Tri-Continental Corporation
AN INVESTMENT YOU CAN LIVE WITH
May 1, 1998
100 Park Avenue
New York, NY 10017
New York City Telephone (212) 850-1864
Toll-Free Telephone (800) 874-1092
For Retirement Plan Information -- Toll-Free Telephone (800) 445-1777
Tri-Continental Corporation (the 'Corporation') is a diversified,
closed-end investment company -- a publicly traded investment fund. The
Corporation's Common Stock is traded on the New York Stock Exchange under the
symbol 'TY.'
The Corporation invests primarily for the longer term, and over the years
the Corporation's objective has been to produce future growth of both capital
and income while providing reasonable current income. Common stocks have made up
the bulk of investments. However, assets may be held in cash or invested in all
types of securities. See 'Investment and Other Policies.' No assurance can be
given that the Corporation's investment objective will be realized. The
Corporation's Investment Manager is J. & W. Seligman & Co. Incorporated.
This Prospectus applies to all shares of Common Stock purchased pursuant to
the Corporation's various Investment Plans. See 'Description of Investment Plans
and Other Services.' The shares of Common Stock covered by this Prospectus also
may be issued from time to time by the Corporation in connection with the
acquisition of the assets of personal holding companies, private investment
companies or publicly-owned investment companies. See 'Issuance of Shares in
Connection with Acquisitions.'
This Prospectus sets forth concisely the information that a prospective
investor should know about the Corporation before investing. Investors are
advised to read this Prospectus carefully and to retain it for future reference.
Additional information about the Corporation, including a Statement of
Additional Information (the 'SAI'), has been filed with the Securities and
Exchange Commission. The SAI is available upon request and without charge by
writing or calling the Corporation at the address or telephone numbers listed
above. The SAI is dated the same date as this Prospectus and is incorporated
herein by reference in its entirety. The table of contents of the SAI appears on
page 22 of this Prospectus. In addition, copies of the 1997 Annual Report to
Stockholders of the Corporation (the '1997 Annual Report') will be furnished,
without charge, to investors requesting copies of the SAI. The 1997 Annual
Report contains financial statements of the Corporation for the year ended
December 31, 1997 which are incorporated by reference into the SAI.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary of Corporation Expenses.................. 2
Prospectus Summary............................... 3
Financial Highlights............................. 4
Capitalization at March 31, 1998................. 7
Trading and Net Asset Value Information
Concerning Tri-Continental Corporation Common
Stock.......................................... 7
The Corporation.................................. 8
Investment and Other Policies.................... 8
Management of the Corporation.................... 11
Description of Capital Stock..................... 12
Description of Warrants.......................... 14
Computation of Net Asset Value................... 14
Dividend Policy and Taxes........................ 15
Description of Investment Plans and Other
Services....................................... 16
Issuance of Shares in Connection with
Acquisitions................................... 20
Additional Information........................... 21
Table of Contents of the Statement of Additional
Information.................................... 22
Authorization Form for Automatic Dividend
Investment and Cash Purchase Plan.............. 23
Authorization Form for Automatic Check Service... 24
</TABLE>
SUMMARY OF CORPORATION EXPENSES
The following table illustrates the expenses and fees that the Corporation
expects to incur and that stockholders can expect to bear.
<TABLE>
<S> <C>
STOCKHOLDER TRANSACTION EXPENSES
Automatic Dividend Investment and Cash Purchase Plan Fees.......................... (1)
ANNUAL EXPENSES FOR 1997 (AS A PERCENTAGE OF NET ASSETS ATTRIBUTABLE
TO COMMON STOCK)
Management Fees.................................................................... .40%
Other Expenses..................................................................... .20%
----
Total Annual Expenses......................................................... .60%
----
----
</TABLE>
- ------------
(1) Stockholders participating in the Corporation's investment plans pay a
maximum $2.00 fee per transaction. See 'Description of Investment Plans and
Other Services -- Automatic Dividend Investment and Cash Purchase Plan'
for a description of the investment plans and services.
The purpose of the table above is to assist investors in understanding the
various costs and expenses they will bear directly or indirectly. For more
complete descriptions of the various costs and expenses, see 'Management of the
Corporation' and 'Description of Investment Plans and Other
Services -- Automatic Dividend Investment and Cash Purchase Plan.'
The following example illustrates the expenses an investor would pay on a
$1,000 investment, assuming a 5% annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Tri-Continental Corporation
Common Stock......................................... $6 $19 $33 $ 75
</TABLE>
The example does not represent actual or anticipated expenses, which may be
greater or less than those shown. Moreover, the Corporation's actual rate of
return may be greater or less than the hypothetical 5% return shown in the
example.
2
<PAGE>
PROSPECTUS SUMMARY
The following is qualified in its entirety by the more detailed information
included elsewhere in this Prospectus.
The Corporation is a Maryland corporation formed in 1929 by the
consolidation of two predecessor corporations. It is registered under the
Investment Company Act of 1940, as amended (the '1940 Act'), as a diversified
management investment company of the closed-end type. This Prospectus applies to
shares of Common Stock of the Corporation. The Corporation invests primarily for
the longer term and has no Charter restrictions with respect to such
investments. Over the years the Corporation's objective has been to produce
future growth of both capital and income while providing reasonable current
income. See 'The Corporation.' There can be no assurance that this objective
will be attained. While common stocks have made up the bulk of investments,
assets may be held in cash or invested in all types of securities in whatever
amounts or proportions J. & W. Seligman & Co. Incorporated (the 'Manager')
believes best suited to current and anticipated economic and market conditions.
These may include repurchase agreements, options, illiquid securities and
securities of foreign issuers, each of which could involve certain risks. See
'Investment and Other Policies.' The Corporation's Common Stock is listed on the
New York Stock Exchange under the symbol 'TY.' The average weekly trading volume
on that and other exchanges during 1997 was 378,536 shares. The Corporation's
Common Stock has historically been traded on the market at less than net asset
value. As of March 31, 1998, the Corporation had 105,740,345 shares of Common
Stock outstanding and net assets attributable to Common Stock of $3,785,427,349.
The Manager manages the investment of the assets of the Corporation and
administers its business and other affairs pursuant to a Management Agreement
approved by the Board of Directors and the stockholders of the Corporation. The
Manager also serves as manager of seventeen other investment companies which,
together with the Corporation, make up the 'Seligman Group.' The aggregate
assets of the Seligman Group at March 31, 1998 were approximately $20.2 billion.
The Manager also provides investment management or advice to institutional and
other accounts having a value at March 31, 1998 of approximately $7.4 billion.
The Manager's fee is based in part on the average daily net assets of the
Corporation. The management fee rate for 1997 was equivalent to .40% of the
Corporation's average daily net investment assets. See 'Management of the
Corporation.'
Shares of Common Stock covered by this Prospectus may be purchased from
time to time by Seligman Data Corp., the Plan service agent for Automatic
Dividend Investment and Cash Purchase Plans, Individual Retirement Accounts
('IRAs'), Retirement Plans for Self-Employed Individuals, Partnerships and
Corporations, the J. & W. Seligman & Co. Incorporated Matched Accumulation Plan
and the Seligman Data Corp. Employees' Thrift Plan (collectively, the 'Plans'),
as directed by participants, and may be sold from time to time by the Plan
service agent for participants in Systematic Withdrawal Plans. See 'Description
of Investment Plans and Other Services -- Automatic Dividend Investment and Cash
Purchase Plan' and ' -- Systematic Withdrawal Plan.' Shares will be purchased
for the Plans on the New York Stock Exchange or elsewhere when the market price
of the Common Stock is equal to or less than its net asset value, and any
brokerage commissions applicable to such purchases will be charged pro rata to
the Plan participants. Shares will be purchased for the Plans from the
Corporation at net asset value when the net asset value is lower than the market
price, all as more fully described in this Prospectus.
3
<PAGE>
FINANCIAL HIGHLIGHTS
The Corporation's financial highlights for the years presented below have
been audited by Deloitte & Touche LLP, independent auditors. This information
which is derived from the financial and accounting records of the Corporation
should be read in conjunction with the financial statements and notes contained
in the 1997 Annual Report which may be obtained from the Corporation as provided
on the cover page of this Prospectus.
'Per share operating performance' data is designed to allow an investor to
trace the operating performance, on a per Common share basis, from the beginning
net asset value to the ending net asset value so that investors can understand
what effect the individual items have on their investment, assuming it was held
throughout the year. Generally, the per share amounts are derived by converting
the actual dollar amounts incurred for each item, as disclosed in the financial
statements, to their equivalent per Common share amount.
