UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [X] Preliminary Proxy Statement. [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [ ] Definitive Proxy Statement [ ] Definitive Additional Materials. [ ] Soliciting Material Pursuant to ss.240.14a-12 TORTOISE NORTH AMERICAN ENERGY CORPORATION (Name of Registrant as Specified In Its Charter) ------------------------------------------------------------------------ (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed:
TORTOISE NORTH AMERICAN ENERGY CORPORATION 10801 Mastin Boulevard, Suite 222 Overland Park, Kansas 66210 1-800-919-0315 January 27, 2006 Dear Fellow Stockholder: You are cordially invited to attend the first annual meeting of stockholders of Tortoise North American Energy Corporation (the "Company") on Wednesday, April 12, 2006 at [_____ a].m., Central Time, at [The Doubletree Hotel, 10100 College Boulevard, Overland Park, Kansas 66210]. The matters scheduled for consideration at the meeting are the election of two directors of the Company, the grant of authority to the Company to sell its common shares for less than net asset value, subject to certain conditions, and the ratification of the selection of Ernst & Young LLP as independent, registered certified public accountants of the Company for its fiscal year ending November 30, 2006, as more fully discussed in the enclosed proxy statement. Enclosed with this letter are answers to questions you may have about the proposals, the formal notice of the meeting, the Company's proxy statement, which gives detailed information about the proposals and why the Board recommends that you vote to approve each of them, the actual proxy for you to sign and return, and the Company's Annual Report to stockholders for the fiscal year ended November 30, 2005. If you have any questions about the enclosed proxy or need any assistance in voting your shares, please call 1-800-919-0315. Your vote is important. Please complete, sign, and date the enclosed proxy card and return it in the enclosed envelope. This will ensure that your vote is counted, even if you cannot attend the meeting in person. Sincerely, David J. Schulte CEO and President
TORTOISE NORTH AMERICAN ENERGY CORPORATION ANSWERS TO SOME IMPORTANT QUESTIONS Q. WHAT AM I BEING ASKED TO VOTE "FOR" ON THIS PROXY? A. This proxy contains three proposals: (i) the election of two directors to serve until the 2009 Annual Stockholder Meeting; (ii) the grant of authority to the Company to sell its common shares for less than net asset value, subject to certain conditions; and (iii) the ratification of Ernst & Young LLP as the Company's independent, registered certified public accountants. Stockholders of the Company may also transact such other business as may properly come before the meeting. Q. HOW DOES THE BOARD OF DIRECTORS SUGGEST THAT I VOTE? A. The Board of Directors of the Company unanimously recommends that you vote "FOR" all proposals on the enclosed proxy card. Q. HOW CAN I VOTE? A. You can vote by completing, signing and dating your proxy card, and mailing it in the enclosed envelope. You also may vote in person if you are able to attend the meeting. However, even if you plan to attend the meeting, we urge you to cast your vote by mail. That will ensure that your vote is counted should your plans change. This information summarizes information that is included in more detail in the Proxy Statement. We urge you to read the Proxy Statement carefully. If you have questions, call 1-800-919-0315.
TORTOISE NORTH AMERICAN ENERGY CORPORATION 10801 Mastin Boulevard, Suite 222 Overland Park, Kansas 66210 1-800-919-0315 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To the Stockholders of Tortoise North American Energy Corporation: NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Tortoise North American Energy Corporation, a Maryland Corporation (the "Company"), will be held on Wednesday, April 12, 2006 at [____a].m. Central Time at [The Doubletree Hotel, 10100 College Boulevard, Overland Park, Kansas 66210] for the following purposes: 1. To elect two directors of the Company, to hold office for a term of three years and until their respective successors are duly elected and qualified; 2. To grant the Company the authority to sell its common shares for less than net asset value, subject to certain conditions; 3. To ratify the selection of Ernst & Young LLP as independent, registered certified public accountants of the Company for its fiscal year ending November 30, 2006; and 4. To transact any other business that may properly come before the meeting or any adjournment or postponement thereof. The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice. Stockholders may also transact any other business that properly comes before the meeting. Stockholders of record as of the close of business on January 17, 2006 are entitled to notice of and to vote at the meeting (or any adjournment or postponement of the meeting). By Order of the Board of Directors of the Company, Zachary A. Hamel Secretary January 27, 2006 Overland Park, Kansas All stockholders are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please complete, date, sign and return the enclosed proxy as promptly as possible in order to ensure your representation at the meeting. A return envelope (which postage is prepaid if mailed in the United States) is enclosed for that purpose. Even if you have given your proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain from the record holder a proxy issued in your name.
TORTOISE NORTH AMERICAN ENERGY CORPORATION 10801 Mastin Boulevard, Suite 222 Overland Park, Kansas 66210 1-800-919-0315 PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS APRIL 12, 2006 This proxy statement is being sent to you by the Board of Directors of Tortoise North American Energy Corporation (the "Company"). The Board of Directors is asking you to complete and return the enclosed proxy card, permitting your shares of the Company to be voted at the annual meeting of stockholders called to be held on April 12, 2006. Stockholders of record at the close of business on January 17, 2006 (the "record date") are entitled to vote at the meeting as set forth in this proxy statement. This proxy statement and the enclosed proxy and the Company's Annual Report to stockholders for the fiscal year ended November 30, 2005 are first being mailed to stockholders on or about January 27, 2006. The Company's reports can be accessed on its link at its investment advisor's website (www.tortoiseadvisors.com) or on the Securities and Exchange Commission's ("SEC") website (www.sec.gov). 1
PROPOSAL ONE ELECTION OF TWO DIRECTORS The Board of Directors unanimously nominated Terry C. Matlack and Charles E. Heath, following recommendation by the nominating and governance committee, for election as directors at the annual meeting. If elected, Messrs. Matlack and Heath will serve for a term of three years and until their successors are duly elected and qualified. Each of these nominees is currently a director, has consented to be named in this proxy statement and has agreed to serve if elected. The Company has no reason to believe that either Mr. Matlack or Mr. Heath will be unavailable to serve. The persons named on the accompanying proxy card intend to vote at the meeting (unless otherwise directed) FOR the election of Messrs. Matlack and Heath as directors of the Company. Currently the Company has five directors. In accordance with the Company's Articles of Incorporation, its Board of Directors is divided into three classes of approximately equal size. The terms of the directors of the different classes are staggered. The terms of John R. Graham and H. Kevin Birzer expire on the date of the 2007 annual meeting of stockholders and the term of Conrad S. Ciccotello expires at the annual meeting of stockholders in 2008. If Mr. Matlack and Mr. Heath are elected at the 2006 annual meeting, their terms will expire on the date of the 2009 annual meeting of stockholders. In accordance with the Company's Bylaws ("Bylaws"), each share may be voted for as many individuals as there are directors to be elected. On this proposal, the holders of common shares are entitled to vote each share on the election of each of the two directors. The Company's directors are elected by a plurality of the votes cast at the meeting. Where, as here, there are two vacancies for director, the two nominees with the highest number of affirmative votes, regardless of the votes withheld for those candidates, will be elected. Thus, abstentions, withheld votes and broker non-votes, if any, will not be counted towards such nominee's achievement of a plurality. Stockholders do not have cumulative voting rights. If elected, Mr. Matlack and Mr. Heath will hold office until the 2009 annual meeting of stockholders and until their successors are duly elected and qualified. If either Mr. Matlack or Mr. Heath is unable to serve because of an event not now anticipated, the persons named as proxies may vote for one or more other persons designated by the Board of Directors. The following table sets forth each Board member's name, age and address; position(s) with the Company and length of time served; principal occupation during the past five years; the number of portfolios in the Fund Complex that each Board member oversees; and other public company directorships held by each Board member. The Fund Complex is comprised of the closed-end funds advised by the Company's investment advisor, Tortoise Capital Advisors, L.L.C. (the "Advisor") , and as of January 27, 2006 included the Company, Tortoise Energy Infrastructure Corporation ("TYG") and Tortoise Energy Capital Corporation ("TYY"). 2
