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:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY
(AS PERMITTED BY RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
TRI-CONTINENTAL CORPORATION
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(Name of Registrant as Specified In Its Charter)
[INSERT NAME]
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(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(5) Total fee paid:
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[_] 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:
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[LOGO] Tri-Continental Corporation
100 Park Avenue, New York, New York 10017
New York City Telephone (212) 850-1864
Toll-Free Telephone (800) 221-2450
Notice of Annual Meeting of Stockholders
to be held on May 4, 2006
To the Stockholders:
The 76th Annual Meeting of Stockholders (the "Meeting") of Tri-Continental
Corporation, a Maryland corporation (the "Corporation"), will be held at the
offices of Venable LLP, 2 Hopkins Plaza, 18th Floor, Baltimore, Maryland 21201,
on May 4, 2006 at 9:30 A.M., for the following purposes:
(1) To elect three Directors each for a term of three years and until their
successors are elected and qualify;
(2) To act on a proposal to ratify the selection of Deloitte & Touche LLP
as auditors of the Corporation for 2006;
(3) If properly presented at the Meeting, to act upon a Stockholder
proposal presented under the heading "Stockholder Proposal" in the
Proxy Statement accompanying this Notice; and
(4) To transact such other business as may properly come before the Meeting
or any adjournment or postponement thereof;
all as set forth in the Proxy Statement accompanying this Notice. You will need
proof of ownership of the Corporation's stock to enter the meeting or, if your
shares are held in street name, a proxy from the street name holder.
The close of business on February 9, 2006 has been fixed as the record date
for the determination of Stockholders entitled to notice of, and to vote at,
the Meeting or any adjournment or postponement thereof.
This Meeting is extremely important in light of the announcement by a group
of dissident Stockholders of their intention to solicit proxies against the
nominees of your Board of Directors (the "Board"). Your vote is very important.
Whether or not you plan to attend the Meeting, and regardless of the number of
shares you own, we urge you to vote for your Board's nominees by promptly
signing, dating and returning the enclosed White Proxy Card, or by submitting
your proxy by telephone or the Internet as described in the enclosed White
Proxy Card. We strongly urge you not to sign any proxy card that may be sent to
you by dissident Stockholders. If you have previously returned any proxy card
sent to you by a dissident Stockholder or any person other than the
Corporation, or if you previously gave your proxy to a dissident Stockholder by
Internet or telephone, you may change any vote you may have indicated by
signing, dating and returning the enclosed White Proxy Card in the accompanying
envelope, or by submitting your proxy by telephone or the Internet as described
in the enclosed White Proxy Card. In addition, you may be able to submit your
proxy by telephone through the Corporation's proxy solicitor. If you hold your
shares in a brokerage or bank account (in "street name"), your broker or bank
may not vote your shares this year (as it has in past routine annual meetings)
unless you complete, sign and return promptly the voting instructions form it
will send you. In addition, if you hold your shares in a brokerage or bank
account, your broker or bank may allow you to provide your voting instructions
by telephone or Internet. Please consult the materials you receive from your
broker or bank prior to voting by telephone or Internet.
If you have any questions or need additional information, please contact
Georgeson Shareholder Communications Inc., the Corporation's proxy solicitors,
at 17 State Street, New York, New York 10004, or by telephone at 1-888-219-8293.
By order of the Board of Directors,
/s/ Frank J. Nasta
Secretary
Dated: New York, New York, February 14, 2006
-----------------
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN.
You may submit your proxy by telephone, the Internet, or by completing, dating
and signing the enclosed White Proxy Card, and returning it in the envelope
provided, which is addressed for your convenience and needs no postage if
mailed in the United States. In order to avoid the additional expense of
further solicitation, we ask your cooperation in submitting your proxy promptly
by telephone, the Internet, or by mailing the enclosed White Proxy Card
promptly.
February 14, 2006
[LOGO] Tri-Continental Corporation
100 Park Avenue, New York, New York 10017
PROXY STATEMENT
Annual Meeting of Stockholders to be held on May 4, 2006
This Proxy Statement is furnished to you in connection with the
solicitation of Proxies by the Board of Directors of Tri-Continental
Corporation, a Maryland corporation ("Tri-Continental" or the "Corporation") to
be used at the 76th Annual Meeting of Stockholders (the "Meeting") to be held
in Baltimore, Maryland on May 4, 2006. It is expected that the Notice of Annual
Meeting, Proxy Statement and form of Proxy will first be mailed to Stockholders
on or about February 14, 2006.
THIS IS A VERY IMPORTANT ANNUAL MEETING OF STOCKHOLDERS OF THE CORPORATION.
A group of dissident Stockholders has announced its intention to solicit
proxies against the nominees of your Board of Directors and in favor of its
nominees. Your Board strongly believes that the Board's nominees for
re-election as Directors are far better qualified than those proposed by the
dissident group. In addition, the Board believes that the Board nominees will
better serve the interests of all Stockholders.
If you properly give your proxy by the Internet or telephonically or by
executing and returning the enclosed White Proxy Card, and your proxy is not
subsequently revoked, your votes will be cast at the Meeting, and any
postponement or adjournment thereof. If you give instructions, your votes will
be cast in accordance with your instructions. If you return your signed White
Proxy Card without instructions, your votes will be cast (i) FOR the election
of the three Directors named in Proposal 1, (ii) FOR the ratification of the
selection of auditors, and (iii) AGAINST the Stockholder proposal requesting
adoption of cumulative voting for directors. Your votes will be cast in the
discretion of the Proxy holders on any other matter that may properly have come
before the Meeting and any postponement or adjournment thereof, including, but
not limited to, proposing and/or voting on the adjournment or postponement of
the meeting with respect to one or more proposals in the event that sufficient
votes in favor of any Board proposal are not received. If you execute, date and
submit a proxy card, you may revoke your proxy or change it by written notice
to the Corporation (Attention: Secretary), by submitting a subsequently
executed and dated proxy or by attending the Meeting and casting your vote in
person. If you submit your proxy by telephone or through the
1
Internet, you may revoke it by submitting a subsequent proxy by telephone or
Internet, or by completing, signing and returning a proxy card dated as of a
date that is later than your last telephone or Internet proxy submission or by
attending the Meeting and casting your votes in person. Attending the Meeting
will not automatically revoke your prior proxy.
The close of business on February 9, 2006 has been fixed as the record date
for the determination of Stockholders entitled to notice of, and to vote at,
the Meeting and any adjournment or postponement thereof. On that date, the
Corporation had outstanding 752,740 shares of $2.50 cumulative preferred stock
(the "Preferred Stock"), each share being entitled to two votes, and
107,526,521 shares of common stock, par value $0.50 (the "Common Stock"), each
share being entitled to one vote. For all matters to be voted upon, an
abstention or broker non-vote will not be considered a vote cast. Abstentions
and broker non-votes, if any, will be considered present for the purpose of
determining the presence of a quorum. For purposes of the vote on the election
of each nominee for Director, abstentions and broker non-votes, if any, with
respect to a Director will have the effect as a vote against that director. For
purposes of the vote on Proposal 2 and Proposal 3, abstentions and broker
non-votes, if any, will have no effect on the result of the vote.
The presence in person or by proxy of Stockholders entitled to cast a
majority of all the votes entitled to be cast at the Meeting shall constitute a
quorum. In the event that a quorum is not present at the Meeting or, even if a
quorum is so present, in the event that sufficient votes in favor of any Board
proposal (including the election of each of the Board's nominees for Director)
are not received and tabulated prior to the time the Meeting is called to
order, the persons named as Proxies may propose and vote for one or more
adjournments or postponements of the Meeting, with no notice other than an
announcement at the Meeting, if a quorum is not present or, if a quorum is so
present, only with respect to such Board proposal, and further solicitation may
be made. The votes of Stockholders indicating a vote against a Board proposal
in their Proxies will be cast against adjournment or postponement in respect of
that proposal.
The Corporation's manager is J. & W. Seligman & Co. Incorporated (the
"Manager"). The Corporation's stockholder service agent is Seligman Data Corp.
("SDC"). The address of each of these entities is 100 Park Avenue, New York, NY
10017. The Corporation will furnish, without charge, a copy of its most recent
annual report and most recent semi-annual report to any Stockholder upon
request to SDC at 1-800-221-2450.
If you have elected to receive one Proxy Statement for all accounts
maintained by members of your household, the Corporation will deliver promptly
upon written or oral request a separate copy of the Proxy Statement for a
separate account.
2
A. Election of Directors
(Proposal 1)
The Board of Directors is presently comprised of nine Directors. The Board
is divided into three classes, each of which consists of three Directors.
