SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
Tri-Continental Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Not Applicable
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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N/A
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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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(4) Proposed maximum aggregate value of transaction:
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[ ] Fee paid previously with preliminary materials:
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[ ] 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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(4) Date Filed:
<PAGE>
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 20, 1999
To the Stockholders:
The 69th Annual Meeting of Stockholders (the "Meeting") of Tri-Continental
Corporation, a Maryland corporation (the "Corporation"), will be held at the
Four Seasons Resort, 2800 South Ocean Boulevard, Palm Beach, Florida 33480 on
May 20, 1999 at 10:00 A.M., for the following purposes:
(1) To elect four Directors;
(2) To act on a proposal to ratify the selection of Deloitte & Touche LLP
as auditors of the Corporation for 1999;
(3) To consider an amendment to the Charter of the Corporation to increase
the number of authorized shares of Common Stock; and
(4) To transact such other business as may properly come before the
Meeting or any adjournment thereof, including acting upon the three
Stockholder proposals presented under the heading "Other Matters" in
the Proxy Statement accompanying this Notice, if those proposals are
brought before the Meeting;
all as set forth in the Proxy Statement accompanying this Notice.
The minute book of the Corporation will be available at the Meeting for
inspection by Stockholders.
The close of business on March 18, 1999 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 thereof.
By order of the Board of Directors,
/s/Frank J. Nasta
------------------------------
Secretary
Dated: New York, New York, April 19, 1999
--------
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed Proxy Card, date and
sign it, and return 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
mailing your Proxy promptly. A Proxy will not be required for admission to the
Meeting.
<PAGE>
April 19, 1999
Tri-Continental Corporation
100 Park Avenue, New York, New York 10017
PROXY STATEMENT
for the
Annual Meeting of Stockholders to be held on May 20, 1999
This Proxy Statement is furnished to you in connection with the
solicitation of Proxies by the Board of Directors of Tri-Continental Corporation
("Tri-Continental" or the "Corporation") to be used at the 69th Annual Meeting
of Stockholders (the "Meeting") to be held in Palm Beach, Florida on May 20,
1999.
If the accompanying form of Proxy is executed properly and returned, shares
represented by it will be voted at the Meeting. If you give instructions, your
shares will be voted in accordance with your instructions. If you give no
instructions and return your signed Proxy, your shares will be voted (i) for the
election of four Directors, (ii) for the ratification of selection of auditors,
(iii) for the approval of an amendment to the Charter of the Corporation to
increase the number of authorized shares of Common Stock, (iv) against all
Stockholder proposals and, at the discretion of the Proxy holders, on any other
matter that may properly have come before the Meeting or any adjournment. You
may revoke your Proxy or change it by written notice to the Corporation
(Attention: Secretary) or by notice at the Meeting at any time prior to the time
it is voted.
The close of business on March 18, 1999 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 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 116,605,918 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.
In the event that a quorum is not represented at the Meeting or, even if a
quorum is so represented, in the event that sufficient votes in favor of any
management proposal are not received by May 20, 1999, the persons named as
Proxies may propose and vote for one or more adjournments of the Meeting if a
quorum is not represented or, if a quorum is so represented, only with respect
to such management proposal, with no notice other than an announcement at the
Meeting, and further solicitation may be made. Shares represented by Proxies
indicating a vote against a management proposal will be voted against
adjournment in respect of that proposal.
2
<PAGE>
The Corporation's manager is J. & W. Seligman & Co. Incorporated (the
"Manager"). The Corporation's stockholder service agent is Seligman Data Corp.
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, if any, to any Stockholder upon
request to Seligman Data Corp. at 1-800-221-2450.
It is expected that the Notice of Annual Meeting, Proxy Statement and form
of Proxy will first be mailed to Stockholders on or about April 19, 1999.
A. Election of Directors
------------------------
(Proposal 1)
There are twelve Directors presently in office. The Board is currently
divided into three classes, and the members of each class hold office for a term
of three years unless elected in the interim. The term of one class expires in
each year.
At the Meeting this year, four Directors are to be elected. Messrs. John E.
