 and has held positions on the staff
of the U.S. House of Representatives, the U.S. Treasury Department and the
SEC.
Myra R. Drucker (1/16/48)----------------------------------------------------
Ms. Drucker is a Vice Chair of the Board of Trustees of Sarah Lawrence
College, a Trustee of Commonfund (a not-for-profit firm specializing in
asset management for educational endowments and foundations) and a member
of the Investment Committee of the Kresge Foundation (a charitable trust).
She is also Chair of the New York Stock Exchange (NYSE) Pension Managers
Advisory Committee and a member of the Executive Committee of the Committee
on Investment of Employee Benefit Assets. Until August 31, 2004, Ms.
Drucker was Managing Director and a member of the Board of Directors of
General Motors Asset Management and Chief Investment Officer of General
Motors Trust Bank. Ms. Drucker also served as a member of the NYSE
Corporate Accountability and Listing Standards Committee and the NYSE/NASD
IPO Advisory Committee.
Prior to joining General Motors Asset Management in 2001, Ms. Drucker held
various executive positions in the investment management industry. Ms.
Drucker served as Chief Investment Officer of Xerox Corporation (a
technology and service company in the document industry), where she was
responsible for the investment of the company's pension assets. Ms.
Drucker was also Staff Vice President and Director of Trust Investments for
International Paper (a paper, paper distribution, packaging and forest
products company)and previously served as Manager of Trust Investments for
Xerox Corporation. Ms. Drucker received a B.A. degree in Literature and
Psychology from Sarah Lawrence College and pursued graduate studies in
economics, statistics and portfolio theory at Temple University.
John A. Hill (1/31/42),
Trustee since 1985 and Chairman since 2000-----------------------------------
Mr. Hill is Vice Chairman of First Reserve Corporation, a private equity
buyout firm that specializes in energy investments in the diversified
worldwide energy industry.
Mr. Hill is a Director of Devon Energy Corporation, TransMontaigne Oil
Company, Continuum Health Partners of New York and various private
companies controlled by First Reserve Corporation, as well as a Trustee of
TH Lee, Putnam Investment Trust (a closed-end investment company advised by
an affiliate of Putnam Management). He is also a Trustee of Sarah Lawrence
College.
Prior to acquiring First Reserve Corporation in 1983, Mr. Hill held
executive positions in investment banking and investment management with
several firms and with the federal government, including Deputy Associate
Director of the Office of Management and Budget and Deputy Director of the
Federal Energy Administration. He is 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 holds a B.A. degree
in Economics from Southern Methodist University and pursued graduate
studies there as a Woodrow Wilson Fellow.
Ronald J. Jackson (12/17/43),
Trustee since 1996-----------------------------------------------------------
Mr. Jackson is a private investor.
Mr. Jackson is President of the Kathleen and Ronald J. Jackson Foundation
(a charitable trust). He is also a member of the Board of Overseers of WGBH
(a public television and radio station)as well as a member of the Board of
Overseers of the Peabody Essex Museum.
Mr. Jackson is the former Chairman, President and Chief Executive Officer
of Fisher-Price, Inc.(a major toy manufacturer), from which he retired in
1993.He previously served as President and Chief Executive Officer of
Stride-Rite, Inc.(a manufacturer and distributor of footwear) and of Kenner
Parker Toys, Inc.(a major toy and game manufacturer).
Mr. Jackson was President of Talbots, Inc.(a distributor of women's
apparel) and has held financial and marketing positions with General Mills,
Inc.and Parker Brothers (a toy and game company). Mr. Jackson is a graduate
of the University of Michigan Business School.
Paul L. Joskow (6/30/47),
Trustee since 1997-----------------------------------------------------------
Dr. Joskow is the Elizabeth and James Killian Professor of Economics and
Management, and Director of the Center for Energy and Environmental Policy
Research at the Massachusetts Institute of Technology.
Dr. Joskow serves as a Director of National Grid Transco (a UK-based
holding company with interests in electric and gas transmission and
distribution and telecommunications infrastructure) and TransCanada
Corporation (an energy company focused on natural gas transmission and
power services). He also serves on the board of the Whitehead Institute for
Biomedical Research (a non-pro .t research institution)and has been
President of the Yale University Council since 1993.Prior to February
2002,he was a Director of State Farm Indemnity Company (an automobile
insurance company), and, prior to March 2000, he was a Director of New
England Electric System (a public utility holding company).
Dr. Joskow has published five books and numerous articles on topics in
industrial organization, government regulation of industry and competition
policy. He is active in industry restructuring, environmental, energy,
competition and privatization policies-- serving as an advisor to
governments and corporations worldwide. Dr. Joskow holds a Ph.D. and M.
Phil from Yale University and B.A. from Cornell University.
Elizabeth T. Kennan (2/25/38),
Trustee since 1992-----------------------------------------------------------
Dr. Kennan is a Partner of Cambus-Kenneth Farm (thoroughbred horse and
cattle breeding). She is President Emeritus of Mount Holyoke College.
Dr. Kennan served as Chairman and is now Lead Director of Northeast
Utilities and is a Director of Talbots, Inc. She has served as Director on
a number of other boards, including Bell Atlantic, Chastain Real Estate,
Shawmut Bank, Berkshire Life Insurance and Kentucky Home Life Insurance.
She is a Trustee of the National Trust for Historic Preservation, of Centre
College and of Midway College in Midway, Kentucky.She is also a member of
The Trustees of Reservations. Dr. Kennan has served on the oversight
committee of the Folger Shakespeare Library, as President of Five Colleges
Incorporated, as a Trustee of Notre Dame University and is active in
various educational and civic associations.
As a member of the faculty of Catholic University for twelve years, until
1978, Dr. Kennan directed the post-doctoral program in Patristic and
Medieval Studies, taught history and published numerous articles. Dr.
Kennan holds a Ph.D. from the University of Washington in Seattle, an M.S.
from St. Hilda's College at Oxford University and an A.B. from Mount
Holyoke College. She holds several honorary doctorates.
John H. Mullin, III (6/15/41),
Trustee since 1997-----------------------------------------------------------
Mr. Mullin is the Chairman and CEO of Ridgeway Farm (a limited liability
company engaged in timber and farming).
Mr. Mullin serves as a Director of The Liberty Corporation (a broadcasting
company),Progress Energy, Inc.(a utility company, formerly known as
Carolina Power & Light) and Sonoco Products, Inc.(a packaging company). Mr.
Mullin is Trustee Emeritus of The National Humanities Center and Washington
& Lee University, where he served as Chairman of the Investment Committee.
Prior to May 2001,he was a Director of Graphic Packaging International
Corp. Prior to February 2004,he was a Director of Alex Brown Realty, Inc.
Mr. Mullin is also a past Director of Adolph Coors Company; ACX
Technologies, Inc.; Crystal Brands, Inc.; Dillon, Read & Co., Inc.;
Fisher-Price, Inc.; and The Ryland Group, Inc. Mr. Mullin is a graduate of
Washington & Lee University and The Wharton Graduate School, University of
Pennsylvania.
Robert E. Patterson (3/15/45),
Trustee since 1984-----------------------------------------------------------
Mr. Patterson is Senior Partner of Cabot Properties, L.P. and Chairman
of Cabot Properties, Inc.
Mr. Patterson serves as Chairman of the Joslin Diabetes Center and as a
Director of Brandywine Trust Company. Prior to June 2003,he was a
Trustee of Sea Education Association. Prior to December 2001,he was
President and 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 involved in institutional
real estate investments) and, prior to 1990, he served as Executive Vice
President of Cabot, Cabot &Forbes Realty Advisors, Inc.(the predecessor
company of Cabot Partners) and as a Senior Vice President of the Beal
Companies (a real estate management, investment and development firm).
Mr. Patterson practiced law and held various positions in state
government and was the founding Executive Director of the Massachusetts
Industrial Finance Agency. Mr. Patterson is a graduate of Harvard
College and Harvard Law School.
W. Thomas Stephens (9/2/42),
Trustee since 1997-----------------------------------------------------------
Mr. Stephens serves on a number of corporate boards.
Effective November 2004, Mr. Stephens is expected to become Chief Executive
Officer of Boise Cascade, L.L.C.(a paper, forest product and timberland
assets company). Mr. Stephens serves as a Director of Xcel Energy
Incorporated (a public utility company) and TransCanada Pipelines Limited.
Until 2004, Mr. Stephens was a Director of Qwest Communications and Norske
Canada, Inc.(a paper manufacturer). Until 2003,Mr.Stephens was a Director
of Mail-Well, Inc.(a diversified printing company). He served as Chairman
of Mail-Well until 2001 and as CEO of MacMillan-Bloedel,Ltd.(a forest
products company)until 1999.
Prior to 1996, Mr. Stephens was Chairman and Chief Executive Officer of
Johns Manville Corporation. He holds B.S. and M.S. degrees from the
University of Arkansas.
Richard B. Worley (11/15/45)-------------------------------------------------
Mr. Worley is Managing Partner of Permit Capital LLC, an investment
management firm.
Mr. Worley serves on the Executive Committee of the University of
Pennsylvania Medical Center, is a Trustee of The Robert Wood Johnson
Foundation (a philanthropic organization devoted to health care issues)and
is a Director of The Colonial Williamsburg Foundation (a historical
preservation organization). Mr. Worley also serves on the investment
committees of Mount Holyoke College and World Wildlife Fund (a wildlife
conservation organization).
Prior to joining Permit Capital LLC in 2002, Mr. Worley served as Chief
Strategic Officer of Morgan Stanley Investment Management. He previously
served as President, Chief Executive Officer and Chief Investment Officer
of Morgan Stanley Dean Witter Investment Management and as a Managing
Director of Morgan Stanley, a financial services firm. Mr. Worley also was
the Chairman of Miller Anderson & Sherrerd, an investment management firm.
Mr. Worley holds a B.S. degree from University of Tennessee and pursued
graduate studies in economics at the University of Texas.
Interested Trustees
Charles E. Haldeman, Jr.*(10/29/48)------------------------------------------
Mr. Haldeman is President and Chief Executive Officer of Putnam, LLC
("Putnam Investments").He is a member of Putnam Investments' Executive
Board of Directors and Advisory Council. Prior to November 2003, Mr.
Haldeman served as Co-Head of Putnam Investments' Investment Division..
Prior to joining Putnam Investments in 2002,Mr.Haldeman held executive
positions in the investment management industry. Mr. Haldeman previously
served as Chief Executive Officer of Delaware Investments and President &
Chief Operating Officer of United Asset Management. Mr. Haldeman was also a
partner and director of Cooke & Bieler, Inc.(an investment management
firm). Mr. Haldeman currently serves as a Trustee of Dartmouth College and
as Emeritus Trustee of Abington Memorial Hospital. Mr.Haldeman is a
graduate of Dartmouth College, Harvard Law School and Harvard Business
School. Mr. Haldeman is also a Chartered Financial Analyst (CFA)
charterholder.
George Putnam III*(8/10/51),
Trustee since 1984 and President since 2000----------------------------------
Mr. Putnam is President of New Generation Research, Inc.(a publisher of
financial advisory and other research services)and of New Generation
Advisers, Inc.(a registered investment adviser to private funds).
Mr. Putnam founded the New Generation companies in 1986.
Mr. Putnam is a Director of The Boston Family Office, LLC (a registered
investment adviser). He is a Trustee of St. Mark's School, Shore Country
Day School, and until 2002 was a Trustee of the Sea Education Association.
Mr. Putnam previously worked as an attorney with the law firm of Dechert
LLP (formerly known as Dechert Price & Rhoads) in Philadelphia. He is a
graduate of Harvard College, Harvard Business School and Harvard Law
School.
A.J.C.Smith*(4/13/34),
Trustee since 1986-----------------------------------------------------------
Mr. Smith is the Chairman of Putnam Investments and Director of and
Consultant to Marsh & McLennan Companies, Inc.
Mr. Smith is also a Director of Trident Corp.(a limited partnership with
over thirty institutional investors). He is also a Trustee of the Carnegie
Hall Society, the Educational Broadcasting Corporation, and the National
Museums of Scotland. He is Chairman of the Central Park Conservancy and a
Member of the Board of Overseers of the Joan and Sanford I. Weill Graduate
School of Medical Sciences of Cornell University. Prior to May 2000 and
November 1999,Mr.Smith was Chairman and CEO, respectively, of Marsh
&McLennan Companies, Inc.
* Nominees who are or may be deemed to be "interested persons" (as defined
in the 1940 Act) of a fund, Putnam Management, Putnam Retail Management
Limited Partnership ("Putnam Retail Management") or Marsh &McLennan
Companies, Inc., the parent company of Putnam Investments and its
affiliated companies. Messrs. Haldeman, Putnam and Smith are deemed
"interested persons" by virtue of their positions as officers of each
fund, Putnam Management, Putnam Retail Management or Marsh &McLennan
Companies, Inc. and as shareholders of Marsh & McLennan Companies, Inc. Mr.
Haldeman is President and Chief Executive Officer of Putnam Investments.
Mr.Putnam, III is the President of each of the funds. Mr.Smith is the
Chairman of Putnam Investments and serves as a Director of and Consultant
to Marsh & McLennan Companies, Inc. The balance of the nominees are not
"interested persons."
