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<SEC-DOCUMENT>0000928816-02-000425.txt : 20020522
<SEC-HEADER>0000928816-02-000425.hdr.sgml : 20020522
<ACCEPTANCE-DATETIME>20020522112320
ACCESSION NUMBER:		0000928816-02-000425
CONFORMED SUBMISSION TYPE:	PRE 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20020815
FILED AS OF DATE:		20020522

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PUTNAM HIGH INCOME CONVERTIBLE & BOND FUND
		CENTRAL INDEX KEY:			0000810943
		IRS NUMBER:				046562068
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			0831

	FILING VALUES:
		FORM TYPE:		PRE 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	811-05133
		FILM NUMBER:		02659476

	BUSINESS ADDRESS:	
		STREET 1:		ONE POST OFFICE SQ
		STREET 2:		MAILSTOP A 14
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02109
		BUSINESS PHONE:		8002251581
</SEC-HEADER>
<DOCUMENT>
<TYPE>PRE 14A
<SEQUENCE>1
<FILENAME>hic1.txt
<DESCRIPTION>PUTNAM HIGH INCOME CONVERTIBLE AND BOND FUND
<TEXT>
                          SCHEDULE 14A INFORMATION

                    PROXY STATEMENT PURSUANT TO SECTION 14(a)
                      OF THE SECURITIES EXCHANGE ACT OF 1934

                            Filed by the Registrant                    / X /

                    Filed by a party other than the Registrant         /   /

Check the appropriate box:

/ X /   Preliminary Proxy Statement

/   /   Confidential, for Use of the Commission Only (as permitted
        by Rule 14a-6(e) (2))

/   /   Definitive Proxy Statement

/   /   Definitive Additional Materials

/   /   Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12

                    PUTNAM HIGH INCOME CONVERTIBLE AND BOND FUND
                   (Name of Registrant as Specified In Its Charter)

                      (Name of Person(s) Filing Proxy Statement,
                            if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

/ X /   No fee required

/   /   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:

/   /   Fee paid previously with preliminary materials.

/   /   Check box if any part of the fee is offset as provided by Exchange Act
        Rule 0-11(a)(2) and identify the filing for which the offsetting fee
        was paid previously. Identify the previous filing by registration
        statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:



Important information for shareholders in:

PUTNAM HIGH INCOME CONVERTIBLE AND BOND FUND

The document you hold in your hands contains your proxy statement and
proxy card. A proxy card is, in essence, a ballot. When you vote your
proxy, it tells us how to vote on your behalf on important issues
relating to your fund. If you complete and sign the proxy, we'll vote it
exactly as you tell us. If you simply sign the proxy, we'll vote it in
accordance with the Trustees' recommendations on page 5.

We urge you to spend a couple of minutes with the proxy statement, and
either fill out your proxy card and return it to us via the mail, or
record your voting instructions via the Internet. When shareholders
don't return their proxies in sufficient numbers, we have to incur the
expense of follow-up solicitations, which can cost your fund money.

We want to know how you would like to vote and welcome your comments.
Please take a few moments with these materials and return your proxy to
us.

PUTNAM INVESTMENTS

[SCALE LOGO OMITTED]



Table of contents

A Message from the Chairman                                   1
Notice of Shareholder Meeting                                 3
Trustees' Recommendations                                     5


PROXY CARD ENCLOSED

If you have any questions, please contact us at 1-800-225-1581
or call your financial advisor.



A Message from the Chairman

[GRAPHIC OMITTED: PHOTO OF JOHN A. HILL]

Dear Shareholder:

I am writing to you to ask for your vote on important questions that
affect your fund. While you are, of course, welcome to join us at your
fund's meeting, most shareholders cast their vote by either filling out
and signing the enclosed proxy card or by voting via the Internet.

We are asking for your vote on the following proposals: (1) fixing the
number of Trustees and electing your fund's Trustees; and (2) amending
the fund's investment policies to eliminate the requirement that the
fund invest at least 40% of its assets in each of the convertible and
non-convertible sectors. If the change is approved, the fund would adopt
a new policy of requiring 80% of the fund's net assets to be in
convertible and non-convertible fixed income securities rated below
investment grade without fixing any requirement as to allocation between
the two sectors. This amendment is designed to provide the fund with
greater flexibility especially when Putnam views the convertible market
as  unattractive. The fund would also change its name to Putnam High
Income Bond Fund.

In addition to the fund's proposals, this proxy statement includes a
proposal submitted by a shareholder of the fund, who is recommending
that the Trustees terminate the fund's current investment management
agreement with Putnam. The Independent Trustees of your fund recommend
that you vote against this proposal.

We realize that most shareholders will not be able to attend the Fund's
meeting. However, we do need every shareholders' vote. We urge you to
record your voting instructions on the Internet or complete, sign, and
return the enclosed proxy card promptly. A postage-paid envelope is
enclosed for mailing, and Internet voting instructions are listed at the
top of your proxy card.

I'm sure that you, like most people, lead a busy life and are tempted to
put this proxy aside for another day. Please don't. When shareholders do
not return their proxies, their fund may have to incur the expense of
follow-up solicitations. All shareholders benefit from the speedy return
of proxies.

Your vote is important to us. We appreciate the time and consideration
that I am sure you will give this important matter. If you have
questions about the proposals, contact your financial advisor or call a
Putnam customer service representative at 1-800-225-1581.

Sincerely yours,

/s/ John A. Hill

John A. Hill, Chairman



PUTNAM HIGH INCOME CONVERTIBLE AND
BOND FUND

Notice of Annual Meeting of Shareholders

* This is the formal agenda for your fund's shareholder meeting. It
tells you what matters will be voted on and the time and place of the
meeting, if you can attend in person.

To the Shareholders of Putnam High Income Convertible and Bond Fund:

The Annual Meeting of Shareholders of your fund will be held on August
15, 2002 at 11:00 a.m., Boston time, on the eighth floor of One Post
Office Square, Boston, Massachusetts, to consider the following:

1. Fixing the number of Trustees and electing Trustees;

2. Amending the fund's investment policies to eliminate the requirement
that the Fund invest at least 40% of its assets in convertible
securities and related equities and at least 40% of its assets in
non-convertible high yield fixed income  securities under normal market
conditions; and

3. A shareholder proposal recommending the termination of the fund's
investment management agreement with Putnam.


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
Lawrence J. Lasser
John H. Mullin, III
Robert E. Patterson
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike

We urge you to mark, sign, date, and mail the enclosed proxy in the
postage-paid envelope provided or record your voting instructions via
the Internet so you will be represented at the meeting.

June 7, 2002



Proxy statement

This document will give you the information you need to vote on the
matters listed on the previous pages. Much of the information in the
proxy statement is required under rules of the Securities and Exchange
Commission ("SEC"); some of it is technical. If there is anything you
don't understand, please contact us at our special toll-free number,
1-800-225-1581 or call your financial advisor.

* Who is asking for your vote?

The enclosed proxy is solicited by the Trustees of Putnam High Income
Convertible and Bond Fund for use at the Annual Meeting of Shareholders
of the fund to be held on August 15, 2002, and, if your fund's meeting
is adjourned, at any later meetings, for the purposes stated in the
Notice of Annual Meeting (see previous pages). The Notice of Annual
Meeting, the proxy and the Proxy Statement are being mailed on or about
June 10, 2002.

* How do your fund's Trustees recommend that shareholders vote on these
proposals?

The Trustees recommend that you vote

1. For fixing the number of Trustees as proposed and the  election of
all nominees;

2. For amending the fund's investment policies to eliminate the
requirement that the fund invest at least 40% of its assets in
convertible securities and related equities and at least 40% in
non-convertible high yield fixed income securities under normal market
conditions; and

3. Against a shareholder proposal recommending the termination of the
fund's investment management agreement with Putnam.

* Who is eligible to vote?

Shareholders of record at the close of business on May 17, 2002 are
entitled to be present and to vote at the meeting or any adjourned
meeting.

Each share is entitled to one vote. Shares represented by duly executed
proxies will be voted in accordance with your instructions. If you sign
the proxy, but don't fill in a vote, your shares will be voted in
accordance with the Trustees' recommendations. If any other business is
brought before your fund's meeting, your shares will be voted at the
Trustees' discretion.



The Proposals

I. Election of Trustees

* Who are the nominees for trustees?

The Board Policy and Nominating Committee of the Trustees of your fund
makes recommendations concerning the Trustees of that fund. The Board
Policy and Nominating Committee consists solely of Trustees who are not
"interested persons" (as defined in the Investment Company Act of 1940)
of your fund or of Putnam Investment Management, LLC, your fund's
investment manager ("Putnam Management").

The Board Policy and Nominating Committee of the Trustees of your fund
recommends that the number of Trustees be fixed at thirteen and that you
vote for the election of the nominees described below. Each nominee is
currently a Trustee of your fund and of the other Putnam funds. The 13
nominees for election as Trustees at the shareholder meeting of your
fund who receive the greatest number of votes will be elected as
Trustees of your fund.