NOMINEE FOR DIRECTOR WHO IS NOT AN INTERESTED PERSON: Number of Positions(s) Held Portfolios in Other With Company and Fund Complex Directorships Length of Time Principal Occupation Overseen by Held by Name, Age and Address Served During Past Five Years Director Director ---------------------- --------- ---------------------- ---------------- ------------ Charles E. Heath*, 63 Director since 2005 Retired in 1999. Formerly, Three None 10801 Mastin Blvd. Chief Investment Officer, Suite 222 General Electric's Employers Overland Park, KS 66210 Reinsurance Corporation (1989-1999). CFA since 1974. *Mr. Heath is also a director of Tortoise Capital Resources Corporation ("TTO"), an affiliate of the Company and for which the Advisor serves as investment advisor. NOMINEE FOR DIRECTOR WHO IS AN INTERESTED PERSON: Number of Positions(s) Held Portfolios in Other With Company and Fund Complex Directorships Length of Time Principal Occupation Overseen by Held by Name, Age and Address Served During Past Five Years Director Director ---------------------- --------- ---------------------- ---------------- ------------ Terry C. Matlack*, 49 Director and Chief Managing Director of the Three None 10801 Mastin Blvd. Financial Officer Advisor; Managing Director, Suite 222 since 2005, Kansas City Equity Partners LC Overland Park, KS 66210 Assistant Treasurer ("KCEP"), a private equity since November firm (2001- present). 2005, Treasurer Formerly, President, from January 2005 GreenStreet Capital (1995 - to November 2005 2001). *Mr. Matlack, as a principal of the Advisor, is an "interested person" of the Company, as that term is defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the "1940 Act"). Mr. Matlack is also a director of TTO. 3
REMAINING DIRECTORS WHO ARE NOT INTERESTED PERSONS: Number of Positions(s) Held Portfolios in Other With Company and Fund Complex Directorships Length of Time Principal Occupation Overseen by Held by Name, Age and Address Served During Past Five Years Director Director ---------------------- --------- ---------------------- ---------------- ------------ Conrad S. Ciccotello*, 45 Director since 2005 Associate Professor of Risk Three None 10801 Mastin Blvd. Management and Insurance, Suite 222 Robinson College of Business, Overland Park, KS 66210 Georgia State University since 1999; Director of Graduate Personal Financial Planning Programs, and Editor, Financial Services Review since 2001 (an academic journal dedicated to the study of individual financial management). Formerly, faculty member, Pennsylvania State University (1997-1999). John R. Graham*, 60 Director since 2005 Executive-in-Residence and Three Erie Indemnity 10801 Mastin Blvd. Professor of Finance, College Company; Erie Suite 222 of Business Administration, Family Life Overland Park, KS 66210 Kansas State University (has Insurance served as a professor or Company; adjunct professor since 1970); Kansas State Chairman of the Board, Bank President and CEO, Graham Capital Management, Inc. and Owner of Graham Ventures. Formerly, CEO, Kansas Farm Bureau Financial Services, including seven affiliated insurance or financial service companies (1979-2000). *Messrs. Ciccotello and Graham are also directors of TTO. REMAINING DIRECTOR WHO IS AN INTERESTED PERSON: Number of Position(s) Held Portfolios in Other With Company and Fund Complex Directorships Length of Time Principal Occupation Overseen by Held by Name, Age and Address Served During Past Five Years Director Director ---------------------- --------- ---------------------- --------------- ------------ H. Kevin Birzer*, 46 Director and Managing Director of the Three None 10801 Mastin Blvd. Chairman of the Advisor; Partner/Senior Suite 222 Board since 2005 Analyst, Fountain Capital Overland Park, KS 66210 Management, L.L.C. ("Fountain Capital"), a registered investment advisor (1989 - present). Formerly, Vice President, Corporate Finance Department, Drexel Burnham Lambert (1986- 4
1989); and Vice President, F. Martin Koenig & Co. (1983- 1986). *Mr. Birzer, as a principal of the Advisor, is an "interested person" of the Company, as that term is defined in Section 2(a)(19) of the 1940 Act. Mr. Birzer is also a director of TTO. 5
Officers. Mr. Birzer is the Chairman of the Board of the Company, and Mr. Matlack is the Chief Financial Officer and Assistant Treasurer of the Company. The preceding table gives more information about Mr. Birzer and Mr. Matlack. The following table sets forth each other officer's name, age and address; position(s) held with the Company and length of time served; principal occupation during the past five years; the number of portfolios in the Fund Complex overseen by each officer; and other directorships held by each officer. Each officer serves until his successor is chosen and qualified or until his resignation or removal. As principals of the Advisor, each of the following officers of the Company are "interested persons" of the Company, as that term is defined in Section 2(a)(19) of the 1940 Act. Number of Position(s) Held Portfolios in Other With Company and Fund Complex Directorships Length of Time Principal Occupation Overseen by Held by Name, Age and Address Served During Past Five Years Officer Officer --------------------- --------- ---------------------- --------------- ----------- David J. Schulte, 44 President and Managing Director of the Three None 10801 Mastin Blvd., Chief Executive Advisor; Managing Director, Suite 222 Officer since 2005 KCEP (1993-present). Overland Park, KS 66210 Zachary A. Hamel, 40 Secretary since Managing Director of the Three None 10801 Mastin Blvd., 2005 Advisor; Partner/Senior Suite 222 Analyst with Fountain Capital Overland Park, KS 66210 (1997-present). Kenneth P. Malvey, 40 Treasurer since Managing Director of the Three None 10801 Mastin Blvd., November 2005; Advisor; Partner/Senior Suite 222 Assistant Analyst, Fountain Capital Overland Park, KS 66210 Treasurer from (2002-present). Formerly, January 2005 to Investment Risk Manager and November 2005 member of the Global Office of Investments, GE Capital's Employers Reinsurance Corporation (1996 - 2002). Committees of the Board of Directors. The Company's Board of Directors currently has three standing committees: o Executive Committee. Messrs. Birzer and Matlack are members of the executive committee. The executive committee has authority to exercise the powers of the Board (i) where assembling the full Board in a timely manner is impracticable, (ii) to address emergency matters, or (iii) to address matters of an administrative or ministerial nature. Messrs. Birzer and Matlack are "interested persons" of the Company as defined by Section 2(a)(19) of the 1940 Act. o Audit Committee. Messrs. Ciccotello, Heath and Graham serve on the audit committee. The audit committee was established in accordance with 6
Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and operates under a written charter adopted and approved by the Board, which is attached to this proxy statement as Appendix A. The audit committee approves and recommends to the Board the election, retention or termination of independent auditors; approves services to be rendered by the auditors; monitors the auditors' performance; reviews the results of the Company's audit; determines whether to recommend to the Board that the Company's audited financial statements be included in the Company's Annual Report; and responds to other matters as outlined in the Audit Committee Charter. Each audit committee member is "independent" as defined under the applicable New York Stock Exchange listing standards. o Nominating and Governance Committee. Messrs. Ciccotello, Heath and Graham serve on the nominating and governance committee (formerly the Nominating Committee), none of whom are "interested persons" of the Company as defined in the 1940 Act. Each nominating and governance committee member is "independent" as defined under the New York Stock Exchange listing standards. The nominating and governance committee operates under a written charter adopted and approved by the Board[, a current copy of which is available at the Company's link on the Advisor'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; recommends to the Board director nominees for each committee; (iii) reviews issues and developments related to corporate governance issues and develops and recommends to the Board corporate governance guidelines and procedures, to the extent necessary or desirable; (iv) actively seeks individuals who meet the standards for directors set forth in the Company's Bylaws, who meet the requirements of any applicable laws or exchange requirements and who are otherwise qualified to become board members for recommendation to the Board; (v) has the sole authority to retain and terminate any search firm used to identify director candidates and to approve the search firm's fees and other retention terms, though it has yet to exercise such authority; and (vi) may not delegate its authority. The nominating and governance committee will consider stockholder recommendations for nominees for membership to the Board so long as such recommendations are made in accordance with the Company's Bylaws. Nominees recommended by stockholders in compliance with the Bylaws of the Company will be evaluated on the same basis as other nominees considered by the nominating and governance committee. Stockholders should see "Stockholder Proposals and Nominations for the 2007 Annual Meeting" below for information relating to the submission by stockholders of nominees and matters for consideration at a meeting of the Company's stockholders. The Company's Bylaws require all directors and nominees for directors (1) to be at least 21 years of age and have substantial expertise, experience and relationships relevant to the business of the Company and (2) to have a master's degree in economics, finance, business administration or accounting, to have a graduate professional degree in law from an accredited university or college in the United States, or the equivalent degree from an equivalent institution of higher learning in another country, to have a certification 7
as a public accountant in the United States, to be deemed an "audit committee financial expert" as such term is defined in item 401 of Regulation S-K as promulgated by the SEC, or to be a current director of the Company. The nominating and governance committee has the sole discretion to determine if an individual satisfies the foregoing qualifications. o Compliance Committee. This committee was formed in December 2005. Messrs. Ciccotello, Heath and Graham serve on the compliance committee. Each committee member is "independent" as defined under the New York Stock Exchange listing standards, and none are "interested persons" of the Company as defined in the 1940 Act. The compliance committee operates under a written charter adopted and approved by the Board. The committee reviews and assesses management's compliance with applicable securities laws, rules and regulations; monitors compliance with the Company's Code of Ethics; and handles other matters as the Board or committee chair deems appropriate. The Board does not currently have a standing compensation committee. The New York Stock Exchange does not require boards of directors of closed-end funds to have a standing compensation committee. The following table shows the number of Board and committee meetings held during the fiscal year ended November 30, 2005: Board of Directors 3 Executive Committee 1 Audit Committee 0 Nominating Committee (became the Nominating and 0 Governance Committee in December 2005) All of the members of the Board and committee members then serving attended at least 75% of the aggregate meetings of the Board of Directors and applicable committees held during the fiscal year. Director and Officer Compensation. The Company does not compensate any of the directors who are interested persons and does not compensate any of its officers. The following table sets forth certain information with respect to the compensation paid by the Company and the Fund Complex during fiscal 2005 to each of the current directors. The Company has no retirement or pension plans. Total Compensation from Name Compensation from Company Fund Complex ---- ------------------------- ------------ H. Kevin Birzer $0 $0 Terry C. Matlack $0 $0 Conrad S. Ciccotello $6,500 $69,000 John R. Graham $5,833 $59,333 Charles E. Heath $5,833 $65,333 8
Required Vote. Mr. Heath and Mr. Matlack will be elected by the vote of a plurality of all shares of the Company present at the meeting, in person or by proxy. Each common share is entitled to one vote in the election of each of Messrs. Heath and Matlack. Abstentions, withheld votes and broker non-votes, if any, will not be counted towards a nominee's achievement of a plurality. BOARD RECOMMENDATION THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY VOTE "FOR" MR. HEATH AND MR. MATLACK AS DIRECTORS. 9
PROPOSAL TWO APPROVAL TO SELL COMMON SHARES BELOW NET ASSET VALUE Our initial public offering was in October 2005. Under the 1940 Act, the Company may sell common shares in subsequent public offerings and invest the proceeds from such subsequent public offerings in accordance with its investment objectives, so long as the net sale price to the Company (after deduction of offering expenses) is at least equal to the net asset value per share (the "NAV") of its common shares. Additionally, the 1940 Act permits the Company to sell its common shares below NAV with the consent of a majority of its common stockholders or under certain other circumstances. The Company believes that having the ability to issue its common shares below NAV in certain instances will benefit all of its stockholders. The Company expects that it will be periodically presented with attractive opportunities to acquire securities of United States master limited partnerships ("MLPs") or Canadian royalty trusts or income trusts that require the Company to make its investment commitment quickly. Because the Company generally attempts to remain fully invested and does not intend to maintain cash for the purpose of making these investments, the Company may be unable to capitalize on investment opportunities presented to it unless it quickly raises capital. The market value of our common shares, however, may periodically fall below our NAV, which is not uncommon for a closed-end fund such as the Company. If this happens, absent the approval of this proposal by a majority of the common stockholders, the Company will not be able to effectively access capital markets to enable it to take advantage of attractive investment opportunities. The proposed action would give the Company the opportunity to raise cash and purchase attractively priced securities even if the net sale price to the Company of our common shares is below NAV. The Company does not anticipate selling common shares below NAV unless the Company has identified attractive near term investment opportunities that the directors, including a majority of disinterested directors, as defined in the 1940 Act, reasonably believe will increase stockholder distributions. Further, to the extent the Company issues common shares below NAV in a publicly registered transaction, the market capitalization and number of publicly tradable shares of the Company will increase, thus affording all stockholders greater liquidity. Upon stockholder approval, the Company will only sell common shares below NAV if all of the following conditions are met: 1. The per share offering price, before deduction of underwriting fees, commissions and offering expenses, will not be less than the NAV per share of the Company's common stock, as determined at any time within two business days of pricing of the common stock to be sold in the offering. 2. Immediately following the offering, after deducting offering expenses and underwriting fees and commissions, the NAV per share of the Company's common stock, as determined at any time within two business days of pricing of the common stock to be sold, would not have been diluted by greater than a total of 1% of such value per share of all outstanding common stock. The Company will not be subject to a maximum number of shares that can be sold or a defined minimum sales price per share in any offering so long as the 10
