UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No.)
Filed by the Registrant
[X]
Filed by a Party other than the
Registrant [ ]
Check the appropriate box:
[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 §240.14a-12
TORTOISE
ENERGY INFRASTRUCTURE CORPORATION
TORTOISE
ENERGY CAPITAL CORPORATION
TORTOISE
CAPITAL RESOURCES CORPORATION
(Name
of Registrant as Specified In Its Charter)
_________________________________________________________________________________________
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the
appropriate box):
[X] No fee required.
[ ] Fee computed on table
below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction
applies:
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(3)
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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):
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(4)
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Proposed
maximum aggregate value of
transaction:
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[ ]
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Fee
paid previously with preliminary
materials.
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[ ]
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its
filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement
No.:
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TORTOISE
ENERGY INFRASTRUCTURE CORPORATION
TORTOISE
ENERGY CAPITAL CORPORATION
TORTOISE
CAPITAL RESOURCES CORPORATION
11550
Ash Street, Suite 300
Leawood,
Kansas 66211
___________,
2009
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Dear
Fellow Stockholder:
You are
cordially invited to attend a combined special meeting (the “Meeting”) of
stockholders of each of Tortoise Energy Infrastructure
Corporation, Tortoise Energy Capital Corporation and Tortoise Capital Resources
Corporation (each a “Company” and collectively, the “Companies”) on
_________, __________, 2009 at __:__ a.m., Central Time, at 11550 Ash
Street, Suite 300, Leawood, Kansas 66211.
At the
Meeting, (i) stockholders of each Company will be asked to consider and
vote on a proposal to approve a new investment advisory agreement between that
Company and its current investment adviser, Tortoise Capital Advisors, L.L.C.
(the “Adviser”), and (ii) stockholders of Tortoise Capital Resources
Corporation will be asked to consider and vote on a proposal to approve a new
sub-advisory agreement between the Adviser and its current sub-advisor, Kenmont
Investments Management, L.P. (“Kenmont”).
As
discussed in more detail in the enclosed combined proxy statement, the current
investment advisory agreement for each Company is expected to terminate during
the third calendar quarter of 2009 due to a proposed change in ownership of the
Adviser (the “Proposed Transaction”). The proposed new investment
advisory agreement for each Company is substantially identical to its current
investment advisory agreement, except for the effective and termination dates,
and would simply continue the relationship between each Company and the
Adviser. Approval of the new investment advisory agreements will not
result in a change in the portfolio management, investment objectives and
policies or investment processes of the Companies. The current
Managing Directors of the Adviser will continue to serve as the Investment
Committee of the Adviser responsible for the investment management of each
Company’s portfolio. Each Company’s Board of Directors believes that
each applicable proposal is in the Company’s and its stockholders’ best
interests.
As
discussed in more detail in the enclosed combined proxy statement, the current
sub-advisory agreement between the Adviser and Kenmont, pursuant to which the
Adviser compensates Kenmont for providing certain services to the Adviser
relating to Tortoise Capital Resources Corporation, will also terminate as a
result of the Proposed Transaction. The proposed new sub-advisory
agreement between the Adviser and Kenmont is substantially identical to the
current sub-advisory agreement, except for the effective and termination dates,
and would simply continue the relationship between the Adviser and
Kenmont.
Enclosed
with this letter are the formal notice of the Meeting, answers to questions you
may have, the Companies’ combined proxy statement, which gives detailed
information about each of the proposals you will be asked to vote on and why
each Company’s Board of Directors recommends that you vote to approve each
applicable proposal, and the proxy card for you to sign and
return. If you have any questions about the enclosed proxy or need
any assistance in voting your shares, please call 1-866-362-9331.
Your vote
is important. Please complete, sign, and date the enclosed proxy or
voting instruction card and return it in the enclosed envelope. This
will ensure that your vote is counted, even if you cannot attend the Meeting in
person.
Sincerely,
David J.
Schulte
Chief Executive
Officer
TORTOISE
ENERGY INFRASTRUCTURE CORPORATION
TORTOISE
ENERGY CAPITAL CORPORATION
TORTOISE
CAPITAL RESOURCES CORPORATION
11550
Ash Street, Suite 300
Leawood,
Kansas 66211
1-866-362-9331
NOTICE
OF SPECIAL MEETING OF STOCKHOLDERS
To the
Stockholders
of: Tortoise
Energy Infrastructure Corporation
Tortoise
Energy Capital Corporation
Tortoise
Capital Resources Corporation:
NOTICE IS
HEREBY GIVEN that a combined special meeting (the “Meeting”) of Stockholders of
Tortoise Energy Infrastructure Corporation, Tortoise Energy Capital Corporation
and Tortoise Capital Resources Corporation, each a
Maryland corporation (each a “Company” and, collectively, the “Companies”), will
be held on _______, __________, 2009 at __:__ a.m., Central Time, at 11550 Ash
Street, Suite 300, Leawood, Kansas 66211 for the following
purposes:
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1.
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For all
Companies: To consider and vote on a new investment
advisory agreement between the Company and its current investment adviser,
Tortoise Capital Advisors, L.L.C.;
and
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2.
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For Tortoise Capital Resources
Corporation: To consider and vote on a new sub-advisory
agreement between Tortoise Capital Advisors, L.L.C. and its current
sub-advisor, Kenmont Investments Management,
L.P.
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The
foregoing items of business are more fully described in the combined proxy
statement accompanying this Notice.
Stockholders
of record as of the close of business on __________, 2009 are entitled to notice
of and to vote at the Meeting (or any adjournment or postponement of the
Meeting).
By Order of the Board
of Directors of each Company,
Connie J.
Savage
Secretary
___________,
2009
Leawood,
Kansas
All
stockholders are cordially invited to attend the Meeting in
person. Whether or not you expect to attend the Meeting, please
complete, date, sign and return the enclosed proxy or voting instruction card as
promptly as possible in order to ensure your representation at the
Meeting. A return envelope (which postage is prepaid if mailed in the
United States) is enclosed for that purpose. Even if you have given
your proxy, you may still vote in person if you attend the
Meeting. Please note, however, that if your shares are held of record
by a broker, bank or other nominee and you wish to vote at the Meeting, you must
obtain from the record holder a proxy issued in your name.
TORTOISE
ENERGY INFRASTRUCTURE CORPORATION
TORTOISE
ENERGY CAPITAL CORPORATION
TORTOISE
CAPITAL RESOURCES CORPORATION
ANSWERS
TO SOME IMPORTANT QUESTIONS
Q. What
am I being asked to vote “For” on this proxy?
A. At
the combined special meeting (the “Meeting”) of the stockholders of Tortoise
Energy Infrastructure Corporation, Tortoise Energy Capital Corporation and
Tortoise Capital Resources Corporation (each a “Company” and collectively, the
“Companies”), (i) stockholders of each Company will be asked to consider and
vote on a proposal to approve a new investment advisory agreement between that
Company and its current investment adviser, Tortoise Capital Advisors, L.L.C.
(the “Adviser”), and (ii) stockholders of Tortoise Capital Resources
Corporation will be asked to consider and vote on a proposal to approve a new
sub-advisory agreement between the Adviser and its current sub-advisor, Kenmont
Investments Management, L.P. (“Kenmont”).
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Q.
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Why
am I being asked to approve a new investment advisory
agreement?
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A. As
required by the Investment Company Act of 1940, as amended (the “1940 Act”),
each Company's current investment advisory agreement with the Adviser
automatically terminates if the Adviser experiences a change in
control. In effect, this provision requires a fund’s stockholders to
vote on a new investment advisory agreement whenever the ownership of the fund’s
investment adviser significantly changes. The provision is designed to ensure
that stockholders have a say in determining the company or persons that manage
their fund. As described in more detail in the combined proxy
statement, the proposed change in ownership of the Adviser (the “Proposed
Transaction”) will trigger termination of each Company's current investment
advisory agreement.
Q. What
are the terms of the Proposed Transaction?
A. The
current Managing Directors of the Adviser and Mariner Holdings, LLC (“Mariner”),
an independent investment firm with more than 50 employees and $1.2 billion of
assets under management as of April 30, 2009, have entered into an agreement to
purchase all of the ownership interests in the Adviser from Kansas City Equity
Partners LC (“KCEP”), one of its affiliates, and FCM Tortoise, L.L.C.