The nominees for Trustees and their backgrounds are shown in the table
below. The table discloses each nominee's name, date of birth, principal
occupation(s) during the past 5 years, and other information about the
nominee's professional background, including other directorships the
nominee holds. Each nominee currently serves as a Trustee. Each Trustee
oversees all of the Putnam funds and serves for an indefinite term until
his or her resignation, death or removal. The address of all of the
Trustees is One Post Office Square, Boston, Massachusetts 02109. At
December 31, 2001, there were 123 Putnam funds.

Jameson Adkins Baxter (9/6/43)
Trustee since 1994
- -------------------------------------------------
[GRAPHIC OMITTED PHOTO OF JAMESON ADKINS BAXTER]

Ms. Baxter is the President of Baxter Associates, Inc., a management
consulting and private investment firm that she founded in 1986.

Ms. Baxter also serves as a Director of ASHTA Chemicals, Inc., Banta
Corporation (a printing and digital imaging firm), Intermatic
Corporation (manufacturer of energy control products) and Ryerson Tull,
Inc. (a steel service corporation), Advocate Health Care and 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. Ms. Baxter has also
held various positions in investment banking and corporate finance,
including Vice President and Principal of the Regency Group, Inc. and
Consultant to First Boston Corporation. She is a graduate of Mount
Holyoke College.

Charles B. Curtis (4/27/40)
Trustee since 2001
- -------------------------------------------------
[GRAPHIC OMITTED PHOTO OF CHARLES B. CURTIS]

Mr. Curtis is President and Chief Operating Officer, Nuclear Threat
Initiative, a private foundation dedicated to reducing the threat of
weapons of mass destruction. Mr. Curtis also serves as Senior Advisor to
the United Nations Foundation.

Mr. Curtis is a Member of the Council on Foreign Relations, the Electric
Power Research Institute Advisory Council, the University of Chicago
Board of Governors for Argonne National Laboratory, and the Board of
Directors of the Environment and Natural Resources Program Steering
Committee, John F. Kennedy School of Government, Harvard University. He
has over fifteen years of law practice experience and eighteen years in
government service. Until 2002, Mr. Curtis was a Member of the Board of
Directors of the Gas Technology Institute, and until the 2001, he was a
Member of the Department of Defense Policy Board and Director of EG&G
Technical Services, Inc. (provider of technical services to the
Department of Defense and the Department of Energy). Prior to May 1997,
Mr. Curtis was Deputy Secretary of Energy. Mr. Curtis holds B.S. and
B.A. degrees from the University of Massachusetts at Amherst and a J.D.
from Boston University School of Law.

John A. Hill (1/31/42)
Trustee since 1985 and Chairman since 2000
- -------------------------------------------------
[GRAPHIC OMITTED PHOTO OF JOHN A. HILL]

Mr. Hill is Vice-Chairman and Managing Director, First Reserve
Corporation, a registered investment adviser investing in companies in
the world-wide energy industry on behalf of institutional investors.

Mr. Hill is also a Director of Devon Energy Corporation (formerly known
as Snyder Oil Corporation), TransMontaigne Oil Company, Continuum Health
Partners of New York, Sarah Lawrence College and various private
companies controlled by First Reserve Corporation. He is also a Trustee
of TH Lee, Putnam Investment Trust, a closed-end investment company.
Prior to acquiring First Reserve in 1983, Mr. Hill held executive
positions with several advisory firms and various positions with the
federal government, including 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 is a graduate of Southern Methodist
University.

Ronald J. Jackson (12/17/43)
Trustee since 1996
- -------------------------------------------------
[GRAPHIC OMITTED PHOTO OF RONALD J. JACKSON]

Mr. Jackson is a private investor.

Mr. Jackson is former Chairman of the Board, President and Chief
Executive Officer of Fisher-Price, Inc., a major toy manufacturer from
which he retired in 1993. He also 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. He has also held financial and marketing
positions with such companies as General Mills, Inc., Parker Brothers, a
toy and game company, and Talbots, a distributor of women's apparel,
where he served as President of the company. Mr. Jackson currently
serves as President of the Kathleen and Ronald J. Jackson Foundation
(charitable trust). He is a member of the Board of Overseers of WGBH
(public television and radio) and the Peabody Essex Museum. Mr. Jackson
is a graduate of Michigan State University Business School.

Paul L. Joskow (6/30/47)
Trustee since 1997
- -------------------------------------------------
[GRAPHIC OMITTED PHOTO OF PAUL L. JOSKOW]

Dr. Joskow is Elizabeth and James Killian Professor of Economics and
Management and Director of the Center for Energy and Environmental
Policy Research, Massachusetts Institute of Technology.

Dr. Joskow serves as a Director of National Grid Group, a UK based
holding company with interests in electric power and telecommunications
networks and the Whitehead Institute for Biomedical Research, a
non-profit research institution. He has been President of the Yale
University Council since 1993. Prior to February 2002, March 2000 and
September 1998, Dr. Joskow was a Director of State Farm Indemnity
Company, an automobile insurance company, a Director of New England
Electric System, a public utility holding company, and a consultant to
National Economic Research Associates, respectively. He has published
five books and numerous articles on topics in industrial organization,
government regulation of industry and competition policy and is active
on industry restructuring, environmental, energy, competition, and
privatization policies, serving as an advisor to governments and
corporations worldwide. Dr. Joskow is a graduate of Cornell University
and Yale University, and is a Fellow of the Econometric Society and the
American Academy of Arts and Sciences.

Elizabeth T. Kennan (2/25/38)
Trustee since 1992
- -------------------------------------------------
[GRAPHIC OMITTED PHOTO OF ELIZABETH T. KENNAN]

Dr. Kennan is President Emeritus of Mount Holyoke College and serves on
the boards of various organizations.

Dr. Kennan serves as the Chairman of Cambus-Kenneth Bloodstock, a
limited liability company involved in thoroughbred horse breeding and
farming, and as a Director of both Northeast Utilities and Talbots, a
distributor of women's apparel. She also serves as a Trustee of Centre
College. Until 1995 she was a Trustee of the University of Notre Dame,
and until 2001 she was a Member of the Oversight Committee of the Folger
Shakespeare Library. Prior to September 2000, June 2000, and November
1999, Dr. Kennan was a Director of Chastain Real Estate, Bell Atlantic
and Kentucky Home Life Insurance, respectively. For twelve years, Dr.
Kennan was on the faculty of Catholic University, where she taught
history and published numerous articles, and directed the post-doctoral
program in Patristic and Medieval Studies. Active in various educational
and civic associations, she is a graduate of Mount Holyoke College, the
University of Washington, and St. Hilda's College, Oxford University.
She holds several honorary doctorates.

John H. Mullin, III (6/15/41)
Trustee since 1997
- -------------------------------------------------
[GRAPHIC OMITTED PHOTO OF JOHN H. MULLIN, III]

Mr. Mullin is the Chairman and CEO of Ridgeway Farm, a limited liability
company engaged in timber and farming.

Mr. Mullin is a Director of Alex. Brown Realty, Inc., The Liberty
Corporation (a company engaged in the broadcasting industry) and
Progress Energy, Inc. (a utility company, formerly known as Carolina
Power & Light). Prior to October 1997, January 1998 and May 2001, he was
a Director of Dillon, Read and Co. Inc., The Ryland Group, Inc. and
Graphic Packaging International Corp., respectively. Mr. Mullin is a
Trustee Emeritus of Washington & Lee University where he served as
Chairman of the Investment Committee. He is a graduate of Washington &
Lee University and The Wharton Graduate School at the University of
Pennsylvania.

Robert E. Patterson (3/15/45)
Trustee since 1984
- -------------------------------------------------
[GRAPHIC OMITTED PHOTO OF ROBERT E. PATTERSON]

Mr. Patterson is Senior Partner of Cabot Properties, LLP and Chairman of
Cabot Properties, Inc. Prior to December 2001, he served as President
and Trustee of Cabot Industrial Trust, a publicly traded real estate
investment trust.

Mr. Patterson is Chairman of the Joslin Diabetes Center, a Trustee of
SEA Education Association and a Director of Brandywine Trust Company.
Prior to February 1998, Mr. Patterson was Executive Vice President and
Director of Acquisitions of Cabot Partners Limited Partnership, a
registered investment advisor that managed real estate investments for
institutional investors. Prior to 1990, he was Executive Vice President
of Cabot, Cabot & Forbes Realty Advisors, Inc., the predecessor company
of Cabot Partners, and prior to that was Senior Vice President of the
Beal Companies, a real estate management, investment and development
firm. He also worked as an attorney and held various positions in state
government, including the founding Executive Director of the
Massachusetts Industrial Finance Agency. Mr. Patterson is a graduate of
Harvard College and Harvard Law School.