aggregate number of shares offered and the price at which such shares are sold together would not result in dilution of the NAV per share of the Company's common stock in excess of the 1% limitation. 3. A majority of the Company's independent directors makes a determination, based on information and a recommendation from the Advisor, that they reasonably expect that the investment(s) to be made with the net proceeds of such issuance will lead to a long-term increase in distribution growth. As discussed below under the caption "More Information About the Meeting - Investment Advisory Agreement," the Advisor is paid a fee based upon the Company's average monthly Managed Assets (as defined below). The Advisor is controlled directly or indirectly by officers and certain directors of the Company, among others. Therefore, the Advisor's interest in determining whether to recommend that the Company issue common shares below NAV may conflict with the interests of the Company and its stockholders. Before voting on this proposal or giving proxies with regard to this matter, common stockholders should consider the potentially dilutive effect of the issuance of shares of the Company's common stock at less than NAV per share on the NAV per outstanding share of common stock. Any sale of common stock at a price below NAV would result in an immediate dilution on the NAV per outstanding share to existing common stockholders of as much as 1%. The 1940 Act establishes a connection between common share sale price and NAV because when stock is sold at a sale price below NAV per share, the resulting increase in the number of outstanding shares is not accompanied by a proportionate increase in the net assets of the Company. Common stockholders should also consider that holders of the Company's common stock have no subscription, preferential or preemptive rights to acquire additional shares of the common stock proposed to be authorized for issuance, and thus any future issuance of common stock will dilute such stockholders' holdings of common stock as a percentage of shares outstanding to the extent stockholders do not purchase sufficient shares in the offering to maintain their percentage interest. Further, if current stockholders of the Company either do not purchase any shares in an offering conducted by the Company or do not purchase sufficient shares in the offering to maintain their percentage interest, regardless of whether such offering is above or below the then current NAV, their voting power will be diluted. The persons named in the accompanying proxy card intend to vote at the meeting (unless otherwise directed) FOR approval of the sale of common shares below NAV. Required Vote. The proposal must be approved by (a) the affirmative vote of a majority of all common stockholders of record, as of the record date, and (b) the affirmative vote of a majority of the votes cast by the holders of common stock. Solely for the purpose of determining whether a majority of the number of common stockholders of record approved the matter, the number of common shares held by any single stockholder will not be relevant. For the purpose of determining whether a majority of the number of common stockholders of record approved Proposal Two, abstentions and broker non-votes, if any, recorded by record owners will have the effect of a vote against the proposal. For the purposes of determining whether a majority of the votes cast approved this proposal, each common share is entitled to one vote. Further, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote. 11
BOARD RECOMMENDATION THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY VOTE "FOR" THE PROPOSAL TO ALLOW THE COMPANY TO SELL ITS COMMON SHARES BELOW NET ASSET VALUE. 12
PROPOSAL THREE RATIFICATION OF SELECTION OF INDEPENDENT, REGISTERED CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors recommends that the stockholders of the Company ratify the selection of Ernst & Young LLP ("E&Y"), independent, registered certified public accountants, to audit the accounts of the Company for the fiscal year ending November 30, 2006. [E&Y's selection was approved by the audit committee at a meeting held on January 17, 2006. Their selection also was ratified and approved by the vote, cast in person, of a majority of the directors of the Company, including a majority of the directors who are not "interested persons" of the Company within the meaning of the 1940 Act, and who are "independent" as defined in the New York Stock Exchange listing standards, at a meeting held on January 17, 2006.] The persons named in the accompanying proxy card intend to vote at the meeting (unless otherwise directed) FOR the ratification of E&Y as the Company's independent, registered certified public accountants. E&Y has audited the accounts of the Company since prior to the Company's commencement of business in May 2005 and does not have any direct financial interest or any material indirect financial interest in the Company. A representative of E&Y is expected to be available at the meeting and to have the opportunity to make a statement and respond to appropriate questions from the stockholders. The audit committee of the Board of Directors meets each year with representatives of E&Y to discuss the scope of their engagement, review the financial statements of the Company and the results of their examination. Required Vote. E&Y will be ratified as the Company's independent, registered certified public accountant by the affirmative vote of a majority of all shares cast at the meeting, in person or by proxy. Each common share is entitled to one vote on this proposal. For the purposes of the vote on this proposal, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote. AUDIT COMMITTEE REPORT The audit committee of the Board of Directors of the Company reviews the Company's annual financial statements with both management and the independent auditors, and the committee meets periodically with the independent auditors to consider their evaluation of the Company's financial and internal controls. [The audit committee, in discharging its duties, has met with and has held discussions with management and the Company's independent auditors. The committee has reviewed and discussed the Company's audited financial statements for the fiscal year ended November 30, 2005 with management. Management has represented to the independent auditors that the Company's financial statements were prepared in accordance with generally accepted accounting principles. The audit committee has also discussed with the independent auditors the matters required to be discussed by the Statement on Auditing Standards No. 61 (Communications with Audit Committees). The independent auditors provided to the committee the written disclosures and the letter required by Independence 13
Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the committee discussed with representatives of the independent auditors their firm's independence. Based on the audit committee's review and discussions with management and the independent auditors, the representations of management and the reports of the independent auditors to the committee, the committee recommended that the Board include the audited financial statements in the Company's Annual Report for filing with the SEC.] The Audit Committee Conrad S. Ciccotello (Chairman) Charles E. Heath John R. Graham INDEPENDENT AUDITORS [On January 17, 2006, the Company's audit committee selected E&Y, independent, registered certified public accountants, to audit the books and records of the Company for its fiscal year ending November 30, 2006.] E&Y is registered with the Public Company Accounting Oversight Board. AUDIT AND RELATED FEES Audit Fees. For professional services rendered with respect to the audit of the Company's financial statements and the review of the Company's statutory and regulatory filings for its last fiscal year, the Company paid E&Y fees in the approximate amount of $_______. The Company was formed on January 13, 2005, and thus did not pay E&Y any fees prior to that date. Audit-Related Fees. The Company did not pay E&Y any fees for assurance and related services reasonably related to the performance of the audits of the Company's annual financial statements for its last fiscal year. Tax Fees. For professional services for tax compliance, tax advice and tax planning for its last fiscal year, the Company paid to E&Y fees in the approximate amount of $________. All Other Fees. The Company did not pay E&Y any fees for services other than those described above during its last fiscal year. Aggregate Non-Audit Fees. The Company did not pay E&Y any amounts for any non-audit services during the Company's last fiscal year. In addition, the Advisor has not paid nor been billed for fees to E&Y for non-audit services rendered to the Advisor during the Company's last fiscal year. On January 19, 2005, the audit committee of the Company adopted pre-approval polices and procedures. Under these policies and procedures, the audit committee pre-approves (i) the selection of the Company's independent auditors, (ii) the engagement of the independent auditors to provide any non-audit services to the Company, (iii) the engagement of the independent auditors to provide any non-audit services to the Advisor or any entity controlling, 14
