All stockholders are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please vote your shares via the internet, by telephone or by completing, dating, signing and returning the enclosed proxy as promptly as possible in order to ensure your representation at the meeting. If you choose to vote using the enclosed proxy, 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.
Important Notice Regarding the Availability of Proxy Materials for the SpecialAnnual Meeting of Stockholders to be Held on December 21, 2017:May 18, 2018: This combined proxy statement is available on the Internetinternet at http://closedendfunds.tortoiseadvisors.com/annual-proxy-information/. On this site, you will be able to access the proxy statement for the Meetingannual meeting and any amendments or supplements to the foregoing material required to be furnished to stockholders.
1
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.
Proposal for each CompanyProposals
| Class of Stockholders of Each Company Entitled to Vote |
1.For Each Company | |
1. | To consider and vote onelect the following individuals as directors for a new investment advisory agreement between the Company and its investment adviser, Tortoise Capital Advisors, L.L.C.term of three years: | |
| Rand C. Berney | For each of TYG, NTG and TTP —– Common Stockholders and Preferred Stockholders, voting as a single class For each of TPZ and NDP —– Common Stockholders voting as a class |
2. | Jennifer Paquette | For each of TYG, NTG and TTP – Preferred Stockholders, voting as a class For each of TPZ and NDP – Common Stockholders voting as a class |
For Each Company | |
2. | To ratify the selection of Ernst & Young LLP as the independent registered public accounting firm of the Company for the fiscal year ending November 30, 2018. | For each of TYG, NTG and TTP – Common Stockholders and Preferred Stockholders, voting as a single class For each of TPZ and NDP – Common Stockholders voting as a class |
For Each Company | |
3. | To consider and take action upon such other business as may properly come before the meeting, including the adjournment andor postponement thereof. | For each of TYG, NTG and TTP —– Common Stockholders and Preferred Stockholders, voting as a single class For each of TPZ and NDP —– Common Stockholders voting as a class |
2
APPROVALELECTION 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 Company and is responsible for the management of the portfolio of each Company. TWO DIRECTORSThe date of each Company’s Current Investment Advisory Agreement and the date on which it was last approved by shareholders and last approved for continuance by the Board of Directors is set forth on Appendix A.
On October 18, 2017, Tortoise Investments, LLC (“Tortoise Investments”), the parent company of the Adviser, announced the signing of a definitive agreement for a buy-out of Tortoise Investments. Pursuant to the terms of the Membership Interest Purchase Agreement (the “Purchase Agreement”) between a vehicle formed by Lovell Minnick Partners LLC (“Lovell Minnick”) and owned by certain private funds sponsored by Lovell Minnick and a group of institutional co-investors (the “Acquirer”) and certain members of Tortoise Investments, and subject to certain customary closing conditions, the Acquirer will acquire the equity interests in Tortoise Investments currently held by Montage Investments, LLC (a subsidiary of Mariner Holdings, LLC) and the equity interests currently held by certain of the original founders of the firm. Selling members include Messrs. Zachary Hamel, Kenneth Malvey and Terry Matlack, each currently a member of the Investment Committee and a Managing Director of the Adviser, who will sell their remaining interests in Tortoise and retire from Tortoise upon the closing of the Transaction. Mr. David Schulte, another co-founder of the firm who left Tortoise in 2015, will also sell his remaining equity interests in Tortoise Investments as part of the Transaction. As part of the Transaction, ongoing management and employees are expected to meaningfully increase their ownership of Tortoise Investments. Employees will retain a significant equity interest, with many investing additional capital alongside the Acquirer. Following the closing of the Transaction, it is expected that the Acquirer will own approximately two-thirds of the equity interests in Tortoise Investments and ongoing Tortoise management and employees will own approximately one-third of the equity interests in Tortoise Investments. Lovell Minnick is an independent private equity firm founded in 1999, specializing in financial and business services sectors.
The Board of each Company has been advised that the Transaction has been structured in compliance with the safe harbor provisions of Section 15(f) of the 1940 Act. The closing of the Transaction is subject to the satisfaction or waiver of customary closing conditions, including shareholder approval of new investment advisory agreements for each Company which have been approvedunanimously nominated Rand C. Berney and Jennifer Paquette following a recommendation by the BoardNominating and receipt of the requisite consents from advisory clients representing a significant
percentage of the annual revenues of the Adviser. The parties to the Purchase Agreement may terminate the Purchase Agreement if the Transaction is not consummated by April 1, 2018.
The day-to-day portfolio management, investment objectives and policies, and investment processes of the Companies are not expected to change as a result of the Transaction or entering into the proposed new investment advisory agreements with the Adviser (each a “New Investment Advisory Agreement” and collectively, the “New Investment Advisory Agreements”). The InvestmentGovernance Committee of the Adviser will continue to provide investment strategy oversight to the portfolio management team who implements the strategy for each Company’s portfolio and the members of the Investment Committee will remain the same except for the founders who are expected to leave Tortoise upon the closing of the Transaction. P. Bradley Adams, currently Chief Executive Officer, Principal Financial Officer and Treasurer of each of the Companies, will also serve on the Investment Committee for the Companies. Following the closing of the Transaction, the Adviser will continue to operate independently under the Tortoise brand and will remain located at 11550 Ash Street, Suite 300, Leawood, Kansas 66211.
The closing of the Transaction is subject to the receipt of certain regulatory and client approvals and the satisfaction or waiver of certain other customary closing conditions. The 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 advisory fee rate payable to the Adviser by each Company under its Current Investment Advisory Agreement will not change under its New Investment Advisory Agreement. The form of the New Investment Advisory Agreement with TYG, is attached hereto as Appendix B. The form of the New Investment Advisory Agreements with TPZ, NTG, TTP and NDP for election as directors at the combined annual meeting of stockholders of the Companies. Mr. Berney is attached hereto as Appendix C.
Comparison of Current Investment Advisory Agreements and the New Investment Advisory Agreements
The termscurrently a director of each New Investment Advisory Agreement are substantially identical to those of its corresponding Current Investment Advisory Agreement, except for the effective dates and the termination dates. If a New Investment Advisory Agreement is approved by stockholders, it will become effective upon completion of the Transaction and will continue in effect for an initial period ending the earlier of (i) December 31, 2019 or (ii) two years from the effective date of the New Investment Advisory Agreement. Thereafter, each New Investment Advisory
2
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 Investment 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 each Current Investment Advisory Agreement in October 2017. Below is a comparison of certain terms of each Current Investment Advisory Agreement to the corresponding New Investment Advisory Agreement.
Investment Advisory Services. The investment advisory services to be provided by the Adviser to each Company are the same under the Current Investment Advisory Agreements and the New Investment Advisory Agreements. Each Current Investment Advisory Agreement and its corresponding New Investment Advisory Agreement provide that the Adviser shall furnish an investment program, investment research, advice and supervision to the Company, subject always to the overall investment objectives of the Company, policies and instructions as the Board of Directors may from time to time establish, and provisions of the Company’s Articles of Incorporation, Bylaws, and any registration statements filed with the Securities and Exchange Commission (the “Commission”), as any of the same may be amended or supplemented from time to time. The Adviser shall determine what securities shall be purchased by the Company, what securities shall be held or sold by the Company, and what portion of the Company’s assets shall be held uninvested as cash or in other liquid assets. The Adviser will exercise full discretion and act for the Company with respect to purchases, sales or other transactions, as well as with respect to other things necessary or incidental to the furtherance or conduct of such purchases, sales or other transactions. The Current Investment Advisory Agreement and the New Investment Advisory Agreement for each of TPZ, NTG, TTP and NDP additionally provide that the Adviser may (i) determine the composition of the portfolio of the Company, the nature and timing of the changes therein and the manner of implementing such changes, (ii) identify, evaluate and negotiate the structure of the investments made by the Company, (iii) perform due diligence on prospective portfolio companies, (iv) close and monitor the Company’s investments, and (v) provide the Company with such other investment advisory, research and related services as the Company may reasonably require for the investment of its funds.
Compensation. The fee structure and advisory fee rate under each Current Investment Advisory Agreement are the same as its corresponding New Investment Advisory Agreement. Under each Current Investment Advisory Agreement and its corresponding New Investment Advisory Agreement, fees are calculated based on a percentage of the “Managed Assets” of the Company. Managed Assets means a Company’s total assets (including any assets attributable to leverage that may be outstanding) minus accrued liabilities (other than liabilities attributable to financial
3
leverage). In the case of TYG and NTG, for the purpose of determining Managed Assets, assets exclude net deferred tax assets and liabilities exclude deferred tax liabilities.
The advisory fee rate under the terms of each Company’s Current Investment Advisory Agreement are identical to its corresponding New Investment Advisory Agreement as follows:
| Annual Fee Rate |
TYG | 0.95% of average monthly Managed Assets up to $2.5 billion
0.90% of average monthly Managed Assets between $2.5 billion and $3.5 billion
0.85% of average monthly Managed Assets above $3.5 billion
|
TPZ | 0.95% of average monthly Managed Assets |
NTG | 0.95% of average monthly Managed Assets |
TTP | 1.10% of average monthly Managed Assets |
NDP | 1.10% of average monthly Managed Assets |
The advisory fee for TYG is calculated and accrued monthly. The advisory fee for TPZ, NTG, TTP and NDP is calculated and accrued daily. For each Company, the advisory fee is payable quarterly within five (5) days of the end of each calendar quarter. The amount of fees paid to the Adviser during each Company’s most recently ended fiscal year is set forth in Appendix D.
Payment of Expenses. Under each Current Investment Advisory Agreement and New Investment Advisory Agreement, the Company will pay all expenses other than those expressly stated to be payable by the Adviser. Expenses paid by the Company include, without limitation, expenses of maintaining the Company and continuing its existence, commissions, spreads, fees and other expenses connected with the acquisition, holding and disposition of securities and other investments, legal and accounting expenses, taxes and interest, governmental fees, listing expenses, regulatory expenses including furnishing reports, registration fees and communicating with shareholders, insurance expenses, membership dues, fees related to custodial, transfer, valuation and other administrative expenses, compensation of directors of the Company who are unaffiliated with the Adviser, expenses incurred in leveraging of the Company’s assets, Company organization expenses, expenses related to the offering of Company securities and such non-recurring items as may arise.
Other Services. Under each Current Investment Advisory Agreement and New Investment Advisory Agreement, the Adviser agrees to furnish administrative services, other than services provided by the Company’s custodian, accounting agent, administrator, dividend and interest paying agent and other services providers, necessary to the operation of the Company. Specifically, the Adviser is authorized to conduct relations with custodians, depositaries, underwriters,
4
brokers, dealers, placement agents, banks, insurers, accountants, attorneys, pricing agents and other persons as may be deemed necessary or desirable. The Adviser shall also oversee the performance of, and payment of the fees to, the service providers, make reports and recommendations to the Board of Directors, assist and liaise with service providers in the preparation and filing of regulatory reports, proxy statements, shareholder reports and Board materials, establish and oversee the implementation of borrowing facilities or other forms of leverage authorized by the Board of Directors, and generally supervise any other aspects of the Company’s administration as agreed to by the Company and Adviser. The Company shall reimburse the Adviser or its affiliates for any out-of-pocket expenses incurred in providing these administrative duties. The Current Investment Advisory Agreement and New Investment Advisory Agreement of TPZ, NTG, TTP and NDP further provide that to the extent the Adviser expects to provide administrative services that the agreement contemplates would be provided by a third party, the Adviser may propose to the Board of Directors a separate Administrative Agreement that provides for the Adviser to provide such services with separate compensation to the Adviser.
Liability of Adviser. Under each Current Investment Advisory Agreement and New Investment Advisory Agreement, the Adviser will not be liable for any default, failure or defect in any of the securities compromising the Company’s portfolio if itMs. Paquette has satisfied the duties and the standard of care, diligence and skill. The Adviser shall be liable, however, for any loss, damage, claim, cost, charge, expense or liability resulting from the Adviser’s willful misconduct, bad faith or gross negligence, or a material breach or default of the Adviser’s obligations under the Current Investment Advisory Agreement or New Investment Advisory Agreement.
Continuance. The Current Investment Advisory Agreement for each Company continues in effect for successive one-year periods after its initial term, if such continuance is specifically approved at least annually (a) either by the Board of Directors or by the vote of “a majority of the outstanding voting securities” of the Company (as defined in Section 2(a)(42) of the 1940 Act), and (b) by the affirmative vote of a majority of the directors who are not parties to, or “interested persons” (as defined in the 1940 Act) of parties to, the Current Investment Advisory Agreements. The New Investment Advisory Agreements shall have an initial term ending the earlier of (i) December 31, 2019 or (ii) two years from the effective date of the New Investment Advisory Agreement, and will continue thereafter for successive one-year periods if approved annually in the same manner required under the Current Investment Advisory Agreements.
Termination. Each Current Investment Advisory Agreement and its corresponding New Investment Advisory Agreement provide that they may be terminated by the Company at any time, without the payment of any penalty,been nominated by the Board of Directors of
each Company to fill the
seat that will be vacated upon the retirement of Charles E. Heath effective as of the annual meeting. Each of Mr. Berney and Ms. Paquette has consented to be named in this proxy statement and has agreed to serve if elected. The Companies have no reason to believe that either Mr. Berney or Ms. Paquette 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 Mr. Berney and Ms. Paquette as directors of each Company. Currently, each Company has five directors. In accordance with each Company’s Articles of Incorporation, 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 term of each of H. Kevin Birzer and Alexandra A. Herger expires on the date of the 2019 annual meeting of stockholders of each Company and the term of Conrad S. Ciccotello expires on the date of the 2020 annual meeting of stockholders of each Company. Pursuant to the terms of each of TYG’s, NTG’s and TTP’s preferred shares, the preferred stockholders of each of those Companies have the exclusive right to elect two directors to their Company’s Board. The Board of each of TYG, NTG and TTP has designated Mr. Birzer and Ms. Paquette as the directors the preferred stockholders of that Company shall have the right to elect.
Holders of common shares and preferred shares of each of TYG, NTG and TTP will vote as a single class on the election of Mr. Berney as a director of each Company and holders of preferred shares of each of TYG, NTG and TTP will vote as a class on the election of Ms. Paquette as a director of each Company. Holders of common shares of each of TPZ and NDP will vote as a class on the election of Mr. Berney and Ms. Paquette as directors of each Company. Stockholders do not have cumulative voting rights.
With respect to each Company, if elected, Mr. Berney and Ms. Paquette will hold office until the 2021 annual meeting of stockholders of each Company and until their successors are duly elected and qualified. If either Mr. Berney or Ms. Paquette is unable to serve because of an event not now anticipated, the persons named as proxies may vote for another person designated by the voteCompany’s Board of Directors.
3
The following table sets forth each Board member’s name, age and address; position(s) with the holdersCompanies and length of a majoritytime served; principal occupation during the past five years; the number 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
5
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 terminatecompanies in the eventFund Complex that each Board member oversees and other public company directorships held by each Board member. Unless otherwise indicated, the address of an “assignment” (as defined in the 1940 Act).
Information Regarding the Adviser
The Advisereach director is
located at 11550 Ash Street, Suite 300, Leawood, Kansas 66211. The
Adviser specializes in essential asset investing. The Adviser was formed in October 20021940 Act requires the term “Fund Complex” to
provide portfolio management servicesbe defined to
institutional and high-net worth investors seeking professional management of their MLP investments.include registered investment companies advised by the Company’s investment adviser, Tortoise Capital Advisors, L.L.C. (the “Adviser”). As of
September 30, 2017,February 28, 2018, the Fund Complex included TYG, TPZ, NTG, TTP, NDP, and three open-end funds.Nominees For Director Who Are Independent:
Name and Age | Position(s) Held
With The Company
and Length of
Time Served | Principal Occupation During Past Five Years | Number of
Portfolios in
Fund Complex
Overseen by
Director | Other Public
Company Directorships
Held by
Director |
Rand C. Berney (Born 1955) | Director of each Company since January 1, 2014. | Executive-in-Residence and Professor for Professional Ethics Course, College of Business Administration, Kansas State University since 2012; Formerly Senior Vice President of Corporate Shared Services of ConocoPhillips from April 2009 to 2012, Vice President and Controller of ConocoPhillips from 2002 to April 2009, and Vice President and Controller of Phillips Petroleum Company from 1997 to 2002; Member of the Oklahoma Society of CPAs, the Financial Executive Institute, American Institute of Certified Public Accountants, the Institute of Internal Auditors and the Institute of Management Accountants. | Five | None |
4
Name and Age | Position(s) Held
With The Company
and Length of
Time Served | Principal Occupation During Past Five Years | Number of
Portfolios in
Fund Complex
Overseen by
Director | Other Public
Company Directorships
Held by
Director |
Jennifer Paquette (Born 1962) | Director Nominee | Retired in 2017; Previously Chief Investment Officer of the Public Employees’ Retirement Association of Colorado (“Colorado PERA”) from 2003 to 2017; Held various positions within Colorado PERA from 1999 to 2003 and 1995 to 1996; Formerly Vice-President Institutional Account Executive at Merrill Lynch, Pierce, Fenner & Smith from 1991 to 1994; Vice-President, Portfolio Manager and Analyst at Alliance Capital Management from 1987 to 1991; Portfolio Assistant and Assistant at Mitchell Hutchins Asset Management from 1985 to 1987. Chartered Financial Analyst (“CFA”) charterholder. | None | None |
5
Remaining Directors Who Are Independent:
Name and Age | Position(s) Held
With The Company
and Length of
Time Served | Principal Occupation During Past Five Years | Number of
Portfolios in
Fund Complex
Overseen by
Director | Other Public
Company Directorships
Held by
Director |
Conrad S. Ciccotello (Born 1960) | Director of each Company since its inception. | Professor and the Director, Reiman School of Finance, University of Denver (faculty member since 2017); Associate Professor and Chairman of the Department of Risk Management and Insurance, Director of the Asset and Wealth Management Program, Robinson College of Business, Georgia State University (faculty member from 1999 to 2017); Investment Consultant to the University System of Georgia for its defined contribution retirement plan (2008-2017); Formerly Faculty Member, Pennsylvania State University (1997-1999); Published a number of academic and professional journal articles on investment company performance and structure, with a focus on MLPs. | Five | CorEnergy Infrastructure Trust, Inc.; Peachtree Alternative Strategies Fund; Tortoise Tax-Advantaged Social Infrastructure Fund, Inc. |
6
Name and Age | Position(s) Held
With The Company
and Length of
Time Served | Principal Occupation During Past Five Years | Number of
Portfolios in
Fund Complex
Overseen by
Director | Other Public
Company
Directorships
Held by
Director |
Alexandra A. Herger (Born 1957) | Director of each Company since January 1, 2015. | Retired in 2014; Previously interim vice president of exploration for Marathon Oil and director of international exploration and new ventures for Marathon Oil from 2008 to 2014; Held various positions with Shell Exploration and Production Co. between 2002 and 2008; Member of the Society of Exploration Geophysicists, the American Association of Petroleum Geologists, the Houston Geological Society and the Southeast Asia Petroleum Exploration Society; Member of the 2010 Leadership Texas/Foundation for Women’s Resources since 2010; Director of Panoro Energy ASA, an international independent oil and gas company listed on the Oslo Stock Exchange. | Five | None |
7
Remaining Directors Who Are Interested Persons:
Name and Age | Position(s) Held
With The Company
and Length of
Time Served | Principal Occupation During Past Five Years | Number of
Portfolios in
Fund Complex
Overseen by
Director | Other Public
Company
Directorships
Held by
Director |
H. Kevin Birzer* (Born 1959) | Director and Chairman of the Board of each Company since its inception. | Member of the Board of Directors of the Adviser; Managing Director of the Adviser and member of the Investment Committee of the Adviser since 2002; Director and Chairman of the Board of each of Tortoise Energy Capital Corporation (“TYY”) and Tortoise North American Energy Corporation (“TYN”) from its inception until its merger into TYG effective June 23, 2014. CFA charterholder. | Five | None |
* | Mr. Birzer, as a principal of the Adviser, is an “interested persons” of the Company, as that term is defined in Section 2(a)(19) of the 1940 Act. |
In connection with the change in control of the Adviser had approximately $16.0 billion of assets under management.
