DEF14A Proxy Statement for Tortoise Energy Infrastructure Corporation
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. )
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Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[X] Definitive Proxy Statement
[ ] Definitive Additional Materials.
[ ] Soliciting Material Pursuant to ss.240.14a-12
TORTOISE ENERGY INFRASTRUCTURE CORPORATION
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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TORTOISE ENERGY INFRASTRUCTURE CORPORATION
10801 Mastin Boulevard, Suite 222
Overland Park, Kansas 66210
1-800-919-0315
January 27, 2006
Dear Fellow Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
Tortoise Energy Infrastructure Corporation (the "Company") on Wednesday, April
12, 2006 at 9:00 a.m., Central Time, at The Doubletree Hotel, 10100 College
Boulevard, Overland Park, Kansas 66210.
The matters scheduled for consideration at the meeting are the election of two
directors of the Company and the ratification of the selection of Ernst & Young
LLP as the independent registered public accounting firm of the Company for its
fiscal year ending November 30, 2006, as more fully discussed in the enclosed
proxy statement.
Enclosed with this letter are answers to questions you may have about the
proposals, the formal notice of the meeting, the proxy statement, which gives
detailed information about the proposals and why the Board recommends that you
vote to approve each of them, the actual proxy for you to sign and return, and
the Company's Annual Report to stockholders for the fiscal year ended November
30, 2005. If you have any questions about the enclosed proxy or need any
assistance in voting your shares, please call 1-888-728-8784.
Your vote is important. Please complete, sign, and date the enclosed proxy 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,
/s/ David J. Schulte
David J. Schulte
CEO and President
TORTOISE ENERGY INFRASTRUCTURE CORPORATION
ANSWERS TO SOME IMPORTANT QUESTIONS
Q. WHAT AM I BEING ASKED TO VOTE "FOR" ON THIS PROXY?
A. This proxy contains two proposals: (i) the election of two directors to
serve until the 2009 Annual Stockholder Meeting; and (ii) the ratification of
Ernst & Young LLP as the Company's independent registered public accounting
firm. Stockholders of the Company may also transact such other business as may
properly come before the meeting.
Q. AM I ENTITLED TO VOTE ON THE ELECTION OF BOTH DIRECTORS?
A. Only holders of preferred shares voting as a class are entitled to vote
on the election of Terry C. Matlack. Holders of preferred shares and holders of
common shares are entitled to vote as a single class on the election of Charles
E. Heath.
Q. HOW DOES THE BOARD OF DIRECTORS SUGGEST THAT I VOTE?
A. The Board of Directors of the Company unanimously recommends that you
vote "FOR" all proposals on the enclosed proxy card.
Q. HOW CAN I VOTE?
A. You can vote by completing, signing and dating your proxy card, and
mailing it in the enclosed envelope. You also may vote in person if you are able
to attend the meeting. 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 Proxy Statement. We urge you to
read the Proxy Statement carefully.
If you have questions, call 1-888-728-8784.
TORTOISE ENERGY INFRASTRUCTURE CORPORATION
10801 Mastin Boulevard, Suite 222
Overland Park, Kansas 66210
1-888-728-8784
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Tortoise Energy Infrastructure Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Tortoise
Energy Infrastructure Corporation, a Maryland Corporation (the "Company"), will
be held on Wednesday, April 12, 2006 at 9:00 a.m. Central Time at The Doubletree
Hotel, 10100 College Boulevard, Overland Park, Kansas 66210 for the following
purposes:
1. To elect two directors of the Company, to hold office for a term of
three years and until their respective successors are duly elected and
qualified;
2. To ratify the selection of Ernst & Young LLP as the independent
registered public accounting firm of the Company for its fiscal year
ending November 30, 2006; and
3. To transact any other business that may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy Statement
accompanying this Notice.
Stockholders may also transact any other business that properly comes before the
meeting.
Stockholders of record as of the close of business on January 17, 2006 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 the Company,
/s/ Zachary A. Hamel
Zachary A. Hamel
Secretary
January 27, 2006
Overland Park, 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 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
10801 Mastin Boulevard, Suite 222
Overland Park, Kansas 66210
1-888-728-8784
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 12, 2006
This proxy statement is being sent to you by the Board of Directors of
Tortoise Energy Infrastructure Corporation (the "Company"). The Board of
Directors is asking you to complete and return the enclosed proxy card,
permitting your shares of the Company to be voted at the annual meeting of
stockholders called to be held on April 12, 2006. Stockholders of record at the
close of business on January 17, 2006 (the "record date") are entitled to vote
at the meeting as set forth in this proxy statement. This proxy statement and
the enclosed proxy and the Company's Annual Report to stockholders for the
fiscal year ended November 30, 2005 are first being mailed to stockholders on or
about January 27, 2006.
The Company's reports can be accessed on its website
(www.tortoiseenergy.com) or on the SEC's website (www.sec.gov).
1
This Proxy Statement sets forth concisely the information that stockholders
should know in order to evaluate each of the following proposals. The following
table presents a summary of the proposals and the class stockholders being
solicited with respect to each proposal.