controlled by, or under common control with the Advisor that provides ongoing services to the Company, if the engagement relates directly to the operations and financial reporting of the Company, and (iv) the fees and other compensation to be paid to the independent auditors. The Chairman of the audit committee may grant the pre-approval of any engagement of the independent auditors for non-audit services of less than $5,000, and such delegated pre-approvals will be presented to the full audit committee at its next meeting. Under certain limited circumstances, pre-approvals are not required under securities law regulations for certain non-audit services below certain de minimus thresholds. Since the adoption of these policies and procedures, the audit committee has pre-approved all audit and non-audit services provided by E&Y, and all non-audit services provided by E&Y for the Advisor, or any entity controlling, controlled by, or under common control with the Advisor that provides ongoing services to the Company, that are related to the operation of the Company. None of these services provided by E&Y were approved by the audit committee pursuant to the de minimus exception under Rule 2.01(c)(7)(i)(C) or Rule 2.01(c)(7)(ii) of Regulation S-X. The audit committee of the Company has considered whether E&Y's provision of services (other than audit services) to the Company, the Advisor or any entity controlling, controlled by, or under common control with the Advisor that provides services to the Company is compatible with maintaining E&Y's independence in performing audit services. OTHER MATTERS The Board of Directors of the Company knows of no other matters that are intended to be brought before the meeting. If other matters are presented for action, the proxies named in the enclosed form of proxy will vote on those matters in their sole discretion. MORE INFORMATION ABOUT THE MEETING Stockholders. At the record date, the Company had [4,612,640] common shares issued and outstanding: At December 31, 2005, each director beneficially owned (as determined pursuant to Rule 16a-1(a)(2) under the Exchange Act) shares of the Company and in all Funds overseen by each Director in the same Fund Complex having values within the indicated dollar ranges. Other than the Fund Complex and TTO, none of the Company's directors who are not interested persons of the Company, nor any of their immediate family members, has ever been a director, officer or employee of the Advisor or its affiliates. Aggregate Dollar Range of Holdings Aggregate Dollar Range of Holdings in in Funds Overseen by Director in Director the Company(1) Fund Complex(2) -------- -------------- H. Kevin Birzer(3) $50,001 - $100,000 Over $100,000 Terry C. Matlack(3) $50,001 - $100,000 Over $100,000 Conrad S. Ciccotello $10,001 - $50,000 $50,001 - $100,000 John R. Graham $10,001 - $50,000 Over $100,000 Charles E. Heath $10,001 - $50,000 Over $100,000 15
- ---------------------------- (1) Based on the closing price of the Company's common shares on the New York Stock Exchange on December 30, 2005. (2) Includes the Company, TYG and TYY. Amounts based on the closing price of common shares of the Company, TYG and TYY on the New York Stock Exchange on December 30, 2005. (3) These persons are "interested persons" of the Company as defined by Section 2(a)(19) of the 1940 Act. The following table sets forth the securities of TTO owned beneficially by the Company's directors who are not "interested persons" of the Company, as defined in Section 2(a)(19) of the 1940 Act, as of January 11, 2006. The Advisor also serves as the investment advisor to TTO. Value of Securities Name of Director Title of Class (1) Percent of Class (2) ---------------- -------------- --- -------------------- Conrad S. Ciccotello (3) Common Shares $15,000 0.04% John R. Graham (4) Common Shares $60,000 0.16% Charles E. Heath (5) Common Shares $45,000 0.12% (1) The value of the securities is determined by reference to the most recent price at which TTO sold its common shares, and includes the net value of all warrants to purchase common shares of TTO ("Warrants") held by such director, assuming the Warrants were exercised on January 11, 2006. (2) The percentage of class is determined by including all shares the director could purchase if the director exercised all Warrants the director holds, but not including the number of shares which could be purchased by all other holders of Warrants if they exercised such Warrants. (3) Mr. Ciccotello holds these shares jointly with his wife, Elizabeth Ciccotello. (4) These shares are held of record by the John R. Graham Trust U/A 1/3/92, John R. Graham, Trustee. (5) These shares are held of record by the Charles E. Heath Trust No.1 U/A 2/1/92, Charles E. Heath and Kathleen M. Heath, Trustees. At December 31, 2005, each director, each officer and the directors and officers as a group, beneficially owned (as determined pursuant to Rule 13d-3 under the Exchange Act) shares of common stock of the Company (or percentage of outstanding shares) as follows: Number of Directors and Officers Common Shares % ---------------------- ------------- ----- H. Kevin Birzer** 2,700 * Terry C. Matlack** 4,200 * Conrad S. Ciccotello 500 * John R. Graham 1,000 * Charles E. Heath 1,000 * David J. Schulte** 1,300 * Zachary A. Hamel** 0 * Kenneth P. Malvey** 420 * Directors and Officers as a Group 11,120 * *Indicates less than 1%. **These persons are "interested persons" of the Company as defined by Section 2(a)(19) of the 1940 Act. 16
At December 31, 2005, to the knowledge of the Company, no person held (sole or shared) power to vote or dispose of more than 5% of the outstanding shares of the Company. Investment Advisory Agreement. Tortoise Capital Advisors, L.L.C. (the "Advisor") is the Company's investment advisor. The Advisor is controlled equally by Fountain Capital and KCEP. As of December 31, 2005, the Advisor had approximately $1.5 billion of client assets under management. The Advisor may be contacted at the address listed on the first page of this proxy statement. Pursuant to the terms of an Advisory Agreement between the Company and the Advisor, dated October 31, 2005 (the "Advisory Agreement"), the Company pays to the Advisor quarterly, as compensation for the services rendered by the Advisor, a fee equal on an annual basis to 1.0% of the Company's average monthly Managed Assets. The Advisor has contractually agreed to waive or reimburse the Company for fees and expenses, including the investment advisory fee and expenses in an amount equal on an annual basis to 0.25% of the average monthly Managed Assets for the first year of the Company's operations. "Managed Assets" means the total assets of the Company (including any assets attributable to leverage) minus accrued liabilities other than (1) deferred taxes or debt entered into for the purpose of leverage and (2) the aggregate liquidation preference of any outstanding preferred shares. In its fiscal year ending November 30, 2005, the Company paid no fees to the Advisor under the Advisory Agreement. The Advisor is controlled directly or indirectly by David J. Schulte, CEO and President of the Company; Terry Matlack, a director and the Chief Financial Officer and Assistant Treasurer of the Company; H. Kevin Birzer, director and Chairman of the Board of the Company, Zachary A. Hamel, Secretary of the Company, and Kenneth P. Malvey, Treasurer of the Company, among others. How Proxies Will Be Voted. All proxies solicited by the Board of Directors that are properly executed and received prior to the meeting, and that are not revoked, will be voted at the meeting. Shares represented by those proxies will be voted in accordance with the instructions marked on the proxy. If no instructions are specified, shares will be counted as a vote FOR the proposals described in this proxy statement. How To Vote. Complete, sign and date the enclosed proxy card and return it in the enclosed envelope. Expenses and Solicitation of Proxies. The expenses of preparing, printing and mailing the enclosed proxy card, the accompanying notice and this proxy statement and all other costs, in connection with the solicitation of proxies will be borne by the Company. The Company may also reimburse banks, brokers and others for their reasonable expenses in forwarding proxy solicitation material to the beneficial owners of shares of the Company. In order to obtain the necessary quorum at the meeting, additional solicitation may be made by mail, telephone, telegraph, facsimile or personal interview by representatives of the Company, the Advisor, the Company's transfer agent, or by brokers or their representatives or by a solicitation firm that may be engaged by the Company to assist in proxy solicitations. If a proxy solicitor is retained by the Company, the costs associated with all proxy solicitation are not anticipated to exceed $35,000. The Company will not pay any representatives of the Company or the Advisor any additional compensation for their efforts to supplement proxy solicitation. 17