The Adviser is wholly-owned by Tortoise Investments, LLC (“Tortoise Investments”), a holding company. Employees under the Tortoise Investments family, including the members of the Adviser’s Investment Committee, hold a minority interest in Tortoise Investments, and Montage Investments, LLC (“Montage Investments”) owns a majority interest in Tortoise Investments.
The investment management of the portfolio of each Company is the responsibility of the Adviser’s Investment Committee, currently consisting of H. Kevin Birzer, Zachary A. Hamel, Kenneth P. Malvey,on January 31, 2018, Terry C. Matlack Brian A. Kessens, James R. Mick, Matthew G.P. Sallee and Robert J. Thummel, Jr. The Investment Committee provides investment strategy oversight to the portfolio management team who implements the strategy. While responsibility for monitoring, review, and analysisresigned effective as of individual securities is spread among various individual members of the portfolio management team, all portfolio management decisions and reviews are based on a team approach.
Following the closing of the Transaction, the Investment Committee with respect to the Companies will consist of Messrs. Birzer, Sallee, Mick, Kessens, and Thummel (all existing members of the Investment Committee), and P. Bradley Adams.
H. Kevin Birzer. Mr. Birzer has been a Managing Director and member of the Investment Committee of the Adviser since 2002. Mr. Birzer, Chief Executive Officer of our Adviser, has served as a Director and Chairman ofthat date from the Board of Directors of each Company since its inception.Company.In accordance with each Company’s Bylaws, Charles E. Heath will not be standing for re-election at the Annual Meeting and his term will expire at the Annual Meeting.
In addition to the experience provided in the table above, each director possesses the following qualifications, attributes and skills, each of which factored into the conclusion to invite them to join the Company’s Board of Directors: Mr. Ciccotello, experience as a college professor, a Ph.D. in finance and expertise in energy infrastructure MLPs; Mr. Berney, experience as a college professor, executive leadership and business experience; Mr. Heath and Ms. Herger, executive leadership and business experience; Ms. Paquette, investment management experience as a chief investment officer of a state public employees’ retirement association; and Mr. Birzer, who was a member in Fountain Capital Management, L.L.C. (“Fountain Capital”), a high yield bondinvestment management firm, from 1990 to May 2009, began his career in 1981. Mr. Birzer graduated with a Bachelor of Business Administration degree from the University of Notre Dame and holds a Master of Business Administration degree from New York University. He earned his CFA designation in 1988.
Brian A. Kessens. Mr. Kessens joined the Adviser in 2008. He has been aexperience as an executive, portfolio manager ofand leadership roles with the Adviser since July 2013, a Managing Director of the Adviser since January 2015,Adviser.8
Other attributes and a member of the Investment Committee of the Adviser since June
6
30, 2015. Mr. Kessens has served as President of TTP and TPZ since June 30, 2015. He was a senior investment analyst of the Adviser from June 2012qualifications considered for each director in connection with their selection to July 2013, and an investment analyst from 2008 to June 2012. Previously, from 2004 to 2008, he was a vice president in Citigroup’s global energy investment banking practice. Prior to Citigroup, he served from 1997 to 2002 as a field artillery officer in the United States Army. Mr. Kessens earned a Master of Business Administration from Columbia Business School in New York and a Bachelor of Science in economics from the United States Military Academy at West Point. He earned his CFA designation in 2006.
James R. Mick. Mr. Mick joined the Adviser in 2006. He has been a portfolio manager of the Adviser since July 2013, a Managing Director of the Adviser since January 2014, and a member of the Investment Committee of the Adviser since June 30, 2015. He was a senior investment analyst of the Adviser from June 2012 to July 2013, an investment analyst from 2011 to June 2012, and a research analyst from 2006 to 2011. Previously, he was a senior finance specialist at General Electric Insurance Solutions (now Swiss Re) from 2003 to 2006 and a senior auditor at Ernst & Young from 2000 to 2003. Mr. Mick earned Bachelor of Science degrees in business administration and accounting and a Master of Accounting and Information Systems degree from the University of Kansas. He earned his CFA designation in 2010.
Matthew G.P. Sallee. Mr. Sallee joined the Adviser in 2005. He has been a portfolio manager of the Adviser since July 2013, a Managing Director of the Adviser since January 2014, and a member of the Investment Committee of the Adviser since June 30, 2015. Mr. Sallee has served as President of TYG and NTG since June 30, 2015. He was a senior investment analyst of the Adviser from June 2012 to July 2013, an investment analyst from 2009 to June 2012, and a research analyst from 2005 to 2009. Previously, he served for five years (from 2000 to 2005) as a senior financial analyst with Aquila, Inc., where he was responsible for analysis of capital allocation at the firm’s communications infrastructure subsidiary, Everest Connections. Mr. Sallee graduated magna cum laude from the University of Missouri with a degree in business administration. He earned his CFA designation in 2009.
Robert J. Thummel, Jr. Mr. Thummel joined the Adviser in 2004. He has been a portfolio manager of the Adviser since July 2013, a Managing Director of the Adviser since January 2014, and a member of the Investment Committee of the Adviser since June 30, 2015. Mr. Thummel has served as President of NDP since June 30, 2015. He was a senior investment analyst of the Adviser from June 2012 to July 2013, and an investment analyst from 2004 to June 2012. Mr. Thummel was previously the president of TYN from 2008 until the fund was merged into TYG in June 2014. Previously, he was director of finance at KLT Inc., a subsidiary of Great Plains Energy, from 1998 to 2004 and a senior auditor at Ernst & Young from 1995 to 1998. Mr. Thummel earned a Bachelor of Science in accounting from Kansas State University and a Master of Business Administration degree from the University of Kansas.
7
P. Bradley Adams. Mr. Adams joined the Adviser in 2005 and oversees Tortoise’s financial operations. He has been a Managing Director of the Adviser since January 2013 and was Director of Financial Operations of the Adviser from 2005 to January 2013. He is also the Chief Executive Officer, Principal Financial Officer and Treasurer of each of the Companies. Previously, he served as a consultant to the financial services industry and was vice president of finance and operations, chief operating officer and director of Jones & Babson, Inc., an investment company distributor and service provider. Mr. Adams earned a Bachelor of Science degree in finance from the University of Wyoming and a Master of Business Administration degree from Rockhurst University in Kansas City, Missouri.
Information regarding other registered investment companies or series thereof (other than the Companies) managed by the Adviser, that have similar investment strategies to a Company is set forth in Appendix E to this Proxy Statement.
Additional information regarding the officers, directors, beneficial owners and other personnel of the Adviser is set forth in Appendix G to this Proxy Statement.
Lovell Minnick Partners LLC, located at 150 N. Radnor Chester Road, Radnor, PA, 19087, is an independent private equity firm found in 1999, which specializes in financial and business services sectors.
Matters Considered byjoin the Board of Directors of each Company in approvingwere their character and integrity and their willingness and ability to serve and commit the New Investment Advisory Agreement
The Current Investment Advisory Agreementtime necessary to perform the duties of a director for each Company was reviewed and, by unanimous vote, renewed by such Company’s Board of Directors, including the Independent Directors, at an in-person meeting held on October 16, 2017. Such renewal term expires upon the earlier to occurall of the closing ofclosed-end funds in the Transaction or December 31, 2018. At the same meeting, the Board of Directors, including theTortoise Fund Complex. In addition, as to each director other than Mr. Birzer, his status as an Independent Directors, reviewedDirector; and, unanimously approved the New Investment Advisory Agreements for each Company, subjectas to requisite stockholder approval and the closing of the Transaction.
As the Current Investment Advisory Agreements and the New Investment Advisory Agreements were reviewed and considered by each Company’s Board of Directors contemporaneously, and they are substantially identical except for the effective and termination dates, the Board of Director’s analysis of them engaged a parallel process and,Mr. Birzer, his roles with respect to the New Investment Advisory Agreements, drew additional focus on the expected effect that the change of control of the Adviser would have on the Adviser and the Company’s relationship with the Adviser.
In preparation for its reviewwere an important factor in his selection as a director. No experience, qualification, attribute or skill was by itself controlling.Mr. Birzer serves as Chairman of the Current Investment Advisory Agreement and the New Investment Advisory Agreement, the Independent Directors of each Company consulted with independent legal counsel regarding the factors to be considered in its review and the nature of information to be provided, and through its independent legal counsel the Independent Directors sent a detailed formal request for information to the Adviser. In addition to materials received
8
and reviewed by the Board of Directors throughout the year, the Adviser provided extensive information, including information from independent third party sources, and the directors reviewed such information, over the course of several weeks in response to this request.
For each Company, the Adviser provided information to assist the Board of Directors in assessing, among other things, the nature, extent and quality of advisory, administrative and other services provided by the Adviser, the investment performance of the Company (including a comparison of advisory fees and total expenses of the Company to other peer funds), the cost of services provided (including a comparison of advisory fees and total expenses of the Company to other peer funds), the profitability of the advisory contract to the Adviser, the potential for economies of scale, if any, and the collateral benefits the Adviser may derive from its relationship with the Company.
In August 2017, the Independent Directors consulted with its independent legal counsel regarding the legal issues and items to consider in a potential change of control of the Adviser. Working with its independent legal counsel, the Independent Directors provided to the Adviser a document requesting information from the potential acquirer, to assist the Board of Directors in assessing the potential acquirer and the impact that the change of control would have on the Adviser’s relationship with the Companies and the factors considered in reviewing and approving a new investment advisory agreement. The Board of Directors met several times in September 2017 to review and discuss these considerations.
After the Adviser’s decision to engage in exclusive negotiations with Lovell Minnick, the Board of Directors held an in-person meeting on October 2, 2017 to meet with representatives of the Adviser and Lovell Minnick. At this meeting, Lovell Minnick outlined its background, expertise and experience, described its business, operational and management plans for the Adviser following the closing of the Transaction, summarized the principal terms of the Transaction, and answered such questions as were raised at the meeting. Later that day, Lovell Minnick provided to the Board of Directors, in response to the written request for information submitted by the Independent Directors, detailed information to assist the Board of Directors of each Company in its review and considerationCompany. Mr. Birzer is an “interested person” of the New Investment Advisory Agreement andCompanies within the effect thatmeaning of the Transaction would have on the Adviser and its relationship with the Company (“Transaction Materials”).
1940 Act. The appointment of Mr. Birzer as Chairman reflects each Board of Directors ofDirectors’ belief that his experience, familiarity with each Company reviewed the Transaction Materials, alongCompany’s day-to-day operations and access to individuals with the materials it had receivedresponsibility for its general review of the Current Investment Advisory Agreementeach Company’s management and the New Investment Advisory Agreement, and held a meeting with the Adviser on October 9, 2017 to discuss and address issues and questions. The Transaction Materials provided tooperations provides the Board of Directors included,with insight into each Company’s business and activities and, with his access to appropriate administrative support, facilitates the efficient development of meeting agendas that address each Company’s business, legal and other needs and the orderly conduct of meetings of the Board of Directors. Mr. Ciccotello serves as Lead Independent Director. The Lead Independent Director will, among other things, responsive information regarding (1) the organizational and operational structure of Acquirer and how the Adviser would be integrated into that structure, (2) the background and qualifications of Lovell Minnick and the executives who will be primarily responsible for the Acquirer’s relationship with
9
the Adviser, (3) the capitalization and financial conditionchair executive sessions of the Acquirer, (4) the financing arrangementsfour directors who are Independent Directors, serve as a spokesperson for the Transaction and the implications of leverage upon the Adviser, (5) whether after the Transaction there were plans to change the business, operations or management of the Adviser, (6) Acquirer’s availability of capital for future investments in the Adviser, (7) legal, litigation and regulatory matters, including Lovell Minnick’s compliance policies, (8) potential conflicts of interest that may arise due to the Acquirer’s ownership of the Adviser, (9) the draft definitive purchase agreement and a summary of the terms of the Transaction, including closing conditions, and (10) confirmation that the Transaction is structured to comply with the safe harbor of Section 15(f) of the 1940 Act, and that the Company would not bear any expenses related to the Transaction. At the meeting, the Board of Directors also reviewed and discussed the terms of the Transaction.
Based upon its review, at an in-person meeting held on October 16, 2017, the Board of Directors of each Company, including the Independent Directors meeting in executive session with its independent legal counsel, unanimously concluded that it was in the best interest of the Company and its stockholders to approve the New Investment Advisory Agreement forserve as a term expiring upon the earlier of (i) December 31, 2019 or (ii) two years from the effective date of the New Investment Advisory Agreement, subject to stockholder approval and the closing of the Transaction, and resolved to recommend that the stockholders of the Company approve the New Investment Advisory Agreement with respect to such Company.
In connection with each Board of Director’s consideration of the New Investment Advisory Agreement, the directors considered, among other information and factors, the following factors regarding the Transaction’s effect upon the Adviser and the Company’s relationship with the Adviser:
| ● | the statements of Lovell Minnick and the Adviser to the Board of Directors that: |
| o | the day-to-day portfolio management, investment objectives and policies, and investment processes of the Company will not change in any material respect as a result of the Transaction; |
| o | the Transaction does not require or propose any change in the Adviser’s day-to-day portfolio management teams or key personnel, except that certain founders of the Adviser are expected to leave Tortoise upon the closing of the Transaction; |
| o | the services provided by the Adviser to the Company will be of the same or improved quality following the closing of the Transaction as those in effect immediately prior to the closing of the Transaction; |
| o | there will be no impact on the profitability of the Adviser as a result of the Transaction; |
10
| o | the Acquirer and the Adviser intend to comply with the safe harbor provisions of Section 15(f) of the 1940 Act, including having Independent Directors comprise 75% or more of the Company’s Board of Directors for three years following the closing of the Transaction and they will use reasonable best efforts not to engage in activities that would impose an “unfair burden” (within the meaning of Section 15(f)) on the Companies for a period of two years following the closing of the Transaction. |
| ● | except for provisions relating to effectiveness and termination dates, the terms of the New Investment Advisory Agreement are substantially identical to the Current Investment Advisory Agreement, including the fee and expense structure and the advisory fee rate; |
| ● | the investment advisory and administrative services to be provided to the Company by the Adviser are the same under the Current Investment Advisory Agreement and the New Investment Advisory Agreements; |
| ● | the impact of the Transaction on the Adviser’s day-to-day operations, including, without limitation, the potential increase in resources available to the Adviser personnel as a result of the Transaction; |
| ● | the anticipated capitalization and level of indebtedness of the Adviser following the closing of the Transaction; |
| ● | the reputation, capabilities, experience, organizational structure and financial resources of Lovell Minnick; |
| ● | the long-term business goals of Lovell Minnick and the Adviser with regard to the business and operations of the Adviser; |
| ● | that stockholders of the Companies will not bear any costs in connection with the Transaction, as the parties to the Purchase Agreement will bear the costs, fees and expenses incurred by the Companies in connection with this Proxy Statement, the solicitation of proxies, and any other costs of the Companies associated with the Transaction; and |
| ● | the terms of the Transaction, including payments made by the Acquirer to the owners of the Adviser in connection with the Transaction, Tortoise ongoing management and employees retaining a significant equity interest in Tortoise with many investing additional capital alongside the Acquirer, and employment relationships of the Adviser’s key personnel following closing of the Transaction. |
The Board of Directors of each Company, includingliaison between the Independent Directors considered and evaluated all the information provided to it by the Adviser and Lovell Minnick. The directors did not identify any single factor as being all-important or controlling, and each director may have attributed different levelsCompany’s management. The Independent Directors will regularly meet outside the presence of important to
11
different factors. In deciding to approve the New Investment Advisory Agreement,management and in addition to factors described above, the Board of Directors’ decision included an assessment of the following factors:
Nature, Extent and Quality of Services Provided. The Board of Directors considered information regarding the history, qualification and background of the Adviser and the individuals who will be primarily responsible for the portfolio management of the Company. Additionally, the Board of Directors considered the quality and extent of the resources devoted to research and analysis of the Company’s actual and potential investments, including the research and decision-making processes utilizedare advised by the Adviser, as well as risk oversight and the methods adopted to seek to achieve compliance with the investment objectives, policies and restrictions of the Company, and meeting regulatory requirements. Further, the Board of Directors considered the quality and depth of the Adviser personnel (including the number and caliber of portfolio managers and research analysts involved and the size and experience of the investment, accounting, trading, client service and compliance teams dedicated to the Company), the fact that the current day-to-day portfolio management teams of the Adviser will continue to be engaged in the investment management of the Company’s portfolio, and other Adviser resources and plans for growth, use of affiliates of the Adviser, and the particular expertise with respect to energy companies, MLP markets and financing (including private financing).