(“FCM”). KCEP and FCM are the entities that currently control the
Adviser. KCEP and FCM provided the original capital and management to
form the Adviser. Of the five Managing Directors, two came from KCEP
and three came from FCM. All five Managing Directors are now
full-time employees of the Adviser, and KCEP and FCM no longer have a management
role in TCA. As such, Mariner will provide Tortoise with a
complementary strategic partner in the asset management business. As part of the
Proposed Transaction, Mariner will purchase a majority stake in the Adviser,
with the intention to provide growth capital and resources. The Proposed
Transaction further aligns the business of the Adviser with the interests of the
Managing Directors, who will continue to own a portion of the Adviser, and also
provides a strategic partner.
Q. Will
the proposed new advisory agreements affect the portfolio management and
strategy of the Companies?
A. The
portfolio management, investment objectives and policies, and investment
processes of the Companies will not change as a result of entering into the
proposed new investment advisory agreements
with the
Adviser. The current Managing Directors of the Adviser will continue
to serve as the Investment Committee of the Adviser responsible for the
investment management of each Company’s portfolio. In addition, each
Company will retain its current name and ticker symbol.
Q. Are
there differences between the Companies’ current investment advisory agreements
and the proposed new investment advisory agreements?
A. The
proposed new investment advisory agreement for each Company is substantially
identical to its current investment advisory agreement, except for the effective
and termination dates. The amount of the advisory fee paid to the
Adviser by each Company under its current investment advisory agreement will not
change under the new investment advisory agreement. Approval of the
new investment advisory agreements will not change the level, nature or quality
of services provided to the Companies by the Adviser and will simply continue
the relationship between each Company and the Adviser.
Q. Who
will pay for the costs and expenses of the Meeting?
A. The
Adviser will bear
all costs and expenses associated with the Proposed Transaction, including the
costs of holding the Meeting, the costs of this proxy solicitation and the
incremental costs of mailing the combined proxy statement to stockholders of
record as of the record date.
Q. Are
any changes anticipated to any Company’s Board of Directors?
A. As
described in more detail in the combined proxy statement, in order to comply
with a safe harbor under Section 15(f) of the 1940 Act, during the
three-year period following the completion of the Proposed Transaction at least
75% of each Company’s Board of Directors must not be “interested persons” (as
defined in the 1940 Act) of the Adviser. Accordingly, upon
consummation of the Proposed Transaction, Terry Matlack, one of the five members
of the Adviser’s Investment Committee, is expected to resign from the Board of
Directors of each Company. Mr. Matlack will continue as a Managing
Director of the Adviser and as the Chief Financial Officer of each
Company. H. Kevin Birzer, another member of the Adviser’s Investment
Committee, is expected to continue to serve as Chairman of the Board of
Directors of each Company and each of the Company’s current independent
directors is expected to remain a member of each Company’s Board.
Q. Why
are stockholders of Tortoise Capital Resources Corporation being asked to
approve a new sub-advisory agreement between the Adviser and
Kenmont?
A. As
discussed above in the case of each Company’s current investment advisory
agreement with the Adviser, the Adviser’s sub-advisory agreement with Kenmont
will automatically terminate upon consummation of the Proposed
Transaction.
Q. How
will the proposed new sub-advisory agreement affect Tortoise Capital Resources
Corporation?
A. The
services provided to the Adviser by Kenmont will not change as a result of
entering into the proposed new sub-advisory agreement. The Adviser
will continue to be solely responsible for all fees to Kenmont.
Q. How
does each Company’s Board of Directors suggest that I vote?
A. The
Board of Directors of each Company unanimously recommends that you vote “FOR”
all proposals on the enclosed proxy or voting instruction card.
Q. How
can I vote?
A. You
can vote by completing, signing and dating your proxy or voting instruction
card, and mailing it in the enclosed envelope. You also may vote in
person if you are able to attend the Meeting. Please note, however,
that if your shares are held of record by a broker, bank or other nominee and
you wish to vote at the Meeting, you must obtain from the record holder a proxy
issued in your name. However, even if you plan to attend the Meeting,
we urge you to cast your vote by mail. That will ensure that your
vote is counted should your plans change.
This
information summarizes information that is included in more
detail
in the combined proxy statement. We urge you to
read
the entire combined proxy statement carefully.
If
you have questions, call 1-866-362-9331.
TORTOISE
ENERGY INFRASTRUCTURE CORPORATION
TORTOISE
ENERGY CAPITAL CORPORATION
TORTOISE
CAPITAL RESOURCES CORPORATION
11550
Ash Street, Suite 300
Leawood,
Kansas 66211
1-866-362-9331
COMBINED
PROXY STATEMENT
SPECIAL
MEETING OF STOCKHOLDERS
___________,
2009
This
combined proxy statement is being sent to you by the Boards of Directors of each
of Tortoise Energy
Infrastructure Corporation (“TYG”), Tortoise Energy Capital Corporation (“TYY”)
and Tortoise Capital
Resources Corporation (“TTO”) (each a “Company” and collectively, the
“Companies”). The Board of Directors of each Company is asking you to
complete and return the enclosed proxy, permitting all shares you own in each
Company to be voted at a combined special meeting of stockholders (the
“Meeting”) to be held on ___________,
2009. The Board of Directors of each Company has fixed the close of
business on ___________,
2009 as the record date (the “Record Date”) for the determination of
stockholders entitled to notice of and to vote at the Meeting and at any
adjournment or postponement thereof as set forth in this combined proxy
statement. This combined proxy statement and the enclosed proxy are
first being mailed to stockholders on or about ___________,
2009.
Each
Company’s reports can be accessed through its link on its investment adviser’s
website (www.tortoiseadvisors.com) or on the Securities and Exchange
Commission’s (“SEC”) website (www.sec.gov). You
may also request, and each Company will provide to you without charge, a copy of
the Company’s most recent annual report and most recent semi-annual report
succeeding the annual report, by writing to the Secretary of the Company at the
Company’s offices located at 11550 Ash Street, Suite 300, Leawood, Kansas 66211
or by calling the Company at 1-866-362-9331.
Important Notice Regarding the
Availability of Proxy Materials for the Special Meeting of Stockholders to be
Held on ___________, 2009: This combined proxy statement is
available on the Internet at [___________________________]. On
this site, you will be able to access the proxy statement for the Meeting and
any amendments or supplements to the foregoing material required to be furnished
to stockholders.
This combined
proxy statement sets forth the information that each Company’s stockholders
should know in order to evaluate each of the following proposals. The
following table presents a summary of the proposals for each Company and the
class of stockholders of the Company being solicited with respect to each
proposal.
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Proposal for each Company
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Class of Stockholders of Each Company Entitled to
Vote
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1.
To consider and vote on a new investment advisory agreement between the
Company and its investment adviser, Tortoise Capital Advisors,
L.L.C.
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For
each of TYG and TYY — Common Stockholders and Preferred Stockholders,
voting
as a
single class
For
TTO — Common Stockholders voting as a class
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Proposal for TTO
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2.
To consider and vote on a new sub-advisory agreement between Tortoise
Capital Advisors, L.L.C. and its current sub-advisor, Kenmont Investments
Management, L.P.
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TTO Common
Stockholders voting as a
class
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PROPOSAL
ONE
APPROVAL
OF A NEW INVESTMENT ADVISORY AGREEMENT
Background
Pursuant
to the terms of the separate investment advisory agreement between Tortoise
Capital Advisors, L.L.C. (the “Adviser”) and each Company (each, a “Current
Investment Advisory Agreement” and collectively, the “Current Investment
Advisory Agreements”), Tortoise Capital Advisers, L.L.C. currently serves as the
investment adviser to each of the Companies and is responsible for the portfolio
management of each Company.
On June
3, 2009, the Adviser announced that senior management of the Adviser has entered
into a definitive agreement to acquire, along with Mariner Holdings, LLC
(“Mariner”), all of the ownership interests in the Adviser. Mariner
will purchase a majority stake in the Adviser, with the intention to provide
growth capital and resources, and serve as a complementary strategic partner in
the asset management business (the “Proposed Transaction”). Mariner is an
independent investment firm with affiliates focused on wealth and asset
management. Mariner was founded in 2006 by former A.G. Edwards investment
professionals and management staff led by Marty Bicknell, and has grown to more
than 50 employees with $1.2 billion of assets under management as of April 30,
2009.