Merow, James C. Pitney and James N. Whitson and Ms. Betsy S. Michel, each of
whose term will expire at the 1999 Annual Meeting, have been recommended by the
Director Nominating Committee of the Board of Directors of the Corporation for
election to the class whose term will expire in 2002.
It is the intention of the persons named in the accompanying form of Proxy
to nominate and to vote for the election of Messrs. Merow, Pitney and Whitson
and Ms. Michel. Mr. Merow has been a Director of the Corporation since 1991, Mr.
Pitney has been a Director of the Corporation since 1981, Mr. Whitson has been a
Director of the Corporation since 1993 and Ms. Michel has been a Director of the
Corporation since 1985. All nominees were last elected by Stockholders at the
1996 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, Proxies will be
voted for the persons the Board of Directors recommends.
Background information regarding Messrs. Merow, Pitney and Whitson and Ms.
Michel, as well as the other Directors of the Corporation, follows.
3
<PAGE>
Principal Occupation and Other Information
<TABLE>
<CAPTION>
Securities
The nominees designated by asterisk (*) are Beneficially
Expiration of "interested persons" of the Corporation (as that Owned, Directly or
Name, Period Served as Term if Elected term is defined in the Investment Company Act of Indirectly, as of
a Director and (Age) as a Director 1940, as amended) because of their stated associations. March 18, 1999
-------------------- ------------- ------------------------------------------------------- --------------
<S> <C> <C> <C>
John E. Merow 2002 Retired Chairman and Senior Partner, Sullivan & Cromwell, 14,534 Common
1991 to Date law firm, New York, NY. Mr. Merow is a Director or Trustee Shares
(69) of each of the Seligman Group of investment companies.+ He
is also a Director of Commonwealth Industries, Inc., the
[PHOTO] Foreign Policy Association, the Municipal Art Society of New
York, and the United States Council for International
Business; Chairman of the American Australian Association;
Chairman of the New York Presbyterian Healthcare Network,
Inc. and a Trustee of the New York Presbyterian Hospital;
Vice Chairman of the United States-New Zealand Council; and
a Member of the American Law Institute and the Council on
Foreign Relations.
Betsy S. Michel 2002 Attorney, Gladstone, NJ. Ms. Michel is a Director or Trustee 6,954 Common
1985 to Date of each of the Seligman Group of investment companies.+ She Shares
(56) is also a Trustee of The Geraldine R. Dodge Foundation; and
Chairman of the Board of Trustees of St. George's School
[PHOTO] (Newport, RI). She was formerly a Director of The National
Association of Independent Schools (Washington, DC).
</TABLE>
4
<PAGE>
Principal Occupation and Other Information
<TABLE>
<CAPTION>
Securities
The nominees designated by asterisk (*) are Beneficially
Expiration of "interested persons" of the Corporation (as that Owned, Directly or
Name, Period Served as Term if Elected term is defined in the Investment Company Act of Indirectly, as of
a Director and (Age) as a Director 1940, as amended) because of their stated associations. March 18, 1999
-------------------- ------------- ------------------------------------------------------- --------------
<S> <C> <C> <C>
James C. Pitney 2002 Retired Partner, Pitney, Hardin, Kipp & Szuch, law firm, 33,359 Common
1981 to Date Morristown, NJ. Mr. Pitney is a Director or Trustee of each Shares
(72) of the Seligman Group of investment companies.+ He was
formerly a Director of Public Service Enterprise Group.
[PHOTO]
James N. Whitson 2002 Retired Executive Vice President and Chief Operating Officer 8,249 Common
1993 to Date of Sammons Enterprises, Inc., Dallas, TX. Mr. Whitson is a Shares
(64) Director or Trustee of each of the Seligman Group of
investment companies.+ He is also a Consultant to and
[PHOTO] Director of Sammons Enterprises, Inc.; and a Director of
C-SPAN and CommScope, Inc. He was formerly a Director of Red
Man Pipe and Supply Company.