In addition to advisory services, the Board of Directors considered the quality of the administrative and other non-investment advisory services provided to the Company. The Adviser will provide the Company with certain services (in addition to any such services provided to the Company by third parties) and officers and other personnel as are necessary for the operations of the Company. In particular, the Adviser will provide the Company with the following administrative services, among others: (1) preparing disclosure documents, such as periodic stockholder reports and the prospectus and the statement of additional information in connection with public offerings; (2) communicating with analysts to support secondary market analysis of the Company; (3) oversight of daily accounting and pricing; (4) preparing periodic filings with regulators and stock exchanges; (5) overseeing and coordinating the activities of other service providers; (6) organizing Board meetings and preparing the materials for such Board meetings; (7) providing compliance support; (8) furnishing analytical and other support to assist the Board of Directors in its consideration of strategic issues; (9) the responsible handling of the leverage target; and (10) performing other administrative services for the operation of the Company, such as press releases, fact sheets, investor calls, leverage financing, tax reporting, tax management, fulfilling regulatory filing requirements and investor relations services.
The Board of Directors considered the Adviser’s and Lovell Minnick’s representations that Lovell Minnick intends for the Adviser to continue to operate following the closing of the Transaction in much the same manner as it operates today, and that the impact of the Transaction on the day-to-day operations of the
12
Adviser would be neutral or positive.independent legal counsel. The Board of Directors also consideredhas determined that its leadership structure, as described above, is appropriate in light of each Company’s size and complexity, the likelihood thatnumber of Independent Directors and the Transaction may result in increased resources available to the Adviser’s personnel in day-to-day operations as well as strategically.
Board of Directors’ general oversight responsibility. The Board of Directors also
reviewedbelieves that its leadership structure not only facilitates the orderly and efficient flow of information
received from the Adviser and the Company’s Chief Compliance Officer regarding the compliance policies and procedures established pursuant to the
1940 ActIndependent Directors from management, but also enhances the independent and
their applicability toorderly exercise of its responsibilities.Information About Executive Officers
Mr. Birzer is the Company, includingChairman of the Company’s code of ethics. The Board of Directors considered Lovell Minnick’s statements that the Adviser’s compliance policieseach Company. The preceding tables give more information about Mr. Birzer. The following table sets forth each other executive officer’s name, age and procedures (including ethics policies and procedures), disaster recovery program and cybersecurity infrastructure would be the same, or improved, following the closing of the Transaction.
The Board of Directors concluded that the nature ofaddress; position(s) held with the Company and length of time served; principal occupation during the specialized expertisepast five years; the number of the Adviserportfolios in the niche market of MLPs forFund Complex overseen by each of TYG and NTG and the energy market for each of TTP, NDP and TPZ, as well as the nature, extent and quality of services provided by the Adviser to the Company, made it qualified to serve as the adviser. The Board of Directors recognized that Lovell Minnick’s and the Adviser’s investment horizon correlated well to the investment strategy of the Company. The Board of Directors reviewed the financial information, including information regarding existing and anticipated indebtedness, provided by the Adviser and Lovell Minnick and concluded that upon closing of the Transaction, the Adviser will have the financial resources to meet its obligations to the Company.
The Board of Directors concluded that they are satisfied with the nature, extent and quality of services that the Adviser will provide to each Company under the New Investment Advisory Agreement and that the nature, extent and quality of services provided by the Adviser under the Current Investment Advisory Agreement are expected to continue under the New Investment Advisory Agreement at the same or improved levels.
Investment Performance, Costs of Services, Profitability. The Board of Directors reviewed and evaluated information regarding the Company’s performance and the performance of 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 for each of TYG and NTG and on the energy sector for each of TTP, NDP and TPZ. The Board of Directors considered the Company’s investment performance against peer funds for the following periods, where applicable: one year, three year, five year, ten year, 2015, 2016, 2017 year-to-date and since inception for each of TYG, NTG, TTP, NDP and TPZ. Additionally, the Board of Directors considered each Company’s performance against a specialized sector (including a custom composite of sector indices (“custom composite”) for each of TTP and TPZ) and more general market indices for the fiscal year-to-date, one year and since inception periods for each Company. The Board of Directors also considered senior management’s and portfolio managers’ analysis of the reasons for any over-performance or underperformance against its peers and/or sector market indices, as applicable. The Board of Directors noted
13
that for the relevant periods, based on NAV: TYG’s performance outperformed and underperformed the median for its peers depending on the period, and outperformed and underperformed sector market indices depending on the period and the index and outperformed and underperformed the general market index depending on the period; NTG’s performance outperformed and underperformed the median for its peers depending on the period, and outperformed and underperformed the specialized sector and general market indices depending on the period; TTP’s performance outperformed and underperformed the median for its peers depending on the period, and outperformed and underperformed the custom composite, the specialized sector market index and the general market index depending on the period and the index; NDP’s performance outperformed and underperformed the median for its peers depending on the period, and outperformed and underperformed the specialized sector market index and outperformed and underperformed the general market index depending on the period; and TPZ’s performance outperformed and underperformed the median for its peers depending on the period and outperformed and underperformed the custom composite and the general market index depending on the period. The Board of Directors noted that for the relevant periods, based on market price, each of TYG, NTG and TTP outperformed and underperformed the median for its peers depending on the period; NDP outperformed and underperformed the median for its peers depending on the period, and TPZ outperformed and underperformed the median for its peers depending on the period. For each of TTP and TPZ, the Board of Directors noted the lack of peers and sector market indices with similar strategies to the Company and also took into account the custom composite to better reflect the strategy of the Company. The Adviser believes that performance relative to the applicable custom composite for each of TTP and TPZ is an appropriate performance metric for the Company. The Board of Directors also noted that the custom composites for TTP and TPZ and the sector market indices are pre expenses, in contrast to the Company and its peers, and the sector market indices are pre-tax accrual in contrast to TYG and NTG and their MLP peers. The Board of Directors also noted differences across the peer universe in distribution and leverage strategies, including the Company’s focus on sustainable distributions and leverage strategy, and took into account that stockholders, in pursuing their investment goals and objectives, may have purchased their shares based upon the reputation and the investment style, long-term philosophy and strategy of the Adviser. The Board of Directors also considered discussions with the Adviser regarding a variety of initiatives for the Company, including the Adviser’s plans to continue aftermarket support and investor communications regarding recent market price performance. The Board of Directors also noted differences across the peer universe in distribution and leverage strategies, including the Company’s focus on sustainable distributions and leverage strategy, and took into account that stockholders, in pursuing their investment goals and objectives, may have purchased their shares based upon the reputation and the investment style, long-term philosophy and strategy of the Adviser. Based upon their review and also considering market conditions and volatility, the Board of Directors concluded that each Company’s performance has been reasonable
14
based on the Company’s strategy and compared to other closed-end funds that focus on the MLP sector (for each of TYG and NTG) and the energy sector (for each of TTP, NDP and TPZ) and that the Company has generated reasonable returns for investors.
The Adviser provided detailed information concerning its cost of providing services to the Company, its profitability in managing the Company, its overall profitability, and its financial condition. The Board of Directors reviewed 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 the New Investment Advisory Agreement, and the reasonableness of the current advisory fee, and was, to the extent possible, evaluated in comparison to other more specialized investment advisers.
The Board of 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), and fees charged to separate institutional accountsofficer and other accounts managedpublic company directorships held by each officer. Unless otherwise indicated, the Adviser. The information provided to the Board of Directors discussed the significant differences in scope of services provided to the Company and to the Adviser’s other non-closed-end fund clients. The Board of Directors considered the fee comparisons in light of the different services provided in managing these other types of clients. The Board of Directors considered and evaluated the information they received comparing the Company’s contractual annual advisory fee and overall expenses with a peer group of comparable closed-end funds with similar investment objectives and strategies, including other MLP or energy investment companies, as applicable depending on the Company, determined by the Adviser. Given the specialized universe of managers and funds fitting within the criteria for the peer group as well as a lack of reliable, consistent third party data, the Adviser did not believe that it would be beneficial to engage the services of an independent third-party to prepare the peer group analysis, and the Independent Directors concurred with this approach. The Adviser provided information on the methodology used for determining the peer group.
The Board of Directors reviewed and considered the advisory fee payable by the Company under the New Investment Advisory Agreement. The Board of Directors compared the Company’s contractual advisory fee and total expense ratio to industry data with respect to other mutual funds in the same peer group. The Board noted that the advisory fee rates payable to the Adviser would be the same under the New Investment Advisory Agreement as they are under the Current Investment Advisory Agreement, which had been determined to be reasonable in connection with the Board of Directors’ consideration and renewal of the Current Investment Advisory Agreement. The Board of Directors concluded that the fees (including the advisory fee) and expenses that the Company is paying under the
15
New Investment Advisory Agreement, as well as the operating expense ratios of the Company, are reasonable given the quality of services provided under the New Investment Advisory Agreement and that such fees and expenses are reasonable compared to the fees charged by advisers to comparable funds.
Economies of Scale. The Board of Directors considered information from the Adviser concerning whether economies of scale would be realized as the Company grows, and whether fee levels reflect any economies of scale for the benefit of the Company’s stockholders. In addition, the Board of Directors considered any potential economies of scale that may result from the Transaction and whether fee levels reflect any economies of scale for the benefit of the Company’s stockholders. The Board of Directors concluded that economies of scale are difficult to measure and predict overall and that such economies of scale could not be predicted in advance of the closing of the Transaction. Accordingly, the Board of Directors reviewed other information, such as year-over-year profitability of the Adviser generally, the profitability of its management of the Company, and the fees of competitive funds not managed by the Adviser over a range of asset sizes. The Board of Directors concluded the Adviser will appropriately be sharing any economies of scale through its fee structure under the New Investment Advisory Agreements and through reinvestment in its business resources to provide stockholders additional content and services.
Collateral Benefits Derived by the Adviser. The Board of Directors reviewed information from the Adviser and Lovell Minnick concerning collateral benefits it may receive as a result of its relationship with the Company. The Board of Directors concluded that the Adviser generally does not and will not directly use the Company’s or stockholder information to generate profits in other lines of business, and therefore would not derive any significant collateral benefits from them.
The Board of 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 third party soft dollar arrangements in rendering its advisory services. The Adviser receives unsolicited research from some of the brokers with whom it places trades on behalf of clients, however, the Adviser has no arrangements or understandings with such brokers regarding receipt of research in return for commissions. The Adviser does not consider this research when selecting brokers to execute fund transactions and does not put a specific value on unsolicited research, nor attempt to estimate and allocate the relative costs or benefits among clients.
Conclusion. On the basis of such information as the Board of Directors considered necessary to the exercise of its reasonable business judgment and its evaluation of all of the factors described above, and after the Independent Directors’ separate consultation with its independent legal counsel, the Board of Directors concluded that their analysis favored approval of the New Investment Advisory Agreement for each Company, and that (a) the terms and conditions thereof are
16
fair and reasonable and in the best interests of the Company and its stockholders, and (b) the Transaction would not result in the imposition of an unfair burden on the Company or their stockholders. The Board of Directors therefore unanimously approved the New Investment Advisory Agreement between each Company and the Adviser.
Section 15(f) of the 1940 Act
The Board has been advised that the parties to the Purchase Agreement have structured the Transaction in reliance upon 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, a memberaddress of each Company’s Board of Directors and a co-founder of the Adviser,officer is expected to resign from the Board of Directors of each Company upon completion of the 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).
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, NTG and TTP, 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.
17
An unfavorable vote on the proposal to approve the New Investment Advisory Agreement by the stockholders of one Company will not affect the implementation of the proposal by another Company if the proposal is approved by the stockholders of that Company. However, the New Investment Advisory Agreement will only take effect upon the closing of the Transaction, which is conditioned upon obtaining the satisfaction or waiver of customary closing conditions including the receipt of regulatory approvals and the requisite consents of advisory clients representing a significant portion of the annual revenue of the Adviser.
In the event that the Transaction does not, for any reason, occur, each Current Investment Advisory Agreement will continue in effect in accordance with its terms.
BOARD RECOMMENDATION
The Board of Directors of each Company unanimously recommends that the stockholders of each Company vote “FOR” approval of Proposal One.
18
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Each Company’s Audit and Valuation 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, 2017. On May 18, 2017, 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
Fund Share Ownership. The number of outstanding shares of each Company, as of the close of business on the Record Date, is included in Appendix F to this Proxy Statement.
Beneficial owners of 5% or more of the outstanding shares of each class of each Company are provided in Appendix H to this Proxy Statement. To the best knowledge of each Company, no person or entity beneficially owned more than 5% of the outstanding shares of any class of a Fund except as stated in Appendix H.
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.
How To Vote. You may vote your shares via the internet, by telephone (for internet and telephone voting, please follow the instructions on the proxy ballot), or by simply completing and signing the enclosed proxy ballot, and mailing it in the postage-paid envelope included in this package. You may also 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 early. That will ensure your vote is counted should your plans change.
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 parties to the Purchase Agreement.
Such parties 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 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. The Companies have engaged AST Fund Solutions, LLC (“AST”) to assist in the solicitation of proxies. The costs associated with printing, mailing and solicitation by AST is
19
expected to be approximately $650,000.00. The cost of solicitation will be borne by the parties to the Purchase Agreement. AST has also been retained as proxy tabulator. None of the Companies will pay any representatives of the Company or the Adviser any additional compensation for their efforts to supplement proxy solicitation.
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;66211. Each officer serves until his successor is elected and qualified or until his resignation or removal. As employees of the Adviser, each of the following officers are “interested persons” of the Company, as that term is defined in Section 2(a)(19) of the 1940 Act.9
Name and Age | Position(s) Held
With The Company
and Length of
Time Served | Principal Occupation During Past Five Years | Number of
Portfolios in
Fund Complex
Overseen by
Officer | Other Public
Company
Directorships
Held by
Officer |
P. Bradley Adams (Born 1960) | Chief Executive Officer of TYG, NTG, TPZ, TTP and NDP since June 30, 2015; Principal Financial Officer and Treasurer of each of TYG, NTG, TPZ, TTP and NDP since May 2017; Chief Financial Officer of NTG from 2010 to June 30, 2015, of each of TYG and TPZ from 2011 to June 30, 2015 and of each of TTP and NDP from its inception to June 30, 2015; Assistant Treasurer of TYG from 2005 to 2011 and of TPZ from its inception to 2011. | Managing Director of the Adviser since January 2013; Director of Financial Operations of the Adviser from 2005 to January 2013; Chief Financial Officer of each of TYY and TYN from May 2011 to June 23, 2014; Assistant Treasurer of each of TYY and TYN from November 2005 to May 2011. | Five | None |
Matthew G.P. Sallee (Born 1978) | President of TYG and NTG since June 30, 2015. | Managing Director of the Adviser since January 2014; Member of the Investment Committee of the Adviser since June 30, 2015; Portfolio Manager of the Adviser since July 2013; Senior Investment Analyst of the Adviser from June 2012 to July 2013; Investment Analyst of the Adviser from 2009 to June 2012; Research Analyst of the Adviser from 2005 to 2009; CFA charterholder. | Two | None |
10
Name and Age | Position(s) Held
With The Company
and Length of
Time Served | Principal Occupation During Past Five Years | Number of
Portfolios in
Fund Complex
Overseen by
Officer | Other Public
Company
Directorships
Held by
Officer |
Brian A. Kessens (Born 1975) | President of TTP and TPZ since June 30, 2015. | Managing Director of the Adviser since January 2015 and a member of the Investment Committee of the Adviser since June 30, 2015; Portfolio Manager of the Adviser since July 2013; Senior Investment Analyst of the Adviser from June 2012 to July 2013; Investment Analyst of the Adviser from 2008 to June 2012; CFA charterholder. | Two | None |
Robert J. Thummel, Jr. (Born 1972) | President of NDP since June 30, 2015. | Managing Director of the Adviser since January 2014 and a member of the Investment Committee of the Adviser since June 30, 2015; Portfolio Manager of the Adviser since July 2013; Senior Investment Analyst of the Adviser from June 2012 to July 2013; Investment Analyst of the Adviser from 2004 to June 2012; President of TYN from 2008 until its merger into TYG in June 2014. | One | None |
Nicholas S. Holmes (Born 1985) | Vice President of TYG and NTG since June 30, 2015. | Director of the Adviser since January 2018; Investment Analyst of the Adviser since January 2015; Research Analyst of the Adviser from January 2012 through December 2014 and Assistant Research Analyst from January 2010 through December 2011; CFA charterholder. | Two | None |
11
Name and Age | Position(s) Held
With The Company
and Length of
Time Served | Principal Occupation During Past Five Years | Number of
Portfolios in
Fund Complex
Overseen by
Officer | Other Public
Company
Directorships
Held by
Officer |
Brett Jergens (Born 1978) | Vice President of NDP since June 30, 2015. | Director and Portfolio Manager of the Adviser since January 2018; Investment Analyst of the Adviser from December 2010 to January 2018; Research Analyst of the Adviser from June 2007 to December 2010; CFA charterholder. | One | None |
Stephen Pang (Born 1981) | Vice President of TTP since May 2017 | Director and Portfolio Manager of Adviser since January 2018; Investment Analyst of Adviser from January 2015 to January 2018; Director in Credit Suisse’s Equity Capital Markets Group from 2012 to September 2014; CFA charterholder. | One | None |
Adam Peltzer (Born 1975) | Vice President of TPZ since May 2017 | Director and Investment Analyst of the Adviser since March 2015; Investment Analyst and Principal at Fountain Capital Management from 2006 to March 2015; CFA charterholder. | One | None |
Shobana Gopal (Born 1962) | Vice President of TYG, NTG, TPZ, TTP and NDP since June 30, 2015. | Director, Tax of the Adviser since January 2013; Tax Analyst of the Adviser from September 2006 through December 2012. | Five | None |
Diane Bono (Born 1958) | Chief Compliance Officer of TYG since 2006 and of each of NTG, TPZ, TTP and NDP since its inception; Secretary of TYG, NTG, TPZ, TTP and NDP since May 2013. | Managing Director of the Adviser since January 2018; Chief Compliance Officer of the Adviser since June 2006. | Five | None |
12
Committees of the Board of Directors of each Company
Each Company’s Board of Directors currently has four standing committees: (i) the Executive Committee; (ii) the Audit and Valuation Committee; (iii) the Nominating and Governance Committee; and (iv) the Compliance Committee. Currently, all of the non-interested directors, Messrs. Ciccotello, Berney and Heath and Ms. Herger, are the only members of each of these committees, except for the Executive Committee, for each Company. Each Company’s Executive Committee currently consists of Mr. Birzer and Mr. Ciccotello. Subject to her election, Ms. Paquette will serve on each of these committees, except for the Executive Committee.