The
portfolio management, investment objectives and policies, and investment
processes of the Companies will not change as a result of the Proposed
Transaction or entering into the proposed new investment advisory agreements
(each a “New Investment Advisory Agreement” and collectively, the “New
Investment Advisory Agreements”) with the Adviser. The current
Managing Directors of the Adviser will continue to serve as the Investment
Committee of the Adviser responsible for the investment management of each
Company’s portfolio. The Adviser will retain its name and other
personnel currently providing services to the Companies and will remain located
at 11550 Ash Street, Suite 300, Leawood, Kansas 66211.
The
business and affairs of the Adviser are currently managed by David J.
Schulte, Chief Executive Officer and President of TYG and TYY and Chief
Executive Officer of TTO; Terry Matlack, a director and the Chief Financial
Officer of each Company; H. Kevin Birzer, director and Chairman of the Board of
each Company; Zachary A. Hamel, Senior Vice President of each Company; and
Kenneth P. Malvey, Senior Vice President and Treasurer of each
Company. Each of Messrs. Schulte, Matlack, Birzer, Hamel and Malvey
will continue to serve as Managing Directors of the Adviser and will continue to
own a portion of the Adviser following the Proposed Transaction.
The
Proposed Transaction is subject to the receipt of certain approvals and the
fulfillment of certain other conditions. The Proposed Transaction will result in
a change in control of the Adviser and will, therefore, constitute an
“assignment” of the Current Investment Advisory Agreements within the meaning of
the Investment Company Act of 1940, as amended (the “1940 Act”). An investment
advisory agreement automatically terminates upon its “assignment” under the
applicable provisions of the 1940 Act.
The terms
of each New Investment Advisory Agreement are substantially identical to the
terms of its corresponding Current Investment Advisory Agreement, except for the
effective and termination dates, and would simply continue the relationship
between each Company and the Adviser. The amount of the advisory fee
paid to the Adviser by each Company under its Current Investment Advisory
Agreement will not change under its New Investment Advisory
Agreement. Forms of the New Investment Advisory Agreements are
attached hereto as Appendices A, B and C.
Information
Concerning the Current Investment Advisory Agreements and the New Investment
Advisory Agreements
The terms
of each New Investment Advisory Agreement are substantially identical to those
of its corresponding Current Investment Advisory Agreement, except for the
effective and termination dates. If a New Investment Advisory
Agreement is approved by stockholders, it will become effective upon completion
of the Proposed Transaction and will continue in effect for an initial period
that runs through December 31, 2010. Thereafter, each New Investment
Advisory Agreement will continue annually, provided that its continuance is
approved by the Board of Directors, including a majority of the Directors who
are not parties to the New Advisory Agreement or “interested persons” (as
defined in the 1940 Act) of any such party (the “Independent Directors”), at a
meeting called for that purpose, or by vote of a majority of the outstanding
shares of the applicable Company. The Board of Directors, including the
Independent Directors, last approved the continuance of the Current Investment
Advisory Agreements in November 2008.
Each
Current Investment Advisory Agreement and its corresponding New Investment
Advisory Agreement provide that they may be terminated by a Company at any time,
without the payment of any penalty, by the Board of Directors of the Company or
by the vote of the holders of a majority of the outstanding shares of the
Company on 60 days written notice to the Adviser. Each Current Investment
Advisory Agreement and its corresponding New Investment Advisory Agreement
provide that they may be terminated by the Adviser at any time, without the
payment of any penalty, upon 60 days written notice to a Company. Each Current
Investment Advisory Agreement and its corresponding New Investment Advisory
Agreement also provide that they will automatically terminate in the event of an
“assignment” (as defined in the 1940 Act).
Information
Regarding the Adviser
Tortoise
Capital Advisors, L.L.C. is each Company’s investment adviser. The
Adviser’s address is 11550 Ash Street, Suite 300, Leawood, Kansas
66211. As of May 31, 2009, the Adviser had approximately
$2.0 billion of client assets under management. The Adviser may
be contacted at the address listed on the first page of this proxy
statement.
Matters
Considered by the Board of Directors of each Company in approving the New
Investment Advisory Agreements
Prior to
the Board of Directors’ approval of the New Investment Advisory Agreements, the
Independent Directors, with the assistance of counsel independent of the Adviser
(hereinafter “independent legal counsel”), requested and evaluated extensive
materials about the Proposed Transaction and Mariner from the Adviser and
Mariner, which also included information from independent, third-party sources,
regarding the factors considered in their evaluation.
The
Independent Directors first learned of the potential Proposed Transaction in
January 2009. Prior to conducting due diligence of the Proposed
Transaction and of Mariner, each Independent Director had a personal meeting
with key officials of Mariner. In February 2009, the Independent
Directors consulted with independent legal counsel regarding the role of the
Independent Directors in the Proposed Transaction. Also in February
2009, the Independent Directors, in conjunction with independent legal counsel,
prepared and submitted their own due diligence request list to Mariner, so that
the Independent Directors could better understand the effect the change of
control would have on the Adviser. In March 2009, the Independent
Directors, in conjunction with independent legal counsel, reviewed the written
materials provided by Mariner. In April and May 2009, the Independent
Directors asked for supplemental written due diligence information and were
given such follow-up information about Mariner and the Proposed
Transaction.
In May 2009, the Independent Directors interviewed key Mariner personnel and
asked follow-up
questions after having completed a review of all documents
provided in response to formal due diligence requests. In particular,
the follow-up questions focused on (i) the expected continuity of management and
employees at the Adviser, (ii) compliance and regulatory experience of the
Adviser, (iii) plans to maintain the Adviser’s compliance and regulatory
personnel and (iv) benefit and incentive plans used to maintain the Adviser’s
current personnel. On May 22, 2009, the Independent Directors and
Mariner officials jointly attended the annual meetings of the Companies and at
such time met to discuss the Proposed Transaction. The Independent
Directors also met face-to-face with the Mariner officials in May in the
interest of better getting to know key personnel at Mariner. The
Independent Directors also discussed the Proposed Transaction and the findings
of the Mariner diligence investigation with independent legal counsel in private
sessions.
In
approving each New Investment Advisory Agreement, the Independent Directors of
each Company requested and received extensive data and information from the
Adviser concerning the Company and the services provided to it by the Adviser
under the Current Investment Advisory Agreement. In addition, the
Independent Directors had approved the continuance of the Current Investment
Advisory Agreements, whose terms are substantially identical to those of the New
Investment Advisory Agreements, in November 2008. The extensive data
and information reviewed, in conjunction with the results of the diligence
investigation of the Proposed Transaction and Mariner, form the basis of the
conclusions reached below.
Factors
Considered
The
Independent Directors considered and evaluated all the information provided by
the Adviser. The Independent Directors did not identify any single
factor as being all-important or controlling, and each Director may have
attributed different levels of importance to different factors. In deciding to
approve each New Investment Advisory Agreement, the Independent Directors’
decision was based on the following factors and what, if any, impact the
Proposed Transaction would have on such factors.
Nature, Extent
and Quality of Services Provided. The Independent Directors considered
information regarding the history, qualification and background of the Adviser
and the individuals responsible for the Adviser’s investment program, the
adequacy of the number of the Adviser personnel and other Adviser resources and
plans for growth, use of affiliates of the Adviser, and the particular expertise
with respect to energy infrastructure companies, MLP markets and financing
(including private financing). The Independent Directors concluded that the
unique nature of the Companies and the specialized expertise of the Adviser in
the niche market of MLPs made it uniquely qualified to serve as the adviser.
Further, the Independent Directors recognized that the Adviser’s commitment to a
long-term investment horizon correlated well to the investment strategy of the
Companies.