W. Thomas Stephens (9/2/42)
Trustee since 1997
- -------------------------------------------------
[GRAPHIC OMITTED PHOTO OF W. THOMAS STEPHENS]

Mr. Stephens is a director of various corporations. Until 1999, he was
the President and Chief Executive Officer of MacMillan Bloedel Limited,
a forest  products and building materials company.

Mr. Stephens is a Director of Mail-Well, a printing and envelope
company, Qwest Communications, Xcel Energy Incorporated, a public
utility company, TransCanada Pipelines and Norske Skog Canada, Inc., a
paper manufacturer. Mr. Stephens retired as Chairman of the Board of
Directors, President and Chief Executive Officer of Johns Manville
Corporation in 1996 and as Chairman of Mail-Well in 2001. He holds B.S.
and M.S. degrees from the University of Arkansas.

W. Nicholas Thorndike (3/28/33)
Trustee since 1992
- -------------------------------------------------
[GRAPHIC OMITTED PHOTO OF W. NICHOLAS THORNDIKE]

Mr. Thorndike is a Director of various corporations and charitable
organizations, including Courier Corporation, a book binding and
printing company, and The Providence Journal Co., a newspaper publisher.

Mr. Thorndike is a Trustee of Northeastern University and an Honorary
Trustee of Massachusetts General Hospital, where he previously served as
Chairman and President. Prior to September 2000, April 2000, and
December 2001, Mr. Thorndike was a Director of Bradley Real Estate,
Inc., a Trustee of Eastern Utilities Associates, and a Trustee of Cabot
Industrial Trust, respectively. He has also served as Chairman of the
Board and Managing Partner of Wellington Management Company/Thorndike,
Doran, Paine & Lewis, a registered investment advisor that manages
mutual funds and institutional assets, as a Trustee of the Wellington
Group of Funds (currently The Vanguard Group) and as the Chairman and a
Director of Ivest Fund, Inc. Mr. Thorndike is a graduate of Harvard
College.

* Interested trustees

Lawrence J. Lasser* (11/1/42)
Trustee since 1992 and Vice President since 1981
- -------------------------------------------------
[GRAPHIC OMITTED PHOTO OF LAWRENCE J. LASSER]

Mr. Lasser is the President and Chief Executive Officer of Putnam
Investments, LLC and Putnam Investment Management, LLC. He has been
President and Chief Executive Officer since 1985, having begun his
career there in 1969.

Mr. Lasser is a Director of Marsh & McLennan Companies, Inc. and the
United Way of Massachusetts Bay. He also serves as a Member of the Board
of Governors of the Investment Company Institute, as a Trustee of the
Museum of Fine Arts, Boston, and as a Trustee and Member of the Finance
and Executive Committees of Beth Israel Deaconess Medical Center,
Boston. He is a Member of the CareGroup Board of Managers Investment
Committee, the Council on Foreign Relations and the Commercial Club of
Boston. Mr. Lasser is a graduate of Antioch College and Harvard Business
School.

George Putnam III* (8/10/51)
Trustee since 1984 and President since 2000
- -------------------------------------------------
[GRAPHIC OMITTED PHOTO OF GEORGE PUTNAM III]

Mr. Putnam is the President of New Generation Research, Inc., a
publisher of financial advisory and other research services relating to
bankrupt and distressed companies, and of New Generation Advisers, Inc.,
a registered investment adviser that provides advice to private funds
specializing in investments in such companies. He founded New Generation
in 1985.

Mr. Putnam is a Director of The Boston Family Office, L.L.C., a
registered investment advisor, a Trustee of the SEA Education
Association, and a Trustee of St. Mark's School and Shore Country Day
School. Mr. Putnam also worked as an attorney with the law firm of
Dechert Price & Rhoads. He is a graduate of Harvard College, Harvard
Business School and Harvard Law School.

A.J.C. Smith* (4/13/34)
Trustee since 1986
- -------------------------------------------------
[GRAPHIC OMITTED PHOTO OF A.J.C. SMITH]

Mr. Smith is a Director of Marsh & McLennan Companies, Inc. Prior to May
2000 and November 1999, Mr. Smith was Chairman and CEO, respectively, of
Marsh & McLennan.

Mr. Smith is a Director of Trident Corp., a limited partnership with
over thirty institutional investors, and 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. He was
educated in Scotland. Mr. Smith is a Fellow of the Faculty of Actuaries
in Edinburgh, the Canadian Institute of Actuaries and the Conference of
Actuaries, an Associate of the Society of Actuaries, and a Member of the
American Academy of Actuaries, the International Actuarial Association
and the International Association of Consulting Actuaries.

- -------------------------------------------------------------------------
* Nominees who are or may be deemed to be "interested persons" (as
  defined in the Investment Company Act of 1940) of the fund, Putnam
  Management, Putnam Retail Management, or Marsh & McLennan Companies,
  Inc., the parent company of Putnam, LLC and its affiliated companies.
  Messrs. Putnam, Lasser and Smith are deemed "interested persons" by
  virtue of their positions as officers or shareholders of the fund or
  Putnam Management, Putnam Retail Management, or Marsh & McLennan
  Companies, Inc. George Putnam, III is the President of your Fund and
  each of the other Putnam funds. Lawrence J. Lasser is the President and
  Chief Executive Officer of Putnam Investments, LLC and Putnam
  Management. Mr. Lasser and Mr. Smith also serve as Directors of Marsh &
  McLennan Companies, Inc.

  The balance of  the nominees are not "interested persons."

All the nominees were elected by the shareholders on June 2001 other
than Mr. Curtis who was elected by the Board of Trustees effective July
1, 2001. The nominees for election as Trustees at the shareholder
meeting of your fund who receive the greatest number of votes will be
elected as Trustees of your fund. The Trustees serve until their
successors are elected and qualified. Each of the nominees has agreed to
serve as a Trustee if elected. If any of the nominees is unavailable for
election at the time of the meeting, which is not anticipated, the
Trustees may vote for other nominees at their discretion, or the
Trustees may fix the number of Trustees at less than 13 for your fund.

* 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, 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 auditors, counsel and other
experts as appropriate, selected by and responsible to the Trustees.

Your fund's 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
chairman 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 Trustees who are not "interested
persons" of the fund or Putnam Management. Each member of the Audit and
Pricing Committee is "independent" as defined in Sections
303.01(B)(2)(a) and (3) of the listing standards of the New York Stock
Exchange. 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 Messrs. Stephens (Chairperson) and
Thorndike, and Drs. Kennan and Joskow.

Board Policy and Nominating Committee. The Board Policy and Nominating
Committee reviews 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 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 makes
recommendations to the Board as appropriate. The Committee consists only
of Trustees who are not "interested persons" of your fund or Putnam
Management. 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 fund's
shareholders. The Board Policy and Nominating Committee currently
consists of Dr. Kennan (Chairperson), Ms. Baxter and Messrs. Hill,
Mullin, Patterson and Thorndike. The Board Policy and Nominating
Committee will consider nominees for trustee recommended by shareholders
of a fund provided shareholders submit their recommendations by the date
disclosed in the fund's proxy statement and provided the shareholders'
recommendations otherwise comply with applicable securities laws,
including Rule 14a-8 under the Securities Exchange Act of 1934.

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, Mullin, Thorndike,
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, Stephens, Thorndike 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 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 that
it deems appropriate. The Committee also reviews the conversion of Class
B shares into Class A shares of the open-end funds in accordance with
procedures approved by the Trustees. After review and evaluation, the
Committee recommends to the Trustees the proposed organization of new
Fund products, and proposed structural changes to existing funds. Its
oversight of the closed-end funds includes (i) investment performance,
(ii) trading activity, (iii) determinations with respect to sunroof
provisions, (iv) disclosure practices, and (v) the use of leverage. The
Committee is comprised exclusively of independent Trustees. The
Committee currently consists of Ms. Baxter (Chairperson) and Messrs.
Curtis, Jackson, Mullin and Patterson.

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
Investments to review distribution levels and the funds' distribution
policies. The Committee currently consists of Messrs. Patterson
(Chairperson), Jackson, Thorndike 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 insure coordination of all efforts between the Trustees and Putnam
Investments on behalf of the shareholders of the Putnam funds. The
Committee currently consists of Ms. Baxter and Messrs. Hill (Chairman),
Jackson, Putnam, Stephens and Thorndike.

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. Investment Oversight Committee A
currently consists of Messrs. Curtis (Chairperson), Hill, and Lasser and
Dr. Kennan. Investment Oversight Committee B currently consists of Dr.
Joskow (Chairperson), Ms. Baxter and Mr. Putnam. Investment Committee C
currently consists of Messrs. Mullin (Chairperson), Jackson and Smith.
Investment Oversight Committee D currently consists of Messrs. Patterson
(Chairperson), Stephens and Thorndike.

The Investment Company Act of 1940 requires that your fund have a
minimum proportion of trustees who are not affiliated in any way with
your fund's investment manager, principal underwriter from time to time
or any broker-dealer. 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
Trustees of your fund believe that independent trustees should represent
at least two-thirds of the members of the board. Your fund's independent
trustees meet regularly as a group in executive session.