Proposal Class of Stockholders Entitled to Vote
1. To approve the election of the following individuals
as directors:
Terry C. Matlack Preferred Stockholders
Charles E. Heath Common Stockholders and Preferred Stockholders,
voting as a single class
2. To ratify the selection of Ernst & Young LLP as the Common Stockholders and Preferred Stockholders,
independent registered public accounting firm of the voting as a single class
Company for the fiscal year ending November 30,
2006
PROPOSAL ONE
ELECTION OF TWO DIRECTORS
The Board of Directors unanimously nominated Terry C. Matlack and Charles
E. Heath, following recommendation by the nominating and governance committee,
for election as directors at the annual meeting. If elected, Messrs. Matlack and
Heath will serve for a term of three years and until their successors are duly
elected and qualified. Each of these nominees is currently a director, has
consented to be named in this proxy statement and has agreed to serve if
elected. The Company has no reason to believe that either Mr. Matlack or Mr.
Heath will be unavailable to serve.
The persons named on the accompanying proxy card intend to vote at the
meeting (unless otherwise directed) FOR the election of Messrs. Matlack and
Heath as directors of the Company. Currently the Company has five directors. In
accordance with the Company's Articles of Incorporation, as amended, its Board
of Directors is divided into three classes of approximately equal size. The
terms of the directors of the different classes are staggered. The terms of John
R. Graham and H. Kevin Birzer expire on the date of the 2007 annual meeting of
stockholders and the term of Conrad S. Ciccotello expires at the annual meeting
of stockholders in 2008. If Mr. Matlack and Mr. Heath are elected at the 2006
annual meeting, their terms will expire on the date of the 2009 annual meeting
of stockholders. Pursuant to the terms of the Company's preferred shares, the
preferred stockholders have the exclusive right to elect two directors to the
board. The board has designated Mr. Matlack and Mr. Graham as the directors the
preferred stockholders shall have the right to elect.
On this proposal, the holders of preferred shares of the Company will have
the exclusive right, voting as a class, to vote on the election of Mr. Matlack,
and will vote together with the holders of common shares as a single class on
the election of Mr. Heath. The holders of common shares will have no right to
vote on the election of Mr. Matlack. In accordance with the Company's Amended
and Restated Bylaws ("Bylaws"), each share may be voted for as many individuals
as there are directors to be elected and for whose election the share is
entitled to vote. The holders of preferred shares are entitled to vote each
share on the election of each of the two directors, while the holders of common
shares are entitled to vote each share on the election of one director. The
Company's directors are elected by a plurality of the votes cast at the meeting.
Where, as here, there are two vacancies for director, the two nominees with the
highest number of affirmative votes, regardless of the votes withheld for those
candidates, will be elected. Thus, abstentions, withheld votes and broker
non-votes, if any, will not be counted towards a nominee's achievement of a
plurality. Stockholders do not have cumulative voting rights.
2
If elected, Mr. Matlack and Mr. Heath will hold office until the 2009
annual meeting of stockholders and until their successors are duly elected and
qualified. If either Mr. Matlack or Mr. Heath is unable to serve because of an
event not now anticipated, the persons named as proxies may vote for one or more
other persons designated by the Board of Directors.
The following table sets forth each Board member's name, age and address;
position(s) with the Company and length of time served; principal occupation
during the past five years; the number of portfolios in the Fund Complex that
each Board member oversees; and other public company directorships held by each
Board member. The Fund Complex is comprised of the closed-end funds advised by
the Company's investment advisor, Tortoise Capital Advisors, L.L.C. (the
"Advisor"), and as of January 27, 2006 included the Company, Tortoise North
American Energy Corporation ("TYN") and Tortoise Energy Capital Corporation
("TYY").
NOMINEE FOR DIRECTOR WHO IS INDEPENDENT:
Number of
Portfolios in Other Public
Positions(s) Held Fund Company
With Company Complex Directorships
and Length of Principal Occupation Overseen by Held by
Name, Age and Address Time Served During Past Five Years Director Director
--------------------- ----------------- ---------------------- ------------- -------------
Charles E. Heath*, 63 Director since 2003 Retired in 1999. Formerly, Three None
10801 Mastin Blvd. Chief Investment Officer,
Suite 222 General Electric's Employers
Overland Park, KS 66210 Reinsurance Corporation
(1989-1999). CFA since 1974.
*Mr. Heath is also a director of Tortoise Capital Resources Corporation ("TTO"),
an affiliate of the Company and for which the Advisor serves as investment
advisor.
NOMINEE FOR DIRECTOR WHO IS AN INTERESTED PERSON:
Number of
Portfolios in Other Public
Positions(s) Held Fund Company
With Company Complex Directorships
and Length of Principal Occupation Overseen by Held by
Name, Age and Address Time Served During Past Five Years Director Director
--------------------- ----------------- ---------------------- ------------- -------------
Terry C. Matlack*, 49 Director and Chief Managing Director of the Three None
10801 Mastin Blvd. Financial Officer Advisor; Managing Director,
Suite 222 since 2003, Chief Kansas City Equity Partners
Overland Park, KS 66210 Compliance LC ("KCEP"), a private equity
Officer since firm (2001- present).