| ● | Executive Committee. The Executive Committee of each Company has authority to exercise the powers of the Board (i) to address emergency matters where assembling the full Board in a timely manner is impracticable, or (ii) to address matters of an administrative or ministerial nature. Mr. Birzer is an “interested person” of each Company as defined by Section 2(a)(19) of the 1940 Act. In the absence of either member of the Executive Committee, the remaining member is authorized to act alone. |
| ● | Audit and Valuation Committee. The Audit and Valuation Committee of each of TYG, TPZ, NTG, TTP and NDP 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, a current copy of which is available at the Company’s link on the Adviser’s website (www.tortoiseadvisors.com) and in print to any stockholder who requests it from the Secretary of the Company at 11550 Ash Street, Suite 300, Leawood, Kansas 66211. The Committee: (i) approves and recommends to the Board the selection, retention or termination of the independent registered public accounting firm (“auditors”); (ii) approves services to be rendered by the auditors and monitors the auditors’ performance; (iii) reviews the results of each Company’s audit; (iv) determines whether to recommend to the Board that the Company’s audited financial statements be included in the Company’s Annual Report; and (v) responds to other matters as outlined in the Committee Charter. Each Committee member is “independent” as defined under the applicable New York Stock Exchange listing standards, and none are “interested persons” of the Company as defined in the 1940 Act. The Board of Directors of each company has determined that Conrad S. Ciccotello and Rand C. Berney are each an “audit committee financial expert.” In addition to his experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements, Mr. Ciccotello has a Ph.D. in Finance. |
13
| ● | Nominating and Governance Committee. Each Nominating and Governance Committee member is “independent” as defined under the New York Stock Exchange listing standards, and none are “interested persons” of TYG, TPZ, NTG, TTP or NDP as defined in the 1940 Act. The Nominating and Governance Committee of each Company operates under a written charter adopted and approved by the Board, a current copy of which is available at the Company’s link on the Adviser’s website (www.tortoiseadvisors.com). The 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 and 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) 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 (v) 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 Committee. Stockholders should see “Stockholder Proposals and Nominations for the 2018 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. Each Company’s Bylaws require all nominees for directors, at the time of nomination, (1) to be at least 21 and less than 75 years of age and have substantial expertise, experience or relationships relevant to the business of the Company, or (2) to be a current director of the Company that has not reached 75 years of age. The Committee has the sole discretion to determine if an individual satisfies the foregoing qualifications. The Committee also considers the broad background of each individual nominee for director, including how such individual would impact the diversity of the Board, but does not have a formal policy regarding consideration of diversity in identifying nominees for director. |
| ● | 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. Each Company’s Compliance Committee operates under a written charter adopted and approved by the Board. The committee reviews and assesses management’s compliance with applicable securities |
14
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.
The Board of Directors’ role in the Company’s risk oversight reflects its responsibility under applicable state law to oversee generally, rather than to manage, the Company’s operations. In line with this oversight responsibility, the Board of Directors will receive reports and make inquiry at its regular meetings and as needed regarding the nature and extent of significant risks (including investment, compliance and valuation risks) that potentially could have a materially adverse impact on the Company’s business operations, investment performance or reputation, but relies upon the Company’s management to assist it in identifying and understanding the nature and extent of such risks and determining whether, and to what extent, such risks may be eliminated or mitigated. In addition to reports and other information received from the Company’s management regarding its investment program and activities, the Board of Directors as part of its risk oversight efforts will meet at its regular meetings and as needed with the Adviser’s Chief Compliance Officer to discuss, among other things, risk issues and issues regarding the Company’s policies, procedures and controls. The Board of Directors may be assisted in performing aspects of its role in risk oversight by the Audit and Valuation Committee and such other standing or special committees as may be established from time to time. For example, the Audit and Valuation Committee will regularly meet with the Company’s independent public accounting firm to review, among other things, reports on internal controls for financial reporting.
The Board of Directors believes that not all risks that may affect the Company can be identified, that it may not be practical or cost-effective to eliminate or mitigate certain risks, that it may be necessary to bear certain risks (such as investment-related risks) to achieve the Company’s goals and objectives, and that the processes, procedures and controls employed to address certain risks may be limited in their effectiveness. Moreover, reports received by the directors as to risk management matters are typically summaries of relevant information and may be inaccurate or incomplete. As a result of the foregoing and other factors, the risk management oversight of the Board of Directors is subject to substantial limitations.
None of the Companies currently has a standing compensation committee. None of the Companies has any employees and the New York Stock Exchange does not require boards of directors of registered closed-end funds to have a standing compensation committee.
15
The following table shows the number of Board and committee meetings held during the fiscal year ended November 30, 2017 for each of the Companies:
| TYG | TPZ | NTG | TTP | NDP |
Board of Directors | 12 | 12 | 12 | 12 | 12 |
Executive Committee | 0 | 0 | 0 | 0 | 0 |
Audit and Valuation Committee | 4 | 4 | 4 | 4 | 4 |
Nominating and Governance Committee | 2 | 2 | 2 | 2 | 2 |
Compliance Committee | 2 | 2 | 2 | 2 | 2 |
During the 2017 fiscal year, for each of the Companies, all directors who were directors during the 2017 fiscal year attended at least 75% of the aggregate of (1) the total number of meetings of the Board and (2) properly executingthe total number of meetings held by all committees of the Board on which they served. None of the Companies has a policy with respect to Board member attendance at annual meetings. All of the directors of each of TYG, TPZ, NTG, TTP and sendingNDP attended the Company’s 2017 annual meeting.
Director and Officer Compensation
None of the Companies compensates any of its directors who are interested persons nor any of its officers. The following table sets forth certain information with respect to the compensation paid by each Company and the Fund Complex for fiscal 2017 to each of the current independent directors for their services as a later-dated proxy;director. None of the Companies has any retirement or (3) attendingpension plans.
| | Aggregate
Compensation from
Company(1) | Pension or Retirement Benefits Accrued as Part of | Estimated Annual | Total Compensation from Company and Fund |
| Name of Person, Position | TYG | TPZ | NTG | TTP | NDP | Company Expenses | Benefits Upon Retirement | Complex Paid to Director |
Independent Directors | | | | | | | | |
Conrad S. Ciccotello | $56,000 | $18,000 | $44,000 | $23,000 | $23,000 | $0 | $0 | $164,000 |
Rand C. Berney | $54,000 | $18,000 | $43,000 | $22,000 | $22,000 | $0 | $0 | $159,000 |
Charles E. Heath | $54,000 | $18,000 | $43,000 | $22,000 | $22,000 | $0 | $0 | $159,000 |
Alexandra A. Herger | $53,000 | $17,000 | $42,000 | $21,000 | $21,000 | $0 | $0 | $154,000 |
(1) | No amounts have been deferred for any of the persons listed in the table. |
16
For the Meeting, requesting return2018 fiscal year, each independent director receives an annual retainer from each Company as set forth below, and a fee of any previously delivered proxy,$1,000 for each meeting of the Board of Directors and votingAudit and Valuation Committee he or she attends in person.
person (or $500 for each Board and Audit and Valuation Committee meeting attended telephonically, or for each Audit and Valuation Committee meeting attended in person that is held on the same day as a Board meeting). Independent directors also receive $500 for each other committee meeting attended in person or telephonically (other than Audit and Valuation Committee meetings). The Chairman of the Audit and Valuation Committee receives an additional annual retainer as set forth below. Each other committee chairman receives an additional annual retainer of $1,000. The independent directors are reimbursed for expenses incurred as a result of attendance at meetings of the Board of Directors and Board committees. | TYG | TPZ | NTG | TTP | NDP |
Annual Board Retainer | $35,600 | $18,000 | $29,000 | $19,000 | $19,000 |
Audit and Valuation Committee Chairman Retainer | $3,000 | $1,000 | $2,000 | $2,000 | $2,000 |
Other Committee Chairman Retainer | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 |
QuorumRequired Vote.. With respect to each of TYG, NTG and TTP, Mr. Berney will be elected by the vote of a plurality of all shares of common stock and preferred stock of the Company present at the presence,meeting, in person or by proxy and Ms. Paquette will be elected by the vote of holdersa plurality of all the shares entitledof preferred stock of the Company present at the meeting, in person or by proxy. With respect to castTPZ and NDP, Mr. Berney and Ms. Paquette will each be elected by the vote of a majorityplurality of all shares of common stock of the Company present at the meeting, in person or by proxy. When there are two vacancies for director, as is the case here, a vote by plurality means the two nominees with the highest number of affirmative votes, regardless of the votes entitledwithheld for the candidates, will be elected. Therefore, with respect 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, oreach Company, 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 not be treatedcounted towards a nominee’s achievement of a plurality. With respect to TYG, NTG and TTP, each common share and each preferred share is entitled to one vote in the election of Mr. Berney. With respect to TYG, NTG and TTP, each preferred share is entitled to one vote in the election of Ms. Paquette. With respect to TPZ and NDP, each common share is entitled to one vote in the election of Mr. Berney and one vote in the election of Ms. Paquette.
17
BOARD RECOMMENDATION
The Board of Directors of each of TYG, NTG and TTP unanimously recommends that the common and preferred stockholders of each Company vote “for” Mr. Berney as sharesa director. The Board of Directors of each of TYG, NTG and TTP uananimously recommends that the preferred stockholders vote “for” Ms. Paquette as a director. The Board of Directors of each of TPZ and NDP unanimously recommends that the common stockholders of each Company vote “for” Mr. Berney as a director and “for” Ms. Paquette as a director.
18
RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors of each Company recommends that the stockholders of the Company ratify the selection of Ernst & Young LLP (“EY”) as the independent registered public accounting firm (“independent auditors”), to audit the accounts of the Company for the fiscal year ending November 30, 2018. EY’s selection was approved by each Company’s Audit and Valuation Committee. Their selection also was ratified and approved by the Board of Directors of each Company, including a majority of the directors who are presentnot “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.
EY has audited the financial statements of each Company since prior to each Company’s commencement of business (TYG in February 2004, TPZ in July 2009, NTG in July 2010, TTP in October 2011 and NDP in July 2012) and does not have any direct financial interest or any material indirect financial interest in any of the Companies. A representative of EY is expected to be available at the meeting butand to have not been voted.
With respectthe opportunity to
make a statement and respond to appropriate questions from the stockholders. Each Company’s Audit and Valuation Committee meets twice each
year with representatives of EY to discuss the scope of their engagement, review the financial statements of the Company
ifand the results of their examination.Required Vote
EY will be ratified as a quorum is not presentCompany’s independent registered public accounting firm by the affirmative vote of a majority of the shares voted, in person or by proxy, at the Meeting,meeting by the Chairmanholders of common stock and the holders of preferred stock (if any), voting together as a single class. With respect to each of TYG, NTG and TTP, each common share and each preferred share is entitled to one vote on this proposal. With respect to TPZ and NDP, each common share is entitled to one vote on this proposal. For the purposes of the Meeting or the stockholders entitledvote on this proposal for each Company, abstentions and broker non-votes (which occur when a broker has not received directions from customers and does not have discretionary authority to vote at such meeting, present in person or by proxy,the customers’ shares), will not be counted as shares voted and will have no effect on 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 Chairmanresult 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
Each Company has entered into administration agreements with US Bancorp Fund Services, LLC whose principal business address is 615 E. Michigan Street, Milwaukee, Wisconsin 53202.
20
STOCKHOLDER COMMUNICATIONS
Stockholders are able to send communications to thevote.BOARD RECOMMENDATION
The Board of Directors of each Company. Communications should be addressed toCompany unanimously recommends that stockholders of each Company vote “for” the Secretaryratification of the applicable Company at its principal offices at 11550 Ash Street, Suite 300, Leawood, Kansas 66211. Ernst & Young LLP as their Company’s Independent Registered Public Accounting Firm.
19
AUDIT AND VALUATION COMMITTEE REPORT
The Secretary will forward any communications received directly to the BoardAudit and Valuation Committee of Directors or particular director, as applicable.
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR THE 2018 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 4, 2017. 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 November 4, 2017 for each of
TYG, TPZ, NTG, TTP and NDP,
reviews the Company’s annual financial statements with both management and
December 4,the independent auditors.The Audit and Valuation Committee of each Company, in discharging its duties, has met with and has held discussions with management and the Company’s independent auditors. Each Company’s Audit and Valuation Committee has reviewed and discussed the Company’s audited financial statements for the fiscal year ended November 30, 2017 for TYG,with management. Management of each Company 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 and no later than 5:00 p.m. Pacific TimeValuation Committee of each Company has also discussed with the independent auditors the matters required to be discussed by Auditing Standard 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board. The independent auditors provided to each Company’s Audit and Valuation Committee the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit and Valuation Committee concerning independence, and each Company’s Audit and Valuation Committee discussed with representatives of the independent auditors their firm’s independence with respect to that Company.
With respect to each Company, based on December 4, 2017 for eachthe Audit and Valuation Committee’s review and discussions with management and the independent auditors, the representations of NTG, TTPmanagement and NDPthe reports of the independent auditors to the committee, the Audit and 5:00 p.m. Central Time on December 4, 2017 for TPZ and January 3, 2018 for TYG. The stockholder must satisfy certain requirements set forthValuation Committee recommended that the Board include the audited financial statements in the Company’s BylawsAnnual Report for filing with the SEC.
| The Audit and Valuation Committee of each of
TYG, TPZ, NTG, TTP and NDP |
| |
| Conrad S. Ciccotello (Chairman) |
| Rand C. Berney |
| Charles E. Heath |
| Alexandra A. Herger |
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Each Company’s Audit and Valuation Committee selected EY as the notice must contain specific information required byindependent registered public accounting firm to audit the Company’s Bylaws. With respect to nominees for director, the notice must include, among other things, the name, age, business addressbooks 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
21
Company at 1-866-362-9331 or by writing the Secretaryrecords of the Company
at 11550 Ash Street, Suite 300, Leawood, Kansas 66211. Timely submission of a proposal does not meanfor its fiscal year ending November 30, 2018. EY is registered with the
proposal will be allowed to be brought beforePublic Company Accounting Oversight Board.20
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FEES AND SERVICES
The following table sets forth 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 rulesapproximate amounts of the SEC.
aggregate fees billed to each Company for the fiscal years ended November 30, 2017 and 2016 by EY, respectively:| | | TYG | | | TPZ | | | NTG | |
| | | 2017 | | | 2016 | | | 2017 | | | 2016 | | | 2017 | | | 2016 | |
Audit Fees(1) | | $ | 237,000 | | | $ | 220,000 | | | $ | 123,000 | | | $ | 122,000 | | | $ | 144,000 | | | $ | 142,000 | |
Audit-Related Fees(2) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Tax Fees(3) | | $ | 82,000 | | | $ | 81,000 | | | $ | 20,000 | | | $ | 20,000 | | | $ | 55,000 | | | $ | 53,000 | |
| All Other Fees | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Aggregate
Non-Audit Fees | | $ | 82,000 | | | $ | 81,000 | | | $ | 20,000 | | | $ | 20,000 | | | $ | 55,000 | | | $ | 53,000 | |
| | | TTP | | | NDP | |
| | | 2017 | | | 2016 | | | 2017 | | | 2016 | |
Audit Fees(1) | | $ | 119,000 | | | $ | 118,000 | | | $ | 116,000 | | | $ | 115,000 | |
Audit-Related Fees(2) | | | — | | | | — | | | | — | | | | — | |
Tax Fees(3) | | $ | 20,000 | | | $ | 19,000 | | | $ | 20,000 | | | $ | 20,000 | |
| All Other Fees | | | — | | | | — | | | | — | | | | — | |
| Aggregate Non-Audit Fees | | $ | 20,000 | | | $ | 19,000 | | | $ | 20,000 | | | $ | 20,000 | |
(1) | By OrderFor professional services rendered with respect to the audit of each Company’s financial statements and the Boardreview of Directors |
| |
| Diane M. Bono |
| Secretaryeach Company’s statutory and regulatory filings with the SEC. |
October 30, 2017
22
APPENDIX A
DATES RELATING TO CURRENT INVESTMENT ADVISORY AGREEMENTS
Company(2) | Date of Current Investment
Advisory Agreement | Date Current Investment Advisory Agreement Last Approved by Shareholders; Reason for Approval | Date Current Investment Advisory Agreement Last Approved for Continuance by the Board of Directors |
TYG | September 15, 2009,
as amended
June 23, 2014 | September 11, 2009 (Change of Control) | October 16, 2017 |
TPZ | September 15, 2009 | September 11, 2009 (Change of Control) | October 16, 2017 |
NTG | July 27, 2010 | July 27, 2010 (Initial Stockholder Approval) | October 16, 2017 |
TTP | September 12, 2011 (effective October 26, 2011) | October 26, 2011 (Initial Stockholder Approval) | October 16, 2017 |
NDP | May 24, 2012
(effective July 26, 2012) | May 24, 2012 (Initial Stockholder Approval) | October 16, 2017For professional services rendered with respect to assurance related services in connection with each Company’s compliance with its rating agency guidelines. |
A-1
APPENDIX B
FORM OF INVESTMENT ADVISORY AGREEMENT (TYG)
AGREEMENT made as(3) | For professional services for tax compliance, tax advice and tax planning. |
The Audit and Valuation Committee of this ___ dayeach Company has adopted pre-approval policies and procedures. Under these policies and procedures, the Audit and Valuation Committee of ___________, 20___, by and between Tortoise Energy Infrastructure Corporation, a Maryland corporation having its principal placeeach Company pre-approves (i) the selection of business in Leawood, Kansas (the “Company”), and Tortoise Capital Advisors, L.L.C., a Delaware limited liability company having its principal placethe Company’s independent registered public accounting firm, (ii) the engagement of business in Leawood, Kansas (the “Adviser”).