* How large a stake do the trustees have in the Putnam family of funds?

The Trustees believe each Trustee should have a significant investment
in the Putnam funds. The Trustees allocate their investments among the
approximately 123 Putnam funds based on their own investment needs. The
table below shows the number of shares beneficially owned by each
Trustee and the value of each Trustee's holdings in the fund and in all
of the Putnam funds as of March 31, 2002.


<TABLE>
<CAPTION>

Trustee shares table
                              Number of       Dollar Amount    Aggregate Dollar
                           shares owned            Range of     Range of Shares
                              in Putnam         Putnam High  Held in all of the
                            High Income  Income Convertible        Putnam Funds
                        Convertible and       and Bond Fund Overseen by Trustee
Name of Trustee               Bond Fund        Shares Owned               (123)
- --------------------------------------------------------------------------------
<S>                             <C>            <C>               <C>
Jameson A. Baxter                   209          $1-$10,000       over $100,000
- --------------------------------------------------------------------------------
Charles B. Curtis                   100          $1-$10,000       over $100,000
- --------------------------------------------------------------------------------
John A. Hill                     32,100       over $100,000       over $100,000
- --------------------------------------------------------------------------------
Ronald J. Jackson                   200          $1-$10,000       over $100,000
- --------------------------------------------------------------------------------
Paul L. Joskow                      100          $1-$10,000       over $100,000
- --------------------------------------------------------------------------------
Elizabeth T. Kennan                 213          $1-$10,000       over $100,000
- --------------------------------------------------------------------------------
John H. Mullin, III                 100          $1-$10,000       over $100,000
- --------------------------------------------------------------------------------
Robert E. Patterson                 616          $1-$10,000       over $100,000
- --------------------------------------------------------------------------------
W. Thomas Stephens                  100          $1-$10,000       over $100,000
- --------------------------------------------------------------------------------
W. Nicholas Thorndike               272          $1-$10,000       over $100,000
- --------------------------------------------------------------------------------
Lawrence J. Lasser                  100          $1-$10,000       over $100,000
- --------------------------------------------------------------------------------
George Putnam, III                  500          $1-$10,000       over $100,000
- --------------------------------------------------------------------------------
A.J.C. Smith                        200          $1-$10,000       over $100,000
- --------------------------------------------------------------------------------

At March 31, 2002, the Trustees and officers of your fund owned less
than 1% of the outstanding shares of such fund on that date.

</TABLE>


* What are some of the ways in which the trustees represent shareholder
interests?

The Trustees believe that, as substantial investors in the Putnam funds,
their interests are closely aligned with those of individual
shareholders. Among other ways, the Trustees seek to represent
shareholder interests:

* by carefully reviewing your fund's investment performance on an
individual basis with your fund's managers;

* by also carefully reviewing the quality of the various other services
provided to the funds and their shareholders by Putnam Management and
its affiliates;

* by discussing with senior management of Putnam Management steps being
taken to address any performance deficiencies;

* by 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 also monitoring potential conflicts among funds to ensure that
shareholders continue to realize the benefits of participation in a
large and diverse family of funds.


* How often do the trustees meet?

The Trustees meet each month (except August) over a two-day period to
review the operations of your fund and of the other Putnam funds. A
portion of these meetings is devoted to meetings of various committees
of the board which focus on particular matters. Each Trustee generally
attends at least two formal committee meetings during each regular
meeting of the Trustees. During 2001, the average Trustee participated
in approximately 46 committee and board meetings. In addition, the
Trustees meet in small groups with Chief Investment Officers and
Portfolio Managers to review recent performance and the current
investment climate for selected funds. These meetings ensure that each
fund's performance is reviewed in detail at least twice a year. The
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 last fiscal year is shown in the table below:

Fiscal year ended August 31, 2001
- -------------------------------------------
Audit and Pricing Committee*              8
- -------------------------------------------
Board Policy and Nominating Committee**   7
- -------------------------------------------
Brokerage and Custody Committee           5
- -------------------------------------------
Communication, Service and
Marketing Committee                       5
- -------------------------------------------
Contract Committee                       11
- -------------------------------------------
Distributions Committee                   3
- -------------------------------------------
Executive Committee                       4
- -------------------------------------------
Investment Oversight Committee            9
- -------------------------------------------

 * Effective February 2002, the Pricing Committee's functions were merged
   into the Audit and Pricing Committee. The number of meetings shown
   represents the number of meetings held by the Audit Committee during
   your fund's last fiscal year. The Pricing Committee met 5 times prior to
   the combination.

** Effective March 2002, the Proxy Committee's functions were merged
   into the Board Policy and Nominating Committee. The number of meetings
   shown represents the number of meetings held by the Board Policy and
   Nominating Committee during your fund's last fiscal year. The Proxy
   Committee met 4 times prior to the combination.



* What are the trustees paid for their services?

Each Trustee of your fund receives a fee for his or her services. Each
Trustee also receives fees for serving as Trustee of the other Putnam
funds. Each Trustee of the fund receives an annual fee and an additional
fee for each Trustees' meeting attended. Trustees who are not interested
persons of Putnam Management and who serve on committees of the Trustees
receive additional fees for attendance at certain committee meetings and
for special services rendered in that connection. All of the Trustees
are Trustees of all the Putnam funds and each receives fees for his or
her services.

The Trustees periodically review their fees to assure that such fees
continue to be appropriate in light of their responsibilities as well as
in relation to fees paid to trustees of other mutual fund complexes. The
Board Policy and Nominating Committee, which consists solely of Trustees
not affiliated with Putnam Management, estimates that Committee and
Trustee meeting time, together with the appropriate preparation,
requires the equivalent of at least three business days per Trustee
meeting. The following table shows the fees paid to each Trustee by your
fund for its most recent fiscal year and the fees paid to each Trustee
by all of the Putnam funds during calendar year 2001:


<TABLE>
<CAPTION>

COMPENSATION TABLE
                                                                      Estimated
                                                 Retirement              annual               Total
                              Aggregate            benefits       benefits from        compensation
                           compensation             accrued          all Putnam            from all
                               from the          as part of          funds upon              Putnam
Trustees/Year                   fund(1)       fund expenses       retirement(2)            funds(3)
- ---------------------------------------------------------------------------------------------------
<S>                              <C>                  <C>             <C>                 <C>
Jameson A. Baxter/1994(4)          $700                $149            $100,000            $205,750
- ---------------------------------------------------------------------------------------------------
Charles B. Curtis/2001(8)           603                  --            $100,000              92,000
- ---------------------------------------------------------------------------------------------------
Hans H. Estin/1972(5)               676                 311             $97,904             109,000
- ---------------------------------------------------------------------------------------------------
John A. Hill/1985(4)(7)             947                 228             200,000             403,500
- ---------------------------------------------------------------------------------------------------
Ronald J. Jackson/1996(4)           699                 169             100,000             205,750
- ---------------------------------------------------------------------------------------------------
Paul L. Joskow/1997(4)              683                 111             100,000             201,250
- ---------------------------------------------------------------------------------------------------
Elizabeth T. Kennan/1992            693                 219             100,000             203,500
- ---------------------------------------------------------------------------------------------------
Lawrence J. Lasser/1992(6)           --                 121              92,500                  --
- ---------------------------------------------------------------------------------------------------
John H. Mullin, III/1997(4)         701                 167             100,000             205,500
- ---------------------------------------------------------------------------------------------------
Robert E. Patterson/1984            696                 109             100,000             204,750
- ---------------------------------------------------------------------------------------------------
George Putnam, III/1984(7)          806                  97             125,000             249,750
- ---------------------------------------------------------------------------------------------------
A.J.C. Smith/1986(6)                 --                 221              91,833                  --
- ---------------------------------------------------------------------------------------------------
W. Thomas Stephens/1997(4)          685                 156             100,000             201,000
- ---------------------------------------------------------------------------------------------------
W. Nicholas Thorndike/1992          685                 307             100,000             202,000
- ---------------------------------------------------------------------------------------------------

(1) Includes an annual retainer and an attendance fee for each meeting
    attended.

(2) Assumes that each Trustee retires at the normal retirement date. 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 2001.

(3) As of December 31, 2001, there were 123 funds in the Putnam family.

(4) Includes compensation deferred pursuant to a Trustee Compensation
    Deferral Plan.

(5) Reflects retirement from the Board of Trustees of the Putnam funds
    on June 30, 2001.

(6) Commencing July 1, 2000, Marsh & McLennan Companies, Inc.,
    compensates Mr. Lasser and Mr. Smith for their services as Trustees. The
    estimated annual retirement benefits and related fund expenses shown in
    this table for Messrs. Lasser and Smith reflect benefits earned under
    the funds' retirement plan prior to that date.

(7) Includes additional compensation for services commencing July 1, 2000.

(8) Elected by the Board of Trustees as a Trustee effective July 1,
    2001. The fund will begin accruing expenses for Mr. Curtis' retirement
    benefits in 2002.