Ms. Drucker and Mr. Haldeman were each recommended for consideration as a
nominee for Trustee of the Trust by an Independent Trustee. Mr. Worley was
recommended for consideration as a nominee for Trustee of the Trust by a
third-party search firm that was engaged by the Trustees. The third-party
search firm assisted the Trustees in identifying and evaluating potential
nominees. The current 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 fewer than 14 for the Trust.
What are the Trustees' responsibilities??
Your fund's Trustees are responsible for the general oversight of your
fund's affairs and for assuring that your fund is managed in the best
interests of its shareholders. The Trustees regularly 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, distribution, custody and shareholder servicing.
At least annually, the Trustees review and evaluate the fees and operating
expenses paid by your fund for these services and negotiate changes that
they deem appropriate. In carrying out these responsibilities, the Trustees
are assisted by an independent administrative staff and by your fund's
independent auditors, independent counsel and other experts as
appropriate, selected by and responsible to the Trustees.
The 1940 Act and the rules and regulations promulgated thereunder require
that the Trust have a minimum proportion of trustees who are not
"interested persons " (as defined in the 1940 Act) of your fund or your
fund's investment manager. These independent trustees must vote separately
to approve all financial arrangements and other agreements with your fund's
investment manager and other affiliated parties. The role of independent
trustees has been characterized as that of a "watchdog" charged with
oversight to protect shareholders' interests against overreaching and
abuse by those who are in a position to control or influence a fund. The
Trust's Independent Trustees meet regularly as a group in executive
session. Eleven of the 14 nominees for election as Trustee would be
Independent Trustees.
Board committees. The Trustees have determined that the efficient conduct
of your fund's affairs makes it desirable to delegate responsibility for
certain specific matters to committees of the board. Certain committees
(the Executive Committee, Distributions Committee and Audit and Pricing
Committee) are authorized to act for the Trustees as specified in their
charters. The other committees review and evaluate matters specified in
their charters and make recommendations to the Trustees as they deem
appropriate. Each committee may utilize the resources of your fund's
independent staff, counsel and auditors as well as other experts. The
committees meet as often as necessary, either in conjunction with regular
meetings of the Trustees or otherwise. The membership and chairperson of
each committee are appointed by the Trustees upon recommendation of the
Board Policy and Nominating Committee.
Audit and Pricing Committee. The Audit and Pricing Committee provides
oversight on matters relating to the preparation of the funds' financial
statements, compliance matters and Code of Ethics issues. This oversight
is discharged by regularly meeting with management and the funds'
independent auditors and keeping current on industry developments.
Duties of this Committee also include the review and evaluation of all
matters and relationships pertaining to the funds' independent auditors,
including their independence. The members of the Audit and Pricing
Committee of your fund include only Independent Trustees. The Committee
also reviews the funds' policies and procedures for achieving accurate
and timely pricing of the funds' shares, including oversight of fair
value determinations of individual securities made by Putnam Management
or other designated agents of the funds. The Committee oversees
compliance by money market funds with Rule 2a-7, interfund transactions
pursuant to Rule 17a-7 and the correction of occasional pricing errors.
The Committee also receives reports regarding the liquidity of portfolio
securities. The Trustees have adopted a written charter for the Audit
and Pricing Committee. The Committee currently consists of Drs. Joskow
(Chairperson) and Kennan and Messrs. Patterson and Stephens.
Board Policy and Nominating Committee. The Board Policy and Nominating
Committee reviews policy matters pertaining to the operations of the Board
of Trustees and its committees, the compensation of the Trustees and their
staff and the conduct of legal affairs for the Putnam funds. The Committee
also oversees the voting of proxies associated with portfolio investments
of the Putnam funds, with the goal of ensuring that these proxies are voted
in the best interest of the funds' shareholders.
The Committee evaluates and recommends all candidates for election as
Trustees and recommends the appointment of members and chairs of each board
committee. The Committee also identifies prospective nominees for election
as Trustees by considering individuals who come to its attention through
the recommendation of current Trustees, Putnam Management or shareholders.
Candidates properly submitted by shareholders (as described below) will be
considered and evaluated on the same basis as candidates recommended by
other sources. The Committee may, but is not required to, engage a
third-party professional search firm to assist it in identifying and
evaluating potential nominees.
When evaluating a potential candidate for membership on the Board of
Trustees, the Committee considers the skills and characteristics that it
feels would most benefit the Putnam funds at the time the evaluation is
made. The Committee may take into account a wide variety of attributes in
considering potential trustee candidates, including, but not limited to:
(i) availability and commitment of a candidate to attend meetings and
perform his or her responsibilities to the Board of Trustees, (ii) other
board experience, (iii) relevant industry and related experience, (iv)
educational background, (v) financial expertise, (vi) an assessment of the
candidate's ability, judgment and expertise, (vii) an assessment of the
perceived needs of the Board of Trustees and its committees at that point
in time and (viii) overall Board of Trustees composition. In connection
with this evaluation, the Committee will determine whether to interview
prospective nominees, and, if warranted, one or more members of the
Committee, and other Trustees and representatives of the funds, as
appropriate, will interview prospective nominees in person or by telephone.
Once this evaluation is completed, the Committee recommends such candidates
as it determines appropriate to the Independent Trustees for nomination,
and the Independent Trustees select the nominees after considering the
recommendation of the Committee. The Committee will consider nominees for
Trustee recommended by shareholders of a fund provided shareholders submit
their recommendations by the date disclosed in the paragraph entitled
"Date for receipt of shareholders' proposals for subsequent meetings of
shareholders", and provided the shareholders' recommendations otherwise
comply wiith applicable securities laws, including Rule 14a-8 under the
Securities Exchange Act of 1934,as amended (the "1934 Act").
The Committee consists only of Independent Trustees. The Trustees have
adopted a written charter for the Board Policy and Nominating Committee, a
copy of which is attached to this proxy statement as Exhibit A. The
Committee currently consists of Dr. Kennan (Chairperson), Ms. Baxter and
Messrs. Hill, Mullin and Patterson.
Brokerage and Custody Committee. The Brokerage and Custody Committee
reviews the policies and procedures of the funds regarding the execution of
portfolio transactions for the funds, including policies regarding the
allocation of brokerage commissions and soft dollar credits. The Committee
reviews periodic reports regarding the funds' activities involving
derivative securities, and reviews and evaluates matters relating to the
funds' custody arrangements. The Committee currently consists of Messrs.
Jackson (Chairperson),Curtis and Mullin, Ms. Baxter and Dr. Kennan.
Communication, Service and Marketing Committee. This Committee examines the
quality, cost and levels of services provided to the shareholders of the
Putnam funds. The Committee also reviews communications sent from the funds
to their shareholders, including shareholder reports, prospectuses,
newsletters and other materials. In addition, the Committee oversees
marketing and sales communications of the funds' distributor. The Committee
currently consists of Messrs. Putnam (Chairperson), Smith and Stephens and
Dr. Joskow.
Contract Committee. The Contract Committee reviews and evaluates, at least
annually, all arrangements pertaining to (i) the engagement of Putnam
Management and its affiliates to provide services to the funds, (ii) the
expenditure of the funds' assets for distribution purposes pursuant to the
distribution plans of the open-end funds, and (iii) the engagement of other
persons to provide material services to the funds, including in particular
those instances where the cost of services is shared between the funds and
Putnam Management and its affiliates or where Putnam Management or its
affiliates have a material interest. The Committee recommends to the
Trustees such changes in arrangements as it deems appropriate. After review
and evaluation, the Committee recommends to the Trustees the proposed
organization of new fund products and proposed structural changes to
existing funds. The Committee consists only of Independent Trustees. The
Committee currently consists of Ms. Baxter (Chairperson), Messrs. Curtis,
Jackson and Mullin and Dr. Kennan.
Distributions Committee. This Committee oversees all fund distributions
and approves the amount and timing of distributions paid by all the funds
to the shareholders when the Trustees are not in session. The Committee
also meets regularly with representatives of Putnam Management and its
affiliates to review distribution levels and the funds' distribution
policies. The Committee currently consists of Messrs. Patterson
(Chairperson)and Jackson and Dr. Joskow.
Executive Committee. The functions of the Executive Committee are twofold.
The first is to ensure that the funds' business may be conducted at times
when it is not feasible to convene a meeting of the Trustees or for the
Trustees to act by written consent. The Committee may exercise any or all
of the power and authority of the Trustees when the Trustees are not in
session. The second is to establish annual and ongoing goals, objectives
and priorities for the Board of Trustees and to ensure coordination of all
efforts between the Trustees and Putnam Management and its affiliates on
behalf of the shareholders of the Putnam funds. The Committee currently
consists of Messrs. Hill (Chairperson), Jackson and Putnam, Dr. Joskow and
Ms. Baxter.
Investment Oversight Committees. These Committees regularly meet with
investment personnel of Putnam Management to review the investment
performance and strategies of the Putnam funds in light of their stated
investment objectives and policies. Each such Committee will, among its
duties, identify any compliance issues that are unique to the category of
funds under its review and work with the appropriate board committees to
ensure that any such issues are properly addressed. Investment Oversight
Committee A currently consists of Ms. Baxter (Acting Chairperson) and Mr.
Smith. Investment Oversight Committee B currently consists of Messrs.
Curtis (Chairperson), Hill and Stephens. Investment Committee C currently
consists of Messrs. Mullin (Chairperson) and Putnam, and Dr. Kennan.
Investment Oversight Committee D currently consists of Messrs. Patterson
(Chairperson), Jackson and Dr. Joskow.
What are some of the ways in which the Trustees represent shareholder
interests? 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 investment team;
* by 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 conducting an in-depth review of the fees paid by each fund and by
negotiating with 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 reviewing brokerage costs and fees, allocations among brokers, soft
dollar expenditures and similar expenses of each fund;
* 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 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 can shareholders communicate with the Trustees?
The Board of Trustees provides a process for shareholders to send
communications to the Trustees. Shareholders may direct communications
to the Board of Trustees as a whole or to specified individual Trustees
by submitting them in writing to the following address:
The Putnam Funds
Attention: "Board of Trustees" or any specified Trustee(s)
One Post Office Square
Boston, Massachusetts 02109
The written communication must include the shareholder's name, be
signed by the shareholder, refer to the Putnam fund(s) in which the
shareholder holds shares and include the class and number of shares held
by the shareholder as of a recent date. The Office of the Trustees will
respond to all correspondence sent to Trustees; however, due to the
volume of correspondence, all communications are not sent directly to
the Trustees. The correspondence is reviewed, summarized and presented
to the Trustees on a periodic basis.
How often do the Trustees meet?
The Trustees meet each month (except August) over a two-day period to
review the operations of each Putnam fund. A portion of these meetings
is devoted to meetings of various committees of the board that focus on
particular matters. Each Trustee generally attends at least two formal
committee meetings during each regular meeting of the Trustees. In
addition, the Trustees meet in small groups with Chief Investment
Officers, Portfolio Leaders and Portfolio Members 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. During 2003, the average Trustee participated in
approximately 49 committee and board meetings. The Contract Committee
typically meets on several additional occasions during the year to carry
out its responsibilities. Other committees, including the Executive
Committee, may also meet on special occasions as the need arises. The
number of times each committee met during your fund's fiscal year ended
December 31, 2003 is shown in the table below:
Audit and Pricing Committee
- -----------------------------------------------------------------------
Board Policy and Nominating Committee
- -----------------------------------------------------------------------
Brokerage and Custody Committee
- -----------------------------------------------------------------------
Communication, Service and Marketing Committee
- -----------------------------------------------------------------------
Contract Committee
- -----------------------------------------------------------------------
Distributions Committee
- -----------------------------------------------------------------------
Executive Committee
- -----------------------------------------------------------------------
Investment Oversight Committees
- -----------------------------------------------------------------------
Your fund does not have a policy with respect to Trustees' attendance
at shareholder meetings. Your fund is not required under the Trust's
Agreement and Declaration of Trust to hold annual meetings, but has
voluntarily undertaken to hold such meetings at least every five years.
What are the Trustees paid for their services?
Each Independent Trustee of your fund receives a fee for his or her
services. Each Independent Trustee also receives fees for serving as
Trustee of the other Putnam funds. Each Trustee receives an annual retainer
fee and an additional meeting fee for each Trustees' meeting attended.
Independent Trustees who serve on board committees receive additional fees
for attendance at certain committee meetings and for special services
rendered in that connection. All of the current Independent Trustees are
Trustees of all the Putnam funds and receive fees for their services from
each fund.