Members of each class hold office for a term of three years and until their
successors are elected and qualify. The term of one class expires in each year.
At the Meeting this year, three Directors are to be elected.
General John R. Galvin, Mr. William C. Morris, and Mr. Robert L. Shafer, whose
terms will expire at the 2006 Annual Meeting and when their successors are
elected and qualify, have been unanimously recommended by the Director
Nominating Committee of the Board of Directors of the Corporation for election
to the class whose term will expire in 2009 and when their successors are
elected and qualify. Although General Galvin has reached the retirement age set
by Board policy, the Board has waived this policy in his case at the unanimous
recommendation of the Director Nominating Committee.
It is the intention of the persons named in the accompanying form of Proxy
to nominate and to cast your votes for the election of General Galvin and
Messrs. Morris and Shafer. General Galvin has been Director of the Corporation
since 1995, Mr. Morris has been Director and Chairman of the Corporation since
1988, and Mr. Shafer has been Director of the Corporation since 1991. All were
last elected by Stockholders at the 2003 Annual Meeting.
Each nominee has agreed to serve if elected. There is no reason to believe
that any of the nominees will become unavailable for election as a Director of
the Corporation, but if that should occur before the Meeting, votes will be
cast for the persons the Director Nominating Committee and the Board of
Directors recommend.
3
Background information regarding General Galvin and Messrs. Morris and
Shafer, as well as the other Directors of the Corporation, follows.
Term of Number of
Office if Portfolios in
Elected and Principal Occupation(s) Fund Complex
Name (Age) and Length of During Past 5 Years, to be Overseen
Position With Corporation* Time Served Directorships and Other Information by Nominee
-------------------------- ------------ ----------------------------------- --------------
Independent Director Nominees
John R. Galvin (76) 2006-2009; Dean Emeritus, Fletcher School of 58
Director 1995 to Date Law and Diplomacy at Tufts
University; Director or Trustee of
[PHOTO] each of the investment companies
of the Seligman Group of Funds+;
and Chairman Emeritus, American
Council on Germany. Formerly,
Director, Raytheon Co. (defense
and commercial electronics);
Governor of the Center for
Creative Leadership; and Trustee,
Institute for Defense Analyses.
From February 1995 until June
1997, Director of USLIFE
Corporation (life insurance). From
June 1987 to June 1992, he was the
Supreme Allied Commander, NATO,
and the Commander-in-Chief, United
States European Command.
Robert L. Shafer (73) 2006-2009; Ambassador and Permanent Observer 58
Director 1991 to Date of the Sovereign Military Order of
[PHOTO] Malta to the United Nations; and
Director or Trustee of each of the
investment companies of the
Seligman Group of Funds+. From May
1987 until June 1997, Director,
USLIFE Corporation (life
insurance) and from December 1973
until January 1996, Vice
President, Pfizer Inc.
(pharmaceuticals).
4
Term of Number of
Office if Portfolios in
Elected and Principal Occupation(s) Fund Complex
Name (Age) and Length of During Past 5 Years, to be Overseen
Position With Corporation* Time Served Directorships and Other Information by Nominee
-------------------------- ------------ ----------------------------------- --------------
Interested Director Nominee
William C. Morris** (67) 2006-2009; Chairman, J. & W. Seligman & Co. 58
Director and Chairman 1988 to Date Incorporated; Chairman of the
[PHOTO] Board and Director or Trustee of
each of the investment companies
of the Seligman Group of Funds+;
Chairman, Seligman Advisors, Inc.,
Seligman Services, Inc. and Carbo
Ceramics, Inc. (manufacturer of
ceramic proppants for oil and gas
industry); Director, Seligman Data
Corp.; and President and Chief
Executive Officer of The
Metropolitan Opera Association.
Formerly, Director, Kerr-McGee
Corporation (diversified energy
and chemical company) and Chief
Executive Officer of each of the
investment companies of the
Seligman Group of Funds.
Other Directors
The other Directors of the Corporation who are not standing for election in
2006 are:
Number of
Term of Portfolios in
Office and Principal Occupation(s) Fund Complex
Name (Age) and Length of During Past 5 Years, to be Overseen
Position With Corporation* Time Served Directorships and Other Information by Director
-------------------------- ------------ ----------------------------------- --------------
Independent Directors
Alice S. Ilchman (70) 2004-2007; President Emerita, Sarah Lawrence 58
Director 1990 to Date College; Director or Trustee of
each of the investment companies
of the Seligman Group of Funds+;
Director, Jeannette K. Watson
Fellowship (internships for
college students); Trustee,
Committee for Economic
Development; Governor, Court of
Governors, London School of
Economics; and Director, Public
Broadcasting Service (PBS).
Formerly, Trustee, Save the
Children (non-profit child
assistance organization). From
January 1996 until December 2000,
Chairman, The Rockefeller
Foundation (charitable
foundation). From September 1987
until September 1997, Director,
New York Telephone Company.
5
Number of
Term of Portfolios in
Office and Principal Occupation(s) Fund Complex
Name (Age) and Length of During Past 5 Years, to be Overseen
Position With Corporation* Time Served Directorships and Other Information by Director
-------------------------- ------------ ----------------------------------- --------------
Frank A. McPherson (72) 2004-2007; Retired Chairman of the Board and 58
Director 1995 to Date Chief Executive Officer of
Kerr-McGee Corporation
(diversified energy and chemical
company); Director or Trustee of
each of the investment companies
of the Seligman Group of Funds+;
and Director, DCP Midstream GP,
LLP (natural gas processing),
Integris Health (owner of various
hospitals), Oklahoma Chapter of
the Nature Conservancy, Oklahoma
Medical Research Foundation, Boys
and Girls Clubs of Oklahoma,
Oklahoma City Public Schools
Foundation and Oklahoma Foundation
for Excellence in Education.
Formerly, Director, ConocoPhillips
(integrated international oil
corporation), Kimberly-Clark
Corporation (consumer products)
and BOK Financial (bank holding
company). From 1990 until 1994,
Director, the Federal Reserve
System's Kansas City Reserve Bank.
Betsy S. Michel (63) 2005-2008; Attorney; Director or Trustee of 58
Director 1985 to Date each of the investment companies
of the Seligman Group of Funds+;
and Trustee, The Geraldine
R. Dodge Foundation (charitable
foundation). Formerly, Chairman of
the Board of Trustees of St.
George's School (Newport, RI); and
Trustee, World Learning, Inc.
(international educational
training) and Council of New
Jersey Grantmakers.
6
Number of
Term of Portfolios in
Office and Principal Occupation(s) Fund Complex
Name (Age) and Length of During Past 5 Years, to be Overseen
Position With Corporation* Time Served Directorships and Other Information by Director
-------------------------- ------------ ----------------------------------- --------------
Leroy C. Richie (64) 2004-2007; Counsel, Lewis & Munday, P.C. (law 57
Director 2000 to Date firm); Chairman and Chief
Executive Officer, Q Standards
Worldwide, Inc. (library of
technical standards); Director or
Trustee of each of the investment
companies of the Seligman Group of
Funds+ (with the exception of
Seligman Cash Management Fund,
Inc.); Director, Kerr-McGee
Corporation (diversified energy
and chemical company), Infinity,
Inc. (oil and gas services and
exploration) and Vibration Control
Technologies, LLC (auto vibration
technology); Lead Outside
Director, Digital Ally Inc.
(digital imaging); Director and
Chairman, Highland Park Michigan
Economic Development Corp.; and
Chairman, Detroit Public Schools
Foundation. Formerly, Trustee, New
York University Law Center
Foundation; and Vice Chairman,
Detroit Medical Center and Detroit
Economic Growth Corp. From 1990
until 1997, Vice President and
General Counsel, Automotive Legal
Affairs, Chrysler Corporation.
James N. Whitson (70) 2005-2008; Retired Executive Vice President 58
Director 1993 to Date and Chief Operating Officer,
Sammons Enterprises, Inc. (a
diversified holding company);
Director or Trustee of each of the
investment companies of the
Seligman Group of Funds+; and
Director, CommScope, Inc.
(manufacturer of coaxial cable).
Formerly, Director and Consultant,
Sammons Enterprises, Inc. and a
Director of C-SPAN (cable
television networks).