PER SHARE OPERATING PERFORMANCE, TOTAL
(FOR A SHARE OF COMMON STOCK
<TABLE>
<CAPTION>
---------------------------------------
1997 1996 1995 1994
------ ------ ------ ------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year.......................... $29.28 $27.58 $23.70 $27.49
------ ------ ------ ------
Net investment income*...................................... .60 .68 .74 .83
Net realized and unrealized investment gain (loss).......... 6.94 4.84 6.14 (1.69)
Net realized and unrealized gain (loss) from foreign
currency transactions..................................... (.17) (.02) .03 .02
------ ------ ------ ------
Increase (decrease) from investment operations.............. 7.37 5.50 6.91 (.84)
Dividends paid on Preferred Stock........................... (.02) (.02) (.02) (.03)
Dividends paid on Common Stock.............................. (.60) (.66) (.73) (.79)
Distribution from net gain realized......................... (3.45) (2.72) (2.01) (1.90)
Issuance of Common Stock in gain distributions.............. (.52) (.40) (.27) (.23)
Issuance of Common Stock from exercise of Rights............ -- -- -- --
Rights offering costs....................................... -- -- -- --
Issuance of Common Stock upon Warrant exercise**............ -- -- -- --
------ ------ ------ ------
Net increase (decrease) in net asset value.................. 2.78 1.70 3.88 (3.79)
------ ------ ------ ------
Net asset value at end of year.............................. $32.06 $29.28 $27.58 $23.70
------ ------ ------ ------
------ ------ ------ ------
Adjusted net asset value at end of year**................... $31.99 $29.22 $27.52 $23.65
Market value, end of year................................... $26.6875 $24.125 $22.625 $19.875
TOTAL INVESTMENT RETURN FOR YEAR:
Based upon market value..................................... 27.96% 21.98% 27.95% (5.07)%
Based upon net asset value.................................. 26.65% 21.45% 30.80% (2.20)%
RATIOS AND SUPPLEMENTAL DATA:***
Expenses to average net investment assets................... .60% .62% .63% .64%
Expenses to average net assets for Common Stock............. .60% .63% .64% .65%
Net investment income to average net investment assets...... 1.80% 2.27% 2.71% 3.08%
Net investment income to average net assets for Common
Stock..................................................... 1.82% 2.31% 2.75% 3.14%
Portfolio turnover rate..................................... 83.98% 53.96% 62.28% 70.38%
Average commission rate paid................................ $.0385 $.0478
Net investment assets, end of year (000s omitted):
For Common Stock........................................ $3,391,816 $2,835,026 $2,469,149 $1,994,098
For Preferred Stock..................................... 37,637 37,637 37,637 37,637
--------- ---------- ---------- ----------
Total net investment assets................................. $3,429,453 $2,872,663 $2,506,786 $2,031,735
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
</TABLE>
- ------------
* Net investment income per share has been calculated by dividing the
respective actual amounts for the year by average shares outstanding.
** Assumes the exercise of outstanding warrants. Warrant exercise terms were:
December 30, 1987 to December 29, 1988 -- 7.83 shares at $2.87 per share,
December 30, 1988 to December 29, 1989 -- 8.14 shares at $2.76 per share,
December 30, 1989 to December 28, 1990 -- 8.81 shares at $2.55 per share,
December 29, 1990 to December 27, 1991 -- 9.25 shares at $2.43 per share,
December 28, 1991 to November 1, 1992 -- 9.69 shares at $2.32 per share,
November 2, 1992 to December 28, 1992 -- 11.07 shares at $2.03 per share,
December 29, 1992 to December 28, 1993 -- 11.29 shares at $1.99 per share,
December 29, 1993 to December 21, 1994 -- 11.95 shares
4
<PAGE>
The total investment return based on market value measures the
Corporation's performance assuming investors purchased shares of the Corporation
at the market value as of the beginning of the year, invested dividends and
capital gains paid as provided for in the Corporation's Automatic Dividend
Investment and Cash Purchase Plan, and then sold their shares at the closing
market value per share on the last day of the year. The computation does not
reflect any sales commissions investors may incur in purchasing or selling
shares of the Corporation. The total investment return based on net asset value
is similarly computed except that the Corporation's net asset value is
substituted for the corresponding market value.
'Average commission rate paid' represents the average commission paid by
the Corporation to purchase or sell portfolio securities. It is determined by
dividing the total commission dollars paid by the number of shares purchased and
sold during the period for which commissions were paid.
INVESTMENT RETURNS, RATIOS AND SUPPLEMENTAL DATA
OUTSTANDING THROUGHOUT EACH YEAR)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------
1993 1992 1991 1990 1989 1988
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
$28.03 $28.57 $24.60 $27.44 $23.55 $23.94
------ ------ ------ ------ ------ ------
.83 .81 .81 .81 .88 .84
1.46 1.19 5.79 (1.05) 6.78 1.01
-- -- -- -- -- --
------ ------ ------ ------ ------ ------
2.29 2.00 6.60 (.24) 7.66 1.85
(.03) (.03) (.03) (.03) (.04) (.04)
(.80) (.78) (.78) (.86) (.84) (.81)
(1.80) (.70) (1.80) (1.60) (2.55) (1.25)
(.19) (.05) (.02) (.11) (.33) (.14)
-- (.97) -- -- -- --
-- (.01) -- -- -- --
(.01) -- -- -- (.01) --
------ ------ ------ ------ ------ ------
(.54) (.54) 3.97 (2.84) 3.89 (.39)
------ ------ ------ ------ ------ ------
$27.49 $28.03 $28.57 $24.60 $27.44 $23.55
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
$27.42 $27.95 $28.48 $24.52 $27.35 $23.47
$23.75 $25.50 $27.75 $21.375 $23.00 $19.25
3.47% .61%'D' 42.98% 3.46% 37.96% 3.02%
8.95% 7.42%'D' 27.91% (.20)% 34.54% 8.58%
.66% .67% .67% .56% .55% .57%
.67% .68% .69% .57% .56% .59%
2.88% 2.86% 2.90% 3.01% 3.19% 3.33%
2.94% 2.92% 2.99% 3.07% 3.25% 3.40%
69.24% 44.35% 49.02% 41.23% 59.87% 67.39%
$2,166,212 $2,088,102 $1,833,664 $1,500,281 $1,594,505 $1,263,848
37,637 37,637 37,637 37,637 37,637 37,637
$2,203,849 $2,125,739 $1,871,301 $1,537,918 $1,632,142 $1,301,485
</TABLE>
at $1.88 per share, December 22, 1994 to December 27, 1995 -- 12.77 shares
at $1.76 per share; December 28, 1995 to July 1, 1996 -- 13.54 shares at
$1.66 per share; July 2, 1996 to December 20, 1996 -- 13.79 shares at $1.63
per share; December 21, 1996 to July 1, 1997 -- 14.69 shares at $1.53 per
share; July 2, 1997 to December 19, 1997 -- 14.99 shares at $1.50 per share;
and subsequently, 16.06 shares at $1.40 per share.
'D' The total investment returns for 1992 have been adjusted for the effect of
the exercise of Rights (equivalent to approximately $0.97 per share),
assuming full subscription by Common Stockholders.
*** The ratios of expenses and net investment income to average net investment
assets and to average net assets for Common Stock for the years presented
do not reflect the effect of dividends paid to Preferred Stockholders.
5
<PAGE>
SENIOR SECURITIES -- $2.50 CUMULATIVE PREFERRED STOCK
The following information is being presented with respect to the
Corporation's $2.50 Cumulative Preferred Stock. The first column presents the
number of preferred shares outstanding at the end of each of the periods
presented. Asset Coverage represents the total amount of net assets of the
Corporation in relation to each share of Preferred Stock outstanding as of the
end of the respective periods. The involuntary liquidation preference is the
amount each share of Cumulative Preferred Stock would be entitled to upon
involuntary liquidation of these shares.
<TABLE>
<CAPTION>
AVERAGE
DAILY
YEAR-END INVOLUNTARY MARKET
ASSET LIQUIDATION VALUE PER
TOTAL SHARES COVERAGE PREFERENCE SHARE (EXCLUDING
YEAR OUTSTANDING PER SHARE PER SHARE BANK LOANS)
- ----------------------------------- ------------ --------- ------------ ----------------
<S> <C> <C> <C> <C>
1997............................... 752,740 $4,556 $ 50 $35.62
1996............................... 752,740 3,816 50 34.28
1995............................... 752,740 3,330 50 33.37
1994............................... 752,740 2,699 50 34.12
1993............................... 752,740 2,928 50 36.17
1992............................... 752,740 2,824 50 34.97
1991............................... 752,740 2,486 50 31.51
1990............................... 752,740 2,043 50 28.62
1989............................... 752,740 2,168 50 28.61
1988............................... 752,740 1,729 50 28.49
</TABLE>
6
<PAGE>
CAPITALIZATION AT MARCH 31, 1998
<TABLE>
<CAPTION>
AMOUNT HELD
BY
REGISTRANT
OR FOR ITS
TITLE OF CLASS AUTHORIZED OUTSTANDING ACCOUNT
- ---------------------------------------------------------- ---------------- ---------------- ------------
<S> <C> <C> <C>
$2.50 Cumulative Preferred Stock,
$50 par value........................................... 1,000,000 shs. 752,740 shs. - 0 - shs.
Common Stock,
$.50 par value.......................................... 129,000,000 shs.* 105,740,345 shs. - 0 - shs.
Warrants to purchase
Common Stock............................................ 14,429 wts. 14,429 wts. - 0 - wts.
</TABLE>
- ------------
* 231,730 shares of Common Stock were reserved for issuance upon the exercise
of outstanding Warrants.