WHEREAS, the Company isindependent registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a closed-end, non-diversified management investment company;
WHEREAS, the Adviser is registered under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), as an investment adviser and engages in the business of acting as an investment adviser;
WHEREAS, the Company and the Adviser desire to enter into an agreementpublic accounting firm to provide for investment advisoryany non-audit services to the Company, upon(iii) the terms and conditions hereinafter set forth; and
NOW THEREFORE, in considerationengagement of the mutual covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1. | Appointment of Adviser.
|
The Company appoints the Adviserindependent registered public accounting firm to act as manager and investment adviser to the Company for the period and on the terms herein set forth. The Adviser accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided.
Subject to the overall supervision and review of the Board of Directors of the Company (“Board”), the Adviser will regularly provide the Company with investment research, advice and supervision and will furnish continuously an investment program for the Company, consistent with the investment objective and policies of the Company. The Adviser will determine from time to time what securities shall be purchased for the Company, what securities shall be held or sold by the Company and what portion of the Company’s assets shall be held uninvested as cash, subject always to the provisions of the Company’s Charter, Bylaws and its registration statement under the 1940 Act and under the Securities Act of 1933 covering the Company’s shares, as filed with the Securities and Exchange Commission (the “Commission”), and to the investment objective, policies and restrictions of the Company, as each of the same shall be from time to time in effect, and subject, further, to such policies and instructions as the Board may from time to time establish. To carry out such determinations, the Adviser will exercise full discretion
B-1
and act for the Company in the same manner and with the same force and effect as the Company itself might or could do with respect to purchases, sales or other transactions, as well as with respect to all other things necessary or incidental to the furtherance or conduct of such purchases, sales or other transactions.
3. | Administrative Duties of the Adviser.
|
The Adviser agrees to furnish office facilities and clerical and administrative services necessary to the operation of the Company (other than services provided by the Company’s custodian, accounting agent, administrator, dividend paying agent and other service providers). The Adviser is authorized to conduct relations with custodians, depositaries, underwriters, brokers, dealers, placement agents, banks, insurers, accountants, attorneys, pricing agents, and other persons as may be deemed necessary or desirable. To the extent requested by the Company, the Adviser shall (i) oversee the performance and fees of the Company’s service providers and make such reports and recommendations to the Board of Directors concerning such matters as the parties deem desirable; (ii) respond to inquiries and otherwise assist such service providers in the preparation and filing of regulatory reports, proxy statements, shareholder communications and the preparation of Board materials and reports; (iii) establish and oversee the implementation of borrowing facilities or other forms of leverage authorized by the Board; and (iv) supervise any other aspect of the Company’s administration as may be agreed upon by the Company and the Adviser. The Company shall reimburse the Adviser or its affiliates for all out-of-pocket expenses incurred in providing the services set forth in this Section 3.
4. | Delegation of Responsibilities.
|
The Adviser is authorized to delegate any or all of its rights, duties and obligations under this Agreement to one or more sub-advisers, and may enter into agreements with sub-advisers, and may replace any such sub-advisers from time to time in its discretion, in accordance with the 1940 Act, the Advisers Act, and rules and regulations thereunder, as such statutes, rules and regulations are amended from time to time or are interpreted from time to time by the staff of the Commission, and if applicable, exemptive orders or similar relief granted by the Commission and upon receipt of approval of such sub-advisers by the Board and by shareholders (unless any such approval is not required by such statutes, rules, regulations, interpretations, orders or similar relief).
5. | Independent Contractors.
|
The Adviser and any sub-advisers shall for all purposes herein be deemed to be independent contractors and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Company in any way or otherwise be deemed to be an agent of the Company.
B-2
6. | Compliance with Applicable Requirements.
|
In carrying out its obligations under this Agreement, the Adviser shall at all times conform to:
| a. | all applicable provisions of the 1940 Act and the Advisers Act and any rules and regulations adopted thereunder; |
| b. | the provisions of the registration statement of the Company, as the same may be amended from time to time under the 1940 Act; |
| c. | the provisions of the Prospectus, including without limitation, the investment objective; |
| d. | the provisions of the Company’s Articles of Incorporation, as the same may be amended from time to time; |
| e. | the provisions of the Bylaws of the Company, as the same may be amended from time to time; |
| f. | all policies, procedures and directives adopted by the Board; and |
| g. | any other applicable provisions of state, federal or foreign law. |
The Adviser is responsible for decisions to buy and sell securities for the Company, broker-dealer selection, and negotiation of brokerage commission rates. The Adviser’s primary consideration in effecting a security transaction will be to obtain the best execution. In selecting a broker-dealer to execute each particular transaction, the Adviser will take the following into consideration: the best net price available; the reliability, integrity and financial condition of the broker-dealer; the size of and the difficulty in executing the order; and the value of the expected contribution of the broker-dealer to the investment performance of the Company on a continuing basis. Accordingly, the price to the Company in any transaction may be less favorable than that available from another broker-dealer if the difference is reasonably justified by other aspects of the execution services offered.
Subject to such policies as the Board may from time to time determine, the Adviser shall not be deemed to have acted unlawfully or to have breached any duty created by this Agreement or otherwise solely by reason of its having caused the Company to pay a broker or dealer that provides brokerage and researchnon-audit services to the Adviser
an amount of commission for effecting aor any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the Company,
investment transaction in excessif the engagement relates directly to the operations and financial reporting of the
amount of commission another broker or dealer would have charged for effecting that transaction, ifCompany, and (iv) the
Adviser determines in good faith that such amount of commission was reasonable in relationfees and21
other compensation to be paid to the valueindependent registered public accounting firm. With respect to each Company, the Chairman of the brokerageAudit and researchValuation Committee of the Company may grant the pre-approval of any engagement of the independent registered public accounting firm for non-audit services of less than $10,000, and such delegated pre-approvals will be presented to the full Audit and Valuation Committee at its next meeting for ratification. Under certain limited circumstances, pre-approvals are not required under securities law regulations for certain non-audit services below certain de minimus thresholds. Since each Company’s respective adoption of these policies and procedures, the Audit and Valuation Committee of the Company has pre-approved all audit and non-audit services provided to the Company by EY. None of these services provided by such broker or dealer, viewed in terms of either that particular transaction orEY were approved by the Adviser’s overall responsibilities with respectAudit and Valuation Committee pursuant to the Companyde minimus exception under Rule 2.01(c)(7)(i)(C) or Rule 2.01(c)(7)(ii) of Regulation S-X. All of EY’s hours spent on auditing each Company’s financial statements were attributed to work performed by full-time permanent employees of EY.
The Adviser paid to EY $143,300 in 2016 and $458,000 in 2017 for tax and other non-audit services provided to other clientsthe Adviser. These non-audit services were not required to be preapproved by each Company’s Audit and Valuation Committee. No entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to any of the Adviser asCompanies, has paid to, whichor been billed for fees by, EY for non-audit services rendered to the Adviser exercises investment discretion. or such entity during the Companies’ last two fiscal years.
The Adviser is further authorized to allocate the
B-3
orders placed by it on behalfAudit and Valuation Committee of theeach Company to such brokers and dealers who also provide research or statistical material or otherhas considered whether EY’s provision of services (other than audit services) to the Company, the Adviser or to any sub-adviser. Such allocation shall be in such amounts and proportions asentity controlling, controlled by, or under common control with the Adviser shall determine and the Adviser will report on said allocations regularly to the Board indicating the brokers to whom such allocations have been made and the basis therefor.
The Adviser will maintain complete and accurate records in respect of all transactions relating to the Company’s portfolio. The Adviser will keep or will cause to be kept records in respect of all such portfolio transactions executed on behalf of the Company. To the extent permitted by applicable law, the Adviser shall provide access to its books and records relating to the Company as the Company may reasonably request. The Adviser shall have access at all reasonable times to books and records maintained for the Company to the extent necessary for the Adviser to comply with all applicable securities or other laws to which it is subject, and further provided that the Company shall produce copies of such records and books whenever reasonably required to do so by the Adviser for the purpose of legal proceedings or dealings with any governmental or regulatory authorities or for its internal compliance procedures.
For the services, payments and facilities to be furnished hereunder by the Adviser, the Adviser shall be entitled to receive from the Company compensation in an amount equal to 0.95% of the average monthly managed assets of the Company up to $2.5 billion, 0.90% of the average monthly managed assets of the Company between $2.5 billion and $3.5 billion, and 0.85% of the average monthly managed assets of the Company above $3.5 billion. “Managed assets” means the total assets of the Company (including any assets attributable to any leverage that may be outstanding) minus the sum of accrued liabilities (other than deferred taxes or debt representing financial leverage). Accrued liabilities are expenses incurred in the normal course of the Company’s operations.
Such compensation shall be calculated and accrued monthly and paid quarterly within five (5) days of the end of each calendar quarter. The Company’s net assets shall be computed in accordance with the Articles of Incorporation of the Company and any applicable policies and determinations of the Board of Directors. The parties do hereby expressly authorize and instruct the Company’s Administrator, U.S. Bancorp Fund Services LLC, or its successors, to calculate the fee payable hereunder and to remit all payments specified herein to the Adviser.
In case of initiation or termination of the Agreement during any month, the fee for that month shall be reduced proportionately on the basis of the number of calendar days during which the Agreement is in effect and the fee shall be computed upon the basis of the average gross assets for the business days the Agreement is so in effect for that month.
B-4
The Adviser may, from time to time, waive all or a part of the above compensation.
10. | Expenses of the Adviser.
|
It is understood that the Company will pay all expenses other than those expressly stated to be payable by the Adviser hereunder, which expenses payable by the Company shall include, without implied limitation, (i) expenses of maintaining the Company and continuing its existence, (ii) registration of the Company under the 1940 Act, (iii) commissions, spreads, fees and other expenses connected with the acquisition, holding and disposition of securities and other investments including placement and similar fees in connection with direct placements entered into on behalf of the Company, (iv) auditing, accounting and legal expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses of listing shares of the Company with a stock exchange, and expenses of issue, sale, repurchase and redemption (if any) of interests in the Company, including expenses of conducting tender offers for the purpose of repurchasing Company interests, (viii) expenses of registering and qualifying the Company and its shares under federal and state securities laws and of preparing and filing registration statements and amendments for such purposes, (ix) expenses of reports and notices to shareholders and of meetings of shareholders and proxy solicitations therefor, (x) expenses of reports to governmental officers and commissions, (xi) insurance expenses, (xii) association membership dues, (xiii) fees, expenses and disbursements of custodians and subcustodians for allprovides services to the Company (including without limitation safekeeping of funds, securities and other investments, keeping of books, accounts and records, and determination of net asset values), (xiv) fees, expenses and disbursements of transfer agents, dividend disbursing agents, shareholder servicing agents and registrars for all services to the Company, (xv) compensation and expenses of directors of the Company who are not members of the Adviser’s organization, (xvi) pricing and valuation services employed by the Company, (xvii) all expenses incurredis compatible with maintaining EY’s independence in connection with leveraging of the Company’s assets through a line of credit, or issuing and maintaining preferred shares, (xviii) all expenses incurred in connection with the organization of the Company and the initial public offering of common shares, and (xix) such non-recurring items as may arise, including expenses incurred in connection with litigation, proceedings and claims and the obligation of the Company to indemnify its directors, officers and shareholders with respect thereto.
performing audit services.OTHER MATTERS
The Company understands that the persons employed by the Adviser to assist in the performance of the Adviser’s duties under this Agreement will not devote their full time to such service and nothing contained in this Agreement shall be deemed to limit or restrict the right of the Adviser or any affiliate of the Adviser to engage in and devote time and attention to other businesses or to render services of whatever kind or nature. The Company further understands and agrees that managers of the Adviser may serve as officers or directors of the Company, and that officers or directors of the Company may serve as managers of the Adviser
B-5
to the extent permitted by law; and that the managers of the Adviser are not prohibited from engaging in any other business activity or from rendering services to any other person, or from serving as partners, officers or directors of any other firm or company, including other investment advisory companies.
12. | Consent to the Use of Name.
|
The Adviser hereby consents to the use by the Company of the name “Tortoise” as part of the Company’s name; provided, however, that such consent shall be conditioned upon the employment of the Adviser or one of its affiliates as the investment adviser of the Company. The name “Tortoise” or any variation thereof may be used from time to time in other connections and for other purposes by the Adviser and its affiliates and other investment companies that have obtained consent to the use of the name “Tortoise”. The Adviser shall have the right to require the Company to cease using the name “Tortoise” as part of the Company’s name if the Company ceases, for any reason, to employ the Adviser or one of its affiliates as the Company’s investment adviser. Future names adopted by the Company for itself, insofar as such names include identifying words requiring the consent of the Adviser, shall be the property of the Adviser and shall be subject to the same terms and conditions.
13. | Effective Date, Term and Approval.
|
This Agreement shall become effective with respect to the Company, if approved by the shareholders of the Company, as of the date of execution above. If so approved, this Agreement shall continue in force and effect through the earlier to occur of (i) December 31, 2019 and (ii) two years from such effective date, and may be continued from year to year thereafter, provided that the continuation of the Agreement is specifically approved at least annually:
| a. | (i) by the Board or (ii) by the vote of “a majority of the outstanding voting securities” of the Company (as defined in Section 2(a)(42) of the 1940 Act); and |
| b. | by the affirmative vote of a majority of the directors who are not parties to this Agreement or “interested persons” (as defined in the 1940 Act) of a party to this Agreement (other than as directors of the Company), by votes cast in person at a meeting specifically called for such purpose. |
This Agreement may be terminated as to the Company at any time, without the payment of any penalty, by vote of the Board or by vote of a majority of the outstanding voting securities of the Company, or by the Adviser, on no more than sixty (60) days’ written notice to the other party. The notice provided for herein may be waived by the party entitled to receipt thereof. This Agreement shall automatically terminate in the event of its assignment, the term “assignment” for purposes of this paragraph having the meaning defined in Section 2(a)(4) of
B-6
the 1940 Act. Upon termination pursuant to this Section 14, the Adviser, at the Company’s request, must deliver all copies of books and records maintained in accordance with this Agreement and applicable law.
No amendment of this Agreement shall be effective unless it is in writing and signed by the party against which enforcement of the amendment is sought.
The Adviser will not be liable in any way for any default, failure or defect in any of the securities comprising the Company’s portfolio if it has satisfied the duties and the standard of care, diligence and skill set forth in this Agreement. However, the Adviser shall be liable to the Company for any loss, damage, claim, cost, charge, expense or liability resulting from the Adviser’s willful misconduct, bad faith or gross negligence or disregard by the Adviser of the Adviser’s duties or standard of care, diligence and skill set forth in this Agreement or a material breach or default of the Adviser’s obligations under this Agreement.
Any notices under this Agreement shall be in writing, addressed and delivered, telecopied or mailed postage paid, to the other party entitled to receipt thereof at such address as such party may designate for the receipt of such notice. Until further notice to the other party, it is agreed that the address of the Company and that of the Adviser shall be 11550 Ash Street, Suite 300, Leawood, Kansas 66211.
18. | Questions of Interpretation.
|
Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act or the Advisers Act shall be resolved by reference to such term or provision of the 1940 Act or the Advisers Act and to interpretations thereof, if any, by the United States Courts or in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to said Acts. In addition, where the effect of a requirement of the 1940 Act or the Advisers Act reflected in any provision of the Agreement is revised by rule, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. Subject to the foregoing, this Agreement shall be governed by and construed in accordance with the laws (without reference to conflicts of law provisions) of the State of Delaware.
B-7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their respective duly authorized officers on the day and year first written above.
| TORTOISE ENERGY INFRASTRUCTURE CORPORATION | |
| | |
| By: | | |
| Name: | P. Bradley Adams | |
| Title: | Chief Executive Officer, Principal Financial Officer and Treasurer | |
| TORTOISE CAPITAL ADVISORS, L.L.C. | |
| | |
| By: | | |
| Name: | H. Kevin Birzer | |
| Title: | Chief Executive Officer | |
B-8
APPENDIX C
FORM OF INVESTMENT ADVISORY AGREEMENT (TPZ, NTG, TTP, AND NDP)
AGREEMENT made as of this ___ day of _______, 20___, by and between [TPZ/NTG/TTP/NDP], a Maryland corporation having its principal place of business in Leawood, Kansas (the “Company”), and Tortoise Capital Advisors, L.L.C., a Delaware limited liability company having its principal place of business in Leawood, Kansas (the “Advisor”).
WHEREAS, the Advisor is registered under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), as an investment advisor and engages in the business of acting as an investment advisor;
WHEREAS, the Company and the Advisor [NTG only: entered into a prior Investment Advisory Agreement dated June 18, 2010, which agreement is to be deemed terminated in all respects and superseded by this Agreement, which the parties] desire to enter into an agreement to provide for investment advisory services to the Company upon the terms and conditions hereinafter set forth; and
NOW THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1. | Appointment of Advisor.
|
The Company appoints the Advisor to act as manager and investment advisor to the Company for the period and on the terms herein set forth. The Advisor accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided.
Subject to the overall supervision and review of the Board of Directors of each Company knows of no other matters that are intended to be brought before the Company (“Board”),meeting. If other matters are presented for action, the Advisor will regularly provide the Company with investment research, advice and supervision and will furnish continuously an investment program for the Company, consistent with the investment objective and policies of the Company. The Advisor will determine from time to time what securities shall be purchased for the Company, what securities shall be held or sold by the Company and what portion of the Company’s assets shall be held uninvested as cash or in other liquid assets, subject always to the provisions of the Company’s Articles of Incorporation, Bylaws, and its registration statement under the Investment Company Act of 1940, as amended (the “1940 Act”) and under the Securities Act of 1933 covering the Company’s shares, as filed with the Securities and Exchange Commission (the “Commission”), as any of the same may be amended from time to time, and to the investment objectives of the Company, as each of the same shall be from time to time in effect, and subject, further, to such policies and instructions
C-1
as the Board may from time to time establish. To carry out such determinations, the Advisor will exercise full discretion and act for the Companyproxies named in the
same manner and with the same force and effect as the Company itself might or could do with respect to purchases, sales or other transactions, as well as with respect to all other things necessary or incidental to the furtherance or conductenclosed form of
such purchases, sales or other transactions. Without limiting the generality of the foregoing, the Advisor shall, during the term and subject to the provisions of this Agreement, (i) determine the composition of the portfolio of the Company, the nature and timing of the changes therein and the manner of implementing such changes; (ii) identify, evaluate and negotiate the structure of the investments made by the Company; (iii) perform due diligenceproxy will vote on
prospective portfolio companies; (iv) close and monitor the Company’s investments; (v) provide the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably require for the investment of its funds.those matters in their sole discretion. 22
3. | Administrative Duties of the Advisor.
|
The Advisor agrees to furnish office facilities and clerical and administrative services necessary to the operation of the Company (other than services provided by the Company’s custodian, accounting agent, administrator, dividend and interest paying agent and other service providers). The Advisor is authorized to conduct relations with custodians, depositaries, underwriters, brokers, dealers, placement agents, banks, insurers, accountants, attorneys, pricing agents, and other persons as may be deemed necessary or desirable. To the extent requested by the Company, the Advisor shall (i) oversee the performance of, and payment of the fees to, the Company’s service providers, and make such reports and recommendations to the Board concerning such matters as the parties deem desirable; (ii) respond to inquiries and otherwise assist such service providers in the preparation and filing of regulatory reports, proxy statements, shareholder communications and the preparation of Board materials and reports; (iii) establish and oversee the implementation of borrowing facilities or other forms of leverage authorized by the Board; and (iv) supervise any other aspect of the Company’s administration as may be agreed upon by the Company and the Advisor. The Company shall reimburse the Advisor or its affiliates for all out-of-pocket expenses incurred in providing the services set forth in this Section 3. To the extent the Advisor expects to provide services that this paragraph anticipates will be provided by a separate service provider, the Advisor may propose to the Board a separate Administrative Agreement pursuant to which one or more of such services is provided by, and separate compensation is paid to, the Advisor.