</TABLE>

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 (a committee comprised of Trustees that are not
"interested persons" of the fund, as defined in the Investment Company
Act of 1940) may terminate or amend the Plan at any time, but no
termination or amendment will result in a reduction in the amount of
benefits (i) currently being paid to a Trustee at the time of such
termination or amendment, or (ii) to which a current Trustee would have
been entitled had he or she retired immediately prior to such
termination or amendment.

2. Amending the fund's guidelines to eliminate the requirement to invest
at least 40% of the fund's assets in convertible securities and at least
40% in non-convertible high yield fixed income securities.

The Trustees are recommending that the fund's investment restriction
requiring the fund to invest at least 40% of its assets in convertible
 securities and at least 40% in non-convertible high yield fixed income
securities be eliminated. The current restriction provides:

"The fund will invest, under normal market conditions, at least 40% of
its assets in each of the following categories: (1) convertible
securities and related equity securities and (2) non convertible, high
yielding, lower rated fixed income securities."

If shareholders approve the elimination of this restriction the Trustees
would replace the policy with the following non-fundamental restriction:

"The fund will invest, under normal circumstances, at least 80% of its
net assets in fixed income securities (including debt instruments,
convertible securities and preferred stock) rated below investment grade
(e.g., below BBB/Baa) by at least one nationally recognized rating
agency (or nonrated securities Putnam believes are of equivalent credit
quality)."

This policy may in the future be changed by the Trustees without
shareholder approval but shareholders would be notified in writing at
least 60 days prior to any such change. The current policy can also be
changed without shareholder approval. However, the Trustees decided to
seek shareholder approval in light of the nature of the change and the
opportunity to present this question to shareholders at a regular annual
meeting.

Putnam has proposed the change in investment policy based on its belief
that it would be in shareholders' best interests to eliminate the
requirement to maintain any minimum level of convertible holdings. In
Putnam's view convertible securities represent one of several types of
portfolio investments which may be used to meet the fund's primary
investment objective, high current income. However, from time to time
the convertible market may become relatively unattractive as an
investment matter to investors seeking high current income. However, the
current policy requires the fund to hold a significant position in
convertible securities even at times when they are not viewed as the
most attractive means of generating high current income. Under the
proposed new policy the fund could still allocate a significant portion
of its assets to convertibles when Putnam found that asset class
attractive but it would not be required to do so. The new policy
requiring 80% of the fund's net assets to be invested in non-convertible
and convertible fixed income securities rated below investment grade
will provide assurance that the fund remains focused on its primary
investment objective of high current income.

In addition, Putnam believes that the flexibility to reduce the fund's
commitment to convertible securities and invest a greater portion in
high yield, non-convertible securities may help increase the fund's
investment income and potentially support a higher level of dividends.
Putnam has found in recent years that, in general, the convertible
sector has offered fewer opportunities for high income. Higher income
and dividends may help support the trading price of the fund's shares.
However, many factors affect the fund's dividend rates and stock price.
There can be no assurance that the investment policy change, if
approved, will result in any increases in either dividend rate or share
price.

If the proposal is approved, the name of the fund would be changed to
Putnam High Income Bond Fund. If the proposal is not approved Putnam
will continue to manage the Fund under its current policy.

After carefully considering the recommendations of Putnam Management,
your fund's Trustees approved the submission of this proposal to the
fund's shareholders and recommend that shareholders vote in favor of the
proposed change in investment policy.

Required vote. Approval of Proposal 2 requires the affirmative vote of
the majority of the shares voted with respect to Proposal 2 at the
meeting. The fund's Trustees unanimously recommend that shareholders
vote FOR the proposal.

3. Shareholder Proposal

The following proposal has been submitted by a shareholder of the fund.
This proposal is included in this Proxy Statement in compliance with
regulations of the Securities and Exchange Commission. The fund's
Trustees unanimously recommend that shareholders vote against this
proposal.

RESOLVED: That the shareholders of the Putnam High Income Convertible
and Bond Fund, assembled in annual meeting in person and by proxy
recommend that the board of directors terminate the investment advisory
agreement between Putnam Management and the Fund when the current
contract expires, and at such time solicit offers from selected
advisors, including Putnam, to evaluate the cost and the ability of the
candidates to perform for the benefit of the shareholders.

At the same time, the board should make a comprehensive study of the
cost of operating the Fund with a view to reducing compensation to any
future fund manager.

* Shareholder's Supporting Statement

The shareholder proponent has submitted the following statement in
support of his proposal:

The February 28, 2001 market price of our Fund was $8.29 a share,
according to the semi-annual report. As of this writing, October 10,
2001, the market price is $6.96, a loss of $1.33. Dividends of 0.3815
reduce our seven month ten day loss to 94.85 cents. Barrons Lipper
Mutual Fund Report dated October 8, 2001, reports a three-year annual
loss of 1.8 percent for the period ending September 30, 2001.

The compensation paid to Putnam Management for the fiscal year 2001 was
...75% of the average net assets of the fund according to their annual
report for the year ending August 31, 2001.

One Open End Fund, Vanguard Convertible Securities Fund, has a
management fee of about 0.68%.

Mr. John C. Bogle, former chairman and chief executive officer of the
Vanguard Group, was quoted in the June 20, 2000 Wall Street Journal with
the following statement:

Investment horizons that are too short and costs that are too high are
the principal problems facing the mutual fund industry. The root cause
of these failings is the industry's failure to focus on the primacy of
the fund shareholder. It's called stewardship. The investment company
act of 1940 warns against organizing, operating and managing funds in
the interests of the investment advisors rather than the interest of the
shareholder, but that warning isn't adequately heeded today. It is high
time that fund managers and independent directors as well as public
officials, the media and the shareholders give these issues the
attention they deserve.

In brief, the board of directors have a moral and fiduciary
responsibility to the shareholders to review performance, take actions
to address performance deficiencies, make in-depth review of fees paid,
review brokerage costs, and most importantly monitor potential conflicts
between the Fund and Putnam Management.

Would the directors let us know if they have ever replaced any Putnam
Management team for inferior performance.

A yes vote from active shareholders will convey to the directors that
they should not renew contracts with managers just because of a long and
close relationship and that the managers are good old boys.

* Trustees' Recommendation

The Trustees of the fund, including all of the Independent Trustees
(none of whom are affiliated with Putnam Management), unanimously
recommend that shareholders vote against this proposal.

Putnam Management sponsored the organization of the fund in 1987 and has
served as the fund's investment manager since that date. The shareholder
proponent's proposal recommends that the Trustees terminate the existing
contract with Putnam Management and solicit bids for new advisers with a
view to reducing costs. His supporting statement suggests
dissatisfaction with the market performance of the fund's shares over a
specified seven month period. As discussed in more detail below, the
Trustees believe that the performance record of the fund compares
favorably to leading convertible and high yield benchmarks and to other
closed-end funds investing primarily in convertible and high yield
securities and that the fund's management fees and  operating expenses
compare favorably to those of other closed-end funds investing in these
types of securities. Accordingly, the fund's Trustees do not believe
that adopting the proposal would be in the  interests of shareholders.

As required by the Investment Company Act of 1940, the fund's
Independent Trustees conduct an annual review of the terms of the fund's
Management Contract. As part of that review, they receive and consider
substantial information about the fund's investment performance and
operating costs, including the fees paid to Putnam Management. They
consider the performance and operating costs of comparable closed-end
funds. They also consider detailed information about Putnam Management's
operating expenses and profits. During the course of this contract
review, which typically includes several meetings extending over a
number of months, the Independent Trustees also consider a broad range
of additional information about the fund and the other investment
companies managed by Putnam Management. They are assisted in this
process by their own independent staff and by  independent legal
counsel.

The result of this process has been a carefully considered annual
determination that continuation of the contract with Putnam Management
continues to serve shareholders' interests. In 1991, the fund's Trustees
negotiated a reduction in the fee payable by the fund from 0.85% to
0.75% of average net assets, the fee currently in effect. This reduction
was submitted to shareholders for their approval and was overwhelmingly
approved.

Investment Performance. The shareholder's supporting statement cites the
market performance of the fund's shares over a seven month period. The
Trustees believe that investment performance should be judged over
longer periods of time, not arbitrarily selected periods. (SEC
regulations, for example, generally require that funds present their
investment performance by showing total return for one, five and ten
year periods.) In addition, the Trustees believe that short-term
fluctuations in the market price of the fund's shares are beyond Putnam
Management's control and that its performance as the fund's investment
manager is better judged by the fund's total return based on the net
asset value of its shares. The fund's performance over various periods
is shown below, based both on net asset value and market price.