September 2004, Formerly, President,
Assistant Treasurer GreenStreet Capital (1995 -
since November 2001).
2005, Treasurer
from 2003 to
to November 2005
*Mr. Matlack, as a principal of the Advisor, is an "interested person" of the
Company, as that term is defined in Section 2(a)(19) of the Investment Company
Act of 1940, as amended (the "1940 Act"). Mr. Matlack is also a director and
officer of TTO.
3
REMAINING DIRECTORS WHO ARE INDEPENDENT:
Number of
Portfolios in Other Public
Positions(s) Held Fund Company
With Company Complex Directorships
and Length of Principal Occupation Overseen by Held by
Name, Age and Address Time Served During Past Five Years Director Director
--------------------- ---------------- ---------------------- ------------- -------------
Conrad S. Ciccotello*, 45 Director since 2003 Associate Professor of Risk Three None
10801 Mastin Blvd. Management and Insurance,
Suite 222 Robinson College of Business,
Overland Park, KS 66210 Georgia State University since
1999; Director of Graduate
Personal Financial Planning
Programs, and Editor,
Financial Services Review
since 2001 (an academic
journal dedicated to the
study of individual
financial management).
Formerly, faculty member,
Pennsylvania State
University (1997-1999).
John R. Graham*, 60 Director since 2003 Executive-in-Residence and Three Erie Indemnity
10801 Mastin Blvd. Professor of Finance, College Company; Erie
Suite 222 of Business Administration, Family Life
Overland Park, KS 66210 Kansas State University (has Insurance
served as a professor or Company;
adjunct professor since 1970); Kansas State
and Chairman of the Board, Bank
President and CEO, Graham
Capital Management, Inc. and
Owner of Graham Ventures.
Formerly, CEO, Kansas Farm
Bureau Financial Services,
including seven affiliated
insurance or financial service
companies (1979-2000).
*Messrs. Ciccotello and Graham are also directors of TTO.
4
REMAINING DIRECTOR WHO IS AN INTERESTED PERSON:
Number of
Portfolios in Other Public
Positions(s) Held Fund Company
With Company Complex Directorships
and Length of Principal Occupation Overseen by Held by
Name, Age and Address Time Served During Past Five Years Director Director
--------------------- ---------------- ---------------------- ------------- -------------
H. Kevin Birzer*, 46 Director and Managing Director of the Three None
10801 Mastin Blvd. Chairman of the Advisor; Partner/Senior
Suite 222 Board since 2003 Analyst, Fountain Capital
Overland Park, KS 66210 Management, L.L.C.
("Fountain Capital"), a
registered investment advisor
(1989 - present). Formerly,
Vice President, Corporate
Finance Department, Drexel
Burnham Lambert (1986-
1989); and Vice President, F.
Martin Koenig & Co. (1983-
1986).
*Mr. Birzer, as principal of the Advisor, is an "interested person" of the
Company, as that term is defined in Section 2(a)(19) of the 1940 Act. Mr. Birzer
is also a director and Chairman of the Board of TTO.
Officers. Mr. Birzer is the Chairman of the Board of the Company, and Mr.
Matlack is the Chief Financial Officer, Assistant Treasurer and Chief Compliance
Officer of the Company. The preceding table gives more information about Mr.
Birzer and Mr. Matlack. The following table sets forth each other officer's
name, age and address; position(s) held with the Company and length of time
served; principal occupation during the past five years; the number of
portfolios in the Fund Complex overseen by each officer; and other directorships
held by each officer. Each officer serves until his successor is chosen and
qualified or until his resignation or removal. As principals of the Advisor,
each of the following officers of the Company are "interested persons" of the
Company, as that term is defined in Section 2(a)(19) of the 1940 Act.
Additionally, each of the following officers serves as an officer of TTO.
5
Number of
Portfolios in Other Public
Positions(s) Held Fund Company
With Company Complex Directorships
and Length of Principal Occupation Overseen by Held by
Name, Age and Address Time Served During Past Five Years Director Director
--------------------- ---------------- ---------------------- ------------- -------------
David J. Schulte, 44 President and Managing Director of the Three None
10801 Mastin Blvd. Chief Executive Advisor; Managing Director,
Suite 222 Officer since 2003 KCEP (1993-present).
Overland Park, KS 66210
Zachary A. Hamel, 40 Secretary since Managing Director of the Three None
10801 Mastin Blvd. 2003 Advisor; Partner/Senior
Suite 222 Analyst with Fountain Capital
Overland Park, KS 66210 (1997-present).
Kenneth P. Malvey, 40 Treasurer since Managing Director of the Three None
10801 Mastin Blvd. November 2005; Advisor; Partner/Senior
Suite 222 Assistant Analyst, Fountain Capital
Overland Park, KS 66210 Treasurer from (2002-present). Formerly,
2003 to Investment Risk Manager and
November 2005 member of the Global Office
of Investments, GE Capital's
Employers Reinsurance
Corporation (1996 - 2002).