7
Number of
Term of Portfolios in
Office and Principal Occupation(s) Fund Complex
Name (Age) and Length of During Past 5 Years, to be Overseen
Position With Corporation* Time Served Directorships and Other Information by Director
-------------------------- ----------- ----------------------------------- --------------
Interested Director
Brian T. Zino** (53) 2005-2008; Director and President, J. & W. 57
Director, President and Chief Dir.: 1993 Seligman & Co. Incorporated;
Executive Officer to Date President, Chief Executive Officer
Pres.: 1995 and, with the exception of
to Date Seligman Cash Management Fund,
CEO: 2002 Inc., Director or Trustee of each
to Date of the investment companies of the
Seligman Group of Funds+;
Director, Seligman Advisors, Inc.
and Seligman Services, Inc.;
Chairman, Seligman Data Corp.;
Member of the Board of Governors
of the Investment Company
Institute; and Director (formerly
Chairman), ICI Mutual Insurance
Company.
-----------------
+ The Seligman Group of Funds currently consists of twenty-four registered
investment companies (comprising 58 separate portfolios), including the
Corporation.
* The address for each Director or Nominee is 100 Park Avenue, New York, New
York 10017.
** Messrs. Morris and Zino are considered "interested persons" of the
Corporation, as defined in the Investment Company Act of 1940, as amended
("1940 Act"), by virtue of their positions with the Manager and its
affiliates.
Beneficial Ownership of Shares of the Corporation and Funds of Complex
As of February 1, 2006, each Director (and Nominee) beneficially owned
shares of the Corporation and the investment companies of the Seligman Group of
Funds as follows:
Dollar Range of Common Aggregate Dollar Range of Shares Owned
Shares Owned by Director by Director or Nominee of All Funds
or Nominee of the Overseen or to be Overseen by Director
Name of Director/Nominee Corporation or Nominee of Seligman Group of Funds
------------------------ ------------------------ --------------------------------------
Independent Directors/Nominees
John R. Galvin $10,001-$50,000 $50,001-$100,000
Alice S. Ilchman Over $100,000 Over $100,000
Frank A. McPherson Over $100,000 Over $100,000
Betsy S. Michel $10,001-$50,000 Over $100,000
Leroy C. Richie $10,001-$50,000 $10,001-$50,000
Robert L. Shafer $50,001-$100,000 Over $100,000
James N. Whitson Over $100,000 Over $100,000
8
Dollar Range of Common Aggregate Dollar Range of Shares Owned
Shares Owned by Director by Director or Nominee of All Funds
or Nominee of the Overseen or to be Overseen by Director
Name of Director/Nominee Corporation or Nominee of Seligman Group of Funds
------------------------ ------------------------ --------------------------------------
Interested
Directors/Nominee
William C. Morris Over $100,000 Over $100,000
Brian T. Zino Over $100,000 Over $100,000
As of February 1, 2006, all Directors and officers of the Corporation as a
group owned beneficially less than 1% of the Corporation's Common Stock and
less than 1% of the Corporation's Preferred Stock.
Section 16(a) Beneficial Ownership Reporting Compliance
During the year ended December 31, 2005, one transaction in the
Corporation's Common Stock by David F. Stein (Vice Chairman of the Manager),
two transactions in the Corporation's Common Stock by Frank J. Nasta (the
Secretary of the Corporation) and four transactions in the Corporation's Common
Stock by Michael F. McGarry (a Vice President and Co-Portfolio Manager of the
Corporation) were not reported within two business days as required. The
necessary filings for each Stockholder were subsequently made.
Security Ownership of Certain Beneficial Owners
The table below sets forth the beneficial ownership as of February 1, 2006
of each person (including any "group" as that term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended) known by the Corporation to
be the beneficial owner of more than 5% of the outstanding shares of any class
of the Corporation's stock.
Name of Beneficial Owner Number of Shares Beneficially Owned Percent of Class
------------------------ ----------------------------------- ----------------
A group led by Western Investment 7,281,741 shares of Common 6.77%
LLC and including 13 other Stock
members/1/
-----------------
/1/ Information regarding group membership and shareholdings was obtained from
the Schedule 14A filed jointly on February 10, 2006 and the Schedule 13D/A
filed jointly as a group on January 10, 2006 by Western Investment LLC,
Arthur D. Lipson, Western Investment Hedged Partners L.P., Western
Investment Activism Partners LLC, Benchmark Plus Institutional Partners,
L.L.C., Benchmark Plus Partners, L.L.C., Benchmark Plus Management,
L.L.C., Paradigm Partners, N.W., Inc., Scott Franzblau, Robert Ferguson,
Michael Dunmire, Matthew S. Crouse, Paul Derosa and Marlene A. Plumlee.
9
Board Committees
The Board of Directors met nine times during the year ended December 31,
2005. The standing committees of the Board include the Board Operations
Committee, Audit Committee, and Director Nominating Committee (the "Nominating
Committee"). These Committees are comprised solely of Directors who are not
"interested persons" of the Corporation as that term is defined in the 1940
Act. The duties of these Committees are described below.
Board Operations Committee. This Committee has authority generally to
direct the operations of the Board, including the nomination of members of
other Board Committees and the selection of legal counsel for the Corporation.
The Committee met seven times during the year ended December 31, 2005. Members
of the Committee, Messrs. McPherson (Chairman), Richie, Shafer and Whitson,
General Galvin, Dr. Ilchman, and Ms. Michel, are the independent Directors of
the Corporation. In his capacity as Chairman of the Board Operations Committee,
Mr. McPherson performs duties similar to those of a "lead independent
director," as he chairs meetings of the independent Directors, and acts as a
point of contact between the independent Directors and the Manager between
board meetings in respect of general matters.
Audit Committee. This Committee assists the Board in its oversight of the
Corporation's financial reporting process and operates pursuant to a written
charter most recently amended on March 17, 2005. The Committee met three times
during the year ended December 31, 2005. Members of this Committee are Messrs.
Whitson (Chairman) and Richie, General Galvin, and Ms. Michel. The members of
this Committee are "independent" as required by applicable listing standards of
the New York Stock Exchange. The report of the Audit Committee, as approved on
February 1, 2006, is attached to this Proxy Statement as Appendix 1.
Director Nominating Committee. Members of the Nominating Committee are
Messrs. Shafer (Chairman) and McPherson, and Dr. Ilchman. The Nominating
Committee met once during the year ended December 31, 2005. Pursuant to its
written charter adopted by the Board of Directors on March 18, 2004, the
Nominating Committee identifies, evaluates, selects and nominates, or
recommends for nomination, candidates for the Board. It also may set standards
or qualifications for Directors. The Nominating Committee may consider
candidates for the Board submitted by current Directors, the Manager, the
Stockholders and other appropriate sources.
The Nominating Committee will consider candidates submitted by a
Stockholder or group of Stockholders who have owned at least $10,000 of the
Corporation's outstanding Common Stock for at least one year at the time of
submission and who timely provide specified information about the
10
candidates and the nominating Stockholder or group. To be timely for
consideration by the Nominating Committee, the submission, including all
required information, must be submitted in writing to the attention of the
Secretary at 100 Park Avenue, New York, NY 10017 not less than 120 days before
the date of the proxy statement for the previous year's annual meeting of
Stockholders. The Nominating Committee will consider only one candidate
submitted by such a Stockholder or group for nomination for election at an
annual meeting of Stockholders. The Nominating Committee will not consider
self-nominated candidates or candidates nominated by members of a candidate's
family, including such candidate's spouse, children, parents, uncles, aunts,
grandparents, nieces and nephews.
The Nominating Committee will consider and evaluate candidates submitted by
the nominating Stockholder or group on the basis of the same criteria as those
used to consider and evaluate candidates submitted from other sources. These
criteria may include the candidate's relevant knowledge, experience and
expertise, the candidate's ability to carry out his or her duties in the best
interests of the Corporation and the candidate's ability to qualify as a
disinterested Director. The charter for the Nominating Committee, which
provides a detailed description of the criteria used by the Nominating
Committee as well as information required to be provided by Stockholders
submitting candidates for consideration by the Nominating Committee, was
included in the proxy statement for the 2004 Annual Meeting of Stockholders.
Procedures for Communications to the Board of Directors
The Board of Directors has adopted a process for Stockholders to send
communications to the Board. To communicate with the Board of Directors or an
individual Director, a Stockholder must send written communications to 100 Park
Avenue, New York, NY 10017, addressed to the Board of Directors of
Tri-Continental Corporation or the individual Director. All Stockholder
communications received in accordance with this process will be forwarded to
the Board of Directors or the individual Director. Each member of the Board of
Directors is encouraged to attend the Corporation's annual meeting of
Stockholders. There were nine members of the Board of Directors in attendance
at the Corporation's 2005 Annual Meeting of Stockholders.