Average Annual Total Return for Periods Ended March 31, 2002
- ---------------------------------------------------------
                 Fund
            ---------------   Merrill Lynch
                     Market  All-Convertible   CSFB High
             NAV     Price       Index        Yield Index
- ---------------------------------------------------------
1 year      5.24%   14.34%       2.43%           3.34%
3 years     5.95     4.63        5.23            1.46
5 years     4.65     3.96        9.41            3.46
10 years    8.89     8.84       10.98            7.26
- ---------------------------------------------------------

The foregoing table also shows the investment performance over these
same periods of the Merrill Lynch All-Convertible Index and the Credit
Suisse First Boston High Yield Index, which are both unmanaged indexes
of securities reflective of the principal sectors of the fund's
investment universe. (Unlike the fund's performance, the performance of
these indexes do not reflect any fees or expenses.) The fund invests in
a combination of convertible securities and high yield debt securities.
Since its convertible investments focus on so-called "busted"
convertibles, whose conversion feature has a relatively low value under
current market conditions, the Trustees believe that the high yield
index is the more relevant comparison for purposes of evaluating the
overall performance of the fund.

The Trustees note that the fund outperformed the CSFB High Yield Index
over all time periods noted above and outperformed the Merrill Lynch All
Convertible Index over the one and three-year periods ended March 31,
2002.

In addition to the foregoing information, the Trustees have also
considered the comparative performance of similar closed-end funds
investing primarily in convertible and/or high yield bonds. An analysis
of the investment performance of 12 comparable funds prepared for the
Trustees by Lipper, Inc. (See Exhibit A) indicated that the fund's
performance ranked at or above median for each of the one, three, five
and ten-year periods ended March 31, 2002. (Lipper, Inc. is a
third-party organization that ranks mutual funds with similar investment
styles based on their investment performance and expenses.)

Based on the foregoing, the Trustees believe that Putnam Management has
established a satisfactory record of performance as manager of the fund
over a period of many years. They find no reason to believe that
engaging another manager would result in superior performance.

Fund Operating Expenses. In his supporting statement, the shareholder
proponent notes that one open-end investment company, the Vanguard
Convertible Securities Fund, has a management fee of 0.68% of net asset
value, as compared with the fund's fee of 0.75%. In reviewing management
fees and other operating expenses, the Trustees believe that it is more
meaningful to examine a broad range of competitive funds, rather than a
single point of comparison. They also believe that it is more
appropriate to compare the fund's expenses with those of other
closed-end funds, rather than open-end funds which operate in a
different segment of the market. An analysis of 11 comparable closed-end
funds investing primarily in convertible and/or high yield securities
prepared for the Trustees by Lipper, Inc. (see Exhibit B) indicates that
the fund's management fee is at the median of the group and that its
total operating expenses are fourth lowest in the group.

After reviewing the foregoing data regarding performance, fees and
expenses, the Trustees have concluded that seeking further fee
reductions from Putnam Management (beyond the one reduction already
negotiated) or embarking on a process of interviewing other investment
managers would not be in the best interests of shareholders.

Conclusion. Investors have many thousands of open-end and closed-end
fund to select from in making their investment decisions. The Trustees
believe that most investors in the fund have chosen the fund based in
large part on Putnam Management's long-standing record of providing high
quality investment and shareholder services. They do not believe that it
would be in shareholders' interests, absent compelling circumstances, to
terminate a manager selected by the shareholders in order to engage in a
competitive bidding process. They further believe that changing
investment managers may result in significant disruption of a fund's
long-term investment strategies and that any issues pertaining to
investment performance and operating expenses are more effectively
addressed through the annual contract review process.

For these reasons, the Trustees of the fund, including all of the
Independent Trustees, unanimously recommend that shareholders vote
AGAINST the proposal.

Required Vote. Approval of Proposal 3 requires the affirmative vote of a
majority of the shares voted at the meeting. The fund will promptly
furnish any shareholder of the fund who makes a written or oral request
the name and address of the shareholder proponent and the number of
shares owned by him.

Further information about voting and the meeting

Quorum and methods of tabulation. A majority of the shares entitled to
vote--present in person or represented by proxy--constitutes a quorum for
the transaction of business with respect to any proposal at the meeting
(unless otherwise noted in the proxy statement). Shares represented by
proxies that reflect abstentions and "broker non-votes" (i.e., shares held
by brokers or nominees as to which (i) instructions have not been received
from the beneficial owners or the persons entitled to vote and (ii) the
broker or nominee does not have the discretionary voting power on a
particular matter) will be counted as shares that are present and entitled
to vote on the matter for purposes of determining the presence of a quorum,
but will not have any other effect on any matter to be voted upon at the
meeting. Votes cast by proxy or in person at the meeting will be counted by
persons appointed by your fund as tellers for the meeting.

Other business. The Trustees know of no other business to be brought
before the meeting. However, if any other matters properly come before
the meeting, it is their intention that proxies that do not contain
specific restrictions to the contrary will be voted on such matters in
accordance with the judgment of the persons named as proxies in the
enclosed form of proxy.

Simultaneous meetings. The meeting of shareholders of your fund is
called to be held at the same time as the meetings of shareholders of
certain of the other Putnam funds. It is anticipated that all meetings
will be held simultaneously.

If any shareholder at the meeting objects to the holding of a
simultaneous meeting and moves for an adjournment of the meeting to a
time promptly after the simultaneous meetings, the persons named as
proxies will vote in favor of such adjournment.

Solicitation of proxies. In addition to soliciting proxies by mail,
Trustees of your fund and employees of Putnam Management, Putnam
Fiduciary Trust Company, and Putnam Retail Management may solicit
proxies in person or by telephone. Your fund may also arrange to have
voting instructions recorded by telephone. The telephone voting
procedure is designed to authenticate shareholders' identities, to allow
them to authorize the voting of their shares in accordance with their
instructions and to confirm that their instructions have been properly
recorded. Your fund has been advised by counsel that these procedures
are consistent with the requirements of applicable law. If these
procedures were subject to a successful legal challenge, such votes
would not be counted at the meeting. Your fund is unaware of any such
challenge at this time. Shareholders would be called at the phone number
Putnam Investments has in its records for their accounts, and would be
asked for their Social Security number or other identifying information.
The shareholders would then be given an opportunity to authorize proxies
to vote their shares at the meeting in accordance with their
instructions. To ensure that the shareholders' instructions have been
recorded correctly, they will also receive a confirmation of their
instructions in the mail. A special toll-free number will be available
in case the  information contained in the confirmation is incorrect.

Shareholders may 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. The giving of such a proxy will
not affect your right to vote in person should you decide to attend the
meeting. To vote via the Internet, you will need the control number that
appears on your proxy card. To vote, please access the Internet address
found on your proxy card. The Internet voting procedures are designed to
authenticate shareholder identities, to allow shareholders to give their
voting instructions, and to confirm that shareholders' instructions have
been recorded properly. Shareholders 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 shareholders.

Your fund's Trustees have adopted a policy of maintaining
confidentiality in the voting of proxies. Consistent with that policy,
your fund may solicit proxies from shareholders who have not voted their
shares or who have abstained from voting.

Persons holding shares as nominees will upon request be reimbursed for
their reasonable expenses in soliciting instructions from their
principals. Your fund has retained at its expense D. F. King & Co.,
Inc., 77 Water Street, New York, New York 10005, to aid in the
solicitation of instructions for registered and nominee accounts, for a
fee not to exceed $2,500 plus reasonable out-of-pocket expenses for
mailing and phone costs. The expenses of the preparation of the proxy
statements and related materials, including printing and delivery costs,
are borne by the 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.

Date for receipt of shareholders' proposals for the next annual meeting.
It is currently anticipated that your fund's next annual meeting of
shareholders will be held in June 2003. Shareholder proposals to be
included in the proxy statement for that meeting must be received by
your fund before December 18, 2002. Shareholders who wish to make a
proposal at the June 2003 annual meeting--other than one that will be
included in the fund's proxy materials--should notify the fund no later
than March 1, 2003. The Board Policy and Nominating Committee will also
consider nominees recommended by shareholders of the fund to serve as
Trustees, provided that shareholders submit their recommendations by the
above date. If a shareholder who wishes to present a proposal fails to
notify the fund by this date, 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.
Shareholders who wish to propose one or more nominees for election as
Trustees, or to make a proposal fixing the number of Trustees, at the
June 2003 annual meeting must provide written notice to the fund
(including all required information) so that such notice is received in
good order by the fund no earlier than March 15, 2003 and no later than
April 14, 2003.

Adjournment. If sufficient votes in favor of any of the proposals set
forth in the Notice of the Meeting are not received by the time
scheduled for the meeting, the persons named as proxies may propose
adjournments of the meeting for a period or periods of not more than 60
days in the aggregate to permit further solicitation of proxies with
respect to those proposals. Any adjournment will require the affirmative
vote of a majority of the votes cast on the question in person or by
proxy at the session of the meeting to be adjourned. The persons named
as proxies will vote in favor of adjournment those proxies that they are
entitled to vote in favor of such proposals. They will vote against
adjournment those proxies required to be voted against such proposals.
Your fund pays the costs of any additional solicitation and of any
adjourned session. Any proposals for which sufficient favorable votes
have been received by the time of the meeting may be acted upon and
considered final regardless of whether the meeting is adjourned to
permit additional solicitation with respect to any other proposal.