Committees of the Board of Directors. The Company's Board of Directors
currently has four standing committees:
• Executive Committee. Messrs. Birzer and Matlack are members of the
executive committee. The executive committee has authority to exercise
the powers of the Board (i) where assembling the full Board in a
timely manner is impracticable, (ii) to address emergency matters, or
(iii) to address matters of an administrative or ministerial nature.
Messrs. Birzer and Matlack are "interested persons" of the Company as
defined by Section 2(a)(19) of the 1940 Act.
• Audit Committee. Messrs. Ciccotello, Heath and Graham serve on the
audit committee. The audit committee was established in accordance
with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and operates under a written charter
adopted and approved by the Board, which was attached to the Company's
definitive proxy statement for its 2005 annual shareholders meeting.
The audit committee approves and recommends to the Board the election,
retention or termination of independent auditors; approves services to
be rendered by the auditors; monitors the auditors' performance;
reviews the results of the Company's audit; determines whether to
recommend to the Board that the Company's audited financial statements
be included in the Company's Annual Report; and responds to other
matters as outlined in the Audit Committee Charter. Each audit
committee member is "independent" as defined under the applicable New
York Stock Exchange listing standards.
6
• Nominating and Governance Committee. Messrs. Ciccotello, Heath and
Graham serve on the nominating and governance committee (formerly the
Nominating Committee), none of whom are "interested persons" of the
Company as defined in the 1940 Act. Each nominating and governance
committee member is "independent" as defined under the New York Stock
Exchange listing standards. The nominating and governance committee
operates under a written charter adopted and approved by the Board, a
current copy of which is available at www.tortoiseenergy.com. The
nominating and governance committee: (i) identifies individuals
qualified to become Board members and recommends to the Board the
director nominees for the next annual meeting of stockholders and to
fill any vacancies; (ii) monitors the structure and membership of
Board committees; recommends to the Board director nominees for each
committee; (iii) reviews issues and developments related to corporate
governance issues and develops and recommends to the Board corporate
governance guidelines and procedures, to the extent necessary or
desirable; (iv) actively seeks individuals who meet the standards for
directors set forth in the Company's Bylaws, who meet the requirements
of any applicable laws or exchange requirements and who are otherwise
qualified to become board members for recommendation to the Board; (v)
has the sole authority to retain and terminate any search firm used to
identify director candidates and to approve the search firm's fees and
other retention terms, though it has yet to exercise such authority;
and (vi) may not delegate its authority. The nominating and governance
committee will consider stockholder recommendations for nominees for
membership to the Board so long as such recommendations are made in
accordance with the Company's Bylaws. Nominees recommended by
stockholders in compliance with the Bylaws of the Company will be
evaluated on the same basis as other nominees considered by the
nominating and governance committee. Stockholders should see
"Stockholder Proposals and Nominations for the 2007 Annual Meeting"
below for information relating to the submission by stockholders of
nominees and matters for consideration at a meeting of the Company's
stockholders. The Company's Bylaws require all directors and nominees
for directors (1) to be at least 21 years of age and have substantial
expertise, experience and relationships relevant to the business of
the Company and (2) to have a master's degree in economics, finance,
business administration or accounting, to have a graduate professional
degree in law from an accredited university or college in the United
States, or the equivalent degree from an equivalent institution of
higher learning in another country, to have a certification as a
public accountant in the United States, to be deemed an "audit
committee financial expert" as such term is defined in item 401 of
Regulation S-K as promulgated by the SEC, or to be a current director
of the Company. The nominating and governance committee has the sole
discretion to determine if an individual satisfies the foregoing
qualifications.
• Compliance Committee. This committee was formed in December 2005.
Messrs. Ciccotello, Heath and Graham serve on the compliance
committee. Each compliance committee member is "independent" as
defined under the New York Stock Exchange listing standards, and none
are "interested persons" of the Company as defined in the 1940 Act.
The compliance committee operates under a written charter adopted and
approved by the Board. The compliance committee reviews and assesses
management's compliance with applicable securities laws, rules and
regulations; monitors compliance with the Company's Code of Ethics;
and handles other matters as the Board or committee chair deems
appropriate.
7
The Board does not currently have a standing compensation committee. The
New York Stock Exchange does not require boards of directors of closed-end funds
to have a standing compensation committee.
The following table shows the number of Board and committee meetings held
during the fiscal year ended November 30, 2005:
Board of Directors 8
Executive Committee 0
Audit Committee 2
Nominating Committee (became the 0
Nominating and Governance Committee in
December 2005)
All of the members of the Board and committee members then serving attended
all of the meetings of the Board of Directors and applicable committees held
during the fiscal year.
Director and Officer Compensation. The Company does not compensate any of
the directors who are interested persons and does not compensate any of its
officers. The following table sets forth certain information with respect to the
compensation paid by the Company and the Fund Complex during fiscal 2005 to each
of the current directors. The Company has no retirement or pension plans.