4. | Delegation of Responsibilities.
|
The Advisor is authorized to delegate any or all of its rights, duties and obligations under this Agreement to one or more sub-advisors, and may enter into agreements with sub-advisors, and may replace any such sub-advisors from time to time in its discretion, in accordance with the 1940 Act, the Advisers Act, and rules and regulations thereunder, as such statutes, rules and regulations are
C-2
amended from time to time or are interpreted from time to time by the staff of the Commission, and if applicable, exemptive orders or similar relief granted by the Commission, and upon receipt of approval of such sub-advisors by the Board and by shareholders of the Company (unless any such approval is not required by such statutes, rules, regulations, interpretations, orders or similar relief).
5. | Independent Contractors.
|
The Advisor and any sub-advisors shall for all purposes herein be deemed to be independent contractors and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Company in any way or otherwise be deemed to be an agent of the Company.
6. | Compliance with Applicable Requirements.
|
In carrying out its obligations under this Agreement, the Advisor shall at all times conform to:
| a. | all applicable provisions of the 1940 Act and the Advisers Act and any applicable rules and regulations adopted thereunder; |
| b. | the provisions of the registration statement of the Company, as the same may be amended from time to time under the 1940 Act, including without limitation, the investment objectives set forth therein; |
| c. | the provisions of the Company’s Articles of Incorporation, as the same may be amended from time to time; |
| d. | the provisions of the Bylaws of the Company, as the same may be amended from time to time; |
| e. | all policies, procedures and directives adopted by the Board; and |
| f. | any other applicable provisions of state, federal or foreign law. |
7. | Policies and Procedures.
|
The Advisor has adopted and implemented written policies and procedures reasonably designed to prevent violation of the Federal securities laws by the Advisor. The Advisor shall provide the Company, at such times as the Company shall reasonably request, with a copy of such policies and procedures and a report of such policies and procedures; such report shall be of sufficient scope and in sufficient detail as may reasonably be required to comply with Rule 38a-1 under the 1940 Act and to provide reasonable assurance that any material inadequacies would be disclosed by such examination, and, if there are no such inadequacies, the reports shall so state.
The Advisor is responsible for decisions to buy and sell securities for the Company, broker-dealer selection, and negotiation of brokerage commission rates. The Advisor’s primary consideration in effecting a security transaction will
C-3
be to obtain the best execution. In selecting a broker-dealer to execute a particular transaction, the Advisor will take the following into consideration: the best net price available; the reliability, integrity and financial condition of the broker-dealer; the size of and the difficulty in executing the order; and the value of the expected contribution of the broker-dealer to the investment performance of the Company on a continuing basis. Accordingly, the price to the Company in any transaction may be less favorable than that available from another broker-dealer if the difference is reasonably justified by other aspects of the execution services offered.
Subject to such policies as the Board may from time to time determine, the Advisor shall not be deemed to have acted unlawfully, or to have breached any duty created by this Agreement or otherwise, solely by reason of its having caused the Company to pay a broker or dealer that provides brokerage and research services to the Advisor an amount of commission for effecting a Company investment transaction in excess of the amount of commission another broker or dealer would have charged for effecting that transaction, if the Advisor determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Advisor’s overall responsibilities with respect to the Company and to other clients of the Advisor as to which the Advisor exercises investment discretion. The Advisor is further authorized to allocate the orders placed by it on behalf of the Company to such brokers and dealers who also provide research or statistical material or other services to the Company, the Advisor or to any sub-advisor. Such allocation shall be in such amounts and proportions as the Advisor shall determine and the Advisor will report on such allocations regularly to the Board indicating the brokers to whom such allocations have been made and the basis therefor.
The Advisor will maintain, or cause to be maintained, complete and accurate records in respect of all transactions relating to the Company’s portfolio. The Advisor will keep or will cause to be kept records in respect of all such portfolio transactions executed on behalf of the Company. To the extent permitted by applicable law, the Advisor shall provide such access to its books and records relating to the Company as the Company may reasonably request. The Advisor shall have access at all reasonable times to books and records maintained for the Company to the extent necessary for the Advisor to comply with all applicable securities or other laws to which it is subject, and further provided that the Company shall produce copies of such records and books whenever reasonably required to do so by the Advisor for the purpose of legal proceedings or dealings with any governmental or regulatory authorities or for its internal compliance procedures.
C-4
For the services, payments and facilities to be furnished hereunder by the Advisor, the Advisor shall receive from the Company annual compensation in an amount equal to [TTP & NDP: 1.10%] [TPZ & NTG: 0.95%] the average monthly “Managed Assets” of the Company. “Managed Assets” means the total assets of the Company (including any assets attributable to any leverage that may be outstanding [NTG only: but excluding any net deferred tax assets]) minus the sum of accrued liabilities (other than [NTG only: net deferred tax liabilities] debt representing financial leverage and the aggregate liquidation preference of any outstanding preferred shares). Average monthly Managed Assets is the sum of the daily Managed Assets for the month divided by the number of days in the month. Accrued liabilities are expenses incurred in the normal course of the Company’s operations.
Such compensation shall be calculated and accrued daily and paid quarterly within five (5) days of the end of each calendar quarter,
In case of initiation or termination of the Agreement during any month, the fee for that month shall be reduced proportionately on the basis of the number of calendar days during which the Agreement is in effect and the fee shall be computed upon the basis of the average Managed Assets for the business days the Agreement is so in effect for that month.
The Advisor may, from time to time, waive or defer all or any part of the compensation described in this Section 10. The parties do hereby expressly authorize and instruct the Company’s administrator, or its successors, to calculate the fee payable hereunder and to remit all payments specified herein to the Advisor. The value of the Company’s assets shall be computed in accordance with the Articles of Incorporation of the Company or any applicable policies and determinations of the Board.
11. | Expenses of the Advisor.
|
The compensation and allocable routine overhead expenses of all investment professionals of the Advisor and its staff, when and to the extent engaged in providing investment advisory services required to be provided by the Advisor under Section 2 hereof, will be provided and paid for by the Advisor and not by the Company. It is understood that the Company will pay all expenses other than those expressly stated to be payable by the Advisor hereunder, which expenses payable by the Company shall include, without limitation the following; if applicable:
(i) other than as set forth in the first sentence of this Section 11 above, expenses of maintaining the Company and continuing its existence and related overhead, including, to the extent such services are provided by personnel of the Advisor or its affiliates, office space and facilities, training and benefits,
C-5
(ii) commissions, spreads, fees and other expenses connected with the acquisition, holding and disposition of securities and other investments including placement and similar fees in connection with direct placements entered into on behalf of the Company,
(iii) auditing, accounting, tax and legal service expenses,
(iv) taxes and interest,
(v) governmental fees,
(vi) expenses of listing shares of the Company with a stock exchange and expenses of issue, sale, repurchase and redemption (if any) of securities of the Company,
(vii) expenses of registering and qualifying the Company and its securities under federal and state securities laws and of preparing and filing registration statements and amendments for such purposes,
(viii) expenses of communicating with shareholders, including website expenses and the expenses of preparing, printing, and mailing press releases, reports and other notices to shareholders and of meetings of shareholders and proxy solicitations therefor,
(ix) expenses of reports to governmental officers and commissions,
(x) insurance expenses,
(xi) association membership dues,
(xii) fees, expenses and disbursements of custodians and subcustodians for all services to the Company (including without limitation safekeeping of funds, securities and other investments, keeping of books, accounts and records, and determination of net asset values),
(xiii) fees, expenses and disbursements of transfer agents, dividend and interest paying agents, shareholder servicing agents, registrars and administrator for all services to the Company,
(xiv) compensation and expenses of directors of the Company who are not members of the Advisor’s organization,
(xv) pricing, valuation, and other consulting or analytical services employed in considering and valuing the actual or prospective investments of the Company,
(xvi) all expenses incurred in leveraging of the Company’s assets through a line of credit or other indebtedness or issuing and maintaining notes or preferred shares,
C-6
(xvii) all expenses incurred in connection with the organization of the Company and any offering of the Company’s securities, including, without limitation, common shares and preferred and debt securities, and
(xviii) such non-recurring items as may arise, including expenses incurred in litigation, proceedings and claims and the obligation of the Company to indemnify its directors, officers and shareholders with respect thereto.
12. | Covenants of the Advisor.
|
The Advisor covenants that it is registered as an investment adviser under the Investment Advisers Act of 1940. The Advisor agrees that its activities will at all times be in compliance in all material respects with all applicable federal and state laws governing its operations and investments.
The Company understands that the persons employed by the Advisor to assist in the performance of the Advisor’s duties under this Agreement may not devote their full time to such service and nothing contained in this Agreement shall be deemed to limit or restrict the right of the Advisor or any affiliate of the Advisor to engage in and devote time and attention to other businesses or to render services of whatever kind or nature, so long as the Advisor’s services to the Company are not impaired by the provision of such services to others. The Company further understands and agrees that managers of the Advisor may serve as officers or directors of the Company, and that officers or directors of the Company may serve as managers of the Advisor to the extent permitted by law; and that the managers of the Advisor are not prohibited from engaging in any other business activity or from rendering services to any other person, or from serving as partners, officers or directors of any other firm or company, including other investment advisory companies.
14. | Consent to the Use of Name.
|
The Advisor hereby consents to the royalty free use by the Company of the name “Tortoise” as part of the Company’s name and consents to the royalty free use of the related “Tortoise” logo; provided, however, that such consents shall be conditioned upon the employment of the Advisor or one of its approved affiliates as the investment advisor of the Company. The name “Tortoise” and the related “Tortoise” logo or any variation thereof may be used from time to time in other connections and for other purposes by the advisor and its affiliates and other investment companies that have obtained consent to the use of the name “Tortoise”. The Advisor shall have the right to require the Company to cease using the name “Tortoise” as part of the Company’s name and the related “Tortoise” logo if the Company ceases, for any reason, to employ the Advisor or one of its approved affiliates as the Company’s investment advisor. Future names adopted by the Company for itself, insofar as such names include identifying words requiring the consent of the Advisor, shall be the property of the Advisor and shall be subject to the same terms and conditions.
C-7
15. | Effective Date, Term and Approval.
|
This Agreement shall become effective with respect to the Company, if approved by the shareholders of the Company, as of the date of execution above. If so approved, this Agreement shall continue in force and effect through the earlier to occur of (i) December 31, 2019 and (ii) two years from such effective date, and may be continued from year to year thereafter, provided that the continuation of the Agreement is specifically approved at least annually:
| a. | (i) by the Board or (ii) by the vote of “a majority of the outstanding voting securities” of the Company (as defined in Section 2(a)(42) of the 1940 Act); and |
| b. | by the affirmative vote of a majority of the directors who are not parties to this Agreement or “interested persons” (as defined in the 1940 Act) of a party to this Agreement (other than as directors of the Company), by votes cast in person at a meeting specifically called for such purpose. |
This Agreement may be terminated by the Company at any time, without the payment of any penalty by the Company, by vote of the Board or by vote of a majority of the outstanding voting securities of the Company, on no more than sixty (60) days’ written notice to the Advisor. This Agreement may be terminated by the Advisor at any time, without the payment of any penalty by the Advisor, on no less than sixty (60) days’ written notice to the Company. The notice provided for herein may be waived by the party entitled to receipt thereof. This Agreement shall automatically terminate in the event of its assignment, the term “assignment” for purposes of this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act. Upon termination pursuant to this Section 16, the Advisor, at the Company’s request, must deliver all copies of books and records maintained in accordance with this Agreement and applicable law.
No amendment of this Agreement shall be effective unless it is in writing and signed by the party against which enforcement of the amendment is sought. No amendment to Section 10 or Section 11 of this Agreement shall be effective unless it is approved by the vote of a majority of the outstanding voting securities of the Company to the extent required by the 1940 Act.
The Advisor will not be liable in any way for any default, failure or defect in any of the securities comprising the Company’s portfolio if it has satisfied the duties and the standard of care, diligence and skill set forth in this Agreement. However, the Advisor shall be liable to the Company for any loss, damage, claim, cost, charge, expense or liability resulting from the Advisor’s willful misconduct, bad faith or
C-8
gross negligence or disregard by the Advisor of the Advisor’s duties or standard of care, diligence and skill set forth in this Agreement or a material breach or default of the Advisor’s obligations under this Agreement.
Any notices under this Agreement shall be in writing, addressed and delivered, telecopied or mailed postage paid, to the other party entitled to receipt thereof at such address as such party may designate for the receipt of such notice. Until further notice to the other party, it is agreed that the address of the Company and that of the Advisor shall be 11550 Ash Street, Suite 300, Leawood, Kansas 66211.
20. | Questions of Interpretation.
|
Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act or the Advisers Act shall be resolved by reference to such term or provision of the 1940 Act or the Advisers Act and to interpretations thereof, if any, by the United States courts or in the absence of any controlling decision of any such court, by rules, regulations or orders of the Commission issued pursuant to said Acts. In addition, where the effect of a requirement of the 1940 Act or the Advisers Act reflected in any provision of the Agreement is revised by rule, regulation or order of the Commission, such provision shall be deemed to incorporate the effect of such rule, regulation or order. Subject to the foregoing, this Agreement shall be governed by and construed in accordance with the laws (without reference to conflicts of law provisions) of the State of Delaware.
[Signature Page Follows]
C-9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their respective duly authorized officers on the day and year first written above.
| [TPZ/NTG/TTP/NDP] | |
| | |
| By: | | |
| Name: | P. Bradley Adams | |
| Title: | Chief Executive Officer, Principal Financial Officer and Treasurer | |
| TORTOISE CAPITAL ADVISORS, L.L.C. | |
| | |
| By: | | |
| Name: | H. Kevin Birzer | |
| Title: | Chief Executive Officer | |
C-10
APPENDIX D
ADVISORY FEES PAID
Company | Aggregate Advisory Fees
Paid During Most Recently
Ended Fiscal Year |
TYG | $23,906,557 |
TPZ | $1,853,153 |
NTG | $13,367,676 |
TTP | $2,712,099 |
NDP | $2,728,945 |
D-1
APPENDIX E
OTHER INVESTMENT COMPANIES MANAGED BY ADVISER
The following table sets forth information regarding other registered investment companies or series thereof (other than the Companies) managed by the Adviser that have similar strategies to a Company.
Company | Comparable Fund | Comparable Fund Contractual Fee Rate | Comparable Fund Waivers | Comparable Fund Net Assets |
TYG | Tortoise MLP Fund, Inc. (NTG) | 0.95% on Managed Assets | All fees related to the net proceeds received from the issuance of additional common stock under the At-The-Market program for a six month period following the date of issuance | $830.9 million (as of 9/30/17) |
TPZ | N/A | | | |
NTG | Tortoise Energy Infrastructure Corp. (TYG) | Managed Assets up to $2.5 billion
Managed Assets between $2.5 and $3.5 billion
Managed Assets above $3.5 billion
| 0.95%
0.90%
0.85%
| All fees related to the net proceeds received from the issuance of additional common stock under the At-The-Market program for a six month period following the date of issuance | $1,310.1 million (as of 9/30/17) |
TTP | N/A | | | |
NDP | N/A | | | |
E-1
APPENDIX F
OUTSTANDING SHARES
At the Record Date, each Company had the following number of shares issued and outstanding:
| Common Shares | Preferred Shares |
| TYG | 49,311,266 | 16,500,000 |
| TPZ | 6,951,333 | — |
| NTG | 47,246,780 | 4,400,000 |
| TTP | 10,016,413 | 640,000 |
| NDP | 14,583,662 | — |
F-1
APPENDIX G
DIRECTORS, OFFICERS AND OTHER INFORMATION OF THE ADVISER
The Adviser is wholly-owned by Tortoise Investments, LLC (“Tortoise Investments”). The business address for the Adviser, Tortoise Investments and each officer and director of the Adviser is 11550 Ash Street, Suite 300, Leawood, Kansas 66211.
Montage Investments, LLC (“Montage Investments”), located at 5700 W. 112th Street, Suite 500, Overland Park, Kansas 66211, owns a majority interest in Tortoise Investments. Montage Investments is controlled by Mariner Holdings, LLC (“Mariner”), located at 5700 W. 112th Street, Suite 500, Overland Park, Kansas 66211.
The table below indicates the directors and principal executive officer of the Adviser.