TRADING AND NET ASSET VALUE INFORMATION CONCERNING
TRI-CONTINENTAL CORPORATION COMMON STOCK
The following table shows the high and low sale prices of the Corporation's
Common Stock on the composite tape for issues listed on the New York Stock
Exchange, the high and low net asset value and the percentage discount or
premium to net asset value per share for each calendar quarter since the
beginning of 1996.
<TABLE>
<CAPTION>
DISCOUNT TO NET
MARKET PRICE NET ASSET VALUE ASSET VALUE
------------- ---------------- --------------------
1996 HIGH LOW HIGH LOW HIGH LOW
- ----------------------------------- ------------ ------------ ----- ----- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1st Q.............................. 24 1/2 22 5/8 29.58 27.32 (17.17)% (17.19)%
2nd Q.............................. 25 1/4 23 3/8 30.32 28.65 (16.72)% (18.41)%
3rd Q.............................. 25 22 1/4 30.07 27.75 (16.86)% (19.82)%
4th Q.............................. 27 1/8 23 1/2 32.17 28.65 (15.68)% (17.98)%
<CAPTION>
1997
- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Q.............................. 26 1/8 23 3/4 31.19 29.05 (16.24)% (18.24)%
2nd Q.............................. 28 1/2 23 1/2 34.33 29.45 (16.98)% (20.20)%
3rd Q.............................. 29 3/4 27 1/16 35.32 33.46 (15.77)% (19.12)%
4th Q.............................. 30 1/2 24 7/8 36.80 31.41 (17.12)% (20.81)%
<CAPTION>
1998
- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Q.............................. 30 25 1/8 35.94 30.98 (16.53)% (18.90)%
</TABLE>
The Corporation's Common Stock has historically been traded on the market
at less than net asset value. The closing market price, net asset value and
percentage discount to net asset value per share of the Corporation's Common
Stock on March 31, 1998 were $29.5625, $35.80 and (17.42)%, respectively.
7
<PAGE>
THE CORPORATION
The Corporation is a Maryland corporation formed on December 31, 1929, by
the consolidation of two predecessor corporations. Since the date of its
formation, it has been engaged in business as an investment company. It is
registered under the 1940 Act as a diversified, management investment company of
the closed-end type and is subject to applicable regulatory and other provisions
of that Act. Such registration, of course, does not involve government
supervision of management, investment policies or investment practices. As
indicated by its financial statements incorporated by reference herein, the
Corporation's principal assets, other than cash and receivables, are its
portfolio of investment securities.
INVESTMENT AND OTHER POLICIES
The Corporation invests primarily for the longer term and has no Charter
restrictions with respect to such investments. Over the years, the Corporation's
objective has been to produce future growth of both capital and income while
providing reasonable current income. There can be no assurance that this
objective will be attained in the future. While common stocks have made up the
bulk of investments, assets may be held in cash or invested in all types of
securities, that is, in bonds, debentures, notes, preferred and common stocks,
rights and warrants (subject to limitations as set forth in the SAI), and other
securities, in whatever amounts or proportions the Manager believes best suited
to current and anticipated economic and market conditions.
The management's present investment policies, in respect to which it has
freedom of action, are:
(1) it keeps investments in individual issuers within the limits
permitted diversified companies under the 1940 Act (i.e., 75% of its total
assets must be represented by cash items, government securities, securities
of other investment companies, and securities of other issuers which, at
the time of investment, do not exceed 5% of the Corporation's total assets
at market value in the securities of any issuer and do not exceed 10% of
the voting securities of any issuer);
(2) it does not make investments with a view to exercising control or
management except that it has an investment in Seligman Data Corp.;
(3) it ordinarily does not invest in other investment companies, but
it may purchase up to 3% of the voting securities of such investment
companies, provided purchases of securities of a single investment company
do not exceed in value 5% of the total assets of the Corporation and all
investments in investment company securities do not exceed 10% of total
assets; and
(4) it has no fixed policy with respect to portfolio turnover and
purchases and sales in the light of economic, market and investment
considerations. The portfolio turnover rates for the ten fiscal years ended
December 31, 1997 are shown under 'Financial Highlights.'
The foregoing objective and policies may be changed by management without
stockholder approval, unless such a change would change the Corporation's status
from a 'diversified' to a 'non-diversified' company under the 1940 Act.
The Corporation's stated fundamental policies relating to the issuance of
senior securities, the borrowing of money, the underwriting of securities of
other issuers, the concentration of investments in a particular industry or
groups of industries, the purchase or sale of real estate and real estate
mortgage loans, the purchase or sale of commodities or commodity contracts, and
the making of loans may not be
8
<PAGE>
changed without a vote of stockholders. A more detailed description of the
Corporation's investment policies, including a list of those restrictions on the
Corporation's investment activities which cannot be changed without such a vote,
appears in the SAI. Within the limits of these fundamental policies, the
management has reserved freedom of action.
REPURCHASE AGREEMENTS: The Corporation may enter into repurchase agreements
with respect to debt obligations which could otherwise be purchased by the
Corporation. A repurchase agreement is an instrument under which the Corporation
may acquire an underlying debt instrument and simultaneously obtain the
commitment of the seller (a commercial bank or a broker or dealer) to repurchase
the security at an agreed upon price and date within a number of days (usually
not more than seven days from the date of purchase). The value of the underlying
securities will be at least equal at all times to the total amount of the
repurchase obligation, including the interest factor. The Corporation will make
payment for such securities only upon physical delivery or evidence of book
transfer to the account of the Corporation's custodian. Repurchase agreements
could involve certain risks in the event of default or insolvency of the other
party, including possible delays or restrictions upon the Corporation's ability
to dispose of the underlying securities. The Corporation did not enter into
repurchase agreements in 1997.
ILLIQUID SECURITIES: The Corporation may invest up to 15% of its net
investment assets in illiquid securities, including restricted securities (i.e.,
securities not readily marketable without registration under the Securities Act
of 1933, as amended (the '1933 Act')) and other securities that are not readily
marketable. The Corporation may purchase restricted securities that can be
offered and sold to 'qualified institutional buyers' under the Rule 144A of the
1933 Act, and the Manager, acting pursuant to procedures approved by the
Corporation's Board of Directors, may determine, when appropriate, that specific
Rule 144A securities are liquid and not subject to the 15% limitation on
illiquid securities. Should this determination be made, the Manager will
carefully monitor the security (focusing on such factors, among others, as
trading activity and availability of information) to determine that the Rule
144A security continues to be liquid. It is not possible to predict with
assurance exactly how the market for Rule 144A securities will further evolve.
This investment practice could have the effect of increasing the level of
illiquidity in the Corporation, if and to the extent that qualified
institutional buyers become for a time uninterested in purchasing Rule 144A
securities.
FOREIGN SECURITIES: The Corporation may invest in commercial paper and
certificates of deposit issued by foreign banks and may invest in other
securities of foreign issuers directly or through American Depositary Receipts
('ADRs'), American Depositary Shares ('ADSs'), European Depositary Receipts
('EDRs') or Global Depositary Receipts ('GDRs') (collectively, 'Depositary
Receipts'). Foreign investments may be affected favorably or unfavorably by
changes in currency rates and exchange control regulations. There may be less
information available about a foreign company than about a U.S. company and
foreign companies may not be subject to reporting standards and requirements
comparable to those applicable to U.S. companies. Foreign securities may not be
as liquid as U.S. securities. Securities of foreign companies may involve
greater market risk than securities of U.S. companies, and foreign brokerage
commissions and custody fees are generally higher than those in the United
States. Investments in foreign securities may also be subject to local economic
or political risks, political instability and possible nationalization of
issuers. ADRs and ADSs are instruments generally issued by domestic banks or
trust companies that represent the deposits of a security of a foreign issuer.
ADRs and ADSs may be publicly traded on exchanges or over-the-counter in the
United States and are quoted and settled in dollars at a price that generally
reflects the dollar equivalent of the
9
<PAGE>
home country share price. EDRs and GDRs are typically issued by foreign banks or
trust companies and traded in Europe. Depositary Receipts may be issued under
sponsored or unsponsored programs. In sponsored programs, the issuer has made
arrangements to have its securities traded in the form of a Depositary Receipt.
In unsponsored programs, the issuers may not be directly involved in the
creation of the program. Although regulatory requirements with respect to
sponsored and unsponsored programs are generally similar, the issuers of
securities represented by unsponsored Depositary Receipts are not obligated to
disclose material information in the United States and, therefore, the import of
such information may not be reflected in the market value of such receipts. The
Corporation may invest up to 10% of its total assets in foreign securities that
it holds directly, but this 10% limit does not apply to foreign securities held
through Depositary Receipts or to commercial paper and certificates of deposit
issued by foreign banks.