Financial information. Your fund will furnish to you upon request and
without charge, a copy of the fund's annual report for its most recent
fiscal year, and a copy of its semiannual report for any subsequent
semiannual period. Such requests may be directed to Putnam Investor
Services, P.O. Box 41203, Providence, RI 02940-1203 or
1-800-225-1581.


Fund information

Putnam Investments. Putnam Investment Management, LLC, the fund's
investment manager, is a subsidiary of Putnam Management Trust, which is
in turn owned by Putnam LLC. Putnam LLC 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 is also a subsidiary of Putnam LLC. The address of Putnam
Investments Trust, Putnam LLC, Putnam Investment Management, LLC 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.

Limitation of Trustee liability. The Agreement and Declaration of Trust
of the fund provides that the fund will indemnify its Trustees and
officers against liabilities and expenses incurred in connection with
litigation in which they may be involved because of their offices with
the fund, except if it is determined in the manner specified in the
Agreement and Declaration of Trust that they have not acted in good
faith in the reasonable belief that their actions were in the best
interests of the fund or that such indemnification would relieve any
officer or Trustee of any liability to the fund or its shareholders
arising by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of his or her duties. Your fund, at its expense,
provides liability  insurance for the benefit of its Trustees and
officers.

Independent Auditors. PricewaterhouseCoopers LLP, 160 Federal Street,
Boston, Massachusetts 02110, independent accountants, has been selected
by the Trustees as the independent auditors of your fund for the current
fiscal year. The Audit and Pricing Committee of the Board of Trustees
unanimously approved the selection of PricewaterhouseCoopers LLP in
September 2000, and the Trustees unanimously approved such selection in
September 2000. Among the country's preeminent accounting firms, this
firm also serves as the auditor for various other funds in the Putnam
family. It was selected primarily on the basis of its expertise as
auditors of investment  companies, the quality of its audit services and
the competitiveness of its fees. A representative of the independent
auditors is expected to be present at the meeting to make statements and
to respond to appropriate questions.

The following table sets forth the aggregate fees billed for
professional services rendered by your fund's principal accountant for
the fund's most recent fiscal year:

                                   Financial Information           All
                  Audit Fees for      Systems Design and         Other
Audit Fees      All Putnam Funds     Implementation Fees          Fees
- ----------------------------------------------------------------------
$45,000               $3,812,000                $150,000       $22,500
- ----------------------------------------------------------------------

The fees disclosed in the table above under the caption "Audit Fees" are
the aggregate fees billed for professional services rendered for the
audit of your fund's annual financial statements for the most recent
fiscal year. The fees disclosed under the caption "Audit Fees for All
Putnam Funds" are the aggregate fees billed for professional services
rendered for the audits of all Putnam funds for which your fund's
independent accountants served as auditors for each such fund's most
recent fiscal year ending on or before your fund's most recent fiscal
year end. The fees disclosed under the captions "Financial Information
Systems Design and Implementation Fees" and "All Other Fees" include
fees billed for services, if any, rendered for your fund's most recent
fiscal year to your fund, to Putnam Management, the fund's investment
manager, and to any entity controlling, controlled by or under common
control with Putnam Management that provides services to the fund. The
amounts disclosed in "All Other Fees" are related to providing tax
compliance assistance for the respective fund and general information
technology work.

The Audit and Pricing Committee of the Board of Trustees is responsible
for making recommendations to the Trustees as to the selection of your
fund's auditors. (Additional information about the Audit and Pricing
Committee is included under "Election of Trustees.") The Audit and
Pricing Committee has established a policy, in addition to other
practices and requirements relating to the selection of the fund's
auditors, that all non-audit services proposed to be performed by your
fund's principal accountants for the fund, Putnam Management and certain
related parties be considered and approved by the Audit and Pricing
Committee or by an authorized representative of the committee in advance
of the provision of such services. This pre-clearance policy calls for
the consideration, among other things, of whether the provision of the
proposed services would be compatible with maintaining the independence
of your fund's principal accountants. The provision of services covered
in the table above under "Financial Information Systems Design and
Implementation Fees" and "All Other Fees" was approved in accordance
with such pre-clearance policy.

The Audit and Pricing Committee of your fund has submitted the following
report:

The Audit and Pricing Committee has reviewed and discussed with
management of your fund the audited financial statements for the last
fiscal year. The Audit and Pricing Committee has discussed with your
fund's independent auditors the matters required to be discussed by
Statements on Auditing Standard No. 61 (SAS 61). SAS 61 requires
independent auditors to communicate to the Audit and Pricing Committee
matters including, if applicable: (1) methods used to account for
significant unusual transactions; (2) the effect of significant
accounting policies in controversial or emerging areas for which there
is a lack of authoritative guidance or consensus; (3) the process used
by management in formulating particularly sensitive accounting estimates
and the basis for the auditor's conclusions regarding the reasonableness
of those estimates and (4) disagreements with management over the
application of accounting principles and certain other matters. The
Audit and Pricing Committee has received the written disclosures and the
letter from your fund's independent accountants required by the SEC's
Independence Standards (among other things, requiring auditors to make
written disclosures to and discuss with the Audit and Pricing Committee
various matters relating to the auditor's independence), and has
discussed with such accountants the independence of such accountants.
Based on the foregoing review and discussions, the Audit and Pricing
Committee recommended to the Trustees that the audited financial
statements for the last fiscal year be included in your fund's annual
report to shareholders for the last fiscal year.

Paul L. Joskow
Elizabeth T. Kennan
W. Nicholas Thorndike
W. Thomas Stephens (Chairman)

Officers and other information. All of the officers of your fund are
employees of Putnam Management or its affiliates. Because of their
positions with Putnam Management or its affiliates or their ownership of
stock of Marsh & McLennan Companies, Inc., the parent corporation of
Putnam Investments Trust and indirectly of Putnam Investments, LLC,
Putnam Management and Putnam Fiduciary Trust Company, Messrs. Putnam,
Lasser and Smith (nominees for Trustees of your fund), as well as the
officers of your fund, will benefit from the management fees,
 underwriting commissions, custodian fees, and investor servicing fees
paid or allowed by the fund. In addition to George Putnam and Lawrence
J. Lasser, the other officers of your fund are as follows:



<TABLE>
<CAPTION>
                                         Year first
Name (date of birth)                     elected       Business experience
Office with the fund                     to office     during the past 5 years
- --------------------------------------------------------------------------------
<S>                                     <C>           <C>
Charles E. Porter (7/26/38)              1989          Managing Director,
Executive Vice President,                              Putnam Investments
Treasurer & Principal                                  and Putnam Management
Financial Officer
- --------------------------------------------------------------------------------
Patricia C. Flaherty (12/1/46)           1993          Senior Vice President,
Senior Vice President                                  Putnam Investments
                                                       and Putnam Management
- --------------------------------------------------------------------------------
Michael T. Healy (1/24/58)               2000          Managing Director,
Assistant Treasurer &                                  Putnam Investor
Principal Accounting Officer                           Services and Putnam
                                                       Investments
- --------------------------------------------------------------------------------
Gordon H. Silver (7/3/47)                1990          Senior Managing Director,
Vice President                                         Putnam Investments
                                                       and Putnam Management
- --------------------------------------------------------------------------------
Ian Ferguson (7/3/57)                    1997          Senior Managing Director,
Vice President                                         Putnam Investments
                                                       and Putnam Management
- --------------------------------------------------------------------------------
Deborah F. Kuenstner (7/9/58)            2002          Managing Director of
Vice President                                         Putnam Management
- --------------------------------------------------------------------------------
Richard G. Leibovitch (10/31/63)         2000          Managing Director of
Vice President                                         Putnam Investments and
                                                       Putnam Management.
                                                       Prior to February 1999,
                                                       Managing Director at
                                                       J.P. Morgan
- --------------------------------------------------------------------------------
Brett C. Browchuk (2/27/63)              1994          Managing Director of
Vice President                                         Putnam Investments and
                                                       Putnam Management
- --------------------------------------------------------------------------------
Richard A. Monaghan* (8/25/54)           1998          Managing Director,
Vice President                                         Putnam Investments,
                                                       Putnam Management
                                                       and Putnam Retail
                                                       Management
- --------------------------------------------------------------------------------
John R. Verani (6/11/39)                 1988          Senior Vice President,
Vice President                                         Putnam Investments
                                                       and Putnam Management
- --------------------------------------------------------------------------------
* President of Putnam Retail Management.