11
Executive Officers of the Corporation
Information with respect to Executive Officers, other than Messrs. Morris
and Zino, is as follows:
Name (Age) and Position Term of Office and
With the Corporation Length of Time Served* Principal Occupation During Past Five Years
----------------------- ---------------------- ----------------------------------------------
John B. Cunningham (41) 2004 to Date Mr. Cunningham is a Managing Director and
Vice President and Chief Investment Officer of the Manager, a
Portfolio Manager Vice President and Portfolio Manager of the
Corporation and Seligman Common Stock
Fund, Inc., and a Vice President and Co-
Portfolio Manager of Seligman Income and
Growth Fund, Inc. and Seligman
TargetHorizon ETF Portfolios, Inc. He is also
a Vice President of Seligman Portfolios, Inc.,
as well as Portfolio Manager of its Common
Stock Portfolio. Prior to joining the Manager,
beginning in 2001, he was a Managing
Director and Senior Portfolio Manager of
Salomon Brothers Asset Management
("SBAM") and Group Head, SBAM's Equity
Team. Prior to 2001, he was a Director and
Portfolio Manager of SBAM.
Michael F. McGarry (42) 2005 to Date Mr. McGarry is a Managing Director of the
Vice President and Manager, and a Vice President and Co-
Co-Portfolio Manager Portfolio Manager of the Corporation and
Seligman Common Stock Fund, Inc. He is
also a Vice President of Seligman Portfolios,
Inc. and Co-Portfolio Manager of its
Common Stock Portfolio.
12
Name (Age) and Position Term of Office and
With the Corporation Length of Time Served* Principal Occupation During Past Five Years
-------------------------- ---------------------- -----------------------------------------------
Charles W. Kadlec (59) 1996 to Date Mr. Kadlec is a Director and Managing
Vice President Director of the Manager and President of
Seligman Advisors, Inc. and Seligman
Services, Inc. He is also Vice President and
Portfolio Manager of Seligman Time
Horizon/Harvester Series, Inc. and a Vice
President and Co-Portfolio Manager of
Seligman TargetHorizon ETF Portfolios, Inc.
Eleanor T.M. Hoagland (54) 2004 to Date Ms. Hoagland is a Managing Director of the
Vice President and Chief Manager and Vice President and Chief
Compliance Officer Compliance Officer for each of the investment
companies of the Seligman Group of Funds.
She was formerly a Managing Director, Partner
and Chief Portfolio Strategist at AMT Capital
Management from 1994 to 2000.
Lawrence P. Vogel (49) VP: 1992 to Date; Mr. Vogel is Senior Vice President and
Vice President and Treas: 2000 to Date Treasurer, Investment Companies, of the
Treasurer Manager, Vice President and Treasurer of each
of the investment companies of the Seligman
Group of Funds and Treasurer of SDC.
Thomas G. Rose (48) 2000 to Date Mr. Rose is Managing Director, Chief Financial
Vice President Officer and Treasurer of the Manager, and
Senior Vice President, Finance, of Seligman
Advisors, Inc. and SDC. He is a Vice President
of each of the investment companies of the
Seligman Group of Funds, Seligman
International, Inc. and Seligman Services, Inc.
13
Name (Age) and Position Term of Office and
With the Corporation Length of Time Served* Principal Occupation During Past Five Years
----------------------- ---------------------- ----------------------------------------------
Frank J. Nasta (41) 1994 to Date Mr. Nasta is a Director, Managing Director,
Secretary General Counsel and Corporate Secretary of the
Manager. He is Secretary of each of the
investment companies of the Seligman Group
of Funds. He is also Corporate Secretary of
Seligman Advisors, Inc., Seligman Services,
Inc., Seligman International, Inc. and SDC.
-----------------
* All officers are elected annually by the Board of Directors and serve until
their successors are elected and qualify or their earlier resignation. The
address of each of the foregoing officers is 100 Park Avenue, New York, New
York 10017.
Remuneration of Directors and Officers
Directors of the Corporation who are not employees of the Manager or its
affiliates each receive an annual retainer fee of $60,000, the amount of which
is shared by the Corporation and the other investment companies in the Seligman
Group of Funds. For the year ended December 31, 2005, the Corporation paid each
Director a portion of an aggregate retainer fee in the amount (for each
Director that served for a full year) of $16,870. In addition, such Directors
are currently paid a total of $3,000 for each day on which they attend Board
and/or Committee meetings ($1,500 for telephonic attendance at certain
meetings), the amount of which is shared by the Corporation and the other
investment companies of the Seligman Group of Funds meeting on the same day.
The Directors are also reimbursed for the expenses of attending meetings. There
were nine Directors who were not employees of the Manager or its affiliates at
the beginning of 2005. Mr. John E. Merow retired pursuant to Board policy at
the 2005 Annual Meeting and Mr. Robert B. Catell resigned as a Director on
November 28, 2005. The size of the Board was reduced by one following each of
the retirement of Mr. Merow and the resignation of Mr. Catell. Total Directors'
fees paid by the Corporation to the Directors listed below for the year ended
December 31, 2005 were as follows:
Number of Directors Aggregate Direct
in Group Capacity in which Remuneration was Received Remuneration
--------------------------------------------------------------------------------
9 Directors and Members of Committees $830,698
14
Director's attendance, retainer and/or committee fees paid to each Director
during 2005 were as follows:
Aggregate Pension or Retirement Total Compensation
Compensation Benefits Accrued as From Corporation and
Name From Corporation Part of Corporation Expenses Fund Complex*
---- ---------------- ---------------------------- --------------------
Robert B. Catell** $27,969 -0- $ 83,120
John R. Galvin 34,233 -0- 100,500
Alice S. Ilchman 32,651 -0- 97,500
Frank A. McPherson 32,651 -0- 97,500
John E. Merow*** 14,040 -0- 39,578
Betsy S. Michel 36,770 -0- 105,000
Leroy C. Richie 36,770 -0- 106,500
Robert L. Shafer 33,926 -0- 100,500
James N. Whitson+ 34,233 -0- 100,500
-----------------
* For the year ended December 31, 2005, there were twenty-four registered
investment companies in the Seligman Group of Funds, including the
Corporation.
** Mr. Catell resigned as Director on November 28, 2005.
*** Mr. Merow retired pursuant to Board policy at the 2005 Annual Meeting.
Mr. Merow had previously deferred compensation pursuant to the deferred
compensation plan; however, he had stopped deferring his current
compensation prior to his retirement. The accrued balance of Mr. Merow's
deferred compensation (including earnings/losses) in respect of the
Corporation as of December 31, 2004 was $22,873, all of which was paid to
him in January 2005.
+ Mr. Whitson had previously deferred compensation pursuant to the deferred
compensation plan. Mr. Whitson, who deferred receiving his fees from the
Corporation and other investment companies of the Seligman Group of Funds
from 1993 to 2002, had a balance as of December 31, 2005 of $247,499 in
respect of the Corporation in his deferred plan account, net of
earnings/losses. This amount was paid to Mr. Whitson in January 2006.
No compensation is paid by the Corporation to Directors or officers of the
Corporation who are employees or officers of the Manager.
The Corporation's Bylaws require each Director to be elected by the
affirmative vote of the holders of a majority of the votes entitled to be cast
in the election of a Director.
Each individual who has been nominated by the Board of Directors of the
Corporation for election at this Meeting was previously elected by the
Stockholders of the Corporation and is currently serving as a Director.
Generally, under Maryland law, an incumbent director who does not receive
sufficient votes to be elected at a meeting of Stockholders shall nevertheless
continue to serve as a director until his successor is elected and qualifies,
or until his death, resignation or removal, unless
15
a competing nominee for the directorship, if any, receives a sufficient number
of votes to be elected. If no nominee receives the required vote at the
Corporation's annual meeting, the incumbent Director nominees (or other
individuals) will be nominated for election at the Corporation's next meeting
of Stockholders at which Directors are elected. Maryland law provides that any
Stockholder entitled to vote in the election of directors of a corporation may
petition a court of equity to dissolve the corporation on grounds that the
Stockholders are so divided that they have failed, for a period which includes
at least two consecutive annual meeting dates, to elect successors to directors
whose terms would have expired on the election and qualification of their
successors. The court may or may not grant such a petition and the Corporation
is not aware of this provision being invoked in the case of a public company.
Your Board of Directors Unanimously Recommends that the Stockholders Vote FOR
the Election of Each of the Nominees to Serve as Director of the Corporation.