LEVERAGE: Senior securities issued or money borrowed to raise funds for
investment have a prior fixed dollar claim on the Corporation's assets and
income. Any gain in the value of securities purchased or in income received in
excess of the cost of the amount borrowed or interest or dividends payable
causes the net asset value of the Corporation's Common Stock or the income
available to it to increase more than otherwise would be the case. Conversely,
any decline in the value of securities purchased or income received on them to
below the asset or income claims of the senior securities or borrowed money
causes the net asset value of the Common Stock or income available to it to
decline more sharply than would be the case if there were no prior claim. Funds
obtained through senior securities or borrowings thus create investment
opportunity, but they also increase exposure to risk. This influence ordinarily
is called 'leverage.' As of March 31, 1998, the only senior securities of the
Corporation outstanding were 752,740 shares of its $2.50 Cumulative Preferred
Stock, $50 par value. The Corporation's portfolio requires an annual return of
0.07% in order to cover dividend payments on the Preferred Stock. The following
table illustrates the effect of leverage relating to presently outstanding
Preferred Stock on the return available to a holder of the Corporation's Common
Stock.
<TABLE>
<S> <C> <C> <C> <C> <C>
Assumed return on portfolio (net of
expenses).................................. - 10% - 5% 0% 5% 10%
Corresponding return to common stockholder... - 10.15% - 5.10% - 0.05% 5.00% 10.05%
</TABLE>
The purpose of the table above is to assist an investor in understanding
the effects of leverage. The percentages appearing in the table do not represent
actual or anticipated returns, which may be greater or less than those shown.
YEAR 2000 RISKS: The Corporation is dependent upon service providers and
their computer systems for its day-to-day operations, and many of the
Corporation's service providers in turn depend upon computer systems of other
persons. Many computer systems currently cannot properly recognize or process
date sensitive information relating to the year 2000 and beyond. The Manager and
the Corporation's custodian have been evaluating the impact the year 2000 issue
may have on their computer systems. They expect that any modifications to their
computer systems necessary to address the year 2000 issue will be made and
tested in a timely manner. They are also working with vendors and other persons
whose systems are linked to theirs to obtain satisfactory assurances regarding
the year 2000 issue. Seligman Data Corp., which provides certain corporate and
stockholder account services to the Corporation at cost, has informed the
Corporation that it does not expect that the cost to the Corporation of its
services will increase materially as a result of the modifications to its
computer systems necessary to prepare for the year 2000. The costs of systems
remediation by persons other than
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Seligman Data Corp. will not be borne directly by the Corporation. There can be
no assurance that the remedial actions taken by the Corporation's service
providers will be sufficient or timely. Inadequate remediation could have an
adverse effect on the Corporation's operations, including pricing and securities
trading and settlement, and the provision of shareholder services.
MANAGEMENT OF THE CORPORATION
THE MANAGER: In accordance with the applicable laws of the State of
Maryland, the Board of Directors provides broad supervision over the affairs of
the Corporation. Pursuant to a Management Agreement approved by the Board and
the stockholders, the Manager manages the investment of the assets of the
Corporation and administers its business and other affairs. In that connection,
the Manager makes purchases and sales of portfolio securities consistent with
the Corporation's investment objectives and policies.
The Manager also serves as manager of seventeen other investment companies
which, together with the Corporation, make up the 'Seligman Group.' These other
companies are: Seligman Capital Fund, Inc., Seligman Cash Management Fund, Inc.,
Seligman Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman
Henderson Global Fund Series, Inc., Seligman High Income Fund Series, Seligman
Income Fund, Inc., Seligman Municipal Fund Series, Inc. and Seligman Municipal
Series Trust, Seligman New Jersey Municipal Fund, Inc., Seligman Pennsylvania
Municipal Fund Series, Seligman Portfolios, Inc., Seligman Quality Municipal
Fund, Inc., Seligman Select Municipal Fund, Inc., and Seligman Value Fund
Series, Inc. The address of the Manager is 100 Park Avenue, New York, NY 10017.
As compensation for the services performed and the facilities and personnel
provided by the Manager, the Corporation pays to the Manager promptly after the
end of each month a fee, calculated on each day during such month, equal to the
Applicable Percentage of the daily net assets of the Corporation at the close of
business on the previous business day. The term 'Applicable Percentage' means
the amount (expressed as a percentage and rounded to the nearest one millionth
of one percent) obtained by dividing (i) the Fee Amount by (ii) the Fee Base.
The term 'Fee Amount' means the sum on an annual basis of:
.45 of 1% of the first $4 billion of Fee Base
.425 of 1% of the next $2 billion of Fee Base
.40 of 1% of the next $2 billion of Fee Base, and
.375 of 1% of the Fee Base in excess of $8 billion.
The term 'Fee Base' as of any day means the sum of the net assets at the close
of business on the previous day of each of the investment companies registered
under the 1940 Act for which the Manager or any affiliated company acts as
investment adviser or manager (including the Corporation).
Charles C. Smith, Jr., a Managing Director of the Manager since January 1,
1994, has been Portfolio Manager for the Corporation since January 1, 1995. Mr.
Smith is also Vice President and Portfolio Manager of Seligman Common Stock
Fund, Inc. and Seligman Income Fund, Inc., and Vice President of Seligman
Portfolios, Inc. ('SPI') and Portfolio Manager of SPI's Seligman Common Stock
Portfolio and Seligman Income Portfolio. Mr. Smith joined the Manager in 1985 as
Vice President,
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<PAGE>
Investment Officer and was promoted to Senior Vice President, Senior Investment
Officer in August 1992, and to Managing Director in January 1994.
Odette S. Galli, Senior Vice President, Investment Officer, of the Manager,
has served as Co-Portfolio Manager of the Corporation since October 1996. She is
also Co-Portfolio Manager of Seligman Common Stock Fund, Inc. and Seligman
Common Stock Portfolio of Seligman Portfolios, Inc. Ms. Galli joined the Manager
in 1993 as Vice President, Investment Officer.
The Corporation pays all its expenses other than those assumed by the
Manager, including brokerage commissions, fees and expenses of independent
attorneys and auditors, taxes and governmental fees, cost of stock certificates,
expenses of printing and distributing prospectuses, expenses of printing and
distributing reports, notices and proxy materials to stockholders, expenses of
printing and filing reports and other documents with governmental agencies,
expenses of stockholders' meetings, expenses of corporate data processing and
related services, stockholder record keeping and stockholder account services,
fees and disbursements of transfer agents and custodians, expenses of disbursing
dividends and distributions, fees and expenses of directors of the Corporation
not employed by the Manager or its affiliates, insurance premiums and
extraordinary expenses such as litigation expenses.
The Management Agreement provides that it will continue in effect until
December 29 of each year if such continuance is approved in the manner required
by the 1940 Act (i.e., by a vote of a majority of the Board of Directors or of
the outstanding voting securities of the Corporation and by a vote of a majority
of Directors who are not parties to the Management Agreement or interested
persons of any such party) and if the Manager shall not have notified the
Corporation at least 60 days prior to December 29 of any year that it does not
desire such continuance. The Management Agreement may be terminated by the
Corporation, without penalty, on 60 days' written notice to the Manager and will
terminate automatically in the event of its assignment.
Prior to March 30, 1998, the Manager was party to a Subadvisory Agreement
with Seligman Henderson Co. pursuant to which Seligman Henderson Co. agreed to
provide investment advisory services to the Corporation in respect of foreign
assets to the extent requested by the Manager. On March 30, 1998, the
Subadvisory Agreement terminated in accordance with its terms. The Manager has
no present plans to enter into similar subadvisory arrangements in respect of
the Corporation.
DESCRIPTION OF CAPITAL STOCK
(a) DIVIDEND RIGHTS: Common Stockholders are entitled to receive dividends
only if and to the extent declared by the Board of Directors and only after (i)
such provisions have been made for working capital and for reserves as the Board
may deem advisable, (ii) full cumulative dividends at the rate of $.625 per
share per quarterly dividend period have been paid on the Preferred Stock for
all past quarterly periods and have been provided for the current quarterly
period, and (iii) such provisions have been made for the purchase or for the
redemption (at a price of $55 per share) of the Preferred Stock as the Board may
deem advisable. In any event, no dividend may be declared upon the Common Stock
unless, at the time of such declaration, the net assets of the Corporation,
after deducting the amount of such dividend and the amount of all unpaid
dividends declared on the Preferred Stock, shall be at least equal to $100 per
outstanding share of Preferred Stock. The equivalent figure was $5,078.86 at
March 31, 1998.
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<PAGE>
(b) VOTING RIGHTS: The Preferred Stock is entitled to two votes and the
Common Stock is entitled to one vote per share at all meetings of stockholders.
In the event of a default in payments of dividends on the Preferred Stock
equivalent to six quarterly dividends, the Preferred Stockholders are entitled,
voting separately as a class to the exclusion of Common Stockholders, to elect
two additional directors, such right to continue until all arrearages have been
paid and current Preferred Stock dividends are provided for. Notwithstanding any
provision of law requiring any action to be taken or authorized by the
affirmative vote of the holders of a designated portion of all the shares or of
the shares of each class, such action shall be effective if taken or authorized
by the affirmative vote of a majority of the aggregate number of the votes
entitled to vote thereon, except that a class vote of Preferred Stockholders is
also required to approve certain actions adversely affecting their rights. Any
change in the Corporation's fundamental policies may also be authorized by the
vote of 67% of the votes present at a meeting if the holders of a majority of
the aggregate number of votes entitled to vote are present or represented by
proxy.