Compensation from Total Compensation
Name Company from Fund Complex
Interested Persons
H. Kevin Birzer $0 $0
Terry C. Matlack $0 $0
Independent Persons
Conrad S. Ciccotello $35,500 $69,000
John R. Graham $32,500 $59,333
Charles E. Heath $38,500 $65,333
Required Vote. Mr. Heath will be elected by the vote of a plurality of all
shares of the Company present at the meeting, in person or by proxy and Mr.
Matlack will be elected by the vote of a plurality of all preferred shares of
the Company present at the meeting, in person or by proxy. Each common share and
each preferred share is entitled to vote in the election of Mr. Heath, and each
preferred share is entitled to one vote in the election of Mr. Matlack.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE
COMPANY VOTE "FOR" MR. HEATH AS DIRECTOR AND THAT PREFERRED STOCKHOLDERS OF THE
COMPANY VOTE "FOR" MR. MATLACK AS DIRECTOR.
8
PROPOSAL TWO
RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors recommends that the stockholders of the Company
ratify the selection of Ernst & Young LLP ("E&Y") as the independent registered
public accounting firm to audit the accounts of the Company for the fiscal year
ending November 30, 2006. E&Y's selection was approved by the audit committee at
a meeting held on January 17, 2006. Their selection also was ratified and
approved by the vote, cast in person, of a majority of the directors of the
Company, including a majority of the directors who are not "interested persons"
of the Company within the meaning of the 1940 Act, and who are "independent" as
defined in the New York Stock Exchange listing standards, at a meeting held on
January 17, 2006.
The persons named in the accompanying proxy card intend to vote at the
meeting (unless otherwise directed) FOR the ratification of E&Y as the Company's
independent registered public accounting firm. E&Y has audited the accounts of
the Company since prior to the Company's commencement of business in February
2004 and does not have any direct financial interest or any material indirect
financial interest in the Company. A representative of E&Y is expected to be
available at the meeting and to have the opportunity to make a statement and
respond to appropriate questions from the stockholders. The audit committee of
the Board of Directors meets each year with representatives of E&Y to discuss
the scope of their engagement, review the financial statements of the Company
and the results of their examination.
Required Vote. E&Y will be ratified as the Company's independent registered
public accounting firm by the affirmative vote of a majority of all shares cast
at the meeting, in person or by proxy. Each common share and each preferred
share is entitled to one vote on this proposal. For the purposes of the vote on
this proposal, abstentions and broker non-votes will not be counted as votes
cast and will have no effect on the result of the vote.
AUDIT COMMITTEE REPORT
The audit committee of the Board of Directors of the Company reviews the
Company's annual financial statements with both management and the independent
auditors, and the committee meets periodically with the independent auditors to
consider their evaluation of the Company's financial and internal controls.
The audit committee, in discharging its duties, has met with and has held
discussions with management and the Company's independent auditors. The
committee has reviewed and discussed the Company's audited financial statements
for the fiscal year ended November 30, 2005 with management. Management has
represented to the independent auditors that the Company's financial statements
were prepared in accordance with U.S. generally accepted accounting principles.
The audit committee has also discussed with the independent auditors the
matters required to be discussed by the Statement on Auditing Standards No. 61
(Communications with Audit Committees). The independent auditors provided to the
committee the written disclosures and the letter required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees),
and the committee discussed with representatives of the independent auditors
their firm's independence.
9
Based on the audit committee's review and discussions with management and
the independent auditors, the representations of management and the reports of
the independent auditors to the committee, the committee recommended that the
Board include the audited financial statements in the Company's Annual Report
for filing with the SEC.
The Audit Committee
Conrad S. Ciccotello (Chairman)
Charles E. Heath
John R. Graham
INDEPENDENT AUDITORS
On January 17, 2006, the Company's audit committee selected 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, 2006. E&Y is registered with
the Public Company Accounting Oversight Board.
INDEPENDENT AUDITOR FEES AND SERVICES
Audit Fees. For professional services rendered with respect to the audit of
the Company's financial statements and the review of the Company's statutory and
regulatory filings with the SEC for its fiscal periods ended November 30, 2005
and 2004, the Company paid E&Y fees in the approximate amount of $237,000 and
$229,000, respectively.
Audit-Related Fees. For professional services rendered with respect to
assurance related services in connection with the Company's compliance with its
rating agency guidelines for its fiscal periods ended November 30, 2005 and
2004, the Company paid E&Y fees in the approximate amount of $39,000 and
$46,000, respectively.
Tax Fees. For professional services for tax compliance, tax advice and tax
planning for its fiscal periods ended November 30, 2005 and 2004, the Company
paid to E&Y fees in the approximate amount of $47,000 and $58,000, respectively.
All Other Fees. The Company did not pay E&Y any fees for services other
than those described above during either of its last two fiscal years.
Aggregate Non-Audit Fees. The Company paid E&Y an aggregate amount of
$86,000 and $104,000, as listed above, for non-audit services provided to the
Company for its fiscal periods ended November 30, 2005 and 2004, respectively.