B. Ratification of Selection of Auditors
(Proposal 2)
The Audit Committee of the Board of Directors has appointed, and the Board
of Directors, including a majority of those members who are not "interested
persons" of the Corporation (as defined in the 1940 Act), has selected
Deloitte & Touche LLP as auditors of the Corporation for 2006. The firm of
Deloitte & Touche LLP has extensive experience in investment company accounting
and auditing.
Neither the Corporation's Charter nor the Corporation's Bylaws require that
the Stockholders ratify the selection of Deloitte & Touche LLP as the
Corporation's independent auditors. The Board of Directors is submitting this
matter to the Stockholders as a matter of good corporate practice. If the
Stockholders do not ratify the selection, the Audit Committee of the Board of
Directors will reconsider whether or not to retain Deloitte & Touche LLP, but
may retain such independent auditors. Even if the selection is ratified, the
Audit Committee and the Board of Directors in their discretion may change the
selection at any time during the year if they determine that such change would
be in the best interests of the Corporation and its Stockholders. It is
intended that the persons named in the accompanying form of proxy will vote for
Deloitte & Touche LLP. A representative of Deloitte & Touche LLP will be
present at the Meeting and will have the opportunity to make a statement and
respond to appropriate questions.
16
Deloitte & Touche LLP, in accordance with Independence Standards Board
Standard No. 1, has confirmed to the Audit Committee that they are independent
auditors with respect to the Corporation. Deloitte & Touche LLP has audited the
annual financial statements of the Corporation and provided tax and other
non-audit services to the Corporation. Deloitte & Touche LLP has also rendered
non-audit services to the Manager, Seligman Advisors, Inc. (an affiliate of the
Manager), and SDC, which is partially owned by the Corporation (together, the
"Affiliated Service Providers").
In making its recommendation, the Audit Committee considered whether the
provision by the independent auditors to the Corporation of non-audit services
to the Corporation or of professional services to the Affiliated Service
Providers is compatible with maintaining the auditors' independence and has
discussed the auditors' independence with them.
Principal Accountant Fees and Services
Aggregate fees billed to the Corporation for the last two fiscal years for
professional services rendered by Deloitte & Touche LLP were as follows:
2005 2004
------- -------
AUDIT FEES........ $61,980 $59,097
AUDIT-RELATED FEES -- --
TAX FEES.......... 2,350 2,200
ALL OTHER FEES.... -- 1,931
Audit fees include amounts related to the audit of the Corporation's annual
financial statements and services normally provided by Deloitte & Touche LLP in
connection with statutory and regulatory filings. Tax fees include amounts
related to tax compliance, tax planning, and tax advice. Other fees include the
Corporation's pro-rata share of amounts for services related to the assessment
of procedures for compliance with anti-money laundering regulations by the
Corporation and certain other investment companies advised by the Manager.
Aggregate fees billed by Deloitte & Touche LLP for the last two fiscal
years for non-audit services provided to the Affiliated Service Providers that
provide ongoing services to the Corporation, where the engagement related
directly to the operations and financial reporting of the Corporation, were as
follows:
2005 2004
------- -------
AUDIT-RELATED FEES $80,560 $76,630
TAX FEES.......... 8,000 13,703
ALL OTHER FEES.... -- 43,000
17
Audit-related fees include amounts for attestation services for SDC. Tax
fees include amounts related to tax compliance, tax planning, and tax advice
for, and an evaluation of, certain tax reporting procedures of SDC. Other fees
relates to electronic communication processing services performed on behalf of
outside counsel of the Manager.
The Audit Committee is required to preapprove audit and non-audit services
performed for the Corporation by Deloitte & Touche LLP. The Audit Committee
also is required to preapprove certain non-audit services performed for the
Affiliated Service Providers that provide services directly related to the
operations and financial reporting of the Corporation. The Audit Committee has
delegated preapproval authority to Mr. James N. Whitson, the Audit Committee's
Chairman. Mr. Whitson will report any preapproval decisions to the Audit
Committee at its next scheduled meeting. Notwithstanding the foregoing, under
certain circumstances, preapproval of non-audit services of a de minimis amount
is not required.
The aggregate fees billed for the most recent fiscal year and the preceding
fiscal year by Deloitte & Touche LLP for non-audit services rendered to the
Corporation and the Affiliated Service Providers that provided ongoing services
to the Corporation were $90,910 and $137,464, respectively. All non-audit
services discussed above were preapproved by the Audit Committee, who
considered whether these services were compatible with maintaining Deloitte &
Touche LLP's independence.
The affirmative vote of a majority of the votes cast at the Meeting is
required to ratify the selection of auditors.
Your Board of Directors Unanimously Recommends that the Stockholders
Vote FOR the Ratification of the Selection of Deloitte & Touche LLP
as Auditors of the Corporation.
18
C. Stockholder Proposal
The Corporation has received one proposal from a Stockholder for inclusion
in this year's proxy materials, which is set forth below. The Corporation will
provide the name and address of such Stockholder and the number of shares of
the Corporation's Common Stock owned by such Stockholder upon oral or written
request.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCK-HOLDERS VOTE
AGAINST THE STOCKHOLDER PROPOSAL. THE BOARD'S REASONING IS SET FORTH FOLLOWING
THE PROPOSAL IN A STATEMENT OF OPPOSITION. STOCKHOLDERS ARE URGED TO READ
CAREFULLY THE PROPOSAL, THE SUPPORTING STATEMENT AND THE STATEMENT OF
OPPOSITION.
Stockholder Proposal
RESOLVED: That the shareholders of Tri-Continental Corporation, assembled in
Annual Meeting in person and by proxy, hereby request the Board of Directors to
take the necessary steps to provide for cumulative voting in the election of
directors, which means each shareholder shall be entitled to as many votes as
shall equal the number of shares he or she owns multiplied by the number of
directors to be elected, and he or she may cast all of such votes for a single
candidate or any two or more candidates as he or she may see fit.
The Stockholder has submitted the following statement in support of his
proposal:
SUPPORTING STATEMENT: This proposal was submitted at the 2004 Annual meeting.
It received a 27% "yes" vote. Considering the passive shareholders, this should
have been a clarion call for the Director's to take some kind of action, in my
opinion.
Dividends paid for the last three years were:
$.23 - 2004
$.17 - 2003
$.26 - 2002
19
A shareholder at the 2004 Shareholder meeting, in Philadelphia, was
disappointed with the dividends and capital gains that had been paid in the
past few years and asked what the future outlook was for capital gain
distributions. Mr. Brian Zino responded that capital gain distributions would
not be paid until Tri-Continental's capital loss carryforwards were used up or
expired; an accurate prediction as time has confirmed.
We, the Shareholders paid J. & W. Seligman & Company total expenses of
$15,384,216 in 2004; $14,319,200 in 2003; $16,295,925 in 2002. In 2004 Seligman
received approximately 1/3 of the income of the fund.
The return management has provided to shareholders during the past 5 years on
the market price of the stock, was a negative 3.17% annualized. Lipper
Closed-End Growth & Income Funds Average was a plus 3.13%. This information was
in the 2004 annual report. How many of us would have invested in
Tri-Continental during this 5-year period if we were told, "Hey, if you invest
in Tri-Continental you would only lose 3.17% a year for the next 5 years."
As pointed out in my previous supporting statement in 2004, it is extremely
difficult for a truly independent Director to be elected to the Board of
Directors. This proposal would possibly change this situation.
Again, in my opinion, we need a Director, or Directors, whose primary concern
is the interest of the shareholder. In the meeting in Baltimore, Maryland about
4 or 5 years ago in my verbal presentation to the Directors, I suggested that
if management did not perform up to reasonable standards, they should be fired.
Mr. William Morris followed my comments by saying he hoped not to see me at any
future meetings. Frankly, I hoped so too.
Had Tri-Continental at least matched the Lipper performance I would not be
making this proposal. When we invested in Tri-Continental, it was our intention
to make money on the investment. Not that management would be the only entity
to prosper during this period.
This proposal, once again, can put the Directors on notice that they should put
Seligman's feet to the fire if they do not perform. It might also allow
independent Directors to be elected.
Please vote yes on this proposal.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE AGAINST THIS STOCKHOLDER PROPOSAL
FOR THE REASONS SET FORTH BELOW.
20
For the reasons set forth below, your Board of Directors believes that the
adoption of this proposal would not be in the best interests of the Corporation
or its Stockholders.
The Stockholders considered and rejected a similar proposal regarding
adoption of cumulative voting at the 1996 and 2004 annual meetings.
Approximately 87% and 73% of the votes cast were cast against the proposal at
the 1996 and 2004 meetings, respectively. Your Board of Directors believes that
the reasons for rejecting the proposal in 1996 and 2004 remain valid today.