Revoking a Proxy. At any time before it has been voted, you may revoke your proxy by: (1) sending a letter stating that you are revoking your proxy to the Secretary of the Company at the Company's offices located at 10801 Mastin Boulevard, Suite 222, Overland Park, Kansas 66210; (2) properly executing and sending a later-dated proxy; or (3) attending the meeting, requesting return of any previously delivered proxy, and voting in person. Quorum. The presence, in person or by proxy, of 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, abstentions and broker non-votes will be treated as shares that are present at the meeting but have not been voted. If a quorum is not present in person or by proxy at the meeting, the chairman of the meeting or the stockholders entitled to vote at such meeting, present in person or by proxy, have the power to adjourn the meeting to a date not more than 120 days after the original record date without notice other than announcement at the meeting. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 30(h) of the 1940 Act and Section 16(a) of the Exchange Act require the Company's directors and officers, the Advisor, affiliated persons of the Advisor and persons who own more than 10% of a registered class of the Company's equity securities to file forms reporting their affiliation with the Company and reports of ownership and changes in ownership of the Company's shares with the SEC and the New York Stock Exchange. Those persons and entities are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. Based on a review of those forms furnished to the Company, the Company believes that its directors and officers, the Advisor and affiliated persons of the Advisor have complied with all applicable Section 16(a) filing requirements during the last fiscal year. To the knowledge of management of the Company, no person is the beneficial owner (as defined in Rule 16a-1 under the Exchange Act) of more than 10% of a class of the Company's equity securities. ADMINISTRATOR The Company has entered into an administration agreement with SEI Investments Mutual Funds Services, whose principal business address is One Freedom Valley Drive, Oaks, Pennsylvania 19456. STOCKHOLDER COMMUNICATIONS Stockholders are able to send communications to the Board of Directors. Communications should be addressed to the Secretary of the Company at its principal offices at 10801 Mastin Boulevard, Suite 222, Overland Park, Kansas 66210. The Secretary will forward any communications received directly to the Board of Directors. The Company does not have a policy with regard to Board attendance at annual meetings. This is the Company's first annual meeting. 18
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR THE 2007 ANNUAL MEETING Method for Including Proposals in the Company's Proxy Statement. Under the rules of the SEC, if you want to have a proposal included in our proxy statement for our next annual meeting of stockholders, that proposal must be received by the Secretary of the Company at 10801 Mastin Boulevard, Suite 222, Overland Park, Kansas 66210, not later than 5:00 p.m., Central Time on September 29, 2006. Such proposal must comply with all applicable requirements of Rule 14a-8 of the Exchange Act. Other Proposals and Nominations. If you want to nominate a director or have other business considered at our next annual meeting of stockholders but do not want those items included in our proxy statement, you must comply with the advance notice provision of our Bylaws. Under our Bylaws, nominations for director or other business proposals to be addressed at our next annual meeting may be made by a stockholder who has delivered a notice to the Secretary of the Company at 10801 Mastin Boulevard, Suite 222, Overland Park, Kansas 66210, no earlier than August 30, 2006 nor later than 5:00 p.m. Central Time on September 29, 2006. The stockholder must satisfy certain requirements set forth in the Company's Bylaws and the notice must contain specific information required by the Company's Bylaws. With respect to nominees for director, the notice must include, among other things, the name, age, business address and residence address of any nominee for director, certain information regarding such person's ownership of Company shares, and all other information relating to the nominee as is required to be disclosed in solicitations of proxies in an election contest or as otherwise required by Regulation 14A under the Exchange Act. With respect to other business to be brought before the meeting, a notice must include, among other things, a description of the business and any material interest in such business by the stockholder and certain associated persons proposing the business. Any stockholder wishing to make a proposal should carefully read and review the Company's Bylaws. A copy of the Company's Bylaws may be obtained by contacting the Secretary of the Company at 1-800-919-0315 or by writing the Secretary of the Company at 10801 Mastin Boulevard, Suite 222, Overland Park, Kansas 66210. Timely submission of a proposal does not mean the proposal will be included in the proxy material sent to stockholders. These advance notice provisions are in addition to, and separate from, the requirements that a stockholder must meet in order to have a proposal included in the Company's proxy statement under the rules of the SEC. 19
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 Zachary A. Hamel Secretary January 27, 2006 20
APPENDIX A AUDIT COMMITTEE CHARTER
TORTOISE NORTH AMERICAN ENERGY CORPORATION (the "Company") AUDIT COMMITTEE CHARTER I. PURPOSE The Audit Committee is a committee of the Board of the Company. Its primary function is to assist the Board in fulfilling certain of its responsibilities. This Charter sets forth the duties and responsibilities of the Audit Committee. The Audit Committee serves as an independent and objective party to oversee the Company's accounting policies, financial reporting and internal control system, as well as the work of the independent auditors. The Audit Committee also serves to provide an open avenue of communication among the independent auditors, Company management and the Board. o Company management has the primary responsibility to establish and maintain systems for accounting, reporting and internal controls, which functions may be delegated to an accounting service agent or custodian, provided Company management provides adequate oversight. o The independent auditors have the primary responsibility to plan and implement a proper audit of the Company's financial statements, including consideration of the Company's accounting, reporting and internal control practices. The Audit Committee may have additional functions and responsibilities as deemed appropriate by the Board and the Audit Committee. Although the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company's financial statements are complete and accurate and have been prepared in accordance with generally accepted accounting principles. II. COMPOSITION The Audit Committee shall be comprised of all independent board members who, in the opinion of the Board, are free from any relationship that would interfere with the exercise of his or her independent judgment as a member of the Audit Committee. For these purposes, a board member is considered an independent board member if: o he or she is not an "interested person" of the Company as that term is defined in the Investment Company Act of 1940; o he or she does not accept, directly or in directly, any consulting, advisory, or other compensatory fee from the Company (except in the capacity as a Board or committee member); and