Investment
Performance of the Companies and the Adviser, Costs of the Services To Be
Provided and Profits To Be Realized by the Adviser and its Affiliates from the
Relationship, and Fee Comparisons. The Independent Directors
reviewed and evaluated information regarding each Company’s performance
(including quarterly, last twelve months, and from inception included in
information provided in connection with their November 2008 approval, as well as
supplemental information covering the period from November 30, 2008 through
April 30, 2009 and since inception) and the performance of the other Adviser
accounts (including other investment companies), and information regarding the
nature of the markets during the performance period, with a particular focus on
the MLP sector. The Independent Directors also considered each Company’s
performance as compared to comparable closed-end funds (and, in the case of TTO,
other business development companies) for the relevant periods.
The
Adviser provided detailed information concerning its cost of providing services
to each Company, its profitability in managing each Company, its overall
profitability, and its financial condition. The Independent Directors reviewed
with the Adviser the methodology used to prepare this financial information.
This financial information regarding the Adviser is considered in order to
evaluate the
Adviser’s
financial condition, its ability to continue to provide services under each New
Investment Advisory Agreement, and the reasonableness of the current management
fee, and was, to the extent possible, evaluated in comparison to other
closed-end funds (and, in the case of TTO, other business development companies)
with similar investment objectives and strategies.
The
Independent Directors considered and evaluated information regarding fees
charged to, and services provided to, other investment companies advised by the
Adviser (including the impact of any fee waiver or reimbursement arrangements
and any expense reimbursement arrangements), fees charged to separate
institutional accounts by the Adviser, and comparisons of fees of closed-end
funds with similar investment objectives and strategies, including other MLP
investment companies, to each Company. The Independent Directors concluded that
the fees and expenses that each Company will pay under the New Investment
Advisory Agreement are reasonable given the quality of services to be provided
under the New Investment Advisory Agreement and that such fees and expenses are
comparable to, and in many cases lower than, the fees charged by advisors to
comparable funds.
Economies of
Scale. The Independent Directors considered information from
the Adviser concerning whether economies of scale would be realized as each
Company grows, and whether fee levels reflect any economies of scale for the
benefit of each Company’s stockholders. The Independent Directors concluded that
economies of scale are difficult to measure and predict overall. Accordingly,
the Independent Directors reviewed other information, such as year-over-year
profitability of the Adviser generally, the profitability of its management of
each Company specifically, and the fees of competitive funds not managed by the
Adviser over a range of asset sizes. The Independent Directors concluded the
Adviser is appropriately sharing any economies of scale through its competitive
fee structure and through reinvestment in its business to provide stockholders
additional content and services.
Collateral
Benefits Derived by the Adviser. The Independent Directors
reviewed information from the Adviser concerning collateral benefits it receives
as a result of its relationship with each Company. They concluded that the
Adviser generally does not use any Company’s or stockholder information to
generate profits in other lines of business, and therefore does not derive any
significant collateral benefits from them.
The
Independent Directors did not, with respect to their deliberations concerning
their approval of the New Investment Advisory Agreements, consider the benefits
the Adviser may derive from relationships the Adviser may have with brokers
through soft dollar arrangements because the Adviser does not employ any such
arrangements in rendering its advisory services to the Company. Although the
Adviser may receive research from brokers with whom it places trades on behalf
of clients, the Adviser does not have soft dollar arrangements or understandings
with such brokers regarding receipt of research in return for
commissions.
Conclusions of the
Independent Directors
As a
result of this process, the Independent Directors, assisted by the advice of
legal counsel that is independent of the Adviser, taking into account all of the
factors discussed above and the information provided by the Adviser, unanimously
concluded that the New Investment Advisory Agreement between each Company and
the Adviser is fair and reasonable in light of the services provided and should
be approved.
Section 15(f)
of the 1940 Act
Section 15(f)
of the 1940 Act provides that when a sale of an interest in an investment
adviser of a registered investment company occurs that results in an assignment
of an investment advisory agreement, the investment adviser or any of its
affiliated persons may receive any amount or benefit in connection with the sale
so long as two conditions are satisfied. The first condition of
Section 15(f) is that during the three-year period following the completion
of the transaction, at least 75% of the investment company’s
board of
directors must not be “interested persons” (as defined in the 1940 Act) of the
investment adviser or predecessor adviser. In order to meet this test it is
expected that Terry Matlack, one of the five members of the Adviser’s Investment
Committee, will resign from the Board of Directors of each Company upon
completion of the Proposed Transaction. Second, an “unfair burden”
(as defined in the 1940 Act) must not be imposed on the investment company as a
result of the transaction relating to the sale of such interest, or any express
or implied terms, conditions or understandings applicable thereto. The term
“unfair burden” includes any arrangement during the two-year period after the
transaction whereby the investment adviser (or predecessor or successor
adviser), or any “interested person” (as defined in the 1940 Act) of such an
adviser, receives or is entitled to receive any compensation, directly or
indirectly, from the investment company or its security holders (other than fees
for bona fide investment advisory or other services) or from any person in
connection with the purchase or sale of securities or other property to, from or
on behalf of the investment company (other than bona fide ordinary compensation
as principal underwriter for the investment company). The Board of Directors of
each Company has determined that the Proposed Transaction will not impose an
“unfair burden” on any Company and that the Adviser will not receive any
compensation that will result in an “unfair burden” under the 1940 Act
definition.
Current
and New Investment Advisory Agreements
The New
Investment Advisory Agreement for each Company is substantially identical, other
than the effective and termination dates, to the Current Investment Advisory
Agreement for each Company described below.
TYG. Pursuant to the
terms of the Current Investment Advisory Agreement between TYG and
the Adviser, dated February 23, 2004 (the "TYG Advisory Agreement"), TYG pays to
the Adviser quarterly, as compensation for the services rendered by the Adviser,
a fee equal on an annual basis to 0.95% of the Company's average monthly Managed
Assets (total assets (including any assets attributable to any leverage that may
be outstanding but excluding any net deferred tax assets) minus the sum of
accrued liabilities other than (1) net deferred tax liabilities, (2) debt
entered into for purposes of leverage and (3) the aggregate liquidation
preference of any outstanding preferred stock). The Adviser
contractually agreed to waive or reimburse TYG for fees and expenses, including
the investment advisory fee and other expenses in the amount of 0.23% of the
average monthly Managed Assets through February 28, 2006 and 0.10% of the
average monthly Managed Assets through February 28, 2009. The Adviser
does not have the right to recoup any fees waived or reimbursed by the
Adviser. The Adviser does not include any deferred tax asset in the
calculation of its management fee. In its last fiscal year, TYG
incurred $9,351,912 in net fees due to the Adviser under the TYG Advisory
Agreement.
TYY. Pursuant
to the terms of the Current Investment Advisory Agreement between TYY
and the Adviser, dated May 1, 2005 (the "TYY Advisory Agreement"), TYY pays to
the Adviser quarterly, as compensation for the services rendered by the Adviser,
a fee equal on an annual basis to 0.95% of the Company's average monthly Managed
Assets (total assets (including any assets attributable to any leverage that may
be outstanding but excluding any net deferred tax assets) minus the sum of
accrued liabilities other than (1) net deferred tax liabilities,
(2) debt entered into for purposes of leverage and (3) the aggregate
liquidation preference of any outstanding preferred stock). The
Adviser does not include any deferred tax asset in the calculation of its
management fee. In its last fiscal year, TYY incurred $7,399,871 in
fees due to the Adviser under the TYY Advisory Agreement.
TTO. Pursuant
to the terms of the Current Investment Advisory Agreement between TTO and the
Adviser, dated January 1, 2007 (the “TTO Advisory Agreement”), TTO pays the
Adviser a fee consisting of two components - a base management fee and an
incentive fee. The base management fee is paid quarterly in arrears,
and is equal to 0.375% (1.5% annualized) of TTO’s average monthly Managed Assets
(total assets, including any assets purchased with or attributable to any
borrowed funds, minus accrued liabilities other than (i) deferred taxes,
and (ii) debt entered into for the purpose of leverage) for such
quarter.
The
incentive fee consists of two parts. The first part, the investment
income fee, is calculated and payable quarterly in arrears and will equal 15% of
the excess, if any, of TTO’s net investment income for the fiscal quarter over a
quarterly hurdle rate equal to 2% (8% annualized) of TTO’s average monthly net
assets for the quarter.