</TABLE>
5
<PAGE>
Other Directors
The other Directors of the Corporation whose terms will not expire in 1999
are:
Principal Occupation and Other Information
<TABLE>
<CAPTION>
Securities
The nominees designated by asterisk (*) are Beneficially
Expiration of "interested persons" of the Corporation (as that Owned, Directly or
Name, Period Served as Term if Elected term is defined in the Investment Company Act of Indirectly, as of
a Director and (Age) as a Director 1940, as amended) because of their stated associations. March 18, 1999
-------------------- ------------- ------------------------------------------------------- --------------
<S> <C> <C> <C>
John R. Galvin 2000 Dean, Fletcher School of Law and Diplomacy at Tufts 770 Common
1995 to Date University, Medford, MA. General Galvin is Director or Shares
(69) Trustee of each of the Seligman Group of investment
companies.+ He is also Chairman Emeritus of the American
Council on Germany; a Governor of the Center for Creative
Leadership; and a Director of Raytheon Co., the National
Defense University, and the Institute for Defense Analyses.
He was formerly a Director of USLIFE Corporation;
Ambassador, U.S. State Department for negotiations in
Bosnia; Distinguished Policy Analyst at Ohio State
University; and Olin Distinguished Professor of National
Security Studies at the United States Military Academy. From
June 1987 to June 1992, General Galvin was the Supreme
Allied Commander, Europe and the Commander-in-Chief, United
States European Command.
</TABLE>
6
<PAGE>
Principal Occupation and Other Information
<TABLE>
<CAPTION>
Securities
The nominees designated by asterisk (*) are Beneficially
Expiration of "interested persons" of the Corporation (as that Owned, Directly or
Name, Period Served as Term if Elected term is defined in the Investment Company Act of Indirectly, as of
a Director and (Age) as a Director 1940, as amended) because of their stated associations. March 18, 1999
-------------------- ------------- ------------------------------------------------------- --------------
<S> <C> <C> <C>
Alice S. Ilchman 2001 Retired President, Sarah Lawrence College, Bronxville, NY. 6,186 Common
1990 to Date Dr. Ilchman is a Director or Trustee of each of the Seligman Shares
(64) Group of investment companies.+ She is also Chairman of The
Rockefeller Foundation and a Trustee of The Committee for
Economic Development. She was formerly a Trustee of The
Markle Foundation; and a Director of the International
Research & Exchange Board and New York Telephone Company.
Frank A. McPherson 2001 Retired Chairman of the Board and Chief Executive Officer of 6,613 Common
1995 to Date Kerr-McGee Corporation, Oklahoma City, OK. Mr. McPherson is Shares
(65) a Director or Trustee of each of the Seligman Group of
investment companies.+ He is also a Director of
Kimberly-Clark Corporation, Bank of Oklahoma Holding
Company, Baptist Medical Center, Oklahoma Chapter of the
Nature Conservancy, Oklahoma Medical Research Foundation,
and National Boys and Girls Clubs of America; and President
of the Oklahoma Foundation for Excellence in Education. He
was formerly Chairman of the Oklahoma City Chamber of
Commerce and the Oklahoma City Public Schools Foundation; a
Director of the Federal Reserve System's Kansas City Reserve
Bank; and a Member of The Business Roundtable.
</TABLE>
7
<PAGE>
Principal Occupation and Other Information
<TABLE>
<CAPTION>
Securities
The nominees designated by asterisk (*) are Beneficially
Expiration of "interested persons" of the Corporation (as that Owned, Directly or
Name, Period Served as Term if Elected term is defined in the Investment Company Act of Indirectly, as of
a Director and (Age) as a Director 1940, as amended) because of their stated associations. March 18, 1999
-------------------- ------------- ------------------------------------------------------- --------------
<S> <C> <C> <C>
William C. Morris* 2000 Chairman, J. & W. Seligman & Co. Incorporated, New York, NY. 86,199 Common
1988 to Date Mr. Morris is Chairman and Chief Executive Officer of each Shares
(61) of the Seligman Group of investment companies;+ Chairman of
Seligman Advisors, Inc. and Seligman Services, Inc.; and a
Director of Seligman Data Corp. He is also Chairman of Carbo
Ceramics Inc.; and a Director of Kerr-McGee Corporation.