The Trustees periodically review their fees to ensure 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 Board
Policy and Nominating Committee, which consists solely of Independent
Trustees, 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 current Trustee by your fund for its most recent fiscal year and
the fees paid to each current Trustee by all of the Putnam funds during
calendar year 2003:
COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------------
Retirement Retirement Retirement
benefits benefits benefits
Aggregate accrued Aggregate accrued Aggregate accrued
Compensation as part Compensation as part Compensation as part
from the of fund from the of fund from the of fund
fund expenses fund expenses fund expenses
- -----------------------------------------------------------------------------------------------------------------
Putnam VT
American Putnam VT Putnam VT
Government Capital Capital
Income Appreciation Opportunities
Trustees Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
Jameson A. Baxter/1994(5) $1,182 $385 $539 $170 $145 $35
Charles B. Curtis/2001 1,168 341 535 151 144 31
John A. Hill/1985(5)(7) 1,992 444 914 196 237 41
Ronald J. Jackson/1996(5) 1,185 353 542 156 145 32
Paul L. Joskow/1997(5) 1,181 252 537 111 142 23
Elizabeth T. Kennan/1992 1,159 459 529 202 137 42
John H. Mullin, III/1997(5) 1,173 389 536 172 144 36
Robert E. Patterson/1984 1,174 251 537 111 144 23
George Putnam, III/1984(7) 1,456 205 667 90 175 19
A.J.C. Smith/1986(6) -- -- -- -- -- --
W. Thomas Stephens/1997(5) 1,157 352 529 155 141 32
- -----------------------------------------------------------------------------------------------------------------
COMPENSATION TABLE
- -----------------------------------------------------------------------------------
Retirement Retirement
benefits benefits
Aggregate accrued Aggregate accrued
Compensation as part Compensation as part
from the of fund from the of fund
fund expenses fund expenses
- ------------------------------------------------------------------------------------
Putnam VT Putnam VT
Discovery Diversified
Growth Income
Trustees Fund Fund
- ------------------------------------------------------------------------------------
Jameson A. Baxter/1994(5) $613 $192 $210 $417
Charles B. Curtis/2001 609 171 209 371
John A. Hill/1985(5)(7) 1,040 222 347 482
Ronald J. Jackson/1996(5) 617 176 212 383
Paul L. Joskow/1997(5) 608 126 203 273
Elizabeth T. Kennan/1992 602 229 204 498
John H. Mullin, III/1997(5) 610 195 209 423
Robert E. Patterson/1984 611 126 210 272
George Putnam, III/1984(7) 759 102 257 222
A.J.C. Smith/1986(6) -- -- -- 516
W. Thomas Stephens/1997(5) 601 176 205 382
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Retirement Retirement Retirement
benefits benefits benefits
Aggregate accrued Aggregate accrued Aggregate accrued
Compensation as part Compensation as part Compensation as part
from the of fund from the of fund from the of fund
fund expenses fund expenses fund expenses
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Putnam VT
Putnam VT The George Global
Equity Putnam Asset
Income Fund of Allocation
Trustees Fund Boston Fund
- ------------------------------------------------------------------------------------------------------------------
Jameson A. Baxter/1994(5) $210 $35 $1,392 $424 $941 $290
Charles B. Curtis/2001 209 31 1,377 376 931 258
John A. Hill/1985(5)(7) 347 41 2,345 489 1,585 335
Ronald J. Jackson/1996(5) 212 32 1,398 389 945 266
Paul L. Joskow/1997(5) 203 23 1,390 277 940 190
Elizabeth T. Kennan/1992 204 42 1,367 505 924 346
John H. Mullin, III/1997(5) 209 36 1,382 429 934 294
Robert E. Patterson/1984 210 23 1,384 277 935 190
George Putnam, III/1984(7) 257 19 1,715 226 1,159 155
A.J.C. Smith/1986(6) -- -- -- 524 -- 359
W. Thomas Stephens/1997(5) 205 32 1,364 388 922 266
- ------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Retirement Retirement
benefits benefits
Aggregate accrued Aggregate accrued
Compensation as part Compensation as part
from the of fund from the of fund
fund expenses fund expenses
- ------------------------------------------------------------------------------------
Putnam VT Putnam VT
Global Growth
Equity and Income
Trustees Fund Fund
- ------------------------------------------------------------------------------------
Jameson A. Baxter/1994(5) $1,587 $492 $4,951 $1,535
Charles B. Curtis/2001 1,570 437 5,982 1,363
John A. Hill/1985(5)(7) 2,674 568 8,340 1,773
Ronald J. Jackson/1996(5) 1,593 451 4,968 1,408
Paul L. Joskow/1997(5) 1,586 322 4,946 1,005
Elizabeth T. Kennan/1992 1,559 587 4,864 1,830
John H. Mullin, III/1997(5) 1,576 498 4,914 1,554
Robert E. Patterson/1984 1,577 321 3,835 1,002
George Putnam, III/1984(7) 1,955 262 6,098 817
A.J.C. Smith/1986(6) -- 608 -- 1,898
W. Thomas Stephens/1997(5) 1,554 451 4,848 1,407
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Retirement Retirement Retirement
benefits benefits benefits
Aggregate accrued Aggregate accrued Aggregate accrued
Compensation as part Compensation as part Compensation as part
from the of fund from the of fund from the of fund
fund expenses fund expenses fund expenses
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Putnam VT Putnam VT
Growth Health High
Opportunties Sciences Yield
Trustees Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------
Jameson A. Baxter/1994(5) $715 $222 $912 $280 $1,417 $431
Charles B. Curtis/2001 707 197 902 249 1,097 382
John A. Hill/1985(5)(7) 1,205 256 1,536 324 2,386 497
Ronald J. Jackson/1996(5) 718 204 915 257 1,422 395
Paul L. Joskow/1997(5) 714 145 911 183 1,415 282
Elizabeth T. Kennan/1992 702 265 895 334 1,391 513
John H. Mullin, III/1997(5) 710 225 905 284 1,407 436
Robert E. Patterson/1984 711 145 906 183 1,713 281
George Putnam, III/1984(7) 881 118 1,123 149 1,746 229
A.J.C. Smith/1986(6) -- -- -- 347 -- 532
W. Thomas Stephens/1997(5) 700 203 893 257 1,388 395
- ------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Retirement Retirement
benefits benefits
Aggregate accrued Aggregate accrued
Compensation as part Compensation as part
from the of fund from the of fund
fund expenses fund expenses
- --------------------------------------------------------------------------------------------------------
Putnam VT
Putnam VT International
Income Equity
Trustees Fund Fund
- --------------------------------------------------------------------------------------------------------
Jameson A. Baxter/1994(5) $2,172 $662 $1,552 $476
Charles B. Curtis/2001 2,148 588 1,535 422
John A. Hill/1985(5)(7) 3,657 764 2,613 549
Ronald J. Jackson/1996(5) 2,180 607 1,557 436
Paul L. Joskow/1997(5) 2,169 433 1,556 311
Elizabeth T. Kennan/1992 2,132 789 1,524 567
John H. Mullin, III/1997(5) 2,156 670 1,540 482
Robert E. Patterson/1984 2,158 432 1,542 310
George Putnam, III/1984(7) 2,675 352 1,911 253
A.J.C. Smith/1986(6) -- 818 -- 587
W. Thomas Stephens/1997(5) 2,127 606 1,520 436
- --------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Retirement Retirement Retirement
benefits benefits benefits
Aggregate accrued Aggregate accrued Aggregate accrued
Compensation as part Compensation as part Compensation as part
from the of fund from the of fund from the of fund
fund expenses fund expenses fund expenses
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Putnam VT
International International Putnam VT
Growth and Income New Opportunties Investors
Trustees Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------
Jameson A. Baxter/1994(5) $1,013 $313 $991 $306 $1,262 $414
Charles B. Curtis/2001 1,002 278 980 272 1,247 368
John A. Hill/1985(5)(7) 1,706 361 1,670 353 2,126 478
Ronald J. Jackson/1996(5) 1,017 287 995 281 1,265 380
Paul L. Joskow/1997(5) 1,012 205 990 200 1,259 271
Elizabeth T. Kennan/1992 995 373 973 365 1,237 494
John H. Mullin, III/1997(5) 1,005 317 984 310 1,252 419
Robert E. Patterson/1984 1,007 204 985 200 1,253 270
George Putnam, III/1984(7) 1,248 167 1,221 163 1,551 221
A.J.C. Smith/1986(6) -- 387 -- 380 -- 511
W. Thomas Stephens/1997(5) 992 287 971 280 1,235 380
- ------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Retirement Retirement
benefits benefits
Aggregate accrued Aggregate accrued
Compensation as part Compensation as part
from the of fund from the of fund
fund expenses fund expenses
- ------------------------------------------------------------------------------------
Putnam VT Putnam VT
Mid Cap Value Money Market
Trustees Fund Fund
- ------------------------------------------------------------------------------------
Jameson A. Baxter/1994(5) $110 $35 $1,204 $381
Charles B. Curtis/2001 109 31 1,191 339
John A. Hill/1985(5)(7) 179 41 2,030 440
Ronald J. Jackson/1996(5) 110 32 1,209 350
Paul L. Joskow/1997(5) 107 23 1,211 250
Elizabeth T. Kennan/1992 104 42 1,183 455
John H. Mullin, III/1997(5) 109 36 1,196 386
Robert E. Patterson/1984 109 23 1,197 249
George Putnam, III/1984(7) 132 19 1,484 203
A.J.C. Smith/1986(6) -- -- -- 471
W. Thomas Stephens/1997(5) 106 32 1,180 349
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Retirement Retirement Retirement
benefits benefits benefits
Aggregate accrued Aggregate accrued Aggregate accrued
Compensation as part Compensation as part Compensation as part
from the of fund from the of fund from the of fund
fund expenses fund expenses fund expenses
- ------------------------------------------------------------------------------------------------------------------
Putnam VT Putnam VT
New Putnam VT OTC & Emerging
Opportunties New Value Growth
Trustees Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------
Jameson A. Baxter/1994(5) $2,713 $837 $1,037 $397 $771 $254
Charles B. Curtis/2001 2,684 744 1,027 263 762 226
John A. Hill/1985(5)(7) 4,570 967 1,747 343 1,299 294
Ronald J. Jackson/1996(5) 2,723 768 1,043 272 773 233
Paul L. Joskow/1997(5) 2,710 548 1,033 194 767 167
Elizabeth T. Kennan/1992 2,664 999 1,020 354 756 303
John H. Mullin, III/1997(5) 2,694 848 1,030 300 765 258
Robert E. Patterson/1984 2,697 547 1,032 194 766 166
George Putnam, III/1984(7) 3,342 446 1,279 158 948 135
A.J.C. Smith/1986(6) -- 1,035 -- 367 -- 314
W. Thomas Stephens/1997(5) 2,657 767 1,016 272 755 233
- ------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Retirement Retirement
benefits benefits
Aggregate accrued Aggregate accrued
Compensation as part Compensation as part
from the of fund from the of fund
fund expenses fund expenses
- ------------------------------------------------------------------------------------
Putnam VT Putnam VT
Research Small Cap Value
Trustees Fund Fund
- ------------------------------------------------------------------------------------
Jameson A. Baxter/1994(5) $935 $290 $1,008 $283
Charles B. Curtis/2001 925 258 998 252
John A. Hill/1985(5)(7) 1,576 335 1,697 327
Ronald J. Jackson/1996(5) 939 266 1,014 260
Paul L. Joskow/1997(5) 934 190 1,004 186
Elizabeth T. Kennan/1992 919 346 992 338
John H. Mullin, III/1997(5) 929 294 1,002 287
Robert E. Patterson/1984 930 190 1,003 185
George Putnam, III/1984(7) 1,152 155 1,243 151
A.J.C. Smith/1986(6) -- 359 -- 349
W. Thomas Stephens/1997(5) 916 266 988 260
- ------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
Retirement Retirement
benefits benefits
Aggregate accrued Aggregate accrued
Compensation as part Compensation as part
from the of fund from the of fund
fund expenses fund expenses
- --------------------------------------------------------------------------------------
Putnam VT
Utilities Growth Putnam VT
and Income Vista
Trustees Fund Fund
- --------------------------------------------------------------------------------------
Jameson A. Baxter/1994(5) $1,010 $313 $965 $297
Charles B. Curtis/2001 999 278 954 263
John A. Hill/1985(5)(7) 1,701 361 1,625 343
Ronald J. Jackson/1996(5) 1,014 287 969 272
Paul L. Joskow/1997(5) 1,009 205 964 194
Elizabeth T. Kennan/1992 992 373 948 354
John H. Mullin, III/1997(5) 1,003 317 958 300
Robert E. Patterson/1984 1,004 204 959 194
George Putnam, III/1984(7) 1,244 167 1,189 158
A.J.C. Smith/1986(6) -- 387 -- 367
W. Thomas Stephens/1997(5) 989 287 945 272
- --------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Retirement Retirement
benefits benefits
Aggregate accrued Aggregate accrued
Compensation as part Compensation as part
from the of fund from the of fund
fund expenses fund expenses
- -------------------------------------------------------------------------------------
Putnam VT
Voyager
Trustees Fund
- -------------------------------------------------------------------------------------
Jameson A. Baxter/1994(5) $4,339 $1,343 $100,000 $215,500
Charles B. Curtis/2001 4,291 1,192 100,000 210,250
John A. Hill/1985(5)(7) 7,309 1,551 200,000 413,625
Ronald J. Jackson/1996(5) 4,355 1,232 100,000 214,500
Paul L. Joskow/1997(5) 4,335 897 100,000 215,250
Elizabeth T. Kennan/1992 4,261 1,601 100,000 207,000
John H. Mullin, III/1997(5) 4,307 1,360 100,000 208.75
Robert E. Patterson/1984 4,312 876 100,000 206,500
George Putnam, III/1984(7) 5,345 715 125,000 260,500
A.J.C. Smith/1986(6) -- 1,661 93,333 --
W. Thomas Stephens/1997(5) 4,249 1,230 100,000 206,500
- -------------------------------------------------------------------------------------
(1) Includes an annual retainer and an attendance fee for each meeting
attended.
(2) Assumes that each Trustee retires at the normal retirement date.
For Trustees who are not within three years of retirement, estimated
benefits for each Trustee are based on Trustee fee rates in effect
during calendar 2003.
(3) As of December 31, 2003, there were 101 funds in the Putnam family.