Name | Position with the Adviser |
Terry C. Matlack | Director and Managing Director |
H. Kevin Birzer | Director and Chief Executive Officer |
Zachary A. Hamel | Director and Managing Director |
Kenneth P. Malvey | Director and Managing Director |
The following officers or Directors of the Companies are officers, employees, directors, general partners or shareholders of the Adviser:
Name | Company | Role at Company | Title with Adviser |
Terry Matlack | Each Company | Director | Director and Managing Director, member of the Investment Committee |
H. Kevin Birzer | Each Company | Director and Chairman of the Board | Director and Chief Executive Officer, member of the Investment Committee |
Diane M. Bono | Each Company | Chief Compliance Officer and Secretary | Chief Compliance Officer |
P. Bradley Adams | Each Company | Chief Executive Officer, Principal Financial Officer and Treasurer | Managing Director |
G-1
Name | Company | Role at Company | Title with Adviser |
Matthew G.P. Sallee | TYG | President | Managing Director, member of Investment Committee and Portfolio Manager |
NTG | President | |
Brian A. Kessens | TTP | President | Managing Director, member of Investment Committee and Portfolio Manager |
TPZ | President | |
Robert J. Thummel | NDP | President | Managing Director, member of Investment Committee and Portfolio Manager |
Nicholas S. Holmes | TYG | Vice President | Investment Analyst |
NTG | Vice President | |
Brett Jergens | NDP | Vice President | Investment Analyst |
Adam Peltzer | TPZ | Vice President | Investment Analyst |
Stephen Pang | TTP | Vice President | Investment Analyst |
Shobana Gopal | Each Company | Vice President | Director - Tax |
G-2
APPENDIX H
SECURITY OWNERSHIP OF COMPANY MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
At June 30,December 31, 2017, each director and director nominee beneficially owned (as determined pursuant to Rule 16a-1(a)(2) under the Exchange Act) shares of each Company overseen by such director in the 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 and director nominees 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 | Dollar Range of Holdings in the Company(1) |
DirectorInterested Persons | TYG | TPZ | NTG |
Interested PersonsH. Kevin Birzer | Over $100,000 | $50,001-$100,000 | Over $100,000 |
| | | |
H. Kevin Birzer | Over $100,000 | $50,001-$100,000 | Over $100,000 |
Terry C. Matlack | Over $100,000 | Over $100,000 | Over $100,000 |
Independent Persons | | | |
Conrad S. Ciccotello | Over $100,000 | $10,001-$50,000 | $10,001-$50,000 |
Rand C. Berney | $10,001-$50,000 | $10,001-$50,000 | $10,001-$50,000 |
Charles E. Heath | Over $100,000 | $50,001-$100,000 | $50,001-$100,000 |
Alexandra A. Herger | None$10,001-$50,000 | $1-$10,000 | None |
| | | | |
Director Nominee | | | |
Jennifer Paquette | None | None | None |
Director | Dollar Range of Holdings in the Company(1) |
DirectorInterested Persons | TTP | NDP |
Interested PersonsH. Kevin Birzer | Over $100,000 | $50,001-$100,000 |
| | |
H. Kevin Birzer | Over $100,000 | $50,001- $100,000 |
Terry C. Matlack | Over $100,000 | $50,001- $100,000 |
Independent Persons | | |
Conrad S. Ciccotello | $10,001-$50,000 | $10,001-$50,000 |
Rand C. Berney | $10,001-$50,000 | $10,001-$50,000 |
Charles E. Heath | $10,001-$50,000 | $10,001-$50,000 |
Alexandra A. Herger | None | $10,001-$50,000 |
| | |
Director Nominee | | |
Jennifer Paquette | None | None |
23
Director | Aggregate Dollar Range of
Holdings in Companies Overseen
by Director in Fund Complex(2) |
Interested Persons | |
Interested PersonsH. Kevin Birzer | Over $100,000 |
| | |
H. Kevin Birzer | Over $100,000Independent Persons | |
Terry C. MatlackConrad S. Ciccotello | Over $100,000 | |
Independent PersonsRand C. Berney | Over $100,000 |
Charles E. Heath | Over $100,000 |
Alexandra A. Herger | $10,001-$50,000 |
| | |
Conrad S. Ciccotello | Over $100,000Director Nominee | |
Rand C. BerneyJennifer Paquette | Over $100,000 | |
Charles E. Heath | Over $100,000 | |
Alexandra A. Herger | $10,001-$50,000 | None |
(1) | Based on the closing price of each Company’s common shares on the New York Stock Exchange on June 30,December 31, 2017. |
(2) | Includes TYG, TPZ, NTG, TTP and NDP. Amounts based on the closing price of each of TYG’s, TPZ’s, NTG’s, TTP’s and NDP’s common shares on the New York Stock Exchange on June 30,December 31, 2017. |
At June 30,December 31, 2017, 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 and preferred stock of each Company (or percentage of outstanding shares). Unless otherwise indicated each individual has sole investment and voting power with respect to the shares listed.
| TYG
Common Shares | TPZ
Common Shares | NTG
Common Shares | TTP
Common Shares | NDP
Common Shares |
Independent Directors | | | | | |
Conrad Ciccotello | 10,568.11(1) | 893.00(2) | 1,609.66 | 1,499.19 | 1,000.00 |
Rand C. Berney | 1,508.00(3) | 1,094.00(3) | 1,062.00(3) | 1,067.00(3) | 1,677.00(3) |
Charles Heath | 15,000.00(4) | 3,500.00(4) | 3,500.00(4) | 1,000.00 | 1,000.00 |
Alexandra A. Herger | 500.00 | 250.00 | 0 | 0 | 1,000.00 |
| | | | | | |
Director Nominee | | | | | |
Jennifer Paquette | 0 | 0 | 0 | 0 | 0 |
24
| TYG
Common
Shares | TPZ
Common
Shares | NTG
Common
Shares | TTP
Common
Shares | NDP
Common
Shares |
| Independent Directors | | | | | |
| Conrad Ciccotello | 9,985.61(1) | 893.00(2) | 1,436.35 | 1,559.72 | 1,000.00 |
| Rand C. Berney | 1,508.00(3) | 1,094.00(3) | 1,062.00(3) | 1,067.00(3) | 1,677.00(3) |
| Charles Heath | 15,000.00(4) | 3,500.00(4) | 3,500.00(4) | 1,000.00 | 1,000.00 |
| Alexandra A. Herger | 0 | 250.00 | 0 | 0 | 1,000.00 |
| Interested Directors and Officers | | | | |
| H. Kevin Birzer | 70,108.09(5) | 2,650.00(6) | 5,620.00(7) | 7,317.00(8) | 6,550.00(9) |
| Terry C. Matlack | 54,987.72(10) | 8,967.09(11) | 16,476.08(11) | 9,614.44(11) | 7,292.57(11) |
| P. Bradley Adams | 8,993.78(12) | 2,838.41(13) | 796.07(14) | 453.86(15) | 942.65 |
| Matthew G.P. Sallee | 1,100.00 | N/A | 1,100.00 | N/A | N/A |
| Brian A. Kessens | N/A | 720.00(16) | N/A | 1,150.00(16) | N/A |
| Robert J. Thummel, Jr. | N/A | N/A | N/A | N/A | 2,100.00 |
| Adam Peltzer | N/A | 0 | N/A | N/A | N/A |
| Stephen Pang | N/A | N/A | N/A | 0 | N/A |
H-2
| TYG
Common
Shares | TPZ
Common
Shares | NTG
Common
Shares | TTP
Common
Shares | NDP
Common
Shares |
| Brett Jergens | N/A | N/A | N/A | N/A | 0 |
| Nicholas S. Holmes | 750 | N/A | 0 | N/A | N/A |
| Shobana Gopal | 2,386.58(17) | 0 | 650.37 | 600.28 | 628.52 |
| Diane Bono | 1,186.53(18) | 0 | 0 | 0 | 0 |
| Directors and Officers as a Group | 166,006.31 | 20,912.50 | 30,640.87 | 22,762.30 | 22,190.74 |
| TYG
Common
Shares | TPZ
Common
Shares | NTG
Common
Shares | TTP
Common
Shares | NDP
Common
Shares |
Interested Directors and Officers | | | | | |
H. Kevin Birzer | 71,442.39(5) | 2,950.00(6) | 5,972.00(7) | 7,649.00(8) | 6,850.00(9) |
P. Bradley Adams | 9,816.16(10) | 1,816.62 | 829.13(11) | 468.60(12) | 1,011.53 |
Matthew G.P. Sallee | 6,100.00 | 400.00 | 7,100.00 | 400.00 | 500.00 |
Brian A. Kessens | 500.00(13) | 1,000.00(13) | 1,085.00(13) | 1,150.00(13) | 500.00(13) |
Robert J. Thummel, Jr. | 977.00 | 0 | 1,250.00 | 250.00 | 2,100.00 |
Brett Jergens | 1,010.00 | 0 | 0 | 0 | 0 |
Nicholas S. Holmes | 1,550.00 | 0 | 0 | 0 | 0 |
Stephen Pang | 117.00 | 0 | 0 | 0 | 0 |
Adam Peltzer | 400.00 | 0 | 0 | 0 | 0 |
Shobana Gopal | 2,484.40(14) | 0 | 683.57 | 627.97 | 672.40 |
Diane Bono | 1,140.66(15) | 0 | 0 | 0 | 0 |
| | | | | | |
Directors and Officers as a Group(16) | 120,626.72(17) | 11,503.62(17) | 20,756.36(17) | 13,461.76(17) | 15,310.93(17) |
None of the independent directors and none of the interested directors and officers hold any TYG preferred shares, NTG preferred shares or TTP preferred shares.
| | % of Outstanding Shares(19) |
| TYG
Common
Shares | TPZ
Common
Shares | NTG
Common
Shares | TTP
Common
Shares | NDP
Common
Shares |
Independent Directors | | | | | |
Conrad Ciccotello | * | * | * | * | * |
Rand C. Berney | * | * | * | * | * |
Charles Heath | * | * | * | * | * |
Alexandra A. Herger | * | * | * | * | * |
Interested Directors and Officers | | | | | |
Director Nominee | | | | | |
Jennifer Paquette | * | * | * | * | * |
25
| % of Outstanding Shares (19) |
| TYG
Common
Shares | TPZ
Common
Shares | NTG
Common
Shares | TTP
Common
Shares | NDP
Common
Shares |
Interested Directors and Officers | | | | | |
H. Kevin Birzer | * | * | * | * | * |
Terry C. Matlack | * | * | * | * | * |
P. Bradley Adams | * | * | * | * | * |
Matthew G.P. Sallee | * | N/A* | * | N/A* | N/A* |
Brian A. Kessens | N/A* | * | N/A* | * | N/A* |
Robert J. Thummel, Jr. | N/A* | N/A* | N/A* | N/A* | * |
Adam PeltzerBrett Jergens | N/A* | * | N/A* | N/A* | N/A* |
Stephen Pang | N/A | N/A | N/A | * | N/A |
Brett Jergens | N/A | N/A | N/A | N/A | * |
Nicholas S. Holmes | * | N/A* | * | N/A* | N/A* |
Shobana GopalStephen Pang | * | * | * | * | * |
Diane BonoAdam Peltzer | * | * | * | * | * |
Shobana Gopal | * | * | * | * | * |
Diane Bono | * | * | * | * | * |
Directors and Officers as a Group | * | * | * | * | * |
(1) | Mr. Ciccotello holds 620 of these shares jointly with his wife. |
H-3
(2) | Mr. Ciccotello holds these shares jointly with his wife. |
(3) | Mr. Berney holds these shares jointly with his wife. |
(4) | All shares held by the Charles E. Heath Trust #1, U/A dtd 2/1/92, of which Mr. Heath and his wife are co-trustees and share voting and investment power with respect to the shares. |
(5) | Includes 1,234 shares held by Mr. Birzer’s minor children in accounts established under the Kansas Uniform Transfer to Minor’s Act for which his wife is the custodian, and 3.773.95 shares held jointly with his wife.wife and 1,234 shares held by his adult children living at home. Excludes shares held by his adult children no longer living at his home. |
(6) | Includes 200 shares held by Mr. Birzer’s minor children in accounts established under the Kansas Uniform Transfer to Minor’s Act for which his wife is the custodian.custodian and 200 shares held by his adult children living at home. Excludes shares held by his adult children no longer living at his home. |
(7) | Includes 252 shares held by Mr. Birzer’s minor children in accounts established under the Kansas Uniform Transfer to Minor’s Act for which his wife is the custodian.custodian and 252 shares held by his adult children living at home. Excludes shares held by his adult children no longer living at his home. |
(8) | Includes 216 shares held by Mr. Birzer’s minor children in accounts established under the Kansas Uniform Transfer to Minor’s Act for which his wife is the custodian.custodian and 232 shares held by his adult children living at home. Excludes shares held by his adult children no longer living at his home. |
26
(9) | Includes 200 shares held by Mr. Birzer’s minor children in accounts established under the Kansas Uniform Transfer to Minor’s Act for which his wife is the custodian.custodian and 200 shares held by his adult children living at home. Excludes shares held by his adult children no longer living at his home. |
(10) | Includes 54,474.05 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. |
(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 4,371.324,370.28 shares held by Mr. Adams as sole trustee of a joint trust for Mr. Adams and his wife, 870.22and 124.49 shares held by his wife, and excludes shares held by adult child no longer living at home and 118.75 shares held by his wife.that were previously included. |
(13)(11) | Includes 1,086.02 shares held by adult child living at home. |
(14) | Includes 145.80 shares held by Mr. Adams as sole trustee of a joint trust for Mr. Adams and his wife. |
(15)(12) | Includes 134.25 shares held by Mr. Adams as sole trustee of a joint trust for Mr. Adams and his wife and 119.61125.12 shares held by his wife. |
(16)(13) | Held with his wife. |
(17)(14) | Includes 360 shares held jointly with her husband. |
(18)(15) | Includes 292.83307.92 shares held jointly with her husband. |
(19)(16) | Based on the following shares outstanding as of June 30,December 31, 2017: 49,230,97549,379,408 shares of TYG common stock, 6,951,333 shares of TPZ common stock, 47,160,80147,246,780 shares of NTG common stock, 10,016,413 shares of TTP common stock, and 14,558,66914,583,662 shares of NDP common stock. |
H-4
Based on available public information, to the knowledge(17) | For TYG, total excludes shares held by Messrs. Kessens, Thummel, Jergens, Pang and Peltzer, who are not officers of TYG. For TPZ, total excludes shares held by Mr. Sallee, who is not an officer of TPZ. For NTG, total excludes shares held by Messrs. Kessens and Thummel, who are not officers of NTG. For TTP, total excludes shares held by Messrs. Sallee and Thummel, who are not officers of TTP. For NDP, total excludes shares held by Messrs. Sallee and Kessens, who are not officers of NDP. |
As of NDP, no person held (sole or shared) power to vote or dispose of more than 5% of the outstanding common shares of NDP.
Based on available public information,December 31, 2017, to the knowledge of TPZ, no person held (sole or shared) power to vote or dispose of more than 5% of the outstanding common shares of TPZ.
The table below indicates the persons known to NDP to own 5% or more of its common stock as of December 31, 2017.
Name and Address | Number of NDP
Common Shares | Percent of Class |
First Trust Portfolios L.P. (*) First Trust Advisors L.P.(*) The Charger Corporation(*) 120 East Liberty Drive, Suite 400 Wheaton, IL 60187 | 951,438 | 6.55% |
(*) | Information based on a Schedule 13G jointly filed on January 24, 2018 by First Trust Portfolios L.P., First Trust Advisors L.P., and The Charger Corporation reporting beneficial ownership of 954,438 shares, sole voting power over 0 shares, shared voting power over 0 shares, sole dispositive power over 0 shares, and shared dispositive power over 951,438 shares. The |
27
Charger Corporation is the General Partner of both First Trust Portfolios L.P. and First Trust Advisors L.P. First Trust Portfolios L.P. acts as sponsor of certain unit investment trusts which hold shares of NDP. First Trust Advisors L.P. acts as portfolio supervisor of the unit investment trusts sponsored by First Trust Portfolios L.P. that hold shares of NDP. Each of the First Trust Portfolios L.P., First Trust Advisors L.P and The Charter Corporation disclaims beneficial ownership of the identified shares of NDP.
The table below indicates the persons known to TYG to own 5% or more of its common stock based on available public information.
| Name and Address | Number of TYG Common Shares | Percent of Class |
Bank of America Corporation(*) 100 N. Tryon Street Charlotte, NC 28255 | 2,508,796 | 5.1% |
as of December 31, 2017.Name and Address | Number of TYG
Common Shares | Percent of Class |
Morgan Stanley (*) Morgan Stanley Smith Barney LLC(*) 1585 Broadway New York, NY 10036 | 2,597,201 | 5.2% |
(*) | Information based on a Schedule 13G jointly filed on February 14, 2017 by Bank of America Corporation. Bank of America Corporation reports beneficial ownership of 2,508,796 shares, sole voting power over 0 shares, shared voting power over 148,020 shares, sole dispositive power over 0 shares, and shared dispositive power over 2,508,796 shares. Bank of America filed the report on behalf of itself and its wholly owned subsidiaries Bank of America N.A. and Merrill Lynch Pierce Fenner & Smith, Inc. |
The table below indicates the persons known to NTG to own 5% or more of its shares of common stock based on available public information.
| Name and Address | Number of NTG Common Shares | Percent of Class |
Morgan Stanley(*) Morgan Stanley Smith Barney LLC(*) 1585 Broadway New York, NY 10036 | 3,444,861 | 7.3% |
(*) | Information based on a Schedule 13G jointly filed on February 13, 201712, 2018 by Morgan Stanley and Morgan Stanley Smith Barney LLC. Morgan Stanley reports that it has beneficial ownership of 3,444,861 shares,2,597,201shares, sole voting power over 100,3310 shares, shared voting power over 3,187,8972,526,329 shares, sole dispositive power over 0 shares, and shared dispositive power over 2,256,380 shares. The securities being reported on by Morgan Stanley as a parent holding company are owned, or may be deemed to be beneficially owned, by Morgan Stanley Smith Barney LLC, a broker dealer registered under Section 15 of the Securities Exchange Act of 1934, as amended, and a wholly-owned subsidiary of Morgan Stanley. Morgan Stanley Smith Barney LLC reports that it has beneficial ownership of 3,344,530 shares, sole voting power over 0 shares, shared voting power over 3,187,897 shares, sole dispositive power over 0 shares, and shared dispositive power over 2,156,049 shares. |
H-5
The table below indicates the persons known to TTP to own 5% or more of its shares of common stock based on available public information.
| Name and Address | Number of TTP Common Shares | Percent of Class |
Morgan Stanley(*) Morgan Stanley Smith Barney LLC(*) 1585 Broadway New York, NY 10036 | 651,439 | 6.5% |
Guggenheim Capital, LLC(**) Guggenheim Partners, LLC(**) Guggenheim Funds Services, LLC(**) Guggenheim Funds Distributors, LLC(**) 227 West Monroe Street Chicago, IL 60606 GI Holdco II LLC(**) GI Holdco LLC(**) Guggenheim Partners Investment Management Holdings, LLC(**) 330 Madison Avenue New York, NY 10017 | 545,007 | 5.4% |
(*) | Information based on a Schedule 13G amendment jointly filed on February 13, 2017 by Morgan Stanley and Morgan Stanley Smith Barney LLC. Morgan Stanley and Morgan Stanley Smith Barney LLC each reports beneficial ownership of 651,439 shares, sole voting power over 0 shares, shared voting power over 632,162 shares, sole dispositive power over 0 shares, and shared dispositive power over 386,9481,717,540 shares. The securities being reported on by Morgan Stanley as a parent holding company are owned, or may be deemed to be beneficially owned, by Morgan Stanley Smith Barney LLC, a wholly owned subsidiary of Morgan Stanley. Morgan Stanley Smith Barney LLC reports that it has beneficial ownership of 2,589,101 shares, sole voting power over 0 shares, shared voting power over 2,518,229 shares, sole dispositive power over 0 shares, and shared dispositive power over 1,709,440 shares. |
The table below indicates the persons known to NTG to own 5% or more of its shares of common stock as of December 31, 2017.