The present system of voting for directors provides the best assurance that
the decisions of the directors will be in the interests of all Stockholders,
and that each director will be elected by a majority of the Stockholders and
will not owe any allegiance toward a particular group of minority Stockholders.
Cumulative voting might make it possible for a special interest group to
elect one or more directors whose loyalty might be directed more to the narrow
interests of that particular group of Stockholders rather than to the interests
of all Stockholders. It introduces the possibility of partisanship among your
Corporation's Board of Directors and could impair the Board's ability to work
effectively as a cohesive unit. The present voting system, long utilized by the
Corporation and by most leading corporations, prevents the "stacking" of votes
behind a single nominee for director and thereby promotes the election of each
director on the basis of representing the interests of the Corporation and the
Stockholders as a whole.
The Proponent is disappointed that your Corporation has not made capital
gain distributions for the last several years. As noted by Mr. Zino at last
year's Annual Meeting, and in a letter to Stockholders dated November 21, 2005,
Tri-Continental must use up capital losses sustained during the 2000-2002
market downturn before it resumes making capital gain distributions. For
Stockholders who hold their shares in taxable accounts, the capital loss
carryforwards offer a significant benefit because they shelter capital gains
that are being realized currently from becoming taxable distributions.
The Proponent asserts that it is "extremely difficult for a truly
independent" director to be elected to the Corporation's Board of Directors.
However, for many years your Corporation's Board of Directors has been
comprised of at least 75% of Directors who are both independent of the Manager
and not "interested persons", as defined in the Investment Company Act of 1940,
of the Corporation. This generally means that those Directors do not have
certain restricted relationships with the Corporation or the Manager. None of
the non-interested Directors is employed by, or has ever been employed by, the
Manager or owned shares of, or provided any services to, or had any other
interest in, the Manager. Each of the Corporation's Directors takes his or her
fiduciary and other duties very seriously and devotes considerable time and
attention to those duties.
21
The Proponent cites certain performance and expense information in his
supporting statement. In September 2004 the team of investment professionals
that manage your Corporation's investment portfolio received new leadership,
and the Manager has great confidence in the ability of the reconstituted team
to provide good investment results over time. Factors affecting the performance
of your Corporation in the most recent annual period are discussed in detail in
the Corporation's 2005 annual report to Stockholders, a copy of which was
mailed to Stockholders earlier this year. With respect to expenses, your
Corporation's expense ratio, including the management fee that it pays to the
Manager, is lower than the average of its competitors.
This proposal will not be adopted unless the votes cast in its favor exceed
the votes cast against it. Abstentions and broker non-votes will not be counted
as either for or against the proposal. If not otherwise specified, Proxies will
be voted AGAINST approval of the proposal. The adoption of the proposal would
not in itself result in any action, but would simply amount to a request for
action by the Board. In order to implement the proposal, the Board would need
to approve an amendment to the Corporation's charter providing for cumulative
voting, and the amendment would then have to be submitted to Stockholders for
approval. Approval of a charter amendment to permit cumulative voting would
require the affirmative vote of a majority of all outstanding shares of stock
of the Corporation.
Your Directors believe that your vote AGAINST this proposal
will be in the best interests of the Corporation
and all its Stockholders.
-----------------
The Corporation knows of no other matters which are to be brought before
the Meeting. However, if any other matters come before the Meeting, it is
intended that the persons named in the enclosed form of Proxy, or their
substitutes, will vote in accordance with their discretion on such matters.
Notice is hereby given that, under the Securities Exchange Act's
stockholder proposal rule (Rule 14a-8), any Stockholder proposal that may
properly be included in the Proxy solicitation material for the next Annual
Meeting, now scheduled for May 2007, must be received by the Corporation no
later than October 17, 2006. Timely notice of Stockholder proposals submitted
outside of the Rule 14a-8 process must be received by the Corporation no
earlier than September 17, 2006 and
22
no later than 5:00 P.M., Eastern time, October 17, 2006, to be eligible for
presentation at the May 2007 Annual Meeting. The Corporation's Bylaws require
that certain information must be provided by the Stockholder to the Corporation
when notice of a nominee or proposal is submitted to the Corporation.
D. Expenses
The Corporation will bear the cost of soliciting Proxies. In addition to
the use of the mails, Proxies may be solicited personally or via facsimile,
telephone or the Internet by Directors, officers and employees of the
Corporation, the Manager, Seligman Advisors, Inc., Seligman Services, Inc. and
SDC, and the Corporation may reimburse persons holding shares in their names or
names of their nominees for their expenses in sending solicitation material to
their beneficial owners. The Corporation has engaged Georgeson Shareholder
Communications, Inc., 17 State St., New York, NY 10004 to assist in soliciting
for a fee of up to $290,000 plus expenses. Georgeson will employ up to
approximately 50 people to solicit Stockholders. The Corporation estimates
that, in light of the expected dissident solicitation, the Corporation's
expenses related to the solicitation of Stockholders, including fees for
attorneys, proxy solicitors, advertising, printing, transportation and other
related expenses, are expected to aggregate approximately $685,000,
approximately $113,500 of which has been spent to date. These amounts do not
include costs that are normally expended for a solicitation for an election of
Directors in the absence of a contest.
Appendix 2 sets forth certain information relating to the Directors and
certain officers of the Corporation who will be soliciting proxies on the
Corporation's behalf.
By order of the Board of Directors,
/s/ Frank J. Nasta
Secretary
-----------------
It is important that your shares be voted promptly. All Stockholders,
including those who expect to attend the Meeting, are urged to vote as soon as
possible by accessing the Internet site listed on the enclosed White Proxy
Card, by calling the toll-free number listed on the enclosed White Proxy Card,
or by mailing the enclosed White Proxy Card in the enclosed return envelope,
which requires no postage if mailed in the United States. To enter the meeting
you will need to present proof of ownership of Tri-Continental Corporation
stock or if your shares are held in street name, a proxy from the street name
holder.
23
APPENDIX 1
TRI-CONTINENTAL CORPORATION
(the "Fund")
AUDIT COMMITTEE REPORT
The Audit Committee operates pursuant to a written charter that was last
amended by the Fund's Board of Directors on March 17, 2005. The purposes of the
Audit Committee are 1) to assist the Board of Directors in its oversight of
(i) the integrity of the Fund's financial statements; (ii) the Fund's
compliance with legal and regulatory requirements; and (iii) the independent
auditors' independence, qualifications and performance; and 2) to prepare this
report. Management of the Fund is responsible for the preparation, presentation
and integrity of the Fund's financial statements, the Fund's accounting and
financial reporting principles and internal controls and procedures designed to
assure compliance with accounting standards and applicable laws and
regulations. The independent auditors are responsible for auditing the Fund's
financial statements and expressing an opinion as to their conformity with
generally accepted accounting principles.
In the performance of its oversight function, the Audit Committee has
considered and discussed the audited financial statements with management and
the independent auditors of the Fund. The Audit Committee has also discussed
with the independent auditors the matters required to be discussed by Statement
on Auditing Standards No. 61, Communication with Audit Committees, as currently
in effect. The Audit Committee has also considered whether the provision of any
non-audit services not pre-approved by the Audit Committee provided by the
Fund's independent auditors to the Adviser or Manager and to any entity
controlling, controlled by or under common control with the Adviser or Manager
that provides ongoing services to the Fund is compatible with maintaining the
auditors' independence. Finally, the Audit Committee has received the written
disclosures and the letter from the independent auditors required by
Independence Standards Board Standard No. 1, Independence Discussions with
Audit Committees, as currently in effect, and has discussed with the auditors
the auditors' independence.
The members of the Audit Committee are not full-time employees of the Fund
and are not performing the functions of auditors or accountants. As such, it is
not the duty or responsibility of the Audit Committee or its members to conduct
"field work" or other types of auditing or accounting reviews or procedures or
to set auditor independence standards. Members of the Audit Committee
necessarily rely on the information provided to them by management and the
independent auditors. Accordingly, the Audit Committee's considerations and
discussions referred to above do not assure
1-i
that the audit of the Fund's financial statements has been carried out in
accordance with generally accepted auditing standards, that the financial
statements are presented in accordance with generally accepted accounting
principles or that the Fund's auditors are in fact "independent."
Based upon the reports and discussions described in this report, and
subject to the limitations on the role and responsibilities of the Audit
Committee referred to above, the Audit Committee recommended to the Board of
Directors of the Fund that the audited financial statements of the Fund be
included in the Fund's annual report to Stockholders for the most recent fiscal
period.
SUBMITTED BY THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
John R. Galvin
Betsy S. Michel
Leroy C. Richie
James N. Whitson
As approved on February 1, 2006.