Consistent with the requirements of Maryland law, the Corporation's Charter
provides that the affirmative vote of two-thirds of the aggregate number of
votes entitled to be cast thereon shall be necessary to authorize any of the
following actions: (i) the dissolution of the Corporation; (ii) a merger or
consolidation of the Corporation (in which the Corporation is not the surviving
corporation) with (a) an open-end investment company or (b) a closed-end
investment company, unless such closed-end investment company's Articles of
Incorporation require a two-thirds or greater proportion of the votes entitled
to be cast by such company's stock to approve the types of transactions covered
by clauses (i) through (iv) of this paragraph; (iii) the sale of all or
substantially all of the assets of the Corporation to any person (as such term
is defined in the 1940 Act); or (iv) any amendment of the Charter of this
Corporation which makes any class of the Corporation's stock a redeemable
security (as such term is defined in the 1940 Act) or reduces the two-thirds
vote required to authorize the actions listed in this paragraph. This could have
the effect of delaying, deferring or preventing changes in control of the
Corporation.
(c) LIQUIDATION RIGHTS: In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, after payment to the
Preferred Stockholders of an amount equal to $50 per share plus dividends
accrued or in arrears, the Common Stockholders are entitled, to the exclusion of
the Preferred Stockholders, to share ratably in all the remaining assets of the
Corporation available for distribution to stockholders.
(d) OTHER PROVISIONS: Common Stockholders do not have preemptive,
subscription or conversion rights, and are not liable for further calls or
assessments. The Corporation's Board of Directors (other than any directors who
may be elected to represent Preferred Stockholders as described above) are
classified as nearly as possible into three equal classes with a maximum three
year term so that the term of one class of directors expires annually. Such
classification provides continuity of experience and stability of management
while providing for the election of a portion of the Board of Directors each
year. Such classification could have the effect of delaying, deferring or
preventing changes in control of the Corporation.
The Board of Directors may classify or reclassify any unissued stock of any
class with or without par value (including Preferred Stock and Common Stock)
into one or more classes of preference stock on a parity with, but not having
preference or priority over, the Preferred Stock by fixing or altering before
the issuance thereof the designations, preferences, voting powers, restrictions
and qualifications
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<PAGE>
of, the fixed annual dividends on, the times and prices of redemption, the terms
of conversion, the number and/or par value of the shares and other provisions of
such stock to the full extent permitted by the laws of Maryland and the
Corporation's Charter. Stockholder approval of such action is not required.
DESCRIPTION OF WARRANTS
The Corporation's Charter and Warrant certificates provide that each
Warrant represents the right during an unlimited time to purchase one share of
Common Stock at a price of $22.48 per share, subject to increase in the number
of shares purchasable and adjustment of the price payable pursuant to provisions
of the Charter requiring such adjustments whenever the Corporation issues any
shares of Common Stock at a price less than the Warrant purchase price in effect
immediately prior to issue. Each Warrant presently entitles the holder to
purchase 16.06 shares of Common Stock at $1.40 per share. There were 14,429
Warrants outstanding at March 31, 1998. Fractional shares of Common Stock are
not issued upon the exercise of Warrants. In lieu thereof, the Corporation
issues scrip certificates representing corresponding fractions of the right to
receive a full share of Common Stock if exchanged by the end of the second
calendar year following issuance or of the proceeds of the sale of a full share
if surrendered during the next four years thereafter.
COMPUTATION OF NET ASSET VALUE
Net asset value per share of Common Stock is determined by dividing the
current value of the assets of the Corporation less its liabilities and the
prior claim of the Preferred Stock by the total number of shares of Common Stock
outstanding. Securities owned by the Corporation for which market quotations are
readily available are valued at current market value or, in their absence, fair
value determined in accordance with procedures approved by the Board of
Directors at current market value. Securities traded on national exchanges are
valued at the last sales prices, or in their absence and in the case of
over-the-counter securities, a mean of bid and asked prices. United Kingdom
securities and securities for which there are no recent sales transactions are
valued based on quotations provided by primary market makers in such securities.
Any securities for which recent market quotations are not readily available are
valued at fair value determined in accordance with procedures approved by the
Board of Directors. Short-term holdings maturing in 60 days or less are
generally valued at amortized cost if their original maturity was 60 days or
less. Short-term holdings with more than 60 days remaining to maturity will be
valued at current market value until the 61st day prior to maturity, and will
then be valued on an amortized cost basis based on the value of such date unless
the Board determines that this amortized cost value does not represent fair
market value.
All assets and liabilities initially expressed in foreign currencies will
be converted into U.S. dollars by a pricing service based upon the mean of the
bid and asked prices of such currencies against the U.S. dollar quoted by a
major bank which is a regular participant in the institutional foreign exchange
markets.
Net asset value of the Common Stock is determined daily as of the close of
regular trading on the New York Stock Exchange (normally, 4:00 p.m. Eastern
time) each day the New York Stock Exchange is open for trading.
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<PAGE>
DIVIDEND POLICY AND TAXES
DIVIDENDS: Dividends are paid quarterly on the Preferred Stock and on the
Common Stock in amounts representing substantially all of the net investment
income earned each year. Payments on the Preferred Stock are in a fixed amount,
but payments on the Common Stock vary in amount, depending on investment income
received and expenses of operation. Substantially all of any taxable net gain
realized on investments is paid to Common Stockholders at least annually in
accordance with requirements under the Internal Revenue Code of 1986, as amended
(the 'Code'), and other applicable statutory and regulatory requirements. Unless
Seligman Data Corp. is otherwise instructed by a Common Stockholder, dividends
on the Common Stock are paid in cash and capital gain distributions are paid in
book shares of Common Stock which are entered in a stockholder's Tri-Continental
account as 'book credits.' Long-term gain distributions ordinarily are paid in
shares of Common Stock, or, at the stockholder's option, 75% in book shares and
25% in cash, or, in the alternative, 100% in cash. Shares distributed in payment
of gain distributions are valued at market price or at net asset value,
whichever is lower, on the valuation date. Dividends and capital gain
distributions will generally be taxable to stockholders in the year in which
they are declared by the Corporation if paid before February 1 of the following
year. Distributions or dividends received by a stockholder will have the effect
of reducing the net asset value of the shares of the Corporation by the amount
of such distributions. If the net asset value of shares is reduced below a
stockholder's cost by a distribution, the distribution will be taxable as
described below even though it is in effect a return of capital.
TAXES: The Corporation intends to continue to qualify and elect to be
treated as a regulated investment company under the Code. As a regulated
investment company, the Corporation will generally be exempt from federal income
taxes on net investment income and capital gains that it distributes to
stockholders provided that at least 90% of its investment income and net
short-term capital gains are distributed to stockholders each year.
Dividends on Common or Preferred Stock representing net investment income
and distributions of net short-term capital gains are taxable to stockholders as
ordinary income, whether received in cash or invested in additional shares and,
to the extent designated as derived from the Corporation's dividend income that
would be eligible for the dividends received deduction if the Corporation were
not a regulated investment company, they are eligible, subject to certain
restrictions, for the 70% dividends received deduction for corporations.
Distributions of net capital gain (i.e., the excess of net long-term capital
gains over any net short-term capital losses) are taxable as long-term capital
gain, whether received in cash or invested in additional shares, regardless of
how long shares have been held by the stockholders. Such distributions are not
eligible for the dividends received deduction allowed to corporate stockholders.
Shareholders receiving distributions in the form of additional shares issued by
the Fund will be treated for federal income tax purposes as having received a
distribution in an amount equal to the fair market value on the date of
distribution of the shares received. Individual stockholders will be subject to
federal income tax on net capital gains at a maximum rate of 28% if designated
as derived from the Fund's capital gains from distributions of property held for
more than one year and at a maximum rate of 20% if designated as derived from
the Fund's capital gains from property held for more than eighteen months.
Any gain or loss realized upon a sale or redemption of Common or Preferred
Stock by a stockholder who is not a dealer in securities will generally be
treated as a long-term capital gain or loss if the shares have been held for
more than one year and otherwise as a short-term capital gain or loss.
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<PAGE>
Individual shareholders will be subject to federal income tax on net capital
gains at a maximum rate of 28% in respect of shares held for more than one year
and at a maximum rate of 20% in respect of shares held for more than eighteen
months. Net capital gain of a corporate shareholder is taxed at the same rate as
ordinary income. However, if shares on which a long-term capital gain
distribution has been received are subsequently sold or redeemed and such shares
have been held for six months or less, any loss realized will be treated as
long-term capital loss to the extent that it offsets the long-term capital gain
distribution. No loss will be allowed on the sale or other disposition of shares
of the Fund if, within a period beginning 30 days before the date of such sale
or disposition and ending 30 days after such date, the holder acquires (such as
through the Automatic Dividend Investment and Cash Purchase Plan), or enters
into a contract or option to acquire, securities that are substantially
identical to the shares of the Fund.