For Mr. Hill, amounts shown also include compensation for service as a
trustee of TH Lee, Putnam Emerging Opportunities Portfolio, a closed-end
fund advised by an affiliate of Putnam Management.
(4) Includes amounts (ranging from $2,000 to $11,000 per Trustee) for
which the Putnam funds were reimbursed by Putnam Management for special
Board and committee meetings in connection with certain regulatory and
other matters relating to alleged improper trading by certain Putnam
Management employees and participants in certain 401(k) plans
administered by Putnam Fiduciary Trust Company.
(5) Includes compensation deferred pursuant to a Trustee Compensation
Deferral Plan. As of December 31, 2003, the total amounts of deferred
compensation payable by the fund, including income earned on such
amounts, to certain Trustees were:
Baxter Hill Jackson Joskow Mullin III Stephens
----------------------------------------------------------------------------
Putnam VT American Government Income Fund $785 $2,260 $1,159 $855 $897 $353
Putnam VT Capital Appreciation Fund $276 $794 $407 $301 $315 $124
Putnam VT Capital Opportunities Fund $51 $147 $75 $56 $58 $23
Putnam VT Discovery Growth Fund $567 $1,633 $837 $618 $648 $255
Putnam VT Diversified Income Fund $1,083 $3,118 $1,599 $1,180 $1,238 $487
Putnam VT Equity Income Fund $74 $214 $110 $81 $85 $33
Putnam VT The George Putnam Fund of Boston $1,077 $3,102 $1,591 $1,174 $1,231 $484
Putnam VT Global Asset Allocation Fund $3,907 $11,252 $5,770 $4,257 $4,466 $1,757
Putnam VT Global Equity Fund $8,447 $24,327 $12,476 $9,205 $9,655 $3,799
Putnam VT Growth and Income Fund $22,134 $63,742 $32,690 $24,118 $25,299 $9,955
Putnam VT Growth Opportunities Fund $567 $1,634 $838 $618 $648 $255
Putnam VT Health Sciences Fund $728 $2,096 $1,075 $793 $832 $327
Putnam VT High Yield Fund $5,404 $15,564 $7,982 $5,889 $6,177 $2,431
Putnam VT Income Fund $5,355 $15,420 $7,908 $5,835 $6,120 $2,408
Putnam VT International Equity Fund $1,558 $4,487 $2,301 $1,698 $1,781 $701
Putnam VT International Growth and Income Fund $807 $2,323 $1,192 $879 $922 $363
Putnam VT International New Opportunities Fund $791 $2,279 $1,169 $862 $905 $356
Putnam VT Investors Fund $1,052 $3,029 $1,553 $1,146 $1,202 $473
Putnam VT Mid-Cap Value Fund $38 $111 $57 $42 $44 $17
Putnam VT Money Market Fund $1,202 $3,462 $1,776 $1,310 $1,374 $541
Putnam VT New Opportunities Fund $12,074 $34,771 $17,832 $13,156 $13,800 $5,431
Putnam VT New Value Fund $894 $2,574 $1,320 $974 $1,021 $402
Putnam VT OTC & Emerging Growth Fund $614 $1,769 $907 $669 $702 $276
Putnam VT Research Fund $741 $2,135 $1,095 $808 $847 $333
Putnam VT Small Cap Value Fund $788 $2,269 $1,163 $858 $900 $354
Putnam VT Utilities Growth and Income Fund $4,603 $13,254 $6,798 $5,015 $5,261 $2,070
Putnam VT Vista Fund $883 $2,544 $1,305 $963 $1,010 $397
Putnam VT Voyager Fund $18,130 $52,210 $26,776 $19,755 $20,722 $8,154
(6) Marsh & McLennan Companies, Inc. compensates Mr. Smith for his
services as Trustee. Mr. Smith has waived any retirement benefits that
he is entitled to receive under the Retirement Plan for Trustees of the
Putnam funds.
(7) Includes additional compensation to Messrs. Hill and Putnam for
service as Chairman of the Trustees and President of the Funds,
respectively.
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, also available under the
Plan, 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 (currently the Board Policy and Nominating
Committee) 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 had he or she retired immediately prior to such
termination or amendment. The Trustees have terminated the Plan with
respect to any Trustee first elected to the Board after 2003.
2.ADOPTION OF STANDARDIZED FUNDAMENTALINVESTMENT RESTRICTIONS
As described in the following proposals, the Trustees recommend that
shareholders of the affected funds approve revisions to certain
fundamental investment restrictions currently observed by such funds.
Generally, the purpose of these proposed changes is to increase each
fund''s investment flexibility and reduce administrative and compliance
burdens by simplifying and making uniform these fundamental investment
restrictions across all Putnam funds.
Background. The 1940 Act requires registered investment companies like the
funds to have "fundamental" investment restrictions governing certain of
their investment practices. Investment companies may also voluntarily
designate restrictions relating to other investment practices as
fundamental."Fundamental" investment restrictions can be changed only by
a shareholder vote.
The proposed revisions to certain of the fundamental investment
restrictions of the funds are discussed below. By revising these
fundamental investment restrictions, the Trustees believe that Putnam
Management will be better able to manage the funds in a changing regulatory
or investment environment. In addition, the process of monitoring the
funds' compliance with investment restrictions will be simplified. To the
extent multiple proposals apply to the same fund, the adoption of any of
these proposals is not contingent on the adoption of any other proposal.
2.A. AMENDING FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO BORROWING.
Affected funds:
Putnam VT Diversified Income Fund
Putnam VT Global Asset Allocation Fund
Putnam VT Growth and Income Fund
Putnam VT High Yield Fund
Putnam VT Income Fund
Putnam VT International Equity Fund
Putnam VT International Growth and Income Fund
Putnam VT International New Opportunities Fund
Putnam VT Money Market Fund
Putnam VT New Opportunities Fund
Putnam VT New Value Fund
Putnam VT Utilities Growth and Income Fund
Putnam VT Vista Fund
Putnam VT Voyager Fund
The Trustees recommend that each affected fund's fundamental investment
restriction with respect to borrowing be revised to reflect the standard
restriction expected to be used by other Putnam funds. Under the 1940 Act,
a fund may borrow up to 33 1/3% of its total assets. Generally, each of the
affected fund's current restriction is more restrictive. Each of the
affected funds currently is subject to one of the following restrictions
relating to borrowing:
"The fund may not...[b]orrow money in excess of 10% of the value (taken at
the lower of cost or current value) of [the fund's] total assets (not
including the amount borrowed) at the time the borrowing is made, and then
only from banks as a temporary measure to facilitate the meeting of
redemption requests (not for leverage) which might otherwise require the
untimely disposition of portfolio investments or for extraordinary or
emergency purposes. Such borrowings will be repaid before any additional
investments are purchased. (All affected funds other than Putnam VT
Voyager Fund)
"The fund may not...[b]orrow more than 50% of the value of its total
assets (excluding borrowings and stock index futures contracts and call
options on stock index futures contracts and stock indices) less
liabilities other than borrowings and stock index futures contracts and
call options on stock index futures and stock indices. (Putnam VT Voyager
Fund)
The proposed fundamental investment restriction for each affected fund
is set forth below:
"The fund may not...[b]orrow money in excess of 33 1/3% of the value
of its total assets (not including the amount borrowed) at the time the
borrowing is made."
If the proposed change is approved, each affected fund will not be
restricted to borrowing only for redemption requests or for extraordinary
or emergency purposes, and would not be limited to borrowing only from
banks. The new restriction would not prohibit an affected fund from
borrowing for leveraging purposes, although Putnam Management currently has
no intention of borrowing for such purposes. If an affected fund were to
borrow money, its net assets would tend to increase or decrease to a
greater extent with market changes than if the fund had not borrowed money.
Putnam Management believes that this enhanced flexibility could assist each
affected fund in achieving its investment objective. In circumstances in
which an affected fund's available cash is not sufficient to meet, among
other things, shareholder redemptions, Putnam Management believes that it
may be advantageous at times for an affected fund to borrow money instead
of raising cash by selling its portfolio securities, which could be
disruptive to the fund's investment strategy.
In a separate proposal (see Proposal 2.B below), shareholders of these
affected funds are being asked to approve an amendment to each affected
fund's restriction on lending. The proposed revisions would, subject to
the limitations discussed below, permit an affected fund to participate in
an "interfund lending program," which would allow the fund, through a
master loan agreement, to lend available cash to and borrow from other
Putnam funds. As stated above, certain of the affected funds may currently
borrow money only from banks. Each affected fund would be able to borrow
money under the interfund lending program only if the interest rate on the
loan is more favorable to the fund than the interest rates otherwise
available for short-term bank loans, as well as being more favorable to the
lending fund than available repurchase agreement rates. Putnam Management
believes that the ability to engage in such borrowing transactions will
allow an affected fund to pay lower interest rates on its borrowings. An
affected fund could, in certain circumstances, have its loan recalled by a
lending fund on one day's notice. In these circumstances, the affected
fund might have to borrow from a bank at a higher interest rate if loans
were not available from other Putnam funds.
The Putnam funds have received an exemptive order from the SEC which
permits interfund lending between Putnam funds so long as certain
conditions are satisfied.
Required Vote. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding shares of the
affected fund, or (2) 67% or more of the shares of the affected fund
present at the meeting if more than 50% of the outstanding shares of the
affected fund are present at the meeting in person or by proxy.
2.B.AMENDING FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO MAKING
LOANS.
Affected funds:
Putnam VT American Government Income Fund
Putnam VT Capital Appreciation Fund
Putnam VT Capital Opportunities Fund
Putnam VT Discovery Growth Fund
Putnam VT Equity Income Fund
Putnam VT The George Putnam Fund of Boston
Putnam VT Global Equity Fund
Putnam VT Growth Opportunities Fund
Putnam VT Health Sciences Fund
Putnam VT Investors Fund
Putnam VT Mid Cap Value Fund
Putnam VT OTC & Emerging Growth Fund
Putnam VT Research Fund
Putnam VT Small Cap Value Fund
The Trustees recommend that each affected fund's fundamental investment
restriction with respect to making loans be revised to reflect the standard
restriction used by other Putnam funds, to remove any limitations on each
affected fund's ability to enter into repurchase agreements and securities
loans and to clarify that each affected fund is permitted (subject to the
limitation discussed above) to participate in the proposed interfund lending
program described in Proposal 2.A. Each affected fund currently is subject
to the following fundamental investment restriction, which states that such
affected 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 amended fundamental investment restriction for each affected
fund is set forth below:
"The fund may not...[m]ake 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."
Following the amendment, each affected fund may, consistent with its
investment objective and policies and applicable law, enter into repurchase
agreements and securities loans without limit. Putnam Management believes
that this increased investment flexibility could assist each affected fund
in achieving its investment objective. When a fund enters into a repurchase
agreement, it typically purchases a security for a relatively short period
(usually not more than one week), which the seller agrees to repurchase at
a fixed time and price, representing the fund's cost plus interest. When
a fund enters into a securities loan, it lends certain of its portfolio
securities to broker-dealers or other parties, typically in exchange for a
portion of the interest earned on the collateral posted by the borrower.
These transactions must be fully collateralized at all times, but involve
some risk to the fund if the borrower should default on its obligation. If
the borrower in these transactions should become involved in bankruptcy or
insolvency proceedings, it is possible that the fund may be treated as an
unsecured creditor and be required to return the underlying collateral to
the borrower's estate.
If the proposal is approved, each affected fund would be able to
participate in an interfund lending program and make loans to other Putnam
funds for short-term purposes. As discussed in Proposal 2.A, 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, the 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.
Required vote. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding shares of the
affected fund, or (2) 67% or more of the shares of the affected fund
present at the meeting if more than 50% of the outstanding shares of the
affected fund are present at the meeting in person or by proxy.
2.C. AMENDING FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
DIVERSIFICATION OF INVESTMENTS.
Affected funds: All funds
The Trustees recommend that each affected fund's fundamental investment
restriction with respect to the diversification of its investments be
revised to reflect the standard restrictions expected to be used by the
other Putnam funds, depending on whether the affected fund is a
"diversified" fund or a "non-diversified" fund.
Under the 1940 Act, a "diversified" fund generally may not, with
respect to 75% of its total assets, invest more than 5% of its total
assets in the securities of any one issuer (except U.S. government
securities, cash, cash items or the securities of other regulated
investment companies). The remaining 25% of the fund's total assets is
not subject to this restriction. A "non-diversified" fund is not
subject to the 1940 Act restriction discussed above, but is only subject
to the rules under the Internal Revenue Code of 1986, as amended (the
"Code"), which require that a fund diversify its holdings at the end of
each fiscal quarter such that, with respect to 50% of the fund's total
assets, the fund does not have more than 5% of its total assets invested
in any one issuer. The remaining 50% of the fund's assets is not
subject to this 5% limitation, although with respect to that portion of
its assets the fund may not invest more than 25% in any issuer. Neither
of these Code requirements applies to U.S. government securities, cash,
cash items or the securities of other regulated investment companies.
Each of the funds is currently subject to one of the following
fundamental restrictions relating to diversification:
"The fund may not...[w]ith respect to 75% of its total assets, invest in
securities of any issuer if, immediately after such investment, more than
5% of the total assets of the fund (taken at current value) would be
invested in the securities of such issuer; provided that this limitation
does not apply to obligations issued or guaranteed as to interest or
principal by the U.S. government or its agencies or instrumentalities."