o he or she meets the independence requirements set forth in the New York Stock Exchange Listed Company Manual, Section 303A.07. Each member of the Audit Committee shall be financially literate, as such qualification is interpreted by the Board in its business judgment. The Audit Committee will review the qualifications of its members and determine whether any of its members qualify as an "audit committee financial expert"1 as defined in Form N-CSR. The Audit Committee will submit such determination to the Board for its final determination. At least one member of the Audit Committee must have accounting or related financial management expertise, as the Board interprets such qualification in its business judgment. Audit Committee members may enhance their familiarity with finance and accounting by participating in educational programs from time to time, at the expense of the Company. The members of the Audit Committee shall be elected by the Board annually and serve until their successors shall be duly elected and qualified. Unless a Chairman is elected by the Board, the Chairman shall be elected annually be a majority vote of the members of the Audit Committee. The Audit Committee shall have unrestricted access to the independent auditors and the executive and financial management of the Company. The Audit Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority in its discretion to retain special legal, accounting or other experts or consultants to advise the Audit Committee at the expense of the Company if, in the Audit Committee's judgment, that is appropriate. - ----------------------------------- (1) An "audit committee financial expert" of a company is defined as a person who has all of the following attributes: (1) an understanding of generally accepted accounting principles ("GAAP") and financial statements; (2) the ability to assess the general application of GAA.P in connection with the accounting for estimates, accruals and reserves; (3) experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the company's financial statements, or experience actively supervising one or more persons engaged in such activities; (4) an understanding of internal controls and procedures for financial reporting; and (5) an understanding of audit committee functions. An audit committee financial expert must have acquired such attributes through any one or more of the following: (1) education and experience as a principal financial officer, principal accounting officer, controller, public accountant or auditor or experience in one or more positions that involve the performance of similar functions (or active supervision of such persons); or (2) experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements; or (3) other relevant experience. 2
III. MEETINGS The Audit Committee shall meet two times annually, Or more frequently as circumstances dictate. Special meetings (including telephone meetings) may be called by the Chair or a majority of the members of the Audit Committee upon reasonable notice to the other members of the Audit Committee. With a view to fostering open communication, the Audit Committee shall meet at least annually with senior Company management responsible for accounting and financial reporting and the independent auditors in separate executive sessions to discuss any matters that the Audit Committee, or any of such other persons, believes should be discussed privately. IV. RESPONSIBILITIES AND DUTIES To fulfill its responsibilities and duties the Audit Committee shall: A. Charter. Review this Charter annually and recommend changes, if any, to the Board. B. Internal Controls. 1. Review annually with Company management and the independent auditors: a. the organizational structure, reporting relationship, adequacy of resources and qualifications of the senior Company management personnel responsible for accounting and financial reporting; b. their separate evaluations of the adequacy and effectiveness of the Company's system of internal controls, including those of the Company's service providers; and c. any significant findings related to the Company's systems for accounting, reporting and internal controls, in the form of written observations and recommendations (including any management letter) and Company management's written response. 2. Establish procedures for the receipt, retention and treatment of complaints received by the Company and/or the Audit Committee regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by officers of the Company or employees of the Adviser or any other service provider to the Company of concerns regarding questionable accounting or auditing matters. 3. Review annually with Company management and the independent auditors, policies for valuation of Company portfolio securities, and the frequency and magnitude of pricing errors. 3
C. Independent Auditors. 1. Approve and recommend to the Board, the selection, retention or termination of the independent auditors, and approve the fees and other compensation to be paid to the independent auditors. Such selection shall be pursuant to a written engagement letter approved by the Audit Committee, which shall provide that: o The Audit Committee shall be directly responsible for the appointment, compensation, retention and oversight (such oversight shall include resolving any disagreements between Company management and the independent auditors regarding financial reporting) of the independent auditors; and o The independent auditors shall report directly to the Audit Committee. 2 Pre-approve any engagement of the independent auditors to provide any non-prohibited services to the Company, including the fees and other compensation to be paid to the independent auditors.(2) o The Chairman of the Audit Committee may grant the pre-approval referenced above for non-prohibited services for engagements of less than $5,000. o All such delegated pre-approvals shall be presented to the Audit Committee no later than the next Audit Committee meeting. 3. Pre-approve any engagement of the independent auditors, including the fees and other compensation to be paid to the independent auditors, to provide any non-audit services to the Adviser, or any "control affiliate"3 of the Adviser providing ongoing services to the Company, if the engagement relates directly to the operations and financial reporting of the Company. - --------------------------------------- (2) Pre-approval of non-audit services for the Company pursuant to Section IV.C. 2 above is not required if:(a) the aggregate amount of all non-audit services provided to the Company is no more than 5% of the total fees paid by the Company to the independent auditors during the fiscal year in which the non-audit services are provided; (b) the services were not recognized by Company management at the time of the engagement as non-audit services; and (c) such services are promptly brought to the attention of the Audit Committee by Company management and the Audit Committee approves them (which may be by delegation) prior to the completion of the audit. (3) "Control affiliate" means any entity controlling, controlled by, or under common control with the Adviser. 4
o The Chairman of the Audit Committee may grant the pre-approval referenced above for non-prohibited services for engagements of less than $5,000. o All such delegated pre-approvals shall be presented to the Audit Committee no later than the next Audit Committee meeting. 4. On an annual basis, request, receive in writing and review the independent auditors' specific representations as to their independence, including identification of all significant relationships the independent auditors have with the Company, the Adviser (and any "control affiliate" of the Adviser) and any material service provider to the Company (including, but not limited to, disclosures regarding the independent auditors' independence required by Independence Standards Board Standard No. 1 and compliance with the applicable independence provisions of Rule 2-01 of Regulation S-X), and recommend that the Board take appropriate action, if any, in response to the independent auditors' report to satisfy itself of the independent auditors' independence. 5. On an annual basis, meet with the independent auditors and Company management to review the arrangements for and scope of the annual audit for the current year and the audit procedures to be utilized. 6. Review the management letter, if any, prepared by the independent auditors and Company management's response. 7. Review and evaluate the lead audit partner. D. Financial Reporting Processes. 1. Review with Company management and the independent auditors, the Company's audited financial statements. 2. Review with Company management and the independent auditors the matters that auditing professional standards require to be communicated to the Audit Committee, including, but not limited to, the matters required to be discussed by Statement on Auditing Standards No. 61 (Communications with Audit Committees) and 90 (Audit Committee Communications), including: o the independent auditors' judgments about the quality, and not just the acceptability, of the Company's accounting principles as applied in its financial reporting; o the process used by Company management in formulating estimates and the independent auditors' conclusions regarding the reasonableness of those estimates; 5