</TABLE>


Assets and shares outstanding of your fund
as of March 31, 2002

- ----------------------------------------------------------
Net assets:                                    $99,034,197
- ----------------------------------------------------------
Common shares:                           13,771,649 shares
- ----------------------------------------------------------
5% beneficial ownership:                              None
- ----------------------------------------------------------


<TABLE>
<CAPTION>

Exhibit A

Putnam High Income Conv and Bond Performance Analysis
(Lipper Closed End Convertible and High Yield Objectives)
Annualized NAV return for Periods Ended March 31, 2002
- ---------------------------------------------------------------------------------------------------------------
                                      1 Year             3 Years           5 Years             10 Years
Name of Fund                   Obj    Return      Rank   Return     Rank   Return      Rank    Return      Rank
- ---------------------------------------------------------------------------------------------------------------
<S>                           <C>       <C>      <C>    <C>         <C>    <C>        <C>      <C>        <C>
Renaissance Cap G&I III        CV     20.21%       1     15.83%      1          #                   #
Salomon Bros High Inc          HY      8.15        2      4.20       5       4.88%      5           #
Lincoln Natl Conv Secs         CV      5.89        3      6.76       3       4.67       7        8.87%     6
Putnam High Inc Conv & Bd      CV      5.27        4      5.60       4       4.81       6        9.03      5
Castle Convertible Fund        CV      3.91        5      7.66       2       6.68       4        9.69      4
Ellsworth Conv Gr & Inc        CV      0.99        6      3.10       7       9.00       2       11.09      2
Bancroft Convertible Fd        CV      0.66        7      2.90       8       8.68       3       10.93      3
TCW Convertible Secs           CV     -2.43        8      3.35       6       9.63       1       11.26      1
High Income Opportunity        HY     -7.35        9     -4.12       9       0.18       9           #
Managed High Income            HY     -7.81       10     -4.13      10       0.22       8           #
Morg Stan Hi Inc Adv II        HY    -26.13       11    -24.58      13     -15.26      12       -3.59      8
Morg Stan Hi Inc Adv           HY    -26.84       12    -24.03      11     -14.95      10       -3.52      7
Morg Stan Hi Inc Adv III       HY    -27.48       13    -24.42      12     -15.19      11       -3.78      9
- ---------------------------------------------------------------------------------------------------------------
# Fund's first public offering date occurred after beginning of period.

Performance as calculated by Lipper may differ from performance calculated by fund sponsor due to differing
assumptions as to dividend reinvestment for closed end funds.

</TABLE>


<TABLE>
<CAPTION>

Exhibit B

Putnam High Income Convertible and Bond Fund Expense Comparison
(Lipper Closed End Convertible and High Yield Objectives)
- ---------------------------------------------------------------------------------
                            Total Average
                             Net Assets
                              for most     Effective
                            recent fiscal    Mgmt     Actual
                                year        Fee at     Mgmt    Other      Total
    Name of Fund             (millions)    $100 M*     Fee*   Expenses*  Expense*
- ---------------------------------------------------------------------------------
<S><C>                         <C>         <C>       <C>       <C>       <C>
 1  TCW Convertible Secs        335.3       0.750     0.600     0.153     0.753
 2  Castle Convertible Fund      61.3       0.750     0.750     0.277     1.027
 3  Salomon Bros High Inc        54.6       0.700     0.700     0.359     1.059
 4  Putnam High Inc Conv & Bd   103.7       0.750     0.750     0.373     1.123
 5  Morg Stan Hi Inc Adv II      77.1       0.750     0.750     0.388     1.138
 6  Bancroft Convertible Fd      99.7       0.750     0.750     0.399     1.149
 7  Morg Stan Hi Inc Adv III     42.8       0.750     0.750     0.422     1.172
 8  Ellsworth Conv Gr & Inc      94.7       0.750     0.757     0.443     1.200
 9  Managed High Income         396.6       1.100     1.100     0.104     1.204
10  High Income Opportunity     593.0       1.150     1.150     0.103     1.253
11  Morg Stan Hi Inc Adv         51.1       0.750     0.750     0.564     1.314
12  Lincoln Natl Conv Secs #    101.4       0.875     0.654     0.888     1.542
- ---------------------------------------------------------------------------------
# Fund has management fee waivers.
* Expressed as a percentage of average net assets.

</TABLE>


[LOGO OMITTED]

PUTNAM INVESTMENTS
P.O. Box 9131
Hingham, MA 02043-9131                        82923 6/02





PUTNAM INVESTMENTS                               [SCALE LOGO OMITTED]
P.O. Box 9131
Hingham, MA 02043-9131

FOR YOUR CONVENIENCE YOU MAY RECORD YOUR VOTING INSTRUCTIONS VIA THE
INTERNET OR BY RETURNING THIS PROXY CARD BY MAIL


Your vote is very important.  If you choose to record your voting
instructions via the Internet, visit the website at https://XXXXXXXX.
Please refer to the instructions below.

To record your voting instructions on the Internet

1. Read the proxy statement.

2. Go to https://XXXXXXXXX.

3. Enter the 14-digit control number printed on your proxy card.

4. Follow the instructions on the site.

If you submit your voting instructions on the Internet, do not return
your proxy card.

                    This is your PROXY CARD.

To vote by mail, please record your voting instructions on this proxy
card, sign it below, and return it promptly in the envelope provided.
Your vote is important.

           PLEASE FOLD AT PERFORATION BEFORE DETACHING

Proxy for a meeting of shareholders to be held on August 15, 2002, for
Putnam High Income Convertible and Bond Fund.

This proxy is solicited on behalf of the Trustees of the fund.

The undersigned shareholder hereby appoints John A. Hill, Robert E.
Patterson, and W. Nicholas Thorndike, and each of them separately,
Proxies, with power of substitution, and hereby authorizes them to
represent such shareholder and to vote, as designated below, at the
meeting of shareholders of Putnam High Income Convertible and Bond Fund
on August 15, 2002, at 11:00 a.m., Boston time, and at any adjournments
thereof, all of the shares of the fund that the undersigned shareholder
would be entitled to vote if personally present.

           PLEASE BE SURE TO SIGN AND DATE THIS PROXY.

Please sign your name exactly as it appears on this card.  If you are a
joint owner, each owner should sign.  When signing as executor,
administrator, attorney, trustee, or guardian, or as custodian for a
minor, please give your full title as such.  If you are signing for a
corporation, please sign the full corporate name and indicate the
signer's office.  If you are a partner, sign in the partnership name.

- -------------------------------------------------
Shareholder sign here         Date

- -------------------------------------------------
Co-owner sign here            Date


HAS YOUR ADDRESS CHANGED?

Please use this form to notify us of any change in address or telephone
number or to provide us with your comments.  Detach this form from the
proxy card and return it with your signed proxy in the enclosed
envelope.

Name
- ------------------------------------------------------------------
Street
- ------------------------------------------------------------------
City                          State                         Zip
- ------------------------------------------------------------------
Telephone
- ------------------------------------------------------------------
DO YOU HAVE ANY COMMENTS?

- ------------------------------------------------------------------

- ------------------------------------------------------------------


DEAR SHAREHOLDER:

Your vote is important.  Please help us to eliminate the expense of
follow-up mailings by signing and returning this proxy card or by
recording your voting instructions via the Internet as soon as possible.
A postage-paid envelope is enclosed for your convenience.

THANK YOU!

          PLEASE FOLD AT PERFORATION BEFORE DETACHING

If you complete and sign the proxy, we'll vote it exactly as you tell
us. The proxies are authorized to vote in their discretion upon any
matters as may properly come before the meeting or any adjournments of
the meeting.  If you simply sign the proxy, or fail to provide your
voting instructions on a proposal, the Proxies will vote FOR each
Proposal.

Please vote by filling in the appropriate boxes below.

THE TRUSTEES RECOMMEND A VOTE FOR FIXING THE NUMBER OF TRUSTEES AND
ELECTING ALL OF THE NOMINEES:

1. Proposal to fix the number of Trustees and elect all nominees.

The nominees for Trustees are:  J.A. Baxter, C.B. Curtis, J.A. Hill,
R.J. Jackson, P.L. Joskow, E.T. Kennan, L.J. Lasser, J.H. Mullin, III,
R.E. Patterson, G. Putnam, III, A.J.C. Smith, W.T. Stephens and W.N.
Thorndike.

         FOR                     WITHHOLD
  fixing the number         authority to vote
   of Trustees as            for all nominees
    proposed and
  electing all the
  nominees (except
  as marked to the
  contrary below)

        [ ]                        [ ]

To withhold authority to vote for one or more of the nominees, write the
name(s) of the nominee(s) below:

- ------------------------------------------------------------------------

THE TRUSTEES RECOMMEND A VOTE FOR PROPOSAL 2:

2. Proposal amending the fund's investment policies to eliminate the
requirement that the fund invest at least 40% of its assets in
convertible securities and related equities and at least 40% of its
assets in non-convertible high yield fixed income securities under
normal market conditions.

   FOR                      AGAINST                    ABSTAIN

   [ ]                        [ ]                        [ ]



THE TRUSTEES RECOMMEND A VOTE AGAINST PROPOSAL 3:

3. Shareholder Proposal recommending the termination of the fund's
investment management agreement with Putnam.

   FOR                      AGAINST                    ABSTAIN

   [ ]                        [ ]                        [ ]

Note:  If you have questions on the proposals, please call
1-800-225-1581.

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