The
second part of the incentive fee, the capital gains fee, will be determined and
payable in arrears as of the end of each fiscal year (or, upon termination of
the TTO Advisory Agreement, as of the termination date), and will equal
(i) 15% of (a) TTO’s net realized capital gains on a cumulative basis
from the commencement of TTO’s operations on December 8, 2005 to the end of
each fiscal year, less (b) any unrealized capital depreciation at the end
of such fiscal year, less (ii) the aggregate amount of all capital gains
fees paid to the Adviser in prior fiscal years. The calculation of
the capital gains fee does not include any capital gains that result from that
portion of any scheduled periodic distributions made possible by the normally
recurring cash flow from the operations of portfolio companies (“Expected
Distributions”) that are characterized by TTO as return of capital for U.S.
generally accepted accounting principles purposes. In that regard,
any such return of capital will not be treated as a decrease in the cost basis
of an investment for purposes of calculating the capital gains
fee. This does not apply to any portion of any distribution from a
portfolio company that is not an Expected Distribution.
In
November 2007, the Adviser agreed that it would reimburse TTO for expenses
incurred by TTO beginning September 1, 2007 and ending December 31, 2008 on a
quarterly basis in an amount equal to an annual rate of 0.25% of TTO’s average
monthly Managed Assets for that quarter. In November 2008, the
Adviser agreed that it would reimburse TTO for expenses incurred beginning
January 1, 2009 and ending December 31, 2009 in an amount equal to an annual
rate of 0.25% of TTO’s average monthly Managed Assets. This
reimbursement will continue through December 31, 2009 upon approval of the New
Investment Advisory Agreement for TTO. In fiscal year 2008, TTO
incurred approximately $1,928,109 in base management fees due to the Adviser
under the TTO Advisory Agreement, net of $385,622 in expenses reimbursed by the
Adviser. During the fiscal year ended November 30, 2008, TTO accrued
no investment income incentive fees, and decreased the capital gains incentive
fee payable by $307,611. Pursuant to the TTO Advisory Agreement, the
capital gains incentive fee is paid annually only if there are realization
events and only if the calculation defined in the agreement results in an amount
due. As of November 30, 2008, no amount was required to be paid for
capital gains incentive fees. The Adviser does not include any
deferred tax asset in the calculation of its management fee.
Vote
Required
The
affirmative vote of a “majority of the outstanding voting securities” of a
Company is required for approval of Proposal One. For this purpose, a “majority
of the outstanding voting securities” means the affirmative vote of the lesser
of (i) more than 50% of the outstanding shares of stock of a Company on the
Record Date or (ii) 67% or more of the shares of stock of a Company
present at the Meeting if more than 50% of the outstanding shares of stock
issued, outstanding and entitled to vote is present in person or by proxy at the
Meeting. Each common share, and in the case of TYG and TYY,
each preferred share, is entitled to one vote on Proposal
One. Abstentions and broker non-votes, if any, will have the effect
of a vote against Proposal One.
Impact
of Non Approval
In the
event stockholders of a Company do not approve a Company’s New Investment
Advisory Agreement, the Board of Directors of that Company will take such action
as it deems to be in the best interests of such Company and its stockholders.
Stockholders of each Company will vote separately on their Company’s New
Investment Advisory Agreement and approval of one New Investment Advisory
Agreement is not dependent on approval of the others.
BOARD
RECOMMENDATION
The
Board of Directors of each Company unanimously recommends that the stockholders
of each Company vote “FOR” approval of Proposal One.
PROPOSAL
TWO
APPROVAL
OF A NEW SUB-ADVISORY AGREEMENT
Background
Pursuant
to the current sub-advisory agreement between the Adviser and Kenmont, the
Adviser pays Kenmont a fee consisting of a base management fee and an incentive
fee. This fee serves as compensation to Kenmont for providing TTO
additional contacts and enhancing the number and range of potential investment
opportunities in which TTO has the opportunity to invest.
As
discussed above, on June 3, 2009, the Adviser announced the Proposed
Transaction. The Proposed Transaction will result in a change in
control of the Adviser and will, therefore, constitute an “assignment” and
termination of the current sub-advisory agreement between the Adviser and
Kenmont within the meaning of the 1940 Act.
In
anticipation of the assignment of the current sub-advisory agreement, the Board
of Directors of TTO met in person on June 2, 2009 for purposes of, among other
things, considering whether it would be in the best interests of TTO and its
stockholders to approve the new sub-advisory agreement. The terms of the current
sub-advisory agreement are substantially identical to the terms of the new
sub-advisory agreement, except for the effective and termination dates, and
would simply continue the relationship between the Adviser and
Kenmont. A form of the new sub-advisory agreement is attached hereto
as Appendix D.
Information
Concerning the Current Sub-Advisory Agreement and the Proposed New Sub-Advisory
Agreement
The terms
of the new sub-advisory agreement are substantially identical to those of the
current sub-advisory agreement, except for the effective and termination
dates. If the new sub-advisory agreement is approved by stockholders,
it will become effective upon completion of the Proposed Transaction and will
continue in effect for an initial period that runs through December 31, 2010.
Thereafter, the new sub-advisory agreement is expected to be continued annually,
provided that its continuance is approved by the Board of Directors, including
the Independent Directors, at a meeting called for that purpose, or by vote of a
majority of the outstanding shares of TTO. The Board of Directors, including the
Independent Directors, last approved the continuance of the current sub-advisory
agreement in November 2008.
Information
Regarding the Sub-Adviser
Kenmont
is a Houston, Texas based registered investment adviser. The
principals of Kenmont have collectively created and managed private equity
portfolios in excess of $1.5 billion and collectively have over 50 years of
experience working for investment banks, accounting firms, operating companies
and money management firms. Entities managed by Kenmont own approximately
8.5 percent of TTO’s outstanding common shares and warrants to purchase an
additional 281,666 of TTO’s common shares.
Board
Approval of the New Sub-Advisory Agreement
In
approving the new sub-advisory agreement, the Board of Directors evaluated
information provided by the Adviser and legal counsel and considered various
factors, including:
Services. The Board of Directors
reviewed the nature, extent and quality of the investment advisory services
provided and proposed to be provided to the Adviser by Kenmont and found them to
be consistent with the services provided by the Adviser.
Experience of
Management Team and Personnel. The Board of Directors
considered the extensive experience of Kenmont with respect to the specific
types of investments proposed and concluded that Kenmont would provide valuable
assistance to the Adviser in providing potential investment
opportunities.
Provisions of New
Sub-Advisory Agreement. The Board of Directors
considered the extent to which the provisions of the new sub-advisory agreement
could potentially expose TTO to liability and concluded that its terms
adequately protected TTO from such risk.
Conclusions of the
Independent Directors
As a
result of this process, the Independent Directors, assisted by the advice of
independent legal counsel, and taking into account all of the factors discussed
above and the information provided by the Adviser, unanimously concluded that
the new sub-advisory agreement between the Adviser and Kenmont is fair and
reasonable in light of the services provided and should be
approved.
Vote
Required
The
affirmative vote of a “majority of the outstanding voting securities” of TTO is
required for approval of Proposal Two. For this purpose, a “majority of the
outstanding voting securities” means the affirmative vote of the lesser of
(i) more than 50% of the outstanding shares of stock of TTO on the Record
Date or (ii) 67% or more of the shares of stock of TTO present at the
Meeting if more than 50% of the outstanding shares of stock issued, outstanding
and entitled to vote is present in person or by proxy at the
Meeting. Each common share is entitled to one vote on Proposal
Two. Abstentions and broker non-votes, if any, will have the effect
of a vote against Proposal Two.
BOARD
RECOMMENDATION
The
Board of Directors of Tortoise Capital Resources Corporation unanimously
recommends that stockholders of Tortoise Capital Resources Corporation vote
“FOR” approval of Proposal Two.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Each
Company’s Audit Committee selected Ernst & Young LLP (“E&Y”) as the
independent registered public accounting firm to audit the books and records of
the Company for its fiscal year ending November 30, 2009. On May 22,
2009, the stockholders of each Company ratified the selection of
E&Y. E&Y is registered with the Public Company Accounting
Oversight Board.