The Corporation will generally be subject to an excise tax of 4% on the
amount by which distributions to stockholders fall short of certain required
levels, such that income or gain is not taxable to stockholders in the calendar
year in which it was earned by the Corporation. Furthermore, dividends declared
in October, November or December payable to stockholders of record on a
specified date in such a month and paid in the following January will be treated
as having been paid by the Corporation and received by each stockholder in
December. Under this rule, therefore, stockholders may be taxed in one year on
dividends or distributions actually received in January of the following year.
The tax treatment of the Corporation and of stockholders under the tax laws
of the various states may differ from the federal tax treatment. Stockholders
are urged to consult their own tax advisers regarding specific questions as to
federal, state or local taxes.
THE CORPORATION IS REQUIRED TO WITHHOLD AND REMIT TO THE U.S. TREASURY 31%
OF TAXABLE DIVIDENDS AND OTHER REPORTABLE PAYMENTS PAID ON AN ACCOUNT IF THE
HOLDER OF THE ACCOUNT PROVIDES THE CORPORATION WITH EITHER AN INCORRECT TAXPAYER
IDENTIFICATION NUMBER OR NO NUMBER AT ALL OR FAILS TO CERTIFY THAT THE
STOCKHOLDER IS NOT SUBJECT TO SUCH WITHHOLDING. STOCKHOLDERS SHOULD BE AWARE
THAT, UNDER REGULATIONS PROMULGATED BY THE INTERNAL REVENUE SERVICE, THE
CORPORATION MAY BE FINED $50 ANNUALLY FOR EACH ACCOUNT FOR WHICH A CERTIFIED
TAXPAYER IDENTIFICATION NUMBER IS NOT PROVIDED. THE CORPORATION MAY CHARGE A
SERVICE FEE OF UP TO $50 FOR ACCOUNTS NOT HAVING A CERTIFIED TAXPAYER
IDENTIFICATION NUMBER. CERTIFICATES WILL NOT BE ISSUED UNLESS AN ACCOUNT IS
CERTIFIED.
DESCRIPTION OF INVESTMENT PLANS AND OTHER SERVICES
AUTOMATIC DIVIDEND INVESTMENT AND CASH PURCHASE PLAN
The Automatic Dividend Investment and Cash Purchase Plan is available for
any Common stockholder who wishes to purchase additional shares of the
Corporation's Common Stock with dividends or other cash payments on shares
owned, with cash dividends paid by other corporations in which is owned stock or
with cash funds. Details of the services offered under the Plan are given in the
Authorization Form appearing in this Prospectus. Under the Plan, stockholders
appoint the Corporation as their purchase agent to receive or invest such
dividends and cash funds forwarded by stockholders for their accounts in
additional shares of the Corporation's Common Stock (after deducting a service
charge), as described under 'Method of Purchase' below. Funds forwarded by
stockholders under the Plan should be made payable to Tri-Continental
Corporation and mailed to Tri-Continental Corporation, P.O. Box 9766,
Providence, RI 02940-9766. Checks for investment must be
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<PAGE>
in U.S. dollars drawn on a domestic bank. Credit card convenience checks and
third party checks, i.e., checks made payable to a party other than
Tri-Continental Corporation may not be used to purchase shares under this Plan.
Stockholders should direct all correspondence concerning the Plan to Seligman
Data Corp., 100 Park Avenue, New York, NY 10017. At present, a service fee of up
to a maximum of $2.00 will be charged for each cash purchase transaction. There
is no charge for Automatic Dividend Investment. As of March 31, 1998, 24,709
stockholders, owning 31,426,370 shares of Common Stock, were using the Plan. A
stockholder may choose one or more of the services under the Plan and is free to
change his choices (or terminate his participation) at any time by notifying
Seligman Data Corp. in writing. The Plan may be amended or terminated by written
notice to Planholders.
AUTOMATIC CHECK SERVICE
The Automatic Check Service enables an Automatic Dividend Investment and
Cash Purchase Planholder to authorize checks to be drawn on the stockholder's
regular checking account at regular intervals for fixed amounts to be invested
in additional shares of Common Stock for their account. An Authorization Form to
be used to start the Automatic Check Service is included in this Prospectus.
SHARE KEEPING SERVICE
Any stockholder may send certificates for shares of the Corporation's
Common Stock to Seligman Data Corp. to be placed in the stockholder's account.
Certificates should be sent to Seligman Data Corp., 100 Park Avenue, New York,
NY 10017, with a letter requesting that they be placed in the account. The
stockholder should not sign the certificates and they should be sent by
certified or registered mail. Return receipt is advisable; however, this may
increase mailing time. When a stockholder's certificates are received, the
shares will be entered in the stockholder's Tri-Continental account as 'book
credits' and shown on the Statement of Account the stockholder receives from
Seligman Data Corp. Stockholders using the Share Keeping Service should keep in
mind that they must have a stock certificate for delivery to a broker if they
wish to sell shares. A certificate will be issued on the stockholder's written
request to Seligman Data Corp., usually within two business days of the receipt
of the request, and sent to the stockholder. The time it takes for a letter of
request to arrive and for a certificate to be delivered by mail should be taken
into consideration by stockholders who may choose to use this service.
TAX-DEFERRED RETIREMENT PLANS
Shares of the Corporation may be purchased for:
-- Individual Retirement Accounts (IRAs);
-- Savings Incentive Match Plans for Employees (SIMPLE IRAs);
-- Simplified Employee Pension Plans (SEPs);
-- Section 401(k) Plans for corporations and their employees; and
-- Money Purchase Pension and Profit Sharing Plans for sole
proprietorships, partnerships and corporations.
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These types of plans may be established only upon receipt of a written
application form. The Corporation may register an IRA investment for which an
account application has not been received as on ordinary taxable account.
For more information, write Retirement Plan Services, Seligman Data Corp.,
100 Park Avenue, New York, NY 10017. You may telephone toll-free by dialing
(800) 445-1777 from all continental United States.
Investors Fiduciary Trust Company ('IFTC') acts as trustee and custodian
and performs other related services with respect to the Plans.
J. & W. SELIGMAN & CO. INCORPORATED MATCHED ACCUMULATION PLAN
The Manager has a Matched Accumulation Plan ('Profit-Sharing Plan') which
provides that, through payroll deductions which may be combined with matching
contributions and through any profit sharing distribution made by the Manager to
the Profit-Sharing Plan, eligible employees of the Manager, Seligman Financial
Services, Inc. and Seligman Services, Inc. may designate that the payroll
deductions and contributions made by the Manager and invested by the Plan
trustee, be invested in certain investment companies for which the Manager
serves as investment adviser. One such fund consists of Common Stock of the
Corporation purchased by the trustee as described under 'Method of Purchase.'
SELIGMAN DATA CORP. EMPLOYEES' THRIFT PLAN
Seligman Data Corp. has an Employees' Thrift Plan ('Thrift Plan') which
provides a systematic means by which savings, through payroll deductions, of
eligible employees of Seligman Data Corp. may be combined with matching
contributions made by the company and invested by the Plan trustee, in certain
investment companies for which the Manager serves as investment adviser, as
designated by the employee. One such fund consists of Common Stock of the
Corporation purchased by the trustee as described under 'Method of Purchase.'
METHOD OF PURCHASE
Purchases will be made by the Corporation from time to time on the New York
Stock Exchange or elsewhere to satisfy dividend and cash purchase investments
under the Automatic Dividend Investment and Cash Purchase Plan, tax-deferred
retirement plans, and the investment plans noted above. Purchases will be
suspended on any day when the closing price (or closing bid price if there were
no sales) of the Common Stock on the New York Stock Exchange on the preceding
trading day was higher than the net asset value per share (without adjustment
for the exercise of Warrants remaining outstanding). If on the dividend payable
date or the date shares are issuable to stockholders making Cash Purchase
investments under the Plan (the 'Issuance Date'), shares previously purchased by
the Corporation are insufficient to satisfy dividend or Cash Purchase
investments and on the last trading day immediately preceding the dividend
payable date or the Issuance Date the closing sale or bid price of the Common
Stock is lower than or the same as the net asset value per share, the
Corporation will continue to purchase shares until a number of shares sufficient
to cover all investments by stockholders has been purchased or the closing sale
or bid price of the Common Stock becomes higher than the net asset value, in
which case the Corporation will issue the necessary additional shares. If on the
last trading date immediately preceding the dividend payable date or Issuance
Date, the closing sale or bid
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price of the Common Stock was higher than the net asset value per share, and if
shares of the Common Stock previously purchased on the New York Stock Exchange
or elsewhere are insufficient to satisfy dividend or Cash Purchase investments,
the Corporation will issue the necessary additional shares from authorized but
unissued shares of the Common Stock.
Shares will be issued on the dividend payable date or the Issuance Date at
a price equal to the lower of (i) the closing sale or bid price, plus
commission, of the Common Stock on the New York Stock Exchange on the
ex-dividend date or Issuance Date or (ii) the greater of the net asset value per
share of the Common Stock on such trading day (without adjustment for the
exercise of Warrants remaining outstanding) and 95% of the closing sale or bid
price of the Common Stock on the New York Stock Exchange on such trading day. In
the past, the Common Stock ordinarily has been priced in the market at less than
net asset value per share. The Corporation may change the price at which shares
of its Common Stock may be purchased from it for the Plans, if the Board of
Directors determines it to be desirable, but the Board may not authorize the
issuance of shares of Common Stock at a price less than net asset value without
prior specific approval of stockholders or of the Securities and Exchange
Commission.