o all significant adjustments arising from the audit, whether or not recorded by the Company; o when the independent auditors are aware that Company management has consulted with other accountants about significant accounting and auditing matters, the independent auditors' views about the subject of the consultation; o any disagreements with Company management regarding accounting or reporting matters; o serious difficulties encountered in dealing with Company management that relate to the performance of the audit; and o significant deficiencies in the design or operation of internal controls. 3. Receive annually a report from the independent auditors to the Audit Committee of any changes to the previously reported information regarding: a. all critical accounting policies and practices to be used; b. all alternative treatments of financial information within GAAP for policies and practices related to material items that have been discussed with Company management, the ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditors; c. other material written communications between the independent auditors and Company management including, but not limited to, any management letter or schedule of unadjusted differences; and d. all non-audit services provided to an entity in the "investment company complex"4 as defined in paragraph (f)(14) of Rule 2-01 of Regulation S-X that were not pre-approved by the Audit Committee. - ----------------------------------- (4) "Investment company complex" includes: (1) an investment company and its investment adviser or sponsor; (2) any entity controlled by or controlling an investment adviser or sponsor in (1) above, or any entity under common control with any investment adviser or sponsor in (1) above if the entity: (A) is an investment adviser or sponsor or (B) is engaged in the business of providing administrative, custodian, underwriter, or transfer agent services to any investment company, investment adviser, or sponsor; and (3) an investment company or entity that would be an investment company but for the exclusions provided by Section 3(c) of the 1940 Act that has an investment adviser or sponsor included in (1) and (2) above. Investment adviser does not include a subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser. Sponsor is an entity that establishes a unit investment trust. 6
If the communication is not within 90 days prior to the filing of the Company's annual financial statements with the SEC, the independent auditors shall provide an update in the 90 day period prior to the filing. 4. Review, initially, with Company management and the independent auditors, the process for developing the Company's "disclosure controls and procedures"5 as defined in Rule 30a-3(c) under the Investment Company Act of 1940 and thereafter any significant changes thereto. 5. Receive a report, semi-annually, from Company management that all necessary certifications have been made under Sarbanes-Oxley Act of 2002. 6. Review with Company management and the independent auditors a report by Company management covering any Form N-CSR filed, and any required certification of such filing, along with the results of Company management's most recent evaluation of the Company's "disclosure controls and procedures." 7. Ask Company management, the Company's accounting services agent and the independent auditors to review significant changes to elected tax accounting policies and their effect on amounts distributed and reported to shareholders for Federal tax purposes and review any material accounting, tax, valuation or recordkeeping issues that may affect the Company, its financial statements or the amount of its dividends or distributions. E. Process Improvements To the extent appropriate, review with the independent auditors and Company management significant changes or improvements in accounting and auditing processes that have been implemented. - ---------------------------------- (5) "Disclosure controls and procedures" means controls and other procedures of a registered management investment company that are designed to ensure that information required to be disclosed by the investment company on Form N-CSR is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an investment company in the reports that it files or submits on Form N-CSR is accumulated and communicated to the investment company's management, including its principal executive officer or officers and principal financial officer or officers, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure. 7
F. Other Responsibilities 1. Investigate any other matter brought to its attention within the scope of its duties. 2. Perform any other activities consistent with this Charter, the Company's Articles of Incorporation, Bylaws and governing law, as the Audit Committee or the Board deems necessary or appropriate. 3. Maintain minutes of committee meetings, report its significant activities to the Board, and make such recommendations to the Board as the Audit Committee may deem necessary or appropriate. * * * * * Adopted January 19, 2005
- -------------------------------------------------------------------------------- PROXY - TORTOISE NORTH AMERICAN ENERGY CORPORATION PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS - APRIL 12, 2006 The undersigned holder of common shares appoints David J. Schulte and Terry C. Matlack, or either of them, each with power of substitution, to vote all shares that the undersigned is entitled to vote at the annual meeting of stockholders of Tortoise North American Energy Corporation to be held on April 12, 2006 and at any adjournments thereof, as set forth on the reverse side of this card, and in their discretion upon any other business that may properly come before the meeting. YOUR VOTE IS IMPORTANT. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED POSTMARKED ENVELOPE. (Continued and to be signed on the reverse side) - --------------------------------------------------------------------------------
[ ] Mark this box with an X if you have made changes to your name or address details above. ANNUAL MEETING PROXY CARD THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN AND, ABSENT DIRECTION, WILL BE VOTED "FOR" THE PROPOSALS. A. ELECTION OF DIRECTORS 1. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE NOMINEES BELOW. FOR WITHHOLD Terry Matlack [ ] [ ] Charles E. Heath [ ] [ ] B. ISSUES THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL AND RATIFICATION BELOW. 2. Approval of the Company's sale of common shares below Net Asset Value ("NAV") subject to all of the following conditions being met: (i) the per share offering price, before deduction of underwriting fees, commissions and offering expenses, will not be less than the NAV per share of the Company's common stock, as determined at any time within two business days of pricing of the common stock to be sold in the offering; (ii) immediately following the offering, after deducting offering expenses and underwriting fees and commissions, the NAV per share of the Company's common stock, as determined at any time within two business days of pricing of the common stock to be sold, would not have been diluted by greater than a total of 1% of such value per share of all outstanding common stock; and (iii) a majority of the Company's independent directors makes a determination, based on information and a recommendation from the Company's investment advisor, that they reasonably expect that the investment(s) to be made with the net proceeds of such issuance will lead to a long-term increase in distribution growth. FOR AGAINST ABSTAIN [ ] [ ] [ ] 3. Ratification of Ernst & Young LLP as the Company's independent, registered, certified public accountants, to audit the accounts of the Company for the fiscal year ending November 30, 2006: FOR AGAINST ABSTAIN [ ] [ ] [ ] C. NON-VOTING ISSUE CHECK HERE IF YOU PLAN TO ATTEND THE MEETING [ ] D. AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR INSTRUCTIONS TO BE EXECUTED Please sign exactly as your name appears. If acting as attorney, executor, trustee, or in representative capacity, sign name and indicate title. Signature 1 - Signature 2 - Date Please keep signature Please keep signature (mm/dd/yyyy) within the box within the box - ---------------------- ---------------------- ----------------