MORE
INFORMATION ABOUT THE MEETING
Stockholders. At
the Record Date, each Company had the following number of shares issued and
outstanding:
Common
Shares Preferred
Shares
TYG 2,800
TYY 3,800
TTO 0
At
December 31, 2008, each director beneficially owned (as determined pursuant to
Rule 16a-1(a)(2) under the Exchange Act) shares of each Company and in the
Funds overseen by each director in the same Fund Complex having values within
the indicated dollar ranges. Other than the Fund Complex, with
respect to each Company, none of the Company’s directors who are not interested
persons of the Company, nor any of their immediate family members, has ever been
a director, officer or employee of the Adviser or its affiliates.
|
Director
|
|
Aggregate Dollar Range of Holdings in the Company
(1)
|
|
Aggregate
Dollar Range of Holdings in Funds Overseen by Director in Fund Complex (2)
|
|
|
|
|
|
|
|
|
|
|
|
Interested
Persons
|
|
TYG
|
|
TYY
|
|
TTO
|
|
|
|
H.
Kevin Birzer
|
|
Over
$100,000
|
|
Over
$100,000
|
|
Over
$100,000
|
|
Over
$100,000
|
|
Terry
C. Matlack
|
|
Over
$100,000
|
|
Over
$100,000
|
|
$10,001-$50,000
|
|
Over
$100,000
|
|
|
|
|
|
|
|
|
|
|
|
Independent
Persons
|
|
|
|
|
|
|
|
|
|
Conrad
S. Ciccotello
|
|
$50,001-$100,000
|
|
$10,001-$50,000
|
|
$10,001-$50,000
|
|
Over
$100,000
|
|
John
R. Graham
|
|
Over
$100,000
|
|
$50,001-$100,000
|
|
$10,001-$50,000
|
|
Over
$100,000
|
|
Charles
E. Heath
|
|
Over
$100,000
|
|
$50,001-$100,000
|
|
$10,001-$50,000
|
|
Over
$100,000
|
|
(1)
|
Based
on the closing price of each Company’s common shares on the New York Stock
Exchange on December 31, 2008.
|
|
(2)
|
Includes
TYG, TYY, TTO, Tortoise Total Return Fund, LLC (“TTRF”), Tortoise North
American Energy Corporation (“TYN”) and Tortoise Gas and Oil Corporation
(“TGO”). Amounts based on the closing price of each Company’s
common shares on the New York Stock Exchange on December 31, 2008, the NAV
of TTRF as of December 31, 2008 and the NAV of TGO as of November 30,
2008.
|
At December 31, 2008, each director,
each officer and the directors and officers as a group, beneficially owned (as
determined pursuant to Rule 13d-3 under the Exchange Act) the following number
of shares of common stock of each Company (or percentage of outstanding
shares). At December 31, 2008, no director or officer owned any
preferred stock of a Company. Unless otherwise indicated each
individual has sole investment and voting power with respect to the shares
listed.
|
Directors and
Officers
|
Number of Common
Shares
|
% of Outstanding
Shares
|
|
|
TYG
|
TYY
|
TTO
|
TYG
|
TYY
|
TTO
|
|
Independent
Directors
|
|
|
|
|
|
|
|
Conrad
S. Ciccotello
|
2,366.75
|
1,122.83
|
2,938.90(1)
|
*
|
*
|
*
|
|
John
R. Graham
|
10,492.49(2)
|
4,309.79(3)
|
5,671.02(4)
|
*
|
*
|
*
|
|
Charles
E. Heath
|
8,000.00(5)
|
6,300.00(6)
|
4,253.27(7)
|
*
|
*
|
*
|
|
|
|
|
|
|
|
|
|
Interested
Directors and Officers
|
|
|
|
|
|
|
|
H.
Kevin Birzer
|
37,212.52(8)
|
14,571.49(9)
|
26,428.92(10)
|
*
|
*
|
*
|
|
Terry
C. Matlack
|
11,764.07(11)
|
10,226.75(12)
|
9,467.20(13)
|
*
|
*
|
*
|
|
David
J. Schulte
|
4,771.12(14)
|
2,793.03(15)
|
13,204.04(16)
|
*
|
*
|
*
|
|
Zachary
A. Hamel
|
4,235.09(17)
|
4,150.10(18)
|
5,750.76(19)
|
*
|
*
|
*
|
|
Kenneth
P. Malvey
|
8,665.73(20)
|
1,493.17(21)
|
8,292.54(22)
|
*
|
*
|
*
|
|
Edward
Russell(23)
|
-
|
-
|
6,098.65
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors
and Officers as a Group
|
87,507.77
|
44,967.16
|
82,105.30
|
*
|
*
|
*
|
|
|
|
|
|
|
|
|
|
(1)
|
Mr.
Ciccotello holds 1,010.38 of these shares jointly with his
wife. Includes 250 shares of common stock that may be acquired
through warrants that are currently
exercisable.
|
|
(2)
|
Includes
3,000 shares held in the John R. Graham Trust, of which Mr. Graham is the
sole trustee, and 4,000 shares held by Master Teachers Employee Benefit
Pension Trust, of which Mr. Graham is the sole trustee and for which he
disclaims beneficial ownership.
|
|
(3)
|
Includes
1,259.005 shares held in the John R. Graham Trust, of which Mr. Graham is
the sole trustee.
|
|
(4)
|
These
shares are held of record by the John R. Graham Trust U/A dtd 1/3/92, John
R. Graham, sole trustee and include warrants to purchase 1,000 shares of
common stock that may be acquired through warrants that are currently
exercisable.
|
|
(5)
|
All
shares held by the Charles E. Heath Trust, of which Mr. Heath is a
trustee.
|
|
(6)
|
Includes
4,300 shares held by the Charles E. Heath Trust #1, of which Mr. Heath is
a trustee, and 2,000 shares held by the Charles F. Heath Trust #1, Trust
B, of which Mr. Heath is a trustee.
|
|
(7)
|
These
shares are held of record by the Charles E Health Trust No. 1 dtd U/A
2/1/92, Charles E. Heath, co-trustee and include 750 shares of common
stock that may be acquired through warrants that are currently
exercisable.
|
|
(8)
|
Includes
27,050.03 shares Mr. Birzer holds jointly with his wife and 1,541.25
shares held by Mr. Birzer’s children in accounts established under the
Kansas Uniform Transfer to Minor’s Act for which his wife is the
custodian.
|
|
(9)
|
Includes
13,815.98 shares Mr. Birzer holds jointly with his wife and 755.51 shares
held by Mr. Birzer’s children in accounts established under the Kansas
Uniform Transfer to Minor’s Act for which his wife is the
custodian.
|
|
(10)
|
Mr. Birzer
holds 25,228.92 shares and 1,325 warrants jointly with his wife and holds
1,200 shares for the benefit of his children in an account established
under the Kansas Uniform Transfer to Minor’s Act for which his wife is the
custodian. Includes 1,325 shares of common stock that may be
acquired through warrants that are currently
exercisable.
|
|
(11)
|
All
shares are held in the Matlack Living Trust, U/A DTD 12/30/04, of which
Mr. Matlack and his wife are co-trustees and share voting and investment
power with respect to the shares.
|
|
(12)
|
Includes
9,802.19 shares held in the Matlack Living Trust, U/A DTD 12/30/04, of
which Mr. Matlack and his wife are co-trustees and share voting and
investment power with respect to the
shares.
|
|
(13)
|
These
shares are held of record by the Matlack Living Trust dtd 12/30/2004, for
which Mr. Matlack and his wife are co-trustees and include 616 shares of
common stock that may be acquired through warrants that are currently
exercisable.
|
|
(14)
|
Includes
1,300 shares held jointly with his
wife.
|
|
(15)
|
Includes
1,300 shares held jointly with his wife and 200 shares held in children’s
accounts established under the Kansas Uniform Transfer to Minor’s Act for
which his wife is the custodian.
|
|
(16)
|
Includes
1,128 shares of common stock that may be acquired through warrants that
are currently exercisable. Mr. Schulte holds 12,083 shares and
966 warrants jointly with his wife; 200 shares are held in accounts for
spouse’s children for which she is the custodian and of which Mr. Schulte
disclaims beneficial ownership.
|
|
(17)
|
Includes
220 shares held by Mr. Hamel’s children in accounts established under the
Kansas Uniform Transfer to Minor’s Act for which he is the
custodian.
|
|
(18)
|
Includes
150 shares held by Mr. Hamel’s children in accounts established under the
Kansas Uniform Transfer to Minor’s Act for which he is the
custodian.
|
|
(19)
|
Includes
416 shares of common stock that may be acquired through warrants that are
currently exercisable.
|
|
(20)
|
Includes
2,129.48 shares held by Mr. Malvey’s wife and 121 shares held by his child
in an account established under the Kansas Uniform Transfer to Minor’s Act
for which he is the custodian
|
|
(21)
|
Includes
500 shares held by Mr. Malvey’s wife and 100 shares held by his child in
an account established under the Kansas Uniform Transfer to Minor’s Act
for which he is the custodian.
|
|
(22)
|
Mr.