(Putnam VT Health Sciences Fund and Putnam VT Utilities Growth and Income
Fund.)
OR
"The fund may not...[w]ith respect to 50% of its total assets, invest in
securities of any issuer if, immediately after such investment, more
than 5% of the total assets of the fund (taken at current value) would be
invested in the securities of such issuer; provided that this limitation
does not apply to obligations issued or guaranteed as to interest or
principal by the U.S. government or its agencies or instrumentalities."
(all affected funds except Putnam VT Health Sciences Fund and Putnam VT
Utilities Growth and Income Fund).
The proposed amended fundamental investment restrictions for each of the
funds are set forth below:
"The fund may not ...[w]ith respect to 50% of its total assets, invest
in securities of any issuer if, immediately after such investment, more
than 5% of the total assets of the fund (taken at current value) would be
invested in the securities of such issuer; provided that this limitation
does not apply to obligations issued or guaranteed as to interest or
principal by the U.S. government or its agencies or instrumentalities."
(Putnam VT Health Sciences Fund and Putnam VT Utilities Growth and Income
Fund)
OR
"The fund may not ...[w]ith respect to 75% of its total assets, invest in
securities of any issuer if, immediately after such investment, more than
5% of the total assets of the fund (taken at current value) would be invested
in the securities of such issuer; provided that this limitation does not
apply to obligations issued or guaranteed as to interest or principal by
the U.S. government or its agencies or instrumentalities."
(For all funds except Putnam VT Health Sciences Fund and Putnam VT
Utilities Growth and Income Fund.)
If the proposed change is approved, each affected fund will continue to be
able to invest up to 25% of its total assets in the securities of any one
issuer. The amended restrictions would continue to exclude from its
limitations U.S. government securities, cash and cash items, and would also
exclude from its limitations securities of other investment companies. The
proposed changes would not result in a "diversified" fund becoming a
"non-diversified" fund or a "non-diversified" fund becoming a
"diversified" fund.
The purpose of these proposed changes is to reduce administrative and
compliance burdens by simplifying and making uniform these fundamental
investment restrictions with respect to diversification of investments. The
proposed revisions would also permit each affected fund to invest in shares
of Putnam money market funds, Putnam short-term bond funds or other Putnam
entities that operate as cash management investment vehicles in excess of
the limitations discussed above, by excluding from these limitations
securities of other investment companies.
The Putnam funds have received an exemptive order from the SEC which
permits "cash sweep" arrangements in which a fund invests all or a portion
of its available cash in a Putnam cash management investment vehicle, such
as a Putnam money market fund, rather than directly in short-term
instruments. If the proposed change is approved, each affected fund will be
able to invest up to 25% of its total assets in a Putnam money market fund
or other Putnam cash management investment vehicle, in accordance with the
conditions set forth in the SEC exemptive order. Putnam Management believes
that use of a Putnam money market fund or other Putnam cash management
investment vehicle to invest an affected fund's uninvested cash and cash
collateral from securities lending arrangements may achieve greater
efficiencies, reduce fund management expenses and increase returns.
Moreover, use of a Putnam money market fund or other Putnam cash management
investment vehicle in these instances would permit an affected fund's
management team to focus on the management of the principal investments of
the fund.
Required Vote. Approval of this proposal requires the affirmative vote of
the lesser of (1) more than 50% of the outstanding shares of the affected
fund, or (2) 67% or more of the shares of the affected fund present at the
meeting if more than 50% of the outstanding shares of the affected fund are
present at the meeting in person or by proxy.
2.D. AMENDING A FUND'S INVESTMENT OBJECTIVE
Affected fund: Putnam VT Equity Income Fund
The Trustees recommend that the affected fund's shareholders approve an
amendment to the affected fund's investment objective, which, as disclosed
in the affected fund's prospectus, states:
The fund seeks current income. Capital growth is a secondary objective when
consistent with seeking current income. The proposed new investment
objective of the affected fund is the following:
The proposed new investment objective of the affected fund is the
following:
The fund seeks capital growth and current income.
Putnam Management believes that the affected fund's current investment
objective, which gives priority to current income, could under certain
circumstances impair the management team's ability to pursue total return.
Putnam Management believes that, by restating the fund's investment
objective to give greater emphasis to capital growth, the affected fund's
management team will be able, consistent with the affected fund's
non-fundamental policy of investing at least 80% of the fund's net assets
in common stocks and other equity investments that offer potential for
current income, to give more weight to stocks that Putnam Management
believes have the potential to contribute to the capital growth of the
affected fund. The non-fundamental policy may not be changed without
providing at least 60 days' advance notice to shareholders.
If approved, the proposed investment objective is not expected to have a
material effect on the investment strategy of the affected fund in the near
term, although it may over time lead to increased investments in growth
stocks. Growth stocks may trade at a higher multiple of current earnings
than other stocks. The values of such stocks may be more sensitive to
changes in current or expected earnings than the values of other stocks. If
the management team's assessment of the prospects for a company's
earnings growth is wrong, or if its judgment of how other investors will
value the company's earnings growth is wrong, then the price of the
company's stock may fall or not approach the value that the management
team has placed on it.
Required Vote. Approval of this proposal requires the affirmative vote
of the lesser of (1) more than 50% of the outstanding shares of the
affected fund, or (2) 67% of the shares of the affected fund present at
the meeting if more than 50% of the outstanding shares of the affected
fund are present at the meeting in person or by proxy.
3.APPROVING AN AMENDMENT TO DECLARATION OF TRUST.
Affected funds: All funds
The Trustees of the Trust have approved and recommend shareholder
authorization of a proposal to amend the Trust's Agreement and
Declaration of Trust (the "Declaration of Trust") to expressly provide
that the Trust may pay redemption proceeds in-kind (i.e., by delivering
portfolio securities rather than cash). The Declaration of Trust
provides that it may be amended by the Trustees when authorized by the
Trust's shareholders.
Article VI, Section 2 to the Declaration of Trust currently reads as
follows:
Section 2.The Trust shall purchase such Shares as are offered by any
Shareholder for redemption, upon the presentation of any certificate for the
Shares to be purchased, a proper instrument of transfer and a request
directed to the Trust or a person designated by the Trust that the Trust
purchase such Shares, or in accordance with such other procedures for
redemption as the Trustees may from time to time authorize; and the Trust
will pay therefor the net asset value thereof, as next determined in
accordance with the Bylaws, less any redemption charge fixed by the Trustees.
Payment for said Shares shall be made by the Trust to the Shareholder within
seven days after the date on which the request is made. The obligation set
forth in this Section 2 is subject to the provision that in the event that
any time the New York Stock Exchange is closed for other than customary
weekends or holidays, or, if permitted by the rules of the Commission, during
periods when trading on the Exchange is restricted or during any emergency
which makes it impractical for the Trust to dispose of its investments or to
determine fairly the value of its net assets, or during any other period
permitted by order of the Commission for the protection of investors, such
obligation may be suspended or postponed by the Trustees. The Trust may also
purchase or repurchase Shares at a price not exceeding the net asset value of
such Shares in effect when the purchase or repurchase or any contract to
purchase or repurchase is made.
The proposed amendment to the Declaration of Trust is set forth below.
Article VI
Distributions, Redemptions and Repurchases
***
Redemption and Repurchases
Section 2.The Trust shall purchase such Shares as are offered by any
Shareholder for redemption, upon the presentation of any certificate for
the Shares to be purchased, a proper instrument of transfer and a
request directed to the Trust or a person designated by the Trust that
the Trust purchase such Shares, or in accordance with such other
procedures for redemption as the Trustees may from time to time
authorize; and the Trust will pay therefor the net asset value thereof,
as next determined in accordance with the Bylaws, less any redemption
charge fixed by the Trustees. Payment for said Shares shall be made by
the Trust to the Shareholder within seven days after the date on which
the request is made. The obligation set forth in this Section 2 is
subject to the provision that in the event that any time the New York
Stock Exchange is closed for other than customary weekends or holidays,
or, if permitted by the rules of the Securities and Exchange Commission,
during periods when trading on the Exchange is restricted or during any
emergency which makes it impractical for the Trust to dispose of its
investments or to determine fairly the value of its net assets, or
during any other period permitted by order of the Securities and
Exchange Commission for the protection of investors, such obligation may
be suspended or postponed by the Trustees. The Trust may also purchase
or repurchase Shares at a price not exceeding the net asset value of
such Shares in effect when the purchase or repurchase or any contract to
purchase or repurchase is made.
Payment for any redemption, purchase or repurchase may be made in cash or
in other property, or in any combination thereof. The composition of any
such payment shall be determined by the Trust in its sole discretion, and
the Trust shall have no obligation to effect a pro rata division of cash or
other property in making any such payment. In no event shall the Trust be
liable for any delay of any other person in transferring securities or
other property selected for delivery as all or part of any payment.
Putnam Management recommends the proposed change to modernize and
standardize this provision of the Declaration of Trust. The Declaration of
Trust is currently silent on the matter of the permitted form of redemption
payments and could be construed as permitting only a cash payment. Although
the Trust has no current intention to redeem its shares other than for
cash, Putnam Management believes that the explicit authority to pay a
redemption wholly or partially in kind may benefit the Trust's remaining
shareholders in circumstances where a fund is facing significant
redemptions. If shares are redeemed in kind, the redeeming share-holder
would incur brokerage costs in converting the portfolio securities into
cash. If the proposal is approved by the Trust's shareholders, the Trust,
on behalf of each fund of the Trust, intends to file an election with the
SEC under Rule 18f-1 under the 1940 Act, which will commit each fund to
pay in cash any requests for redemption by a single shareholder during any
90-day period of up to the lesser of $250,000 or 1% of the fund's net asset
value at the beginning of the 90-day period.
Required Vote. All shares of the Trust will vote together as a single
class, and approval of this proposal requires the affirmative vote of
shareholders holding a majority of the shares of the Trust entitled to
vote.
Further information about voting and the meeting
Quorum and methods of tabulation. The shareholders of each fund vote
separately with respect to each proposal other than the election of
Trustees (Proposal 1) and approving the amendment to the Trust's
Declaration of Trust (Proposal 3), in which case shareholders of each series
of the Trust vote together as a single class. In the case of each fund,
30% of the shares entitled to vote constitutes a quorum for the transaction
of business with respect to any proposal at the meeting (unless otherwise
noted in the proxy statement). 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 a proposal for purposes of determining whether sufficient
affirmative votes have been cast. 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. With
respect to the election of Trustees, neither abstentions nor broker
non-votes have an effect on the outcome of the proposal. With respect to
any other proposals, abstentions and broker non-votes have the effect of a
vote" against the proposal.
Other business. The Trustees know of no matters other than those set forth
herein to be brought before the meeting. If, however, any other matters
properly come before the meeting, it is the Trustees' intention that
proxies will be voted on such matters in accordance with the judgment of
the persons named 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 each of the
other funds of the Trust. 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 and voting
instructions by mail, the Trustees of your fund and employees of Putnam
Management, Putnam Fiduciary Trust Company, Putnam Retail Management and
the Insurance Companies may solicit voting instructions from Contract
Owners in person or by telephone. Your fund may arrange to have PFPC, Inc.,
a proxy solicitation firm, call you to record your voting instructions by
telephone. The procedures for solicitation of proxies and voting
instructions by telephone are designed to authenticate Contract Owners'
identities, to allow them to authorize the voting of their units 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. Contract Owners would be called at the phone number
Putnam Management has in its records for their accounts (or that Putnam
Management obtains from the Insurance Companies), and would be asked for
their Social Security number or other identifying information. The Contract
Owners would then be given an opportunity to give their instructions. To
ensure that the Contract Owners' 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.
Contract Owner Instructions. Each Contract Owner is entitled to instruct
his or her insurance company as to how to vote its shares and can do so by
marking voting instructions on the ballot enclosed with this proxy statement
and then signing, dating and mailing the ballot in the envelope provided.
If a ballot is not marked to indicate voting instructions, but is signed,
dated and returned, it will be treated as an instruction to vote the shares
in favor of the proposal. Each insurance company shareholder will vote the
shares for which it receives timely voting instructions from Contract
owners in accordance with those instructions and will vote those shares for
which it receives no timely voting instructions for and against approval of
a proposal, and as an abstention, in the same proportion as the shares for
which it receives voting instructions. Shares attributable to accounts
retained by each insurance company shareholder will be voted in the same
proportion as votes cast by Contract owners. Accordingly, there are not
expected to be any "broker non-votes".
Contract Owners have the opportunity to submit their voting instructions
via the Internet by utilizing a program provided by a third party vendor
hired by Putnam Management or by automated telephone service. The giving of
such voting instructions will not affect your right to vote in person
should you decide to attend the meeting. To use the Internet, please access
the Internet address listed on your proxy card, and follow the instructions
on the Internet site. The Internet voting procedures are designed to
authenticate Contract Owners' identities, to allow Contract Holders to give
their voting instructions and to confirm that shareholders' instructions
have been recorded properly. Contract Owners voting via the Internet should
understand that there may be costs associated with electronic access, such
as usage charges from Internet access providers and telephone companies,
that must be borne by the Contract Owners.
The Trust's Trustees have adopted a general policy of maintaining
confidentiality in the voting of proxies and the giving of voting
instructions. Consistent with this policy, your fund may solicit proxies
from Contract Owners 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.