The net proceeds to the Corporation from the sale of any shares of Common
Stock to the Plan will be added to its general funds and will be available for
additional investments and general corporate purposes. The Manager anticipates
that investment of any proceeds, in accordance with the Corporation's investment
objective and policies, will take up to thirty days from their receipt by the
Corporation, depending on market conditions and the availability of appropriate
securities, but in no event will such investment take longer than six months.
Pending such investment in accordance with the Corporation's objectives and
policies, the proceeds will be held in U.S. Government Securities (which term
includes obligations of the United States Government, its agencies or
instrumentalities) and other short-term money market instruments.
Stockholders participating in the Automatic Dividend Investment and Cash
Purchase Plan who wish to terminate their participation in the Plan and whose
shares are held under the Plan in book credit form may choose to receive a
certificate for all or a part of their shares or to have all or a part of their
shares sold for them by the Corporation and to retain unsold shares in book
credit form or receive a certificate for any shares not sold. Instructions must
be signed by all registered stockholders and should be sent to Seligman Data
Corp., 100 Park Avenue, New York, NY 10017. Stockholders who elect to have
shares sold will receive the proceeds from the sale, less any brokerage
commissions. Only participants whose shares are held in book credit form may
elect upon termination of their participation in the Plan to have shares sold in
the above manner. Whenever the value of the shares being sold is $50,000 or
more, or the proceeds are to be paid or mailed to an address or payee different
from that on our records, the signature of all stockholders must be guaranteed
by an eligible financial institution including, but not limited to, the
following: banks, trust companies, credit unions, securities brokers and
dealers, savings and loan associations and participants in the Securities
Transfer Association Medallion Program (STAMP), the Stock Exchanges Medallion
Program ('SEMP') and the New York Stock Exchange Medallion Signature Program
('MSP'). Notarization by a notary public is not an acceptable signature
guarantee. The Corporation reserves the right to reject a signature guarantee
where it is believed that the Corporation will be placed at risk by accepting
such guarantee.
19
<PAGE>
SYSTEMATIC WITHDRAWAL PLAN
This Plan is available for stockholders who wish to receive fixed payments
from their investment in the Common Stock in any amount at specified regular
intervals. A Plan may be started with shares of the Corporation's Common Stock
with a market value of $5,000 or more. Shares must be held in the stockholder's
account as book credits. Seligman Data Corp. acts for stockholders, makes
payments to them in specified amounts on the 15th day of each month designated,
and maintains their accounts. There is a charge by the agent of $1.00 per
withdrawal payment for this service, which charge may be changed from time to
time.
Payments under the Withdrawal Plan will be made by selling exactly enough
full and fractional shares of Common Stock to cover the amount of the designated
withdrawal. Sales may be made on the New York Stock Exchange, to the agent or a
trustee for one of the other Plans, or elsewhere. Payments from sales of shares
will reduce the amount of capital at work and dividend earning ability, and
ultimately may liquidate the investment. Sales of shares may result in gain or
loss for income tax purposes. Withdrawals under this Plan or any similar Plan of
any other investment company, concurrent with purchases of shares of the Common
Stock or of shares of any other investment company, will ordinarily be
disadvantageous to the Planholder because of the payment of duplicative
commission or sales loads.
STOCKHOLDER INFORMATION
Seligman Data Corp. maintains books and records for all of the Plans, and
confirms transactions to Stockholders. To insure prompt delivery of checks,
account statements and other information, Stockholders should notify Seligman
Data Corp. immediately, in writing, of any address changes. Stockholders will be
sent reports quarterly regarding the Corporation. General information about the
Corporation, may be requested by writing the Corporate Communications/Investor
Relations Department, J. & W. Seligman & Co. Incorporated, 100 Park Avenue, New
York, NY 10017 or by telephoning the Corporate Communications/Investor Relations
Department toll-free at (800) 221-7844 from all continental United States,
except New York or (212) 850-1864 in New York State and in the greater New York
City area. Information about a Stockholder account (other than a retirement plan
account), may be requested by writing Stockholder Services, Seligman Data Corp.,
at the same address or by toll-free telephone by dialing (800) 874-1092 from all
continental United States or 212-682-7600 outside the continental United States.
For information about a retirement account, call Retirement Plan Services
toll-free at (800) 445-1777 or write Retirement Plan Services, Seligman Data
Corp. at the above address. Seligman Data Corp. may be telephoned Monday through
Friday (except holidays) between the hours of 8:30 a.m. and 6:00 p.m. Eastern
time, and calls will be answered by a service representative.
24-HOUR TELEPHONE ACCESS IS AVAILABLE BY DIALING (800) 622-4597 (WITHIN THE
CONTINENTAL UNITED STATES) ON A TOUCHTONE PHONE, WHICH PROVIDES INSTANT ACCESS
TO PRICE, ACCOUNT BALANCE, MOST RECENT TRANSACTION AND OTHER INFORMATION. IN
ADDITION, ACCOUNT STATEMENTS AND FORM 1099-DIV MAY BE ORDERED.
ISSUANCE OF SHARES IN CONNECTION WITH ACQUISITIONS
The Corporation may issue shares of its Common Stock in exchange for the
assets of another investing company in transactions in which the number of
shares of Common Stock of the Corporation
20
<PAGE>
to be delivered will be generally determined by dividing the current value of
the seller's assets by the current per share net asset value or market price on
the New York Stock Exchange of the Common Stock of the Corporation, or by an
intermediate amount. In such acquisitions, the number of shares of the
Corporation's Common Stock to be issued will not be determined on the basis of
the market price of such Common Stock if such price is lower than its net asset
value per share, except pursuant to an appropriate order of the Securities and
Exchange Commission or approval by stockholders of the Corporation, as required
by law. The Corporation is not presently seeking to acquire the assets of any
investing company, but it may acquire the assets of companies from time to time
in the future.
Some or all of the stock so issued may be sold from time to time by the
recipients or their stockholders through brokers in ordinary transactions on
stock exchanges at current market prices. The Corporation has been advised that
such sellers may be deemed to be underwriters as that term is defined in the
1933 Act.
ADDITIONAL INFORMATION
During 1997, the Corporation had transactions in the ordinary course of
business with firms and companies of which one or more directors and officers
was a director and/or officer of the Corporation, and it is expected that the
Corporation will continue to have transactions of such nature during the current
year.
21
<PAGE>
TABLE OF CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
The table of contents of the SAI is as follows:
TABLE OF CONTENTS
<TABLE>
<S> <C>
Additional Investment Objectives and Policies................................................................ 2
Directors and Officers....................................................................................... 4
Management................................................................................................... 9
Experts...................................................................................................... 9
Custodian, Stockholder Service Agent and Dividend Paying Agent............................................... 9
Brokerage Commissions........................................................................................ 9
Incorporation of Financial Statements by Reference........................................................... 10
Independent Auditors' Report on Financial Highlights --
Senior Securities -- $2.50 Cumulative Preferred Stock...................................................... 11
Appendix..................................................................................................... 12
</TABLE>
22
<PAGE>
<TABLE>
<S> <C>
Tri-Continental Corporation AUTHORIZATION FORM
an investment you can live with FOR
To: Seligman Data Corp. AUTOMATIC DIVIDEND INVESTMENT
P.O. Box 3947 AND CASH PURCHASE PLAN
New York, New York 10008-3947 AUTOMATIC DIVIDEND INVESTMENT
AUTOMATIC INVESTMENT OF OTHER
CORPORATIONS' DIVIDENDS
CASH PURCHASE PLAN
AUTOMATIC CHECK SERVICE
Date ....................................
</TABLE>
Gentlemen:
I own shares of Tri-Continental Corporation Common Stock registered as
shown below:
ACCOUNT REGISTRATION
<TABLE>
<S> <C>
______________________________________________________________________________________________
Stockholder's Name (print or type) Stockholder's Signature*
______________________________________________________________________________________________
Co-Holder's Name Co-Holder's Signature*
______________________________________________________________________________________________
Address (street and number) Taxpayer Identification Number
______________________________________________________________________________________________
City State Zip Code Stockholder Account Number, if known
</TABLE>
* If shares are held or to be held in more than one name, all must sign, and
plural pronouns will be implied in the text. In the case of co-holders, a
joint tenancy with right of survivorship will be presumed unless otherwise
specified.
Under penalties of perjury I certify that the number shown on this form is my
correct Taxpayer Identification Number (Social Security Number) and that I am
not subject to backup withholding either because I have not been notified that I
am subject to backup withholding as a result of failure to report all interest
or dividends, or the Internal Revenue Service has notified me that I am no
longer subject to backup withholding. I certify that to my legal capacity to
purchase or sell shares of the Corporation for my own Account, or for the
Account of the organization named above. I have received a current Prospectus of
the Corporation and appoint Seligman Data Corp. as my agent to act in accordance
with my instructions herein.