Malvey holds 100 shares for the benefit of his child in an account for
which he is the custodian, and holds 166 warrants jointly with his wife;
1,500 shares are held by his wife. Includes 347 shares of
common stock that may be acquired through warrants that are currently
exercisable.
|
|
(23)
|
Mr.
Russell is not a director or officer of TYG or
TYY.
|
As of
December 31, 2008, to the knowledge of TYG, no person held (sole or shared)
power to vote or dispose of more than 5% of the outstanding shares of
TYG.
The table
below indicates the persons known to TYY to own 5% or more of its shares of
common stock as of December 31, 2008. The beneficial owner
listed below has sole power to vote and dispose of the shares listed in the
table below.
|
Name and
Address
|
Number of Common
Shares
|
Percent of
Class
|
|
OTR
– Nominee Name for The State Teachers Retirement Board of Ohio
(1)
275
East Broad Street
Columbus,
Ohio 43215
|
880,493
|
5.0%
|
|
(1)
|
Information
with respect to this beneficial owner and its beneficial ownership is
based on a Schedule 13G amendment dated January 9,
2009.
|
The table
below indicates the persons known to TTO to own 5% or more of its shares of
common stock as of December 31, 2008. The beneficial owners
listed below share the power to vote and dispose of the shares listed in the
table below.
|
Name and
Address
|
Number of Common
Shares
|
Percent of
Class
|
|
Kenmont
Investments Management, L.P.
711
Louisiana, Suite 1750, Houston, TX
77002(1)
|
786,832
|
8.5%
|
|
(1)
|
Information
with respect to Kenmont entities is based on a Schedule 13G amendment
filed on February 17, 2009. Kenmont Investments Management,
L.P. (“Kenmont”) serves as investment manager to several entities that
beneficially own the Company’s securities, each of which is more fully
described in that Schedule 13G amendment. Includes 281,666
shares of common stock that may be acquired through warrants that are
currently exercisable.
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How Proxies Will Be Voted. All proxies solicited by the Board
of Directors of each Company that are properly executed and received prior to
the Meeting, and that are not revoked, will be voted at the
Meeting. Shares represented by those proxies will be voted in
accordance with the instructions marked on the proxy. If no
instructions are specified, shares will be counted as a vote FOR the proposals
described in this proxy statement. Votes will be cast in the
discretion of the proxy holders on any procedural matter other than the
proposals that may properly come before the Meeting and any postponement or
adjournment thereof, including, but not limited to, proposing and/or voting on
the adjournment of the Meeting with respect to one or more proposals in the
event that sufficient votes in favor of any proposal are not
received.
How To
Vote. Complete, sign and date the enclosed proxy card and
return it in the enclosed envelope or attend the Meeting and vote in
person.
Expenses and Solicitation of
Proxies. The expenses of preparing, printing and mailing the
enclosed proxy card, the accompanying notice and this proxy statement and all
other costs, in connection with the solicitation of proxies will be borne by the
Adviser. In order to obtain the necessary quorum for a Company at the
meeting, additional solicitation may be made by mail, telephone, telegraph,
facsimile or personal interview by representatives of the Company, the Adviser,
the Company’s transfer agent, or by brokers or their representatives or by a
solicitation firm that may be engaged by the Company to assist in proxy
solicitations.
Revoking a
Proxy. With respect to each Company, at any time before it has
been voted, you may revoke your proxy by: (1) sending a letter stating that you
are revoking your proxy to the Secretary of the Company at the Company’s offices
located at 11550 Ash Street, Suite 300, Leawood, Kansas 66211; (2) properly
executing and sending a later-dated proxy; or (3) attending the Meeting,
requesting return of any previously delivered proxy, and voting in
person.
Quorum. With
respect to each Company, the presence, in person or by proxy, of holders of
shares entitled to cast a majority of the votes entitled to be cast (without
regard to class) constitutes a quorum. For purposes of determining
the presence or absence of a quorum, shares present at the Meeting that are not
voted, or abstentions, and broker non-votes (which occur when a broker has not
received directions from customers and does not have discretionary authority to
vote the customers' shares), if any, will be treated as shares that are present
at the meeting but have not been voted.
With
respect to each Company, if a quorum is not present in person or by proxy at the
Meeting, the Chairman of the Meeting or the stockholders entitled to vote at
such meeting, present in person or by proxy, have the power to adjourn the
Meeting to a date not more than 120 days after the Record Date without notice
other than announcement at the Meeting.
Conduct and
Adjournment. Maryland law and each Company’s bylaws provide
that the Chairman of the Meeting may prescribe such rules, regulations and
procedures and take such action as, in the discretion of such Chairman, are
appropriate for the proper conduct of the Meeting. This may include,
without limitation, recessing or adjourning the Meeting to a later date and time
and place announced at the Meeting, including for the purpose of soliciting
additional proxies if there are insufficient votes at the time of the Meeting to
approve any proposal, without notice other than announcement at the
Meeting.
ADMINISTRATOR
TYG and
TYY have each entered into administration agreements with US Bancorp Fund
Services, LLC whose principal business address is 615 E. Michigan Street,
Milwaukee, Wisconsin 53202.
TTO has
entered into an Administration Agreement with the Adviser, pursuant to which the
Adviser performs (or oversees or arranges for the performance of) the
administrative services necessary for the Company’s operation, including without
limitation providing equipment, clerical, bookkeeping
and
record keeping services. The address of the Adviser is 11550 Ash
Street, Suite 300, Leawood, Kansas 66211.
STOCKHOLDER
COMMUNICATIONS
Stockholders
are able to send communications to the Board of Directors of each
Company. Communications should be addressed to the Secretary of the
applicable Company at its principal offices at 11550 Ash Street, Suite 300,
Leawood, Kansas 66211. The Secretary will forward any communications
received directly to the Board of Directors.
STOCKHOLDER PROPOSALS
AND NOMINATIONS FOR THE 2010 ANNUAL MEETING
Method for Including Proposals in a
Company’s Proxy Statement. Under the rules of the SEC, if you
want to have a proposal included in a Company’s proxy statement for its next
annual meeting of stockholders, that proposal must be received by the Secretary
of the Company at 11550 Ash Street, Suite 300, Leawood, Kansas 66211, not later
than 5:00 p.m., Central Time, on December 22, 2009 in the case of TYG or TYY,
and December 16, 2009 in the case of TTO. Such proposal must comply
with all applicable requirements of Rule 14a-8 of the Exchange
Act. Timely submission of a proposal does not mean the proposal will
be included in the proxy material sent to stockholders.
Other Proposals and
Nominations. If you want to nominate a director or have other
business considered at a Company’s next annual meeting of stockholders but do
not want those items included in such Company’s proxy statement, you must comply
with the advance notice provisions of the Company’s Bylaws. Under
each Company’s Bylaws, nominations for director or other business proposals to
be addressed at the Company’s next annual meeting may be made by a stockholder
who has delivered a notice to the Secretary of the Company at 11550 Ash Street,
Suite 300, Leawood, Kansas 66211, no earlier than December 22, 2009 in the case
of TYG, November 22, 2009 in the case of TYY, and November 16, 2009 in the case
of TTO, nor later than 5:00 p.m. Central Time, on January 21, 2010 in the case
of TYG, December 22, 2009 in the case of TYY, and December 16, 2009 in the case
of TTO. The stockholder must satisfy certain requirements set forth
in the Company’s Bylaws and the notice must contain specific information
required by the Company’s Bylaws. With respect to nominees for
director, the notice must include, among other things, the name, age, business
address and residence address of any nominee for director, certain information
regarding such person’s ownership of Company shares, and all other information
relating to the nominee as is required to be disclosed in solicitations of
proxies in an election contest or as otherwise required by Regulation 14A under
the Exchange Act. With respect to other business to be brought before
the meeting, a notice must include, among other things, a description of the
business and any material interest in such business by the stockholder and
certain associated persons proposing the business. Any stockholder
wishing to make a proposal should carefully read and review the applicable
Company’s Bylaws. A copy of each Company’s Bylaws may be obtained by
contacting the Secretary of the Company at 1-866-362-9331 or by writing the
Secretary of the Company at 11550 Ash Street, Suite 300, Leawood, Kansas
66211. Timely submission of a proposal does not mean the proposal
will be allowed to be brought before the meeting.