The Putnam funds have retained at their own expense PFPC, Inc., 4400
Computer Drive, Westborough, Massachusetts 01581, to aid in the
solicitation of instructions for registered and nominee accounts, for a fee
expected not to exceed $1.3 million plus reasonable out-of- pocket expenses
for mailing. Putnam Variable Trust will pay its allocable portion of such
fee, which is not expected to exceed $____. The expenses of the
preparation of proxy statements and related materials, including printing
and delivery costs, are borne by each fund.
Revocation of proxies. Proxies, including proxies given by telephone or
over the Internet, may be revoked at any time before they are voted either
(i) by a written revocation received by the Clerk of your fund, (ii) by
properly executing a later-dated proxy, (iii) by recording later-dated voting
instructions via the Internet or (iv) by attending the meeting and voting in
person.
Revocation of instructions. Any Contract Owner giving instructions to an
insurance company has the power to revoke such instructions by mail by
providing superseding instructions. All properly executed instructions
received in time for the meeting will be voted as specified in the
instructions.
Date for receipt of shareholders' proposals for subsequent meetings of
shareholders. Your fund does not regularly hold annual shareholder
meetings, but may from time to time schedule special meetings. In
addition, your fund has voluntarily undertaken to hold shareholder
meetings at least every five years. In accordance with the regulations of
the SEC, in order to be eligible for inclusion in your fund's proxy
statement for such a meeting, a shareholder or Contract Owner proposal must
be received a reasonable time before the fund prints and mails its proxy
statement.
The Board Policy and Nominating Committee will also consider nominees
recommended by shareholders of the fund to serve as Trustees. A shareholder
or Contract Owner must submit the names of any such nominees in writing to
the fund, to the attention of the Clerk, at the address of the principal
offices of the fund.
If a shareholder who wishes to present a proposal at a special shareholder
meeting fails to notify the fund within a reasonable time before the fund
mails its proxy statement, the proxies solicited for the meeting will have
discretionary authority to vote on the shareholder's proposal if it is
properly brought before the meeting. If a shareholder makes a timely
notification, the proxies may still exercise discretionary voting authority
under circumstances consistent with the SEC's proxy rules. All shareholder
proposals must also comply with other requirements of the SEC's rules and
the Declaration of Trust.
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 with respect to any fund for a period or periods of not more than
60 days in the aggregate to permit further solicitation of proxies. 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 by
the relevant fund to be adjourned. The persons named as proxies will vote
in favor of adjournment those proxies that they are entitled to vote in
favor of the proposals. They will vote against any such adjournment those
proxies required to be voted against the 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 by any fund may be acted upon and considered final
regardless of whether the meeting is adjourned to permit additional
solicitation with respect to any other proposal for any other fund.
Financial information. The Trust will furnish to you upon request and
without charge, a copy of the Trust'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 1-800-521-0538.
Fund Information
Putnam Investments. Putnam Investment Management, LLC, the funds'
investment manager, is a subsidiary of Putnam Management Trust, which is
in turn owned by Putnam Investments. Putnam Investments is a
wholly-owned subsidiary of Putnam Investments Trust, a holding company
that, except for a minority stake owned by employees, is in turn owned
by Marsh & McLennan Companies, Inc., a leading professional services
firm that includes risk and insurance services, investment management
and consulting businesses. Putnam Fiduciary Trust Company, the fund's
investor servicing agent and custodian, and Putnam Retail Management
Limited Partnership, the fund's principal underwriter, are also
subsidiaries of Putnam Investments. The address of Putnam Investments
Trust, Putnam Investments, Putnam Investment Management, LLC, Putnam
Retail Management Limited Partnership and Putnam Fiduciary Trust Company
is One Post Office Square, Boston, Massachusetts 02109. The address of
the executive offices of Marsh & McLennan Companies, Inc. is 1166 Avenue
of the Americas, New York, New York 10036.
Litigation. Exhibit B to this proxy statement describes the pending
legal proceedings in which the Trustees have been named as parties
adverse to your fund as of [June 30], 2004.
Limitation of Trustee liability. The Declaration of Trust provides that
the Trust will indemnify the Trustees and officers of the Trust against
liabilities and expenses incurred in connection with litigation in which
they may be involved because of their offices with the Trust, except if
it is determined in the manner specified in the 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 Trust, at its expense, provides liability insurance for the benefit
of its Trustees and officers.
Independent registered public accounting firm. As listed below, the
Trustees have selected PricewaterhouseCoopers LLP, 125 High Street,
Boston, Massachusetts 02110 as the independent registered public
accounting firm for each fund's current fiscal year. This firm is among
the country's preeminent independent registered public accounting
firms. The firm 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. Representatives of
PricewaterhouseCoopers LLP are expected to be present at the meeting to
make statements and to respond to appropriate questions.
The following table presents fees billed for the fiscal periods December
31, 2002 and December 31, 2003 for services rendered to a fund:
- -----------------------------------------------------------------------------------------------------------------------
Putnam VT Putnam VT Putnam VT Putnam VT Putnam VT Putnam VT
American Capital Capital Discovery Diversified Equity
Government Appreciation Opportunties Growth Income Income
Income Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------
Audit Fee 2003 -- 28,185 2003 -- 23,359 2003 -- 22,689 2003 -- 25,496 2003 -- 71,752 2003 -- 22,762
2002 -- 23,302 2002 -- 23,010 2002 -- 0 2002 -- 34,791 2002 -- 61,784 2002 -- 0
- -----------------------------------------------------------------------------------------------------------------------
Audit Related 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0
Fees 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 24,000* 2002 -- 0 2002 -- 0
- -----------------------------------------------------------------------------------------------------------------------
Tax Fees 2003 -- 1,820 2003 -- 1,724 2003 -- 2,625 2003 -- 1,724 2003 -- 5,136 2003 -- 2,625
2002 -- 1,904 2002 -- 2,578 2002 -- 0 2002 -- 2,579 2002 -- 4,703 2002 -- 0
- -----------------------------------------------------------------------------------------------------------------------
All Other 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0
Fees 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Putnam VT Putnam VT Putnam VT Putnam VT Putnam VT Putnam VT
The George Global Asset Global Growth and Growth Health
Putnam Fund Allocation Equity Income Opportunties Sciences
of Boston Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------
Audit Fee 2003 -- 54,409 2003 -- 62,426 2003 -- 54,273 2003 -- 81,084 2003 -- 25,668 2003 -- 23,444
2002 -- 44,982 2002 -- 64,313 2002 -- 55,745 2002 -- 57,753 2002 -- 23,241 2002 -- 20,631
- -----------------------------------------------------------------------------------------------------------------------
Audit Related 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0
Fees 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0
- -----------------------------------------------------------------------------------------------------------------------
Tax Fees 2003 -- 3,361 2003 -- 4,977 2003 -- 6,217 2003 -- 2,717 2003 -- 1,719 2003 -- 1,750
2002 -- 3,259 2002 -- 4,839 2002 -- 6,105 2002 -- 3,604 2002 -- 1,884 2002 -- 1,930
- -----------------------------------------------------------------------------------------------------------------------
All Other 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0
Fees 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Putnam VT Putnam VT Putnam VT Putnam VT
High Putnam VT International International International Putnam VT
Yield Income Equity Growth and Income New Opportunties Investors
Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------
Audit Fee 2003 -- 62,730 2003 -- 78,174 2003 -- 47,132 2003 -- 32,702 2003 -- 31,260 2003 -- 29,196
2002 -- 53,770 2002 -- 62,300 2002 -- 37,502 2002 -- 28,447 2002 -- 27,729 2002 -- 29,353
- -----------------------------------------------------------------------------------------------------------------------
Audit Related 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0
Fees 2002 -- 0 2002 -- 0 2002 -- 23,100* 2002 -- 0 2002 -- 0 2002 -- 0
- -----------------------------------------------------------------------------------------------------------------------
Tax Fees 2003 -- 3,233 2003 -- 2,382 2003 -- 5,966 2003 -- 2,354 2003 -- 3,859 2003 -- 1,762
2002 -- 3,297 2002 -- 2,441 2002 -- 2,487 2002 -- 2,384 2002 -- 5,298 2002 -- 2,058
- -----------------------------------------------------------------------------------------------------------------------
All Other 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0
Fees 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Putnam VT Putnam VT Putnam VT Putnam VT
Mid Cap Putnam VT New New OTC & Emerging Putnam VT
Value Money Market Opportunties Value Growth Research
Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------
Audit Fee 2003 -- 22,707 2003 -- 46,031 2003 -- 54,241 2003 -- 24,954 2003 -- 19,338 2003 -- 24,820
2002 -- 0 2002 -- 37,838 2002 -- 42,405 2002 -- 21,605 2002 -- 19,560 2002 -- 20,619
- -----------------------------------------------------------------------------------------------------------------------
Audit Related 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0
Fees 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0
- -----------------------------------------------------------------------------------------------------------------------
Tax Fees 2003 -- 2,625 2003 -- 1,459 2003 -- 1,847 2003 -- 1,758 2003 -- 1,734 2003 -- 1,883
2002 -- 0 2002 -- 1,364 2002 -- 2,517 2002 -- 1,949 2002 -- 1,886 2002 -- 1,884
- -----------------------------------------------------------------------------------------------------------------------
All Other 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0
Fees 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0
- -----------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Putnam VT Putnam VT
Small Cap Utilities Putnam VT Putnam VT
Value Growth and Income Vista Voyager
Fund Fund Fund Fund
- -------------------------------------------------------------------------------------
Audit Fee 2003 -- 26,076 2003 -- 28,625 2003 -- 35,661 2003 -- 70,643
2002 -- 22,641 2002 -- 30,612 2002 -- 35,767 2002 -- 57,032
- -------------------------------------------------------------------------------------
Audit Related 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0
Fees 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0
- -------------------------------------------------------------------------------------
Tax Fees 2003 -- 1,811 2003 -- 2,307 2003 -- 1,756 2003 -- 1,933
2002 -- 1,964 2002 -- 2,377 2002 -- 1,984 2002 -- 2,959
- -------------------------------------------------------------------------------------
All Other 2003 -- 0 2003 -- 0 2003 -- 0 2003 -- 0
Fees 2002 -- 0 2002 -- 0 2002 -- 0 2002 -- 0
- -------------------------------------------------------------------------------------
* Includes fees billed to the fund for services relating to one or more
fund mergers. A portion of such fees was paid by Putnam Management.
AUDITOR NON AUDIT FEE TABLE
- -----------------------------------------------------------------------------------------------------------------------
Putnam VT Putnam VT Putnam VT Putnam VT Putnam VT Putnam VT
American Capital Capital Discovery Diversified Equity
Government Appreciation Opportunties Growth Income Income
Income Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------
Non-Audit Fee 2003 -- 142,650 2003 -- 142,554 2003 -- 143,455 2003 -- 142,554 2003 -- 145,966 2003 -- 143,455
2002 -- 1,904 2002 -- 2,578 2002 -- 0 2002 -- 26,579 2002 -- 4,703 2002 -- 0
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Putnam VT Putnam VT Putnam VT Putnam VT Putnam VT Putnam VT
The George Global Asset Global Growth and Growth Health
Putnam Fund Allocation Equity Income Opportunties Sciences
of Boston Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------
Non-Audit Fee 2003 -- 144,191 2003 -- 145,807 2003 -- 147,047 2003 -- 143,547 2003 -- 142,549 2003 -- 142,580
2002 -- 3,259 2002 -- 4,839 2002 -- 6,105 2002 -- 3,604 2002 -- 1,884 2002 -- 1,930
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Putnam VT Putnam VT Putnam VT Putnam VT
High Putnam VT International International International Putnam VT
Yield Income Equity Growth and Income New Opportunties Investors
Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------
Non-Audit Fee 2003 -- 144,063 2003 -- 143,212 2003 -- 146,796 2003 -- 143,184 2003 --144,689 2003 -- 142,592
2002 -- 3,297 2002 -- 2,441 2002 -- 25,587 2002 -- 2,384 2002 -- 5,298 2002 -- 2,058
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Putnam VT Putnam VT Putnam VT Putnam VT
Mid Cap Putnam VT New New OTC & Emerging Putnam VT
Value Money Market Opportunties Value Growth Research
Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------
Non-Audit Fee 2003 -- 143,455 2003 -- 142,289 2003 -- 142,677 2003 -- 142,588 2003 -- 142,564 2003 -- 142,713
2002 -- 0 2002 -- 1,364 2002 -- 2,517 2002 -- 1,949 2002 -- 1,886 2002 -- 1,884
- -----------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Putnam VT Putnam VT
Small Cap Utilities Putnam VT Putnam VT
Value Growth and Income Vista Voyager
Fund Fund Fund Fund
- -------------------------------------------------------------------------------------
Non-Audit Fee 2003 -- 142,641 2003 -- 143,137 2003 -- 142,586 2003 -- 142,763
2002 -- 1,964 2002 -- 2,377 2002 -- 1,984 2002 -- 2,959
- -------------------------------------------------------------------------------------
Pre-Approval Policies of the Audit and Pricing Committee.
The Audit and Pricing Committee has determined that, as a matter of policy,
all work performed for the funds by the funds' independent auditor will be
pre-approved by the Committee and will generally not be subject to
pre-approval procedures.
Under certain circumstances, the Audit and Pricing Committee believes that
it may be appropriate for Putnam Management and certain of its affiliates
to engage the services of the funds' independent auditor, but only after
prior approval by the Committee. Such requests are required to be submitted
in writing to the Committee and explain, among other things, the nature of
the proposed engagement, the estimated fees and why this work must be
performed by the audit firm. The Committee will review the proposed
engagement at its next meeting.