Name and Address | Number of NTG
Common Shares | Percent of Class |
Morgan Stanley(*) Morgan Stanley Smith Barney LLC(*) 1585 Broadway New York, NY 10036 | 3,429,413 | 7.2% |
(*) | Information based on a Schedule 13G jointly filed on February 12, 2018 by Morgan Stanley and Morgan Stanley Smith Barney LLC. Morgan Stanley reports that it has beneficial ownership of 3,429,413 shares, sole voting power over 0 shares, shared voting power over 3,340,656 shares, sole dispositive power over 0 shares, and shared dispositive power over 2,036,820 shares. The securities being reported on by Morgan Stanley as a parent holding company are owned, or may be deemed to be beneficially owned, by Morgan Stanley Smith Barney LLC, a wholly owned subsidiary of Morgan Stanley. Morgan Stanley Smith Barney LLC reports that it has beneficial ownership of 3,426,213 shares, sole voting power over 0 shares, shared voting power over 3,337,456 shares, sole dispositive power over 0 shares, and shared dispositive power over 2,033,620 shares. |
28
The table below indicates the persons known to TTP to own 5% or more of its shares of common stock as of December 31, 2017.
Name and Address | Number of TTP Common Shares | Percent of Class |
Morgan Stanley(*) Morgan Stanley Smith Barney LLC(*) 1585 Broadway New York, NY 10036 | 557,031 | 5.5% |
Guggenheim Capital, LLC(**) Guggenheim Partners, LLC(**) 227 West Monroe Street Chicago, IL 60606 GI Holdco II LLC(**) GI Holdco LLC(**) Guggenheim Partners Investment Management Holdings, LLC(**) 330 Madison Avenue New York, NY 10017 Guggenheim Funds Services, LLC(**) Guggenheim Funds Distributors, LLC (**) 227 West Monroe Street Chicago, IL 60606 | 544,983 | 5.4% |
(*) | Information based on a Schedule 13G amendment jointly filed on February 12, 2018 by Morgan Stanley and Morgan Stanley Smith Barney LLC. Morgan Stanley and Morgan Stanley Smith Barney LLC each reports beneficial ownership of 557,031 shares, sole voting power over 0 shares, shared voting power over 548,020 shares, sole dispositive power over 0 shares, and shared dispositive power over 286,693 shares. The securities being reported on by Morgan Stanley as a parent holding company are owned, or may be deemed to be beneficially owned, by Morgan Stanley Smith Barney LLC, a wholly owned subsidiary of Morgan Stanley. |
(**) | Information based on a Schedule 13G amendment jointly filed on February 14, 20172018 by Guggenheim Capital, LLC, Guggenheim Partners, LLC, GI Holdco II LLC, GI Holdco LLC, Guggenheim Partners Investment Management Holdings, LLC, Guggenheim Funds Services, LLC and Guggenheim Funds Distributors, LLC (“Guggenheim Filers”). Guggenheim Funds Distributors, LLC (“GFD”) acts as sponsor and supervisor of certain unit investment trusts which directly hold the shares reported on and in such capacity, GFD has the power to dispose or direct the disposition of the TTP shares held by these unit investment trusts. These shares are voted by the trustee of such unit investment trusts so as to insure that the shares are voted as closely as possible in the same manner and in the same general proportion as are the shares held by owners other than such unit investment trust. Guggenheim Capital, LLC is the majority owner of Guggenheim Partners, LLC, GI Holdco II LLC, GI Holdco LLC, Guggenheim Partners Investment Management Holdings, LLC, Guggenheim Funds Services, LLC and GFD. GFD is a registered investment adviser under Section 203 of the Investment Advisers Act of 1940 and a broker dealer registered under Section 15 of the Securities Exchange Act of 1934. EachNone of the Guggenheim filers reports that it sharesFilers has the sole voting andpower or sole dispositive power over any of the shares listed in the table above. The 545,007Each of the Guggenheim Filers reports that it shares reported by Guggenheim Capital, LLC includes 545,007 shares beneficially owned directly by GFD, and indirectly by Guggenheim Funds Services, LLC, Guggenheim Partners Investment Management Holdings, LLC, GI Holdco LLC, GI Holdco II LLC and Guggenheim Partners, LLC. |
29
voting and dispositive power over the shares listed in the table above. The 544,983 shares reported by Guggenheim Capital, LLC includes 544,983 shares beneficially owned directly by GFD, and indirectly by Guggenheim Funds Services, LLC, Guggenheim Partners Investment Management Holdings, LLC, GI Holdco LLC, GI Holdco II LLC and Guggenheim Partners, LLC.
The table below indicates the persons known to TYG to own 5% or more of its shares of preferred stock based on available public information.
| Name and Address | Number of TYG Preferred Shares | Percent of Class |
Barings LLC (*) 470 Atlantic Ave Boston, MA 02210-2208 Massachusetts Mutual Life Insurance Company (*) 1295 State Street Springfield, MA 01111 | 4,600,000 | 27.9% |
Voya Financial, Inc. (**) 230 Park Ave. 14th Floor New York, NY 10169 | 2,700,000 | 16.4% |
The Guardian Life Insurance Company of America (***) 7 Hanover Square New York, NY 10004 | 2,100,000 | 12.7% |
Knights of Columbus (****) One Columbus Plaza New Haven, CT 06510 | 2,100,000 | 12.7% |
Athene Asset Management, L.P. (*****) Athene Annuity and Life Company (*****) Royal Neighbors of America (*****) 7700 Mills Civic Parkway West Des Moines, IA 50266 | 1,800,000 | 10.9% |
Principal Global Investors, LLC (******) Principal Life Insurance Company (******) RGA Reinsurance Company (******) 711 High Street, G-26 Des Moines, IA 50392 | 1,800,000 | 10.9% |
Teachers Insurance and Annuity Association of America (****) 730 Third Avenue New York, NY 10017 | 1,400,000 | 8.5% |
as of December 31, 2017.Name and Address | Number of TYG Preferred Shares | Percent of Class |
Babson Capital Management LLC (*) 470 Atlantic Ave Boston, MA 02210-2208 Massachusetts Mutual Life Insurance Company (*) 1295 State Street Springfield, MA 01111 | 4,600,000 | 27.9% |
Voya Financial, Inc. (**) 230 Park Ave. 14th Floor New York, NY 10169 | 2,700,000 | 16.4% |
The Guardian Life Insurance Company of America (***) 7 Hanover Square New York, NY 10004 | 2,100,000 | 12.7% |
Knights of Columbus (****) One Columbus Plaza New Haven, CT 06510 | 2,100,000 | 12.7% |
Athene Asset Management, L.P. (*****) Athene Annuity and Life Company (*****) Royal Neighbors of America (*****) 7700 Mills Civic Parkway West Des Moines, IA 50266 | 1,800,000 | 10.9% |
Principal Global Investors, LLC (******) Principal Life Insurance Company (******) RGA Reinsurance Company (******) 711 High Street, G-26 Des Moines, IA 50392 | 1,800,000 | 10.9% |
Teachers Insurance and Annuity Association of America (****) 730 Third Avenue New York, NY 10017 | 1,400,000 | 8.5% |
(*) | Information based on Schedule 13G filed on January 7, 2015. Babson Capital Management LLC reports that, in its capacity as investment adviser, it has sole voting and dispositive power with respect to the 4,600,000 shares of Mandatory Redeemable Preferred Stock held in certain advisory accounts owned (directly or indirectly) by |
30
affiliated entities and therefore may be deemed to beneficially own such shares. Babson Capital Management LLC is a wholly-owned subsidiary of Massachusetts Mutual Life Insurance Company (“MassMutual”), the direct beneficial owner of 4,415,000 shares of Mandatory Redeemable Preferred Stock. In addition, C.M. Life Insurance Company, (“MassMutual”), the direct beneficial owner of 4,415,000 shares of Mandatory Redeemable Preferred Stock. In addition, C.M. Life Insurance Company,
H-7
a wholly-owned subsidiary of MassMutual, owns 185,000 shares of Mandatory Redeemable Preferred Stock, which therefore may be deemed to be indirectly owned by MassMutual. Babson Capital Management LLC is now known as Barings LLC.
(**) | Information based on a Schedule 13G filed on February 13, 2015. The Schedule 13G was filed by Voya Financial, Inc. as the ultimate parent corporation of the following entities, each of which is a direct or indirect wholly owned subsidiary of Voya Financial, Inc.: Voya Retirement Insurance and Annuity Company, Voya Insurance and Annuity Company, ReliaStar Life Insurance Company, Security Life of Denver Insurance Company, ReliaStar Life Insurance Company of New York and Voya Investment Management, LLC (as investment adviser to the foregoing subsidiaries). Voya Financial, Inc. reports that it has sole voting and dispositive power over the shares listed in the table above. |
(***) | Information based on a Schedule 13G amendment filed on January 13, 2017. The Guardian Life Insurance Company of America reports that it has sole voting and dispositive power over the shares listed in the table above. |
(****) | Information based on a Securities Purchase Agreement dated October 9, 2014. |
(*****) | Information based on a Securities Purchase Agreement dated October 9, 2014 through which Athene Asset Management, L.P. obtained beneficial ownership of shares on behalf of Athene Asset and Life Company and Royal Neighbors of America in its capacity as investment adviser. |
(******) | Information based on a Securities Purchase Agreement dated October 9, 2014 through which Principal Global Investors, LLC obtained beneficial ownership of shares on behalf of Principal Life Insurance Company and RGA Reinsurance Company. |
The table below indicates the persons known to NTG to own 5% or more of its shares of preferred stock based on available public information.as of December 31, 2017.
Name and Address | Number of NTG Preferred Shares | Percent of Class |
Prudential Financial, Inc.(*) 751 Broad Street Newark, New Jersey 07102-3777 | 2,600,000 | 59.1% |
Mutual of Omaha Insurance Company(**) United of Omaha Life Insurance Company (**) Mutual of Omaha Plaza Omaha, Nebraska 68175 | 400,000 | 9.1% |
National Life Insurance Company(***) One National Life Drive Montpelier, Vermont 05604 | 400,000 | 9.1% |
31
| Name and Address | Number of NTG Preferred Shares | Percent of Class |
Massachusetts Mutual Life Insurance Co.(*) 1295 State Street Springfield, Massachusetts 01111 | 2,500,000 | 56.8% |
Prudential Financial, Inc.(**) 751 Broad Street Newark, New Jersey 07102-3777 | 1,000,000 | 22.7% |
Mutual of Omaha Insurance Company(***) United of Omaha Life Insurance Company Mutual of Omaha Plaza Omaha, Nebraska 68175 | 400,000 | 9.1% |
National Life Insurance Company(****) One National Life Drive Montpelier, Vermont 05604 | 400,000 | 9.1% |
Name and Address | Number of NTG Preferred Shares | Percent of Class |
MetLife Insurance K.K.(****) 1-3 Kioicho, Chiyoda-ku Tokyo, 102-8525 JAPAN | 392,000 | 8.9% |
Metropolitan Life Insurance Company(****) 200 Park Avenue New York, New York 10166 | 296,000 | 6.7% |
Employers Reassurance Corporation(****) 7101 College Boulevard, Suite 1400 Overland Park, Kansas 66210 | 228,000 | 5.2% |
(*) | Information with respect to this beneficial owner and its beneficial ownership is based on a Form 4 filed on November 1, 2010. The reporting person directly beneficially owns all of the shares. |
H-8
(**) | Information is based on a Securities Purchase Agreement dated December 13, 2017 and a Schedule 13G amendment filed on January 11, 2016.9, 2018 by Prudential Financial Inc., reporting sole voting and dispositive power as a parent holding company of The Prudential Insurance Company of America which beneficially owns 1,000,000 shares, Prudential Retirement Insurance and Annuity Company which beneficially owns 1,600,000 shares and PGIM, Inc. which beneficially owns 2,600,000 shares. |
(***) | Information is based on Schedule 13Gs filed on January 8, 2016. Mutual of Omaha Insurance Company reports that it has sole voting and dispositive power over the shares listed in the table above. Mutual of Omaha Insurance Company reports that it is the parent company of United of Omaha Life Insurance Company which acquired the security being reported on. |
(****) | Information based on a Securities Purchase Agreement dated December 8, 2015. |
(****) | Information based on a Securities Purchase Agreement dated December 13, 2017. |
The table below indicates the persons known to TTP to own 5% or more of its shares of preferred stock based on available public information.
| Name and Address | Number of TTP Preferred Shares | Percent of Class |
Massachusetts Mutual Life Insurance Co.(*) 1295 State Street Springfield, Massachusetts 01111 | 520,000 | 81.2% |
Phoenix Life Insurance Company (**) One American Row Hartford, CT 06102 | 120,000 | 18.8% |
as of December 31, 2017.Name and Address | Number of TTP Preferred Shares | Percent of Class |
Massachusetts Mutual Life Insurance Co.(*) 1295 State Street Springfield, Massachusetts 01111 | 520,000 | 81.2% |
Phoenix Life Insurance Company (**) One American Row Hartford, CT 06102 | 120,000 | 18.8% |
(*) | Information with respect to this beneficial owner and its beneficial ownership is based on a Form 4 filed on December 12, 2011. The reporting person directly beneficially owns 454,000 of the shares and indirectly beneficially owns 66,000 of the shares through two different wholly-owned subsidiaries. |
(**) | Information based on a Securities Purchase Agreement dated November 15, 2011. |
32
INVESTMENT ADVISER
Tortoise Capital Advisors, LLC is each Company’s investment adviser. The Adviser’s address is 11550 Ash Street, Suite 300, Leawood, Kansas 66211. As of February 28, 2018, the Adviser had approximately $15.0 billion of client assets under management.
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 | 51,415,578 | 16,500,000 |
TPZ | 6,951,333 | N/A |
NTG | 47,329,800 | 4,400,000 |
TTP | 10,016,413 | 640,000 |
NDP | 14,607,496 | N/A |
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.
How To Vote. You may vote your shares by simply completing and signing the enclosed proxy card (your ballot), and mailing it in the postage-paid envelope included in this package. You may also vote in person if you are able to attend the meeting.
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 Companies on a pro rata basis. Each 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 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. If a proxy solicitor is retained by any Company, the costs associated with all proxy solicitation are not anticipated to exceed $15,000. None of the Companies will pay any representatives of the Company or the Adviser any additional compensation for their efforts to supplement proxy solicitation.
33
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 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.
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 original record date without notice other than announcement at the meeting.
Availability of Annual Report of TYG, TPZ, NTG, TTP and NDP. Each Company will furnish without charge upon written request a copy of its most recent annual report. Each such request must include a good faith representation that, as of the record date, the person making such request was a beneficial owner of the Company’s common shares entitled to vote at the annual meeting of stockholders. Such written request should be directed to the Company’s Secretary at 11550 Ash Street, Suite 300, Leawood, Kansas 66211, (866) 362-9331.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 30(h) of the 1940 Act and Section 16(a) of the Exchange Act require each Company’s directors and officers, the Adviser, affiliated persons of the Adviser 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 applicable Company with copies of all Section 16(a) forms they file. Based on a review of those forms furnished to the Company, each Company believes that its directors and officers, the Adviser and affiliated persons of the Adviser have complied with all applicable Section 16(a) filing requirements during the last fiscal year, except that certain non-discretionary purchases of TYG by Mr. Adams’ investment adviser in an account over which Mr. Adams had no discretion were inadvertently excluded from certain original Form 5 filings, and
34
Kenneth P. Malvey, a member of the Adviser’s investment committee during the last fiscal year, was late in reporting certain automatic reinvestments of distributions for TYG and NDP by a broker not made at the dividend reinvestment plan price which exceeded the small acquisition amount in Rule 16a-6 and the sale of a fractional share of TYG by the transfer agent in connection with the transfer of shares to a brokerage account. The transactions for Mr. Adams were reported on Form 5 amendments, and the transactions of Mr. Malvey were reported on Form 4. To the knowledge of management of each Company, no person is the beneficial owner (as defined in Rule 16a-1 under the Exchange Act) of more than 10% of a class of such Company’s equity securities, except as set forth above with respect to preferred shares of TYG, NTG and TTP.
ADMINISTRATOR
TYG, TPZ, NTG, TTP and NDP have each entered into administration agreements 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 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 or particular director, as applicable.
CODE OF ETHICS
Each of the Companies has adopted a code of ethics pursuant to Rule 17j-1 under the 1940 Act that establishes personal trading procedures for employees designated as access persons and which is available through the Company’s link on its investment adviser’s website (www.tortoiseadvisors.com).
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR THE 2019 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 5, 2018. 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.
35
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 our proxy statement, you must comply with the advance notice provision 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 November 5, 2018 for each of TPZ, NTG, TTP and NDP and December 5, 2018 for TYG, nor later than 5:00 p.m. Pacific Time on December 5, 2018 for each of NTG, TTP and NDP and 5:00 p.m. Central Time on December 5, 2018 for TPZ and January 4, 2019 for TYG. 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.
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 |
| 
|
| Diane M. Bono |
| Secretary |
April 4, 2018
36
This page intentionally left blank.
This page intentionally left blank.
This page intentionally left blank.
This page intentionally left blank.
This page intentionally left blank.
This page intentionally left blank.