These
advance notice provisions are in addition to, and separate from, the
requirements that a stockholder must meet in order to have a proposal included
in any Company’s proxy statement under the rules of the SEC.
By Order of the Board
of Directors
Connie J. Savage
Secretary
________________,
2009
PLEASE
FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE.
Proxy
— Tortoise Energy Infrastructure Corporation
PROXY
SOLICITED BY THE BOARD OF DIRECTORS FOR
A
SPECIAL MEETING OF STOCKHOLDERS – _____________, 2009
The
undersigned holder of common stock or preferred stock of Tortoise Energy
Infrastructure Corporation appoints David J. Schulte and H. Kevin Birzer, or
either of them, each with power of substitution, to vote all shares that the
undersigned is entitled to vote at the special meeting of stockholders of
Tortoise Energy Infrastructure Corporation to be held on ____________, 2009 and
at any adjournments or postponements thereof, as set forth on the reverse side
of this card, and in their discretion upon any procedural matter that may
properly come before the meeting (and any adjournment or postponement
thereof).
YOUR
VOTE IS IMPORTANT. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING
THE ENCLOSED POSTMARKED ENVELOPE.
(Continued
and to be signed on the reverse side)
Using a
black
ink pen, mark your votes with an X as shown
in [ X ]
this
example. Please do not write outside the designated areas.
Special
Meeting Proxy Card
PLEASE
FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE.
This
proxy, when properly executed, will be voted in the manner directed herein and,
absent direction, will be voted “FOR” the proposals. The votes
entitled to be cast by the undersigned will be cast in the discretion of the
proxy holder on any procedural matter related to Proposal 1 that may properly
come before the meeting (and any adjournments or postponements thereof),
including, but not limited to, voting on adjournment of the meeting in the event
that sufficient votes in favor of Proposal 1 are not received.
A. Proposal
— The Board of Directors recommends a vote “FOR” the Proposal
below.
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1.
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Approval
of a new investment advisory agreement between the Company and Tortoise
Capital Advisors, L.L.C.
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For Against Abstain
[ ] [ ] [ ]
B. Non-Voting
Issues
Change of Name or Address –
Please print new information
below. Meeting
Attendance
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Mark
box to the right
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if
you plan to attend the Special Meeting.
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C. Authorized
Signatures – This section must be completed for your vote to be counted. – Date
and Sign Below
Please
sign exactly as your name appears. If acting as attorney, executor,
trustee, or in representative capacity, sign name and indicate
title.
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Date
(mm/dd/yyyy) – Please print date below
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Signature
1 – Please keep signature within the box.
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Signature
2 – Please keep signature within the box.
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PLEASE
FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE.
Proxy
— Tortoise Energy Capital Corporation
PROXY
SOLICITED BY THE BOARD OF DIRECTORS FOR
A
SPECIAL MEETING OF STOCKHOLDERS – ___________, 2009
The
undersigned holder of common stock or preferred stock of Tortoise Energy Capital
Corporation appoints David J. Schulte and H. Kevin Birzer, or either of them,
each with power of substitution, to vote all shares that the undersigned is
entitled to vote at the special meeting of stockholders of Tortoise Energy
Capital Corporation to be held on ____________, 2009 and at any adjournments or
postponements thereof, as set forth on the reverse side of this card, and in
their discretion upon any procedural matter that may properly come before the
meeting (and any adjournment or postponement thereof).
YOUR
VOTE IS IMPORTANT. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING
THE ENCLOSED POSTMARKED ENVELOPE.
(Continued
and to be signed on the reverse side)
Using a
black
ink pen, mark your votes with an X as shown
in [ X ]
this
example. Please do not write outside the designated areas.
Special
Meeting Proxy Card
PLEASE
FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE.
This
proxy, when properly executed, will be voted in the manner directed herein and,
absent direction, will be voted “FOR” the proposals. The votes
entitled to be cast by the undersigned will be cast in the discretion of the
proxy holder on any procedural matter related to Proposal 1 that may properly
come before the meeting (and any adjournments or postponements thereof),
including, but not limited to, voting on adjournment of the meeting in the event
that sufficient votes in favor of Proposal 1 are not received.
A. Proposal
— The Board of Directors recommends a vote “FOR” the Proposal
below.
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1.
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Approval
of a new investment advisory agreement between the Company and Tortoise
Capital Advisors, L.L.C.
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For Against Abstain
[ ] [ ] [ ]
B. Non-Voting
Issues
Change of Name or Address –
Please print new information
below. Meeting
Attendance
|
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Mark
box to the right
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if
you plan to attend the Special Meeting.
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C. Authorized
Signatures – This section must be completed for your vote to be counted. – Date
and Sign Below
Please
sign exactly as your name appears. If acting as attorney, executor,
trustee, or in representative capacity, sign name and indicate
title.
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Date
(mm/dd/yyyy) – Please print date below
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Signature
1 – Please keep signature within the box.
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Signature
2 – Please keep signature within the box.
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/ /
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PLEASE
FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE.
Proxy
— Tortoise Capital Resources Corporation
PROXY
SOLICITED BY THE BOARD OF DIRECTORS FOR
A
SPECIAL MEETING OF STOCKHOLDERS – ___________, 2009
The
undersigned holder of stock of Tortoise Capital Resources Corporation appoints
David J. Schulte and H. Kevin Birzer, or either of them, each with power of
substitution, to vote all shares that the undersigned is entitled to vote at the
special meeting of stockholders of Tortoise Capital Resources Corporation to be
held on _________, 2009 and at any adjournments or postponements thereof, as set
forth on the reverse side of this card, and in their discretion upon any
procedural matter that may properly come before the meeting (and any adjournment
or postponement thereof).
YOUR
VOTE IS IMPORTANT. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING
THE ENCLOSED POSTMARKED ENVELOPE.
(Continued
and to be signed on the reverse side)
Using a
black
ink pen, mark your votes with an X as shown
in [ X ]
this
example. Please do not write outside the designated areas.
Special
Meeting Proxy Card
PLEASE
FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE.
This
proxy, when properly executed, will be voted in the manner directed herein and,
absent direction, will be voted “FOR” the proposals. The votes
entitled to be cast by the undersigned will be cast in the discretion of the
proxy holder on any procedural matter related to the proposals that may properly
come before the meeting (and any adjournments or postponements thereof),
including, but not limited to, voting on adjournment of the meeting in the event
that sufficient votes in favor of the proposals are not received.
A. Proposal
— The Board of Directors recommends a vote “FOR” the Proposals
below.
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1.
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Approval of a new investment
advisory agreement between the Company and Tortoise Capital Advisors,
L.L.C.
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For Against Abstain
[ ] [ ]
[ ]
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2.
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To
approve a new sub-advisory agreement between Tortoise Capital Advisors,
L.L.C. and Kenmont Investments Management,
L.P.
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For Against Abstain
[ ]
[ ]
[ ]
B. Non-Voting
Issues
Change of Name or Address –
Please print new information
below. Meeting
Attendance
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Mark
box to the right
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if
you plan to attend the Special Meeting.
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C. Authorized
Signatures – This section must be completed for your vote to be counted. – Date
and Sign Below
Please
sign exactly as your name appears. If acting as attorney, executor,
trustee, or in representative capacity, sign name and indicate
title.
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Date
(mm/dd/yyyy) – Please print date below
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Signature
1 – Please keep signature within the box.
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Signature
2 – Please keep signature within the box.
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