The Advisor has not paid nor been billed for fees to E&Y for non-audit
services rendered to the Advisor during the Company's last two fiscal years.
On July 15, 2004, the audit committee of the Company adopted pre-approval
polices and procedures. Under these policies and procedures, the audit committee
pre-approves (i) the selection of the Company's independent auditors, (ii) the
engagement of the independent auditors to provide any non-audit services to the
Company, (iii) the engagement of the independent auditors to provide any
non-audit services to the Advisor or any entity controlling, controlled by, or
under common control with the Advisor that provides ongoing services to the
Company, if the engagement relates directly to the
10
operations and financial reporting of the Company, and (iv) the fees and other
compensation to be paid to the independent auditors. The Chairman of the audit
committee may grant the pre-approval of any engagement of the independent
auditors for non-audit services of less than $5,000, and such delegated
pre-approvals will be presented to the full audit committee at its next meeting.
Under certain limited circumstances, pre-approvals are not required under
securities law regulations for certain non-audit services below certain de
minimus thresholds. Since the adoption of these policies and procedures, the
audit committee has pre-approved all audit and non-audit services provided by
E&Y, and all non-audit services provided by E&Y for the Advisor, or any entity
controlling, controlled by, or under common control with the Advisor that
provides ongoing services to the Company, that are related to the operation of
the Company. None of these services provided by E&Y were approved by the audit
committee pursuant to the de minimus exception under Rule 2.01(c)(7)(i)(C) or
Rule 2.01(c)(7)(ii) of Regulation S-X.
The audit committee of the Company has considered whether E&Y's provision
of services (other than audit services) to the Company, the Advisor or any
entity controlling, controlled by, or under common control with the Advisor that
provides services to the Company is compatible with maintaining E&Y's
independence in performing audit services.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters that are
intended to be brought before the meeting. If other matters are presented for
action, the proxies named in the enclosed form of proxy will vote on those
matters in their sole discretion.
MORE INFORMATION ABOUT THE MEETING
Stockholders. At the record date, the Company had the following numbers of
shares issued and outstanding:
Common Shares Preferred Shares
14,905,515 2,800
At December 31, 2005, each director beneficially owned (as determined
pursuant to Rule 16a-1(a)(2) under the Exchange Act) shares of the Company and
in all Funds overseen by each Director in the same Fund Complex having values
within the indicated dollar ranges. Other than the Fund Complex and TTO, 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 Advisor or its affiliates.
11
Aggregate Dollar Range of
Aggregate Dollare Range of Holdings in Funds Overseen
Director Holdings in the Company(1) by Director in Fund Complex(2)
-------- -------------------------- ------------------------------
Interested Persons
H. Kevin Birzer Over $100,000 Over $100,000
Terry C. Matlack Over $100,000 Over $100,000
Independent Persons
Conrad S. Ciccotello $50,001 - $100,000 $50,001 - $100,000
John R. Graham Over $100,000 Over $100,000
Charles E. Heath Over $100,000 Over $100,000
-----------------------------
(1) Based on the closing price of the Company's common shares on the New York
Stock Exchange on December 30, 2005.
(2) Includes the Company, TYN and TYY.
The following table sets forth the securities of TTO owned beneficially by
the Company's directors who are not "interested persons" of the Company, as
defined in Section 2(a)(19) of the 1940 Act, as of January 11, 2006. The Advisor
also serves as the investment advisor to TTO.
Value of Percent of
Name of Director Title of Class Securities (1) Class (2)
---------------- -------------- -------------- ----------
Conrad S. Ciccotello (3) Common Shares $15,000 0.04%
John R. Graham (4) Common Shares $60,000 0.16%
Charles E. Heath (5) Common Shares $45,000 0.12%
(1) The value of the securities is determined by reference to the most recent
price at which TTO sold its common shares, and includes the net value of all
warrants to purchase common shares of TTO ("Warrants") held by such director,
assuming the Warrants were exercised on January 11, 2006.
(2) The percentage of class is determined by including all shares the director
could purchase if the director exercised all Warrants the director holds, but
not including the number of shares which could be purchased by all other holders
of Warrants if they exercised such Warrants.
(3) Mr. Ciccotello holds these shares jointly with his wife, Elizabeth
Ciccotello.
(4) These shares are held of record by the John R. Graham Trust U/A 1/3/92, John
R. Graham, Trustee.
(5) These shares are held of record by the Charles E. Heath Trust No.1 U/A
2/1/92, Charles E. Heath and Kathleen M. Heath, Trustees.
At December 31, 2005, 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) shares of common stock of the Company (or percentage of
outstanding shares) as follows:
12
Number of Number of
Directors and Officers Common Shares % Preferred Shares %
Independent Directors
Conrad S. Ciccotello 1,940.00 * - 0 - N/A
John R. Graham 10,195.32(1) * - 0 - N/A
Charles E. Heath 8,000.00 * - 0 - N/A
Interested Directors and Officers
H. Kevin Birzer * - 0 - N/A
26,724.87
Terry C. Matlack 4,878.61 * - 0 - N/A
David J. Schulte 5,389.54 * - 0 - N/A
Zachary A. Hamel 3,086.44 * - 0 - N/A
Kenneth P. Malvey 2,486.23 * - 0 - N/A
Directors and Officers
as a Group 62,701.01 * - 0 - N/A
*Indicates less than 1%.