1-ii
APPENDIX 2
Security Ownership and Transactions of Directors and Certain Officers
The following table sets forth, with respect to the Directors of the
Corporation and certain officers of the Corporation who will be soliciting
proxies on the Corporation's behalf, such person's (a) ownership of the
Corporation's shares as of February 1, 2006, and (b) purchases and sales of the
Corporation's shares during 2004, 2005 and through February 1, 2006. All shares
are of the Corporation's Common Stock. All holdings represent less than 1% of
the shares of the Corporation's Common Stock.
Directors of the Corporation
Date of Purchase (P) or
Sale (S) of Shares/
Name of Director Number of Shares Owned Number of Shares
---------------- ---------------------- -----------------------
John R. Galvin 1,165.231 03/25/2004, (P) 2.653 shares*
06/21/2004, (P) 2.712 shares*
09/23/2004, (P) 2.728 shares*
12/13/2004, (P) 7.028 shares*
03/24/2005, (P) 3.207 shares*
06/20/2005, (P) 3.855 shares*
09/27/2005, (P) 3.775 shares*
12/13/2005, (P) 4.332 shares*
Alice S. Ilchman
7,389.661
01/07/2004, (P) 29.749 shares
03/25/2004, (P) 16.372 shares*
06/21/2004, (P) 16.732 shares*
08/11/2004, (P) 62.492 shares
09/23/2004, (P) 16.982 shares*
12/01/2004, (P) 55.679 shares
12/13/2004, (P) 44.094 shares*
03/24/2005, (P) 20.121 shares*
06/20/2005, (P) 24.186 shares*
07/27/2005, (P) 54.142 shares
08/16/2005, (S) 31 shares
09/27/2005, (P) 23.761 shares*
10/19/2005, (P) 55.617 shares
12/13/2005, (P) 27.471 shares*
2-i
Date of Purchase (P) or
Sale (S) of Shares/
Name of Director Number of Shares Owned Number of Shares
---------------- ---------------------- -----------------------
Betsy S. Michel 2,265.8 03/25/2004, (P) 5.16 shares*
06/21/2004, (P) 5.273 shares*
09/23/2004, (P) 5.304 shares*
12/13/2004, (P) 13.666 shares*
03/24/2005, (P) 6.236 shares*
06/20/2005, (P) 7.496 shares*
09/27/2005, (P) 7.341 shares*
12/13/2005, (P) 8.423 shares*
Frank A. McPherson 56,025.86 03/25/2004, (P) 119.801 shares*
04/28/2004, (P) 4,395.848 shares
06/21/2004, (P) 132.922 shares*
09/23/2004, (P) 133.716 shares*
12/08/2004, (S) 1,121.705 shares
12/13/2004, (P) 344.495 shares*
03/24/2005, (P) 154.071 shares*
05/04/2005, (P) 2,771.493 shares
06/20/2005, (P) 194.459 shares*
09/27/2005, (P) 193.925 shares*
12/13/2005, (P) 222.509 shares*
12/21/2005, (S) 1,133.477 shares
12/22/2005, (S) 2,695.418 shares
William C. Morris 117,388.896 03/25/2004, (P) 242.203 shares*
06/21/2004, (P) 247.543 shares*
09/23/2004, (P) 249.023 shares*
12/13/2004, (P) 641.562 shares*
12/22/2004, (P) 2,200.22 shares
03/24/2005, (P) 298.892 shares*
06/20/2005, (P) 359.271 shares*
09/27/2005, (P) 351.847 shares*
12/13/2005, (P) 403.706 shares*
12/15/2005, (P) 1,600.854 shares
Leroy C. Richie 1,000 N/A
Robert L. Shafer 3,066 N/A
2-ii
Date of Purchase (P) or
Sale (S) of Shares/
Name of Director Number of Shares Owned Number of Shares
---------------- ---------------------- -----------------------
James. N. Whitson 33,830.059 03/25/2004, (P) 77.032 shares*
06/21/2004, (P) 78.731 shares*
09/23/2004, (P) 79.202 shares*
12/13/2004, (P) 204.048 shares*
03/24/2005, (P) 93.111 shares*
06/20/2005, (P) 111.92 shares*
09/27/2005, (P) 109.607 shares*
12/13/2005, (P) 125.762 shares*
Brian T. Zino
42,129.7844
03/25/2004, (P) 102.0085 shares*
06/21/2004, (P) 104.2571 shares*
09/23/2004, (P) 104.8827 shares*
12/13/2004, (P) 270.2074 shares*
03/24/2005, (P) 124.103 shares*
06/20/2005, (P) 147.091 shares*
09/27/2005, (P) 146.402 shares*
12/13/2005, (P) 166.813 shares*
* Dividend reinvestment.
Certain Officers of the Corporation
Date of Purchase (P) or
Name and Office of Sale (S) of Shares/
Executive Officer Number of Shares Owned Number of Shares
------------------ ---------------------- -----------------------
John B. Cunningham 2,500 N/A
Vice President and Portfolio
Manager
Michael F. McGarry 1,241.03 01/12/2005, (P) 2.682 shares
Vice President 01/26/2005, (P) 2.755 shares
and Co-Portfolio Manager 02/09/2005, (P) 2.706 shares
02/23/2005, (P) 2.715 shares
03/09/2005, (P) 2.66 shares
03/23/2005, (P) 2.75 shares
03/24/2005, (P) 3.4464 shares*
04/06/2005, (P) 2.7 shares
06/20/2005, (P) 4.043 shares*
09/27/2005, (P) 4.092 shares*
12/13/2005, (P) 4.629 shares*
2-iii
Date of Purchase (P) or
Name and Office of Sale (S) of Shares/
Executive Officer Number of Shares Owned Number of Shares
------------------ ---------------------- -----------------------
Charles W. Kadlec 7,541.0813 03/25/2004, (P) 11.0305 shares*
Vice President 03/26/2004, (P) 6.194 shares*
06/21/2004, (P) 11.2734 shares*
06/22/2004, (P) 6.3697 shares*
09/23/2004, (P) 11.3421 shares*
09/24/2004, (P) 6.3622 shares*
12/13/2004, (P) 29.2194 shares*
12/14/2004, (P) 16.165 shares*
03/24/2005, (P) 13.49 shares*
03/28/2005, (P) 7.5345 shares*
06/20/2005, (P) 15.806 shares*
06/21/2005, (P) 8.793 shares*
09/27/2005, (P) 15.943 shares*
09/28/2005, (P) 8.8226 shares*
12/13/2005, (P) 18.063 shares*
12/14/2005, (P) 10.0562 shares*
Frank J. Nasta 1,033.3224 03/25/2004, (P) 3.032 shares*
Secretary 06/21/2004, (P) 3.0987 shares*
09/23/2004, (P) 3.1169 shares*
12/13/2004, (P) 8.0302 shares*
03/24/2005, (P) 3.704 shares*
06/20/2005, (P) 4.349 shares*
09/27/2005, (P) 4.376 shares*
11/2/2005, (P) 1.334 shares
11/2/2005, (S) 298.366 shares
12/13/2005, (P) 3.852 shares*
* Dividend reinvestment.
2-iv
[LOGO] Tri-Continental Corporation
Managed by
J. & W. SELIGMAN & CO.
INCORPORATED
INVESTMENT MANAGERS AND ADVISORS
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
[LOGO] Tri-Continental
Corporation
Notice of Annual Meeting of Stockholders and Proxy Statement
Time:May 4, 2006
9:30 A.M.
Place:Offices of Venable LLP
2 Hopkins Plaza, 18/th/ Floor
Baltimore, Maryland 21201
Please submit your proxy by telephone, by the Internet, or by mailing the
enclosed White Proxy Card in the enclosed return envelope which requires no
postage if mailed in the United States.
[LOGO] J&WS
YOUR VOTE IS IMPORTANT
Please complete, date, sign and mail your proxy card in the
envelope provided as soon as possible.
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
-----------------
PROXY TRI-CONTINENTAL
CORPORATION PREFERRED STOCK
100 Park Avenue, New York,
NY 10017
The undersigned, revoking previous proxies, acknowledges receipt of the Notice
of Meeting and Proxy Statement for the Annual Meeting of Stockholders of
TRI-CONTINENTAL CORPORATION, a Maryland corporation, to be held at 9:30 a.m. on
May 4, 2006, at the offices of Venable LLP, 2 Hopkins Plaza, 18th Floor,
Baltimore, Maryland, 21201, and appoints WILLIAM C. MORRIS, FRANK J. NASTA and
PAUL B. GOUCHER (or any of them) proxy holders, with full power of substitution
in each of them, to attend the Annual Meeting (and adjournments or
postponements thereof) and to cast on behalf of the undersigned all the votes
the undersigned is entitled to cast at the Meeting and otherwise represent the
undersigned at the Meeting with all the powers possessed by the undersigned if
personally present at the Meeting.