Since May 6, 2003, all work performed by the independent auditor for the
funds, Putnam Management and any entity controlling, controlled by or under
common control with Putnam Management that provides ongoing services to the
funds was pre-approved by the Committee or a member of the Committee
pursuant to the pre-approval policies discussed above. Prior to that date,
the Committee had a general policy to pre-approve the independent auditors'
engagements for non-audit services with the funds, Putnam Management and
any entity controlling, controlled by or under common control with Putnam
Management that provides ongoing services to the funds.
For each fund's last two fiscal years, such fund's principal auditors did
not bill for services required to be approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X.
Officers and other information. All of the officers of the Trust, with the
exception of Mr. Putnam, III, are employees of Putnam Management or its
affiliates. Because of their positions with Putnam Management, Putnam
Retail Management or their affiliates or their ownership of stock of Marsh
& McLennan Companies, Inc., the parent corporation of Putnam Investments
Trust and indirectly of Putnam LLC, Messrs. Haldeman, Putnam, III and Smith
(nominees for Trustees of the Trust), as well as the officers of the Trust,
will benefit from the management fees, distribution fees, custodian fees,
and investor servicing fees paid or allowed by each fund. In addition to
Mr. Putnam, III, the other officers of each fund are as follows:
- -------------------------------------------------------------------------------------------------------
Office with the fund to
Year first office during past five years
Name (birthdate) elected Business experience
- -------------------------------------------------------------------------------------------------------
Charles E. Porter (7/26/38)* 1989 Managing Director,
Executive Vice President, Putnam Investments
Associate Treasurer and Putnam Management
Principal Executive Officer
- -------------------------------------------------------------------------------------------------------
Jonathan S. Horwitz (6/4/55)* 2004 Managing Director,
Senior Vice President and Treasurer Putnam Investments
- -------------------------------------------------------------------------------------------------------
Steven D. Krichmar (6/27/58) 2002 Senior Managing Director,
Vice President and Principal Putnam Investments.
Financial Officer Prior to 2001, Mr.Krichmar
was a Partner at
PricewaterhouseCoopers, LLP
- -------------------------------------------------------------------------------------------------------
Michael T. Healy (1/24/58) 2000 Managing Director,
Assistant Treasurer and Principal Putnam Investments
Accounting Officer
- -------------------------------------------------------------------------------------------------------
Beth S. Mazor (4/6/58) 2002 Senior Vice President,
Vice President Putnam Investments
- -------------------------------------------------------------------------------------------------------
Daniel T. Gallagher (2/27/62)* 2004 Vice President, Putnam
Vice President and Legal and Investments. Prior to
Compliance Liaison Officer 2004, Mr. Gallagher was an
Associate for Ropes &
Gray LLP; Prior to 2000,
he was a Law Clerk for the
Massachusetts Supreme
Judicial Court
- -------------------------------------------------------------------------------------------------------
Mark C. Trenchard (6/5/62) 2002 Senior Vice President,
Vice President and Putnam Investments
BSA Compliance Officer
- -------------------------------------------------------------------------------------------------------
Francis J. McNamara (8/19/55) 2004 Senior Managing Director,
Vice President and Chief Legal Officer Putnam Investments,
Putnam Management
and Putnam Retail
Management. Prior
to 2004, Mr. McNamara
was General Counsel of
State Street Research
& Management
- -------------------------------------------------------------------------------------------------------
James P. Pappas (2/24/53) 2004 Managing Director,
Vice President Putnam Investments and
Putnam Management.
During 2002, Mr.Pappas
was Chief Operating
Officer of Atalanta/
Sosnoff Management
Corporation; prior to
2001 he was President
and Chief Executive
Officer of UAM
Investment Services, Inc.
- -------------------------------------------------------------------------------------------------------
Richard S. Robie, III (3/30/60) 2004 Senior Managing Director,
Vice President Putnam Investments,
Putnam Management
and Putnam Retail
Management. Prior to
2003, Mr. Robie was Senior
Vice President of United
Asset Management
Corporation
- -------------------------------------------------------------------------------------------------------
Judith Cohen (6/7/45) 1993 Clerk and Assistant
Clerk and Assistant Treasurer Treasurer, The Putnam
Funds
- -------------------------------------------------------------------------------------------------------
* Officers of each fund who are members of the Trustees' independent administrative staff.
Compensation for these officers is fixed by the Trustees and reimbursed by Putnam management.
Shares outstanding of your fund as of July 31, 2004
- ------------------------------------------------------------------------------------------------------------------------
Fund Class IA Class IB
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT American Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT American Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Appreciation Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Appreciation Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Discovery Growth Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Discovery growth Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Diversified Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Diversified Income
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Equity Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Equity Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Equity Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam Global Equity Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Growth and Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Growth and Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International New Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International New Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam Mid Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam Mid Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT New Value Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT OTC & Emerging Growth Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT OTC & Emerging Growth Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Research Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Research Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Small Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Small Cap Value Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Vista Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Share Ownership
At July 31, 2004 the officers and Trustees as a group owned directly no
shares of the Trust or any fund thereof. Except to the extent set forth
below, to the knowledge of the Trust no person owned of record
beneficially 5% or more of the shares of any fund of the Trust.
Shareholder name Percentage
Fund and class and address owned
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT American Government Income Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT American Government Income Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT American Government Income Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT American Government Income Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Opportunities Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Opportunities Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Opportunities Fund IA Putnam Investments (9)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Opportunities Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Opportunities Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Opportunities Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Appreciation Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Appreciation Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Appreciation Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Capital Appreciation Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Discovery Growth Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Discovery Growth Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Discovery Growth Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Discovery Growth Fund IB ING Life Companies (5)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Diversified Income Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Diversified Income Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Diversified Income Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Diversified Income Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Equity Income Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Equity Income Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Equity Income Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Equity Income Fund IB The Hartford Y (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Equity Income Fund IB MetLife Investors Insurance Company (8)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Equity Income Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Asset Allocation Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Equity Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Equity Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Equity Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Equity Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Global Equity Fund IB TransAmerica Life Insurance Company (11)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth and Income Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth Opportunities Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth Opportunities Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth Opportunities Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Growth Opportunities Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund IB Lincoln National Life Insurance Company (7)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund IB AXP IDS Life (3)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Health Sciences Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund IB AXP IDS Life (3)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT High Yield Fund IB Lincoln National Life Insurance Company (7)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Income Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Income Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Income Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Income Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Growth and Income Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Growth and Income Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Growth and Income Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Growth and Income Fund IB Lincoln National Life Insurance Company (7)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Growth and Income Fund IB ING Life Companies (5)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund IA MetLife Investors Insurance Company (8)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund IB AXP IDS Life (3)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund IB MetLife Investors Insurance Company (8)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund IB The Travelers Life Insurance Company (10)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International Equity Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International New Opportunities Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International New Opportunities Fund IB AXP IDS Life (3)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT International New Opportunities Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Investors Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Mid Cap Value Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Mid Cap Value Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Mid Cap Value Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Mid Cap Value Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Mid Cap Value Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Mid Cap Value Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund IB Allstate Life Insurance Company O (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Money Market Fund IB The Hartford (4)
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Putnam VT Money Market Fund IB TransAmerica Life Insurance Company (11)
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Putnam VT Money Market Fund IB Allstate Life Insurance Company (1)
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Putnam VT New Opportunities Fund IA The Hartford (4)
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Putnam VT New Opportunities Fund IA AXP IDS LIFE (3)
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Putnam VT New Opportunities Fund IB Allstate Life Insurance Company (1)
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Putnam VT New Opportunities Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Value Fund IA The Hartford (4)
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Putnam VT Value Fund IB Allstate Life Insurance Company (1)
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Putnam VT Value Fund IB The Hartford (4)
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Putnam VT OTC & Emerging Growth Fund IA The Hartford (4)
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Putnam VT OTC & Emerging Growth Fund IA The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT OTC & Emerging Growth Fund IB Allstate Life Insurance Company (1)
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Putnam VT OTC & Emerging Growth Fund IB The Hartford (4)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT OTC & Emerging Growth Fund IB Allstate Life Insurance Company (1)
- ------------------------------------------------------------------------------------------------------------------------
Putnam VT Research Fund IA The Hartford (4)
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Putnam VT Research Fund IB Allstate Life Insurance Company (1)
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Putnam VT Research Fund IB The Hartford (4)
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Putnam VT Research Fund IB Allstate Life Insurance Company (1)
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Putnam VT Small Cap Value Fund IA The Hartford (4)
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Putnam VT Small Cap Value Fund IB Allstate Life Insurance Company (1)
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Putnam VT Small Cap Value Fund IB The Travelers Life Insurance Company (10)
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Putnam VT Small Cap Value Fund IB Allstate Life Insurance Company (1)
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Putnam VT Small Cap Value Fund IB The Travelers Life Insurance Company (10)
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Putnam VT Small Cap Value Fund IB Integrity Life Insurance Company (6)
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Putnam VT Utilities Growth and Income Fund IA The Hartford (4)
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Putnam VT Utilities Growth and Income Fund IB Allstate Life Insurance Company (1)
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Putnam VT Utilities Growth and Income Fund IB The Hartford E (4)
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Putnam VT Utilities Growth and Income Fund IB Allstate Life Insurance Company (1)
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Putnam VT Vista Fund IA The Hartford (4)
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Putnam VT Vista Fund IB AXP IDS Life (3)
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Putnam VT Vista Fund IB Allstate Life Insurance Company (1)
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Putnam VT Vista Fund IB American Express Financial Advisors (2)
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Putnam VT Voyager Fund IA The Hartford (4)
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Putnam VT Voyager Fund IB Allstate Life Insurance Company (1)
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Putnam VT Voyager Fund IB The Hartford (4)
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Putnam VT Voyager Fund IB Allstate Life Insurance Company (1)
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The addresses for the shareholders listed above are:
(1) Allstate Life Insurance Co., 3100 Sanders Rd., Northbrook, IL
60062
(2) American Express Financial Advisors, 733 Marquette Avenue,
Minneapolis, MN 55041
(3) AXP IDS Life, 1497 AXP Financial Center, Minneapolis, MN 55474-0014
(4) The Hartford, 200 Hopmeadow St., Simsbury, CT 06089
(5) ING Life Companies, 1290 Broadway, Denver, CO 80203
(6) Integrity Life Insurance Co., 515 West Market St., Louisville, KY
40202
(7) Lincoln National Life Insurance Co., 1300 South Clinton St., Fort
Wayne, IN 46801
(8) MetLife Investors Insurance Company, One Madison Ave., Area 5H, New
York, NY 10010
(9) Putnam Investments, One Post Office Square, Boston, MA 02109
(10) The Travelers Life Insurance Company, One Tower Square, Hartford,
CT 06183
(11) TransAmerica Life Insurance Co., 4333 Edgewood Rd. NE, Cedar
Rapids, IA 52499
Each of the Insurance Companies has agreed to vote its shares in
proportion to and in the manner instructed by Contract Owners. Allstate
Life Insurance Co., American Express Financial Advisors, The Hartford,
ING Life Companies, Integrity Life Insurance Co., Lincoln National Life
Insurance Co., MetLife Investors Insurance Company, The Travelers Life
Insurance Company and TransAmerica Life Insurance Company, or any of
them together, may be deemed to be a controlling person of each of the
funds.
EXHIBIT A
Board Policy and Nominating Committee Charter
This Committee reviews matters pertaining to the operations of the Board
of Trustees and its Committees and the conduct of legal affairs for the
Funds. The Committee evaluates and recommends all candidates for
election as Trustees and recommends the appointment of members and
chairs of each board committee. The Committee also reviews policy
matters affecting the operation of the Board and its independent staff
and make recommendations to the Board as appropriate. The Committee also
oversees the voting of proxies associated with portfolio investments of
The Putnam Funds with the goal of ensuring that these proxies are voted
in the best interest of the Funds' shareholders.. The Committee is
comprised exclusively of Independent Trustees.
EXHIBIT B
Litigation
1.The plaintiff named below alleges that the defendants engaged in, or
allowed others to engage in, activities that took advantage of the way
mutual fund shares are priced in exchange for investments that benefited
the managers and advisers of the funds, but which harmed investors and
the funds themselves. The plaintiff's complaint sets forth violations of
Section 36 of the 1940 Act, Section 206 of the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), Section 10(b) and Section
20(a) of the 1934 Act, breach of fiduciary duty, and civil conspiracy.
The plaintiff seeks declaratory relief, damages, pre and post judgment
interest and attorney's fees and costs.
Case Name Defendants Court Date Instituted
- ------------------------------------------------------------------------
Gladys Baker Putnam Management 1 United States April 5,2004
(derivatively on Omid Kamshad District Court
behalf of the Putnam Justin Scott for the District
Fund for Growth & Putnam Trustees 2 of Delaware
Income, Putnam Putnam Funds 3
Europe Equity Fund, (nominal)
and the Putnam Funds)
v. Putnam Investment
Management LLC, et al.
- ------------------------------------------------------------------------
2.The plaintiffs named below allege that the defendants engaged in,
permitted and/or failed to prevent market timing and short-term trading
in the Putnam Funds. Plaintiffs generally claim violations of Section 36
of the 1940 Act, Section 206 of the Advisers Act, Section 10(b) of the
1934 Act and Rule 10b-5, Section 20(a) of the 1934 Act, breach of
fiduciary duty, aiding and abetting breach of fiduciary duty and civil
conspiracy. The plaintiffs generally seek injunctive relief including
removal of the current Trustees and fund managers, disgorgement of
profits, monetary damages, punitive damages and attorney's fees and
costs.