(1)Includes 4,000 shares owned by Master Teacher Employee Benefit Trust. Mr.
Graham is the trustee of this trust and thus has sole investment and voting
power. He, however, disclaims beneficial ownership of all shares held by the
trust.
At December 31, 2005, no director or officer held preferred shares of the
Company.
At December 31, 2005, to the knowledge of the Company, no person held (sole
or shared) power to vote or dispose of more than 5% of the outstanding shares of
the Company.
Investment Advisory Agreement. Tortoise Capital Advisors, L.L.C. (the
"Advisor") is the Company's investment advisor. The Advisor is controlled
equally by Fountain Capital and KCEP. As of December 31, 2005, the Advisor had
approximately $1.5 billion of client assets under management. The Advisor may be
contacted at the address listed on the first page of this proxy statement.
Pursuant to the terms of an Advisory Agreement between the Company and the
Advisor, dated February 23, 2004 (the "Advisory Agreement"), the Company pays to
the Advisor quarterly, as compensation for the services rendered by the Advisor,
a fee equal on an annual basis to 0.95% of the Company's average monthly Managed
Assets. "Managed Assets" means the total assets of the Company (including any
assets attributable to leverage that may be outstanding) minus accrued
liabilities other than (1) deferred taxes, (2) debt entered into for the purpose
of leverage, and (3) the aggregate liquidation preference of any outstanding
preferred shares. The Advisor has contractually agreed to waive or reimburse the
Company 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 Advisor does not have the right to recoup any fees waived
or reimbursed by the Advisor. In its last fiscal year the Company incurred the
net amount of $4,804,810 in fees due to the Advisor under the Advisory
Agreement. The Advisor is controlled directly or indirectly by David J. Schulte,
CEO and President of the Company; Terry Matlack, a director and the Chief
Financial Officer and Assistant Treasurer of the Company; H. Kevin Birzer,
director and Chairman of the Board of the Company, Zachary A. Hamel, Secretary
of the Company, and Kenneth P. Malvey, Treasurer of the Company, among others.
How Proxies Will Be Voted. All proxies solicited by the Board of Directors
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
13
instructions are specified, shares will be counted as a vote FOR the proposals
described in this proxy statement.
How To Vote. Complete, sign and date the enclosed proxy card and return it
in the enclosed envelope.
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 Company. The Company may also reimburse banks, brokers and
others for their reasonable expenses in forwarding proxy solicitation material
to the beneficial owners of shares of the Company. In order to obtain the
necessary quorum at the meeting, additional solicitation may be made by mail,
telephone, telegraph, facsimile or personal interview by representatives of the
Company, the Advisor, 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. If a proxy solicitor is retained by the Company,
the costs associated with all proxy solicitation are not anticipated to exceed
$35,000. The Company will not pay any representatives of the Company or the
Advisor any additional compensation for their efforts to supplement proxy
solicitation.
Revoking a Proxy. 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 10801 Mastin
Boulevard, Suite 222, Overland Park, Kansas 66210; (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. The presence, in person or by proxy, of the holders of preferred
shares entitled to cast a majority of the votes in the election of Mr. Matlack
shall constitute a quorum for such matter. 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 with respect to the election
of Mr. Heath and the ratification of the selection of the independent registered
public accounting firm. For purposes of determining the presence or absence of a
quorum, shares present at the annual 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) will be treated as shares that are present at the meeting but have not
been voted.
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 original record date without notice other than
announcement at the meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 30(h) of the 1940 Act and Section 16(a) of the Exchange Act require
the Company's directors and officers, the Advisor, affiliated persons of the
Advisor and persons who own more than 10% of a registered class of the Company's
equity securities to file forms reporting their affiliation with the Company and
reports of ownership and changes in ownership of the Company's shares with the
SEC and the New York Stock Exchange. Those persons and entities are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file. Based on a review of those forms furnished to the Company, the
Company believes that its directors and officers, the Advisor and affiliated
persons of the Advisor have complied with all applicable Section 16(a) filing
requirements during the last fiscal year. To the knowledge of management of the
Company, no person owns beneficially more than 10% of a class of the Company's
equity securities.
14
ADMINISTRATOR
The Company has entered into an administration agreement with US Bancorp
Fund Services, LLC, whose principal business address is 615 E. Michigan Street,
Milwaukee, Wisconsin 53202.
STOCKHOLDER COMMUNICATIONS
Stockholders are able to send communications to the Board of Directors.
Communications should be addressed to the Secretary of the Company at its
principal offices at 10801 Mastin Boulevard, Suite 222, Overland Park, Kansas
66210. The Secretary will forward any communications received directly to the
Board of Directors. The Company does not have a policy with regard to Board
attendance at annual meetings. All of the directors attended the 2005 annual
stockholders meeting.