The votes entitled to be cast by the undersigned will be cast as instructed
below. If this Proxy is executed but no instruction is given, the votes
entitled to be cast by the undersigned will be cast FOR each of the nominees of
the Board of Directors, FOR Proposal 2 and AGAINST Proposal 3. The votes
entitled to be cast by the undersigned will be cast in the discretion of the
Proxy holder on any other matter that may properly come before the Meeting (and
any adjournment or postponement thereof), including, but not limited to,
proposing and/or voting on adjournment or postponement of the Meeting with
respect to one or more matters, including, but not limited to, in the event
that sufficient votes in favor of any Board proposal are not received. THE
SOLICITATION OF THIS PROXY IS MADE ON BEHALF OF THE BOARD OF DIRECTORS. YOUR
VOTE IS IMPORTANT. Complete, sign on reverse side and return this card as soon
as possible. Mark each vote with an X in the box.
(Continued and to be signed on the reverse side)
THERE ARE THREE WAYS TO AUTHORIZE THE PROXIES
TO CAST YOUR VOTES
TELEPHONE INTERNET MAIL
--------- --------------------------- ------------------------
This method is available Visit the Internet Simply complete, sign
for residents of the website at and date your proxy card
U.S. and Canada. On a http://proxy.georgeson.com. and return it in the
touch tone telephone, Enter the COMPANY NUMBER postage-paid envelope.
call TOLL FREE and CONTROL NUMBER shown If you are using
1-877-816-0833, 24 hours below and follow the telephone or the
a day, 7 days a week. instructions on your Internet, please do not
You will be asked to screen. You will incur mail your proxy card.
enter ONLY the CONTROL only your usual Internet
NUMBER shown below. Have charges. Available until
your instruction card 12:00 midnight New York
ready, then follow the City time on May 3, 2006.
prerecorded
instructions. Your
instructions will be
confirmed and votes cast
as you direct. Available
until 12:00 midnight New
York City time on May 3,
2006.
This method may also be
available by telephone
through the
Corporation's proxy
solicitor.
COMPANY NUMBER CONTROL NUMBER
-------------- --------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The Board of Directors recommends that you vote FOR all nominees and FOR
Proposal 2, as more fully described in the accompanying Proxy Statement.
1. ELECTION OF DIRECTORS FOR WITHHOLD
all nominees all nominees
NOMINEES: John R. Galvin, William C. Morris, and [_] [_]
Robert L. Shafer
Instruction: To withhold authority to vote for
one or more individual nominees, write the
name(s) of such person(s) below:
------------------------------------------------------------------
2. Ratification of the selection of FOR AGAINST ABSTAIN
Deloitte & Touche LLP as Auditors. [_] [_] [_]
The Board of Directors recommends that you vote AGAINST Proposal 3, as more
fully described in the accompanying Proxy Statement.
3. Shareholder proposal requesting FOR AGAINST ABSTAIN
adoption of cumulative voting for directors. [_] [_] [_]
4. To vote and otherwise represent the undersigned on any other matter that
may properly come before the meeting (and any adjournment or postponement
thereof), including proposing and/or voting on adjournment or postponement
of the Meeting with respect to one or more matters (including, but not
limited to, in the event that sufficient votes in favor of any Board
proposal are not received), in the discretion of the Proxy holder.
PLEASE SIGN AND RETURN IMMEDIATELY
Please sign exactly as your name(s) appear(s) on this Proxy. When shares are
held jointly, each holder should sign. When signing in a representative
capacity, please give title.
DATED: ____________________ , 2006
----------------------------------------
Signature
----------------------------------------
Additional Signature (if held jointly)
YOUR VOTE IS IMPORTANT
Please complete, date, sign and mail your proxy card in the
envelope provided as soon as possible.
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
-----------------
PROXY TRI-CONTINENTAL CORPORATION COMMON STOCK
100 Park Avenue, New York,
NY 10017
The undersigned, revoking previous proxies, acknowledges receipt of the Notice
of Meeting and Proxy Statement for the Annual Meeting of Stockholders of
TRI-CONTINENTAL CORPORATION, a Maryland corporation, to be held at 9:30 a.m. on
May 4, 2006, at the offices of Venable LLP, 2 Hopkins Plaza, 18th Floor,
Baltimore, Maryland, 21201, and appoints WILLIAM C. MORRIS, FRANK J. NASTA and
PAUL B. GOUCHER (or any of them) proxy holders, with full power of substitution
in each of them, to attend the Annual Meeting (and adjournments or
postponements thereof) and to cast on behalf of the undersigned all the votes
the undersigned is entitled to cast at the Meeting and otherwise represent the
undersigned at the Meeting with all the powers possessed by the undersigned if
personally present at the Meeting.
The votes entitled to be cast by the undersigned will be cast as instructed
below. If this Proxy is executed but no instruction is given, the votes
entitled to be cast by the undersigned will be cast FOR each of the nominees of
the Board of Directors, FOR Proposal 2 and AGAINST Proposal 3. The votes
entitled to be cast by the undersigned will be cast in the discretion of the
Proxy holder on any other matter that may properly come before the Meeting (and
any adjournment or postponement thereof), including, but not limited to,
proposing and/or voting on adjournment or postponement of the Meeting with
respect to one or more matters, including, but not limited to, in the event
that sufficient votes in favor of any Board proposal are not received. THE
SOLICITATION OF THIS PROXY IS MADE ON BEHALF OF THE BOARD OF DIRECTORS. YOUR
VOTE IS IMPORTANT. Complete, sign on reverse side and return this card as soon
as possible. Mark each vote with an X in the box.
(Continued and to be signed on the reverse side)
THERE ARE THREE WAYS TO AUTHORIZE THE PROXIES
TO CAST YOUR VOTES
TELEPHONE INTERNET MAIL
--------- --------------------------- ------------------------
This method is available Visit the Internet Simply complete, sign
for residents of the website at and date your proxy card
U.S. and Canada. On a http://proxy.georgeson.com. and return it in the
touch tone telephone, Enter the COMPANY NUMBER postage-paid envelope.
call TOLL FREE and CONTROL NUMBER shown If you are using
1-877-816-0833, 24 hours below and follow the telephone or the
a day, 7 days a week. instructions on your Internet, please do not
You will be asked to screen. You will incur mail your proxy card.
enter ONLY the CONTROL only your usual Internet
NUMBER shown below. Have charges. Available until
your instruction card 12:00 midnight New York
ready, then follow the City time on May 3, 2006.
prerecorded
instructions. Your
instructions will be
confirmed and votes cast
as you direct. Available
until 12:00 midnight New
York City time on May 3,
2006.
This method may also be
available by telephone
through the
Corporation's proxy
solicitor.
COMPANY NUMBER CONTROL NUMBER
-------------- --------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The Board of Directors recommends that you vote FOR all nominees and FOR
Proposal 2, as more fully described in the accompanying Proxy Statement.
1. ELECTION OF DIRECTORS FOR WITHHOLD
all nominees all nominees
NOMINEES: John R. Galvin, William C. Morris, [_] [_]
and Robert L. Shafer
Instruction: To withhold authority to vote for one or more
individual nominees, write the name(s) of
such person(s) below:
------------------------------------------------------------------
2. Ratification of the selection of FOR AGAINST ABSTAIN
Deloitte & Touche LLP as Auditors. [_] [_] [_]
The Board of Directors recommends that you vote AGAINST Proposal 3, as more
fully described in the accompanying Proxy Statement.
3. Shareholder proposal requesting adoption of FOR AGAINST ABSTAIN
cumulative voting for directors. [_] [_] [_]
4. To vote and otherwise represent the undersigned on any other matter that
may properly come before the meeting (and any adjournment or postponement
thereof), including proposing and/or voting on adjournment or postponement
of the Meeting with respect to one or more matters (including, but not
limited to, in the event that sufficient votes in favor of any Board
proposal are not received), in the discretion of the Proxy holder.
PLEASE SIGN AND RETURN IMMEDIATELY
Please sign exactly as your name(s) appear(s) on this Proxy. When shares are
held jointly, each holder should sign. When signing in a representative
capacity, please give title.
DATED: ____________________ , 2006
----------------------------------------
Signature
----------------------------------------
Additional Signature (if held jointly)