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On October 28, 2003, the Commonwealth and the SEC commenced separate administrative
proceedings against Putnam. The Commonwealth and the SEC issued orders settling
these proceedings, respectively, on April 8, 2004 and April 15, 2004 (“Commonwealth
Orders”), and on November 13, 2003 and April 8, 2004 (“SEC Orders”). As part of
the settlements, Putnam was required to pay such amounts as were necessary to compensate
shareholders for losses attributable to market timing and excessive short-term trading
in certain affected Putnam mutual funds (“Putnam Funds”). Putnam was required to
retain an Independent Assessment Consultant (“IAC”) to calculate such losses. The
IAC also calculated losses attributable to excess redemptions in the Putnam Funds.
Putnam also was required to retain an Independent Distribution Consultant (“IDC”)
to develop a methodology to distribute the amounts paid by Putnam pursuant to the
settlements. Dr. Peter Tufano serves as both the IAC and IDC.
The Commonwealth and the SEC have agreed to distribute the amounts paid by Putnam
pursuant to the Commonwealth Orders and the SEC Orders in a common manner and at
the same time. The Commonwealth and the SEC approved distribution plans in July
2007. Prior to any distribution, the Putnam Fair Fund held a total of $153,524,387,
plus accumulated interest. This amount will be distributed by the IDC pursuant to
the April 8, 2004 SEC Order and the Commonwealth Order in batches over several months
starting in August, 2008.
Shareholders who experienced losses, as calculated by the IAC, are eligible to receive
a payment. This includes both current and former shareholders in all funds that
incurred losses in the relevant period.
The amounts due to each shareholder of record will be aggregated into one payment.
This single payment will represent the sum of amounts calculated for each account
within each fund, which are then aggregated across funds. As a practical matter,
however, this aggregation across funds can occur only within each shareholder category,
as defined in the Distribution Plan (i.e. Direct Accounts, Omnibus Accounts, and
Retirement Plans). In circumstances where a shareholder holds accounts in multiple
shareholder categories, these payments will be made separately. For example, a shareholder
with a Direct Account with Putnam who also holds Putnam fund shares through a broker
in an Omnibus Account may receive two payments, and these payments cannot be added
together for the purpose of payment or calculation of threshold amounts.
Because of practical impediments, and in the interest of carrying out the distribution
consistently with other similar distributions, there is a need to establish minimum
threshold levels of payments to shareholders. The minimum payment amount is $10
for Direct Accounts and Retirement Plans and $1000 for Omnibus Accounts. If the
aggregate amount due to a shareholder within each such shareholder category is less
than these minimum amounts, it will be considered under the threshold and the shareholder
will not be eligible to receive a payment.
For additional information, please refer to the "Related
Documents" section of this Web site.
If you have any questions, please refer to the "Frequently
Asked Questions" (FAQ) sections of this Web site or call the Fair Fund Administrator
at (800) 760-5698, Monday through Friday, 8:00 a.m. - 5:00 p.m. Central Time.
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