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR THE 2007 ANNUAL MEETING
Method for Including Proposals in the Company's Proxy Statement. Under the
rules of the SEC, if you want to have a proposal included in our proxy statement
for our 2007 annual meeting of stockholders, that proposal must be received by
the Secretary of the Company at 10801 Mastin Boulevard, Suite 222, Overland
Park, Kansas 66210, not later than 5:00 p.m., Central Time on September 29,
2006. 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 our next annual meeting of stockholders but do not
want those items included in our proxy statement, you must comply with the
advance notice provision of our Bylaws. Under our Bylaws, nominations for
director or other business proposals to be addressed at our next annual meeting
may be made by a stockholder who has delivered a notice to the Secretary of the
Company at 10801 Mastin Boulevard, Suite 222, Overland Park, Kansas 66210, no
earlier than September 29, 2006 nor later than 5:00 p.m. Central Time on October
29, 2006. 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 Company's Bylaws. A copy of the Company's Bylaws
may be obtained by contacting the Secretary of the Company at 1-888-728-8784 or
by writing the Secretary of the Company at 10801 Mastin Boulevard, Suite 222,
Overland Park, Kansas 66210. 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 the Company's proxy statement under the rules of the SEC.
15
A proxy granted by a stockholder will give discretionary authority to the
proxies to vote on any matters introduced pursuant to the above advance notice
Bylaw provisions, subject to applicable rules of the SEC.
By Order of the Board of Directors
/s/ Zachary A. Hamel
Zachary A. Hamel
Secretary
January 27, 2006
16
PREFERRED SHARES
--------------------------------------------------------------------------------
PROXY - TORTOISE ENERGY INFRASTRUCTURE CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS - APRIL 12, 2006
The undersigned holder of preferred shares of Tortoise Energy Infrastructure
Corporation (the "Company") appoints David J. Schulte and Terry C. Matlack, or
either of them, each with power of substitution, to vote all shares that the
undersigned is entitled to vote at the annual meeting of stockholders of the
Company to be held on April 12, 2006 and at any adjournments thereof, as set
forth on the reverse side of this card, and in their discretion upon any other
business that may properly come before the meeting.
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)
--------------------------------------------------------------------------------
[ ] Mark this box with an X if you have made
changes to your name or address details above.
ANNUAL MEETING PROXY CARD
This proxy, when properly executed, will be voted in the manner directed herein
and, absent direction, will be voted "FOR" the proposals.
A. ELECTION OF DIRECTORS
1. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE NOMINEES BELOW.
FOR WITHHOLD
Terry Matlack [ ] [ ]
Charles E. Heath [ ] [ ]
B. ISSUE
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION BELOW.
2. Ratification of Ernst & Young LLP as the Company's independent registered
public accounting firm to audit the accounts of the Company for the fiscal
year ending November 30, 2006:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
C. NON-VOTING ISSUE
CHECK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
D. AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR
INSTRUCTIONS TO BE EXECUTED
Please sign exactly as your name appears. If acting as attorney, executor,
trustee, or in representative capacity, sign name and indicate title.
Signature 1 - Signature 2 - Date
Please keep signature within the box Please keep signature within the box (mm/dd/yyyy)
------------------------------------ ------------------------------------ -------------------
COMMON SHARES
--------------------------------------------------------------------------------
PROXY - TORTOISE ENERGY INFRASTRUCTURE CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS - APRIL 12, 2006
The undersigned holder of common shares of Tortoise Energy Infrastructure
Corporation (the "Company") appoints David J. Schulte and Terry C. Matlack, or
either of them, each with power of substitution, to vote all shares that the
undersigned is entitled to vote at the annual meeting of stockholders of the
Company to be held on April 12, 2006 and at any adjournments thereof, as set
forth on the reverse side of this card, and in their discretion upon any other
business that may properly come before the meeting.
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)
--------------------------------------------------------------------------------
[ ] Mark this box with an X if you have made
changes to your name or address details above.
ANNUAL MEETING PROXY CARD
This proxy, when properly executed, will be voted in the manner directed herein
and, absent direction, will be voted "FOR" the proposals.
A. ELECTION OF DIRECTORS
1. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE NOMINEE BELOW.
FOR WITHHOLD
Charles E. Heath [ ] [ ]
B. ISSUES
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION BELOW.
2. Ratification of Ernst & Young LLP as the Company's independent registered
public accounting firm to audit the accounts of the Company for the fiscal
year ending November 30, 2006:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
C. NON-VOTING ISSUE
CHECK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
D. AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR
INSTRUCTIONS TO BE EXECUTED
Please sign exactly as your name appears. If acting as attorney, executor,
trustee, or in representative capacity, sign name and indicate title.
Signature 1 - Signature 2 - Date
Please keep signature within the box Please keep signature within the box (mm/dd/yyyy)
------------------------------------ ------------------------------------ -------------------