Case Name Defendants Court Date Instituted
- ------------------------------------------------------------------------
Joanne S. Baseman Putnam Management United States Dec.16,2003
(derivatively on behalf Omid Kamshad District Court
of Putnam International Justin Scott for the District
Equity Fund and the William Woolverton of Maryland
Putnam Funds) Putnam Trustees
v.Putnam Investment Putnam Funds
Management, Inc., et al.(nominal)
- ------------------------------------------------------------------------
John K. Clement Putnam Management United States Nov.26,2003
(derivatively on behalf Omid Kamshad District Court
of several individual Justin Scott for the District
funds and the William Woolverton of Maryland
Putnam Funds) Putnam Trustees
v. Putnam Investment Putnam Funds
Management Inc., et al.(nominal)
- ------------------------------------------------------------------------
Simon J. Denenberg Putnam Management United States Jan.30,2004
(derivatively on behalf Omid Kamshad District Court
of the Putnam U.S.Justin Scott for the District
Government Income William Woolverton of Maryland
Trust and the Putnam Putnam Trustees
Funds) v.Putnam Putnam Funds
Investment Management, (nominal)
Inc., et al.
- ------------------------------------------------------------------------
Diane Hutto and Putnam Management United States Nov.12,2003
Dina Rozenbaum Putnam Trustees District Court
(derivative on behalf Justin M.Scott for the District
of several individual Omid Kamshad of Maryland
funds and the Putnam Certain of .cers of the
Funds) v. Putnam, LLC, Putnam Funds and
et.al.Putnam Management
John Does 1-100
Putnam Funds
(nominal)
- ------------------------------------------------------------------------
Seth B. Marks (derivative Putnam Management United States Dec.3,2003
on behalf of several Putnam Trustees District Court
individual funds and the Justin M. Scott for the District
Putnam Funds) Omid Kamshad of Maryland
v.Putnam,LLC, et.al.Certain officers of the
Putnam Funds and
Putnam Management
John Does 1-100
Putnam Funds
(nominal)
- ------------------------------------------------------------------------
Cynthia Puleo (derivative Putnam Management United States Dec.16,2003
on behalf of several Putnam Trustees District Court
individual funds and the Justin M. Scott for the District
Putnam Funds) Omid Kamshad of Maryland
v.Putnam, LLC, et al .Certain officers of the
Putnam Funds and
Putnam Management
John Does 1-100
Putnam Funds
(nominal)
- ------------------------------------------------------------------------
Edward L.Segel Putnam Management United States Jan.23,2004
(derivative on behalf Putnam Trustees District Court
of individual fund Omid Kamshad for the District
and the Putnam Funds) Justin Scott of Maryland
v.Putnam,LLC,et al.William Woolverton
Putnam Funds
(nominal)
- ------------------------------------------------------------------------
Zachary Alan Starr Putnam Management United States Nov.6,2003
(derivative on behalf Putnam Trustees District Court
of Putnam International Omid Kamshad for the District
Equity Fund and the Justin M.Scott of Maryland
Putnam Funds) Putnam Funds
v.Putnam Investment (nominal)
Management, et al.
- ------------------------------------------------------------------------
3.The plaintiffs named below allege that the defendants failed to properly
disclose that select customers were allowed to engage in late trading
or time their mutual fund trades. The plaintiffs generally claim of breach
of fiduciary duty, abuse of control, gross mismanagement, waste of corporate
assets and unjust enrichment. The plaintiffs seek damages, equitable
and/or injunctive relief, restitution and attorney's fees and costs.
Case Name Defendants Court Date Instituted
- ------------------------------------------------------------------------
Leon Brazin Putnam Trustees Superior Court March 15,2004
(derivatively on behalf Putnam Management of Suffolk County,
of Putnam Vista Fund) Putnam Vista Fund MA; Stipulation
v.John A.Hill, et al.(nominal) agreeing to
Certain officers of the removal and
Putnam Funds and transfer to
Putnam Management United States
District Court for
the District of
Maryland executed
on April 23,2004
- ------------------------------------------------------------------------
Peter Kavaler Putnam Trustees Superior Court March 15,2004
(derivatively on behalf Putnam Management of Suffolk County,
of Putnam Income Putnam Income Fund MA; Stipulation
Fund) v. John A. Hill,(nominal) agreeing to
et al. Certain officers of the removal and
Putnam Funds and transfer to
Putnam Management United States
District Court for
the District of
Maryland executed
on April 23,2004
- ------------------------------------------------------------------------
Todd Klein (derivatively Putnam Trustees United States Jan.27,2004
on behalf of Putnam Putnam Management District Court
Global Equity Fund) Putnam Global Equity for the District
v. John A. Hill, et al.Fund (nominal) of Maryland
Certain officers of the
Putnam Funds and
Putnam Management
- ------------------------------------------------------------------------
Steven Wiegand Putnam Trustees United States Jan.27,2004
(derivatively on behalf Putnam Management District Court
of Putnam Classic Putnam Classic Equity for the District
Equity Fund) Fund (nominal) of Maryland
v.John A. Hill et al. Certain officers of the
Putnam Funds and
Putnam Management
- ------------------------------------------------------------------------
4.The plaintiff named below alleges that defendants failed to prevent
the disclosure of confidential information concerning the identity of
securities, the practice of late trading by selected investors,
time-trading by selected investors and insider trading by directors,
officers and/or employees of the defendants. The plaintiff claims breach
of fiduciary duty.
Case Name Defendants Court Date Instituted
- ------------------------------------------------------------------------
Stern (derivative on behalf Putnam Funds Supreme Court Dec.17,2003
of Marsh & McLennan) Putnam Management of the State of
v.Greenberg, et.al, Jeffrey Greenberg New York
Mathis Cabaillavetta
Marsh Directors 4
Lawrence Lasser
- ------------------------------------------------------------------------
1 "Putnam Management" includes Putnam Investments Trust, Putnam Investment
Management,
LLC, Putnam, LLC, and/or Marsh & McLennan Companies, Inc.
2 The 13 Putnam Trustees include current Trustees Jameson Adkins Baxter,
Charles B. Curtis, John A. Hill, Ronald J. Jackson, Paul L. Joskow,
Elizabeth T. Kennan, John H. Mullin, III, Robert E. Patterson,
George Putnam, III, A. J. C. Smith and W.Thomas Stephens and former
Trustees W.Nicholas Thorndike and Lawrence J.Lasser.
3 "Putnam Funds" includes any and/or all registered investment companies
managed by Putnam Management.
4 The Directors of Marsh & McLennan Companies, Inc.are Charles Davis, Lewis
Bernard, Peter Coster, Robert Ebruru, Oscar Fanjul, Ray Groves, Stephen
Hardis, Gwendolyn King, Lord Lang of Monkton, David Olsen, Morton
Shapiro, Adele Simmons and A.J.C.Smith.
PUTNAM INVESTMENTS
The proxy ballot
To vote by mail
Read the proxy statement.
Check the appropriate boxes
on the reverse side.
Sign and date the proxy ballot.
Return the proxy ballot in the
envelope provided.
To vote by telephone
Read the proxy statement and
have the proxy ballot at hand.
Call 1-800-690-6903 6903.
Follow the automated
telephone directions.
There is no need for you to
return your proxy ballot.
To vote on the Web
Read the proxy statement and
have the proxy ballot at hand.
Go to https://www.proxyweb.com/Putnam
Follow the instructions on
the site.
There is no need for you to
return your proxy ballot.
999 999 999 999 99
FUND NAME PRINTS HERE
By signing below, you as a Putnam fund shareholder appoint Trustees John A.
Hill and Robert E. Patterson, and each of them separately, with power of
substitution to each, to be your proxies. You are empowering them to vote
your Putnam fund shares on your behalf at a meeting of the shareholders of
the Putnam funds. The meeting will take place on December 9, 2004 at 11:00
a.m. in Boston, and may be adjourned to later times or dates. Your vote is
being solicited on behalf of the Trustees Trustees. When you complete and
sign the proxy ballot, the Trustees will vote exactly as you have indicated
on the other side of this card. If you simply sign the proxy ballot, or don
don't t vote on a specific proposal, your shares will be automatically
voted as the Trustees recommend. The Trustees are also authorized to vote
at their discretion on any other matter that arises at the meeting or any
adjournment of the meeting.
Please be sure to sign and date here
- ----------------------------------------------------
Signature(s) Date
Sign your name exactly as it appears on this card. If you own shares
jointly, each owner should sign. When signing as executor, administrator,
attorney, trustee, 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.
Putnam PC - DH
Please place an X in the appropriate box(es) using black or blue ink or
number 2 pencil. Please do not use a fine point pen.
Proposals
1 Proposal to elect all nominees for Trustees.
The Trustees recommend voting FOR all proposals
01 J.A. Baxter
02 C.B. Curtis
03 M.R. Drucker
04 C.E. Haldeman, Jr.
05 J.A. Hill
06 R.J. Jackson
07 P.L. Joskow
08 E.T. Kennan
09 J.H. Mullin, III
10 R.E. Patterson
11 G. Putnam, III
12 A.J.C. Smith
13 W.T. Stephens
14 R.B. Worley
To withhold authority to vote for specific nominee(s),
but to vote for all other nominees, write the number(s) of
the excluded nominee(s) on the line to the left.
- ----------------------------------------------------
FOR
electing
all the
nominees
0
WITHHOLD
authority
to vote for
all nominees
0
Proposals to approve an amendment to certain funds' fundamental
investment restrictions with respect to
FOR AGAINST ABSTAIN
2A borrowing. 0 0 0
2B making loans 0 0 0
2C diversification of investments 0 0 0
2D Approving an amendment to a fund's
investment objective 0 0 0
3 Proposal to approve an amendment to
your fund's agreement and declaration
of trust. 0 0 0
Refer to pages _________ in the proxy statement to determine which proposals
apply to your fund. If you have questions on the proposals, please call
1-800-521-0538.
Please sign and date the other side of this card.
Putnam PC - DH
To vote by mail
Read the proxy statement.
Check the appropriate boxes
on the reverse side.
Sign and date the instruction card.
Return the instruction card in
the envelope provided.
To vote by telephone
Read the proxy statement and
have the instruction card at hand.
Call 1-800-690-6903.
Follow the automated
telephone directions.
There is no need for you to
return your instruction card.
To vote on the Web
Read the proxy statement and
have the instruction card at hand.
Go to https://www.proxyweb.com
Follow the instructions on
the site.
There is no need for you to
return your instruction card.
FUND NAME PRINTS HERE
INSURANCE COMPANY NAME PRINTS HERE
The undersigned hereby appoints the above-referenced Insurance Company
and hereby authorizes them to represent and to vote, as designated on
reverse, at the Special Meeting of Shareholders on December 9, 2004, at
11:00 a.m., Eastern Time, and at any adjournments thereof, all shares of
the Fund attributable to his or her contract or interest therein as
directed on the reverse side of this Card. IF THIS VOTING INSTRUCTION
CARD IS SIGNED AND RETURNED WITH NO CHOICES INDICATED, THE SHARES WILL
BE VOTED "FOR" EACH NOMINEE AND "FOR" THE APPROVAL OF THE PROPOSALS.
If you fail to return this Voting Instruction Card, the Company will
vote all shares attributable to your account value in proportion to all
voting instructions for the Fund actually received from contract owners
in the Separate Account.
PLEASE VOTE, DATE AND SIGN, AND PROMPTLY
RETURN THIS INSTRUCTION CARD IN THE
ENCLOSED ENVELOPE PROVIDED
Dated:
-------------------------
- ------------------------------------------------------------------
(Signature) (Sign in the Box)
Please sign exactly as your name or names appear to the left. When shares
are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee, guardian or in any other representative
capacity, please give full title as such. If signing for a corporation,
please sign in full corporate name by authorized person. If a partnership,
please sign in partnership name by authorized person.
Putnam VIC - DH
Please place an X in the appropriate box(es) using black or blue ink or
number 2 pencil. Please do not use a fine point pen.
Proposals
1 Proposal to elect all nominees for Trustees.
The Trustees recommend voting FOR all proposals
01 J.A. Baxter
02 C.B. Curtis
03 M.R. Drucker
04 C.E. Haldeman, Jr.
05 J.A. Hill
06 R.J. Jackson
07 P.L. Joskow
08 E.T. Kennan
09 J.H. Mullin, III
10 R.E. Patterson
11 G. Putnam, III
12 A.J.C. Smith
13 W.T. Stephens
14 R.B. Worley
To withhold authority to vote for specific nominee(s),
but to vote for all other nominees, write the number(s) of
the excluded nominee(s) on the line to the left.
- ------------------------------------------------------------------------
FOR
electing
all the
nominees
0
WITHHOLD
authority
to vote for
all nominees
0
Proposals to approve an amendment to certain funds' fundamental
investment restrictions with respect to
FOR AGAINST ABSTAIN
2A borrowing. 0 0 0
2B making loans 0 0 0
2C diversification of investments 0 0 0
2D Approving an amendment to a fund's
investment objective 0 0 0
3 Proposal to approve an amendment to
your fund's agreement and declaration
of trust. 0 0 0
Refer to pages _________ in the proxy statement to determine which
proposals apply to your fund. If you have questions on the proposals,
please call 1-800-521-0538.
Please sign and date the other side of this card.
Putnam VIC - DH