James Q. Riordan 2000 Director, various organizations, Stuart, FL. Mr. Riordan is 179,159 Common
1989 to Date a Director or Trustee of each of the Seligman Group of Shares
(71) investment companies.+ He is also a Director or Trustee of
The Houston Exploration Company, The Brooklyn Museum,
KeySpan Energy Corporation, The Committee for Economic
Development, and Public Broadcasting Service (PBS). He was
formerly Vice Chairman of Mobil Corporation; Co-Chairman of
the Policy Council of the Tax Foundation; a Director and
President of Bekaert Corporation; and a Director of Tesoro
Petroleum Companies, Inc. and Dow Jones & Company, Inc.
</TABLE>
8
<PAGE>
Principal Occupation and Other Information
<TABLE>
<CAPTION>
Securities
The nominees designated by asterisk (*) are Beneficially
Expiration of "interested persons" of the Corporation (as that Owned, Directly or
Name, Period Served as Term if Elected term is defined in the Investment Company Act of Indirectly, as of
a Director and (Age) as a Director 1940, as amended) because of their stated associations. March 18, 1999
-------------------- ------------- ------------------------------------------------------- --------------
<S> <C> <C> <C>
Richard R. Schmaltz* 2001 Director and Managing Director, Director of Investments, J. 3,131 Common
1997 to Date & W. Seligman & Co. Incorporated, New York, NY. Mr. Schmaltz Shares
(58) is a Director or Trustee of each of the Seligman Group of
investment companies,+ with the exception of Seligman Cash
Management Fund, Inc. He is also a Director of Seligman
Henderson Co. and a Trustee Emeritus of Colby College. He
was formerly Director, Investment Research at Neuberger &
Berman from May 1993 to September 1996.
Robert L. Shafer 2000 Retired Vice President of Pfizer Inc., New York, NY. Mr. 3,000 Common
1991 to Date Shafer is a Director or Trustee of each of the Seligman Shares
(66) Group of investment companies.+ He was formerly a Director
of USLIFE Corporation.
</TABLE>
9
<PAGE>
Principal Occupation and Other Information
<TABLE>
<CAPTION>
Securities
The nominees designated by asterisk (*) are Beneficially
Expiration of "interested persons" of the Corporation (as that Owned, Directly or
Name, Period Served as Term if Elected term is defined in the Investment Company Act of Indirectly, as of
a Director and (Age) as a Director 1940, as amended) because of their stated associations. March 18, 1999
-------------------- ------------- ------------------------------------------------------- --------------
<S> <C> <C> <C>
Brian T. Zino* 2001 Director and President, J. & W. Seligman & Co. Incorporated, 28,462 Common
1993 to Date New York, NY. Mr. Zino is President of each of the Seligman Shares
(46) Group of investment companies,+ with the exception of
Seligman Quality Municipal Fund, Inc. and Seligman Select
Municipal Fund, Inc. He is also a Director or Trustee of
each of the Seligman Group of investment companies; Chairman
of Seligman Data Corp.; and a Director of Seligman Advisors,
Inc. and Seligman Services, Inc. He is also a Member of the
Board of Governors of the Investment Company Institute and a
Director of ICI Mutual Insurance Company.
</TABLE>
+ The Seligman Group of investment companies consists of the Corporation,
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., 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.
10
<PAGE>
Unless otherwise indicated, Directors have sole voting and investment power
with respect to shares shown. Mr. Morris shares voting and investment power with
respect to 16,638 shares. At March 18, 1999, all Directors and Officers of the
Corporation as a group owned beneficially less than 1% of the Corporation's
Common Stock.
Ms. Michel disclaims beneficial ownership of 5,457 shares in two trusts
over which she serves as co-trustee. Mr. Morris disclaims beneficial ownership
of 31,135 shares in three trusts for his children. Mr. Zino disclaims beneficial
ownership of 1,098 shares registered in his wife's name.
As of January 1, 1998, Mr. Richard R. Schmaltz bought 500 Class A common
shares and 1,000 Class B common shares of the Manager from the Manager, each at
a price of $239.48 per share. As of January 1, 1999, Mr. Schmaltz bought 1,000
Class B common shares of the Manager from the Manager, each at a price of
$307.53 per share.
The Board of Directors met six times during 1998. The standing committees
of the Board include the Board Operations Committee, Audit Committee and