<TABLE>
<S> <C>
- ------------------ ------------------------------------------------------------------------------------------
Date Stockholder's Signature
</TABLE>
I have read the Terms and Conditions of the Automatic Dividend Investment
and Cash Purchase Plan and the current Prospectus, a copy of which I have
received, and I wish to establish a Plan to use the Services checked below:
SERVICE(S) DESIRED
[ ] AUTOMATIC INVESTMENT OF TRI-CONTINENTAL DIVIDENDS
I wish to have my quarterly dividends invested in additional shares,
and distributions from gains paid as follows:
[ ] Credited to my account in additional full and fractional shares.
[ ] Credited 75% to my account in shares and 25% paid to me in cash.
[ ] AUTOMATIC INVESTMENT OF OTHER CORPORATION'S DIVIDENDS
I intend to give orders for the payment of cash dividends from other
corporations to be invested in shares of Tri-Continental Common Stock
for my account.
Note: Checks in payment of dividends from other corporations should
indicate your name and Tri-Continental account number. The checks
should be made payable to the order of Tri-Continental Corporation and
be mailed to Seligman Data Corp., P.O. Box 3936, New York, NY
10008-3936.
[ ] CASH PURCHASES
I intend to send funds from time to time to be invested in shares of
Tri-Continental Common Stock for my account.
Note: Your checks should indicate your name and Tri-Continental account
number. Make all checks payable to Tri-Continental Corporation and mail
to Seligman Data Corp., P.O. Box 3947, New York, NY 10008-3947.
[ ] AUTOMATIC CHECK SERVICE
I have completed the Authorization Form to have pre-authorized checks
drawn on my regular checking account at regular intervals for
investment in shares of Tri-Continental Common Stock.
5/98
23
<PAGE>
<TABLE>
<S> <C>
Tri-Continental Corporation AUTHORIZATION FORM
an investment you can live with FOR
AUTOMATIC CHECK SERVICE
</TABLE>
To start your Automatic Check Service, fill out this form and forward it with an
unsigned bank check from your regular checking account (marked 'void') to:
Seligman Data Corp.
P.O. Box 3947
New York, New York 10008-3947
Date ......................
Gentlemen:
I own shares of Tri-Continental Corporation Common Stock, registered as
shown below, which are entered in the Automatic Dividend Investment and Cash
Purchase Plan.
1. Stockholder Account Number (if known)________________________________________
2. AUTOMATIC CHECK SERVICE
Please arrange with my bank to draw pre-authorized checks on my regular
checking account and invest $___________________________ in shares of
Tri-Continental Common Stock every:
[ ] month [ ] 3 months
I have completed the 'Bank Authorization to Honor Pre-Authorized Checks'
which appears below and have enclosed one of my bank checks marked 'void.'
I understand that my checks will be invested on the fifth day of the month
and that I must remember to deduct the amount of my investment as it is
made from my checking account balance.
BANK AUTHORIZATION TO HONOR PRE-AUTHORIZED CHECKS
To:_____________________________________________________________________________
(Name of Bank)
________________________________________________________________________________
(Address of Bank or Branch, Street, City, State and Zip)
Please honor pre-authorized checks drawn on my account by Seligman Data Corp.,
100 Park Avenue, New York, NY 10017, to the order of Tri-Continental
Corporation, and charge them to my checking account. Your authority to do so
shall continue until you receive written notice from me revoking it. You may
terminate your participation in this arrangement at any time by written notice
to me. I agree that your rights with respect to each pre-authorized check shall
be the same as if it were a check drawn and signed by me. I further agree that
should any such check be dishonored, with or without cause, intentionally or
inadvertently, you shall be held under no liability whatsoever.
<TABLE>
<S> <C>
____________________________________________________________________________________________________________
Checking Account No.
____________________________________________________________________________________________________________
Name(s) of Depositor(s) -- Please Print Signature(s) of Depositor(s) -- As Carried by Bank
____________________________________________________________________________________________________________
Address (Street) City State Zip Code
</TABLE>
5/98
24
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
25
<PAGE>
TERMS AND CONDITIONS
The Automatic Dividend Investment and Cash Purchase Plan provides
Tri-Continental Common Stockholders with four ways to add to their investments:
1) with Tri-Continental dividends and distributions, 2) with cash dividends from
other corporations, 3) with cash payments, in any amount at any time, and 4)
with cash provided by pre-authorized checks through the Automatic Check Service.
A Planholder may use any or all of these Services, subject to the following
terms and conditions:
1. Seligman Data Corp. ('SDC'), as Plan service agent, will maintain
accounts and confirm to Planholders, as soon as practicable after each
investment, the number of shares of Common Stock acquired and credited to the
accounts and the cost. Tri-Continental Corporation (the 'Corporation'), as
purchase agent, will purchase shares for Planholders. All checks for dividends
payable by other corporations or for cash purchase payments sent by Planholders
for investment in additional shares of Tri-Continental Common Stock should be
drawn to the order of Tri-Continental Corporation and mailed to Seligman Data
Corp., P.O. Box 3947, New York, NY 10008-3947.
2. Funds received by the Corporation for a Planholder will be combined with
funds of other Planholders and those funds may be combined with funds available
under the plans for the purchase of Tri-Continental Common Stock in order to
minimize brokerage commissions on shares purchased. Shares will be purchased in
accordance with the current Prospectus. Dividends from other corporations and
purchase cash received from Planholders or through the Automatic Check Service
will be invested at least once each 30 days.
3. The cost of shares acquired for each Plan will be the average cost,
including brokerage commissions and any other costs of acquisition, of all
shares acquired for all Planholders in connection with a particular investment.
4. No stock certificates will be delivered for shares acquired unless the
Plan account is terminated or the Planholder requests their delivery by writing
to SDC. The shares acquired will be held in each Planholder's account as book
credits.
5. Certificates held by a Planholder, or subsequently received, may be sent
to SDC for credit to a Plan account. A certificate for any full shares held in a
Plan account will be issued at a Planholder's request. The time required to
obtain a certificate to sell through a broker, or for other purposes, will be
that needed to send a written request to SDC to withdraw the certificate
(normally two business days) and to mail the certificate to the Planholder
through the U.S. Postal Service.
6. A maximum service charge of $2.00 will be deducted before each
investment is made for a Plan account. There is no charge for Automatic Dividend
Investment.
7. Applications for the Automatic Check Service are subject to acceptance
by the Planholder's bank and SDC. SDC will prepare Automatic Check Service
checks with the same magnetic ink numbers that are on a Planholder's check and
will arrange with the Planholder's bank to start the Service in accordance with
the Planholder's instructions. A minimum of 30 days from the date of receipt of
an application by SDC is required to contact the bank and initiate the Service.
If for any reason the bank is unable to honor a pre-authorized check request,
the Planholder will be notified promptly.
Shares with a market value of at least two times the amount of the
authorized checks must be held as book credits for the Planholder's account by
SDC. If any check is dishonored or if the value of shares held by SDC in an
account falls below the required minimum, the Service may be suspended. The
Service may be reinstated upon written request by the Planholder including an
indication that the cause of the interruption has been corrected.
If a Planholder's check is not honored by the Planholder's bank at any
time, SDC is authorized to sell exactly enough full and fractional shares from
the Planholder's account to equal the amount of the dishonored check.
8. A Planholder or SDC may terminate a Plan account at any time upon notice
in writing before the record date of a dividend or distribution by
Tri-Continental. A Plan account will terminate automatically if the Planholder
sells or transfers all of the shares in the Plan account. If a Plan account is
terminated, a certificate for the full shares held may be issued and sent to the
Planholder, and any fractional shares may be liquidated at the Planholder's
request. Terminating Planholders may elect to have all or part of their shares
sold by the Corporation, if their shares are held in book credit form. If a Plan
account is terminated between the record and payment dates of a dividend, the
dividend payment will be made in cash.
9. In acting under this Plan, the Corporation and SDC will be liable only
for willful misfeasance or gross negligence.
10. A Planholder may adopt or suspend one or more of the Plan Services by
sending a revised Authorization Form or notice in writing to SDC.
11. All additional shares registered in a Planholder's name which are
acquired under one or more of the Plan Services or by other means will
participate automatically in each of the Plan services elected.
5/98
26
<PAGE>
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Tri-Continental Corporation
AN INVESTMENT YOU CAN LIVE WITH
100 Park Avenue
New York, New York 10017
INVESTMENT MANAGER
J. & W. Seligman & Co.
Incorporated
100 Park Avenue
New York, New York 10017
STOCKHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, New York 10017
PORTFOLIO SECURITIES CUSTODIAN
Investors Fiduciary Trust Company
801 Pennsylvania
Kansas City, Missouri 64105
GENERAL COUNSEL
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
------------------------------------
Listed on the
New York Stock Exchange
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CETRI 1 5/98
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Tri-Continental Corporation
AN INVESTMENT YOU CAN LIVE WITH
A MANAGEMENT TYPE
DIVERSIFIED, CLOSED-END
INVESTMENT COMPANY
------------------------------------
COMMON STOCK
($.50 PAR VALUE)
------------------------------------
PROSPECTUS
MAY 1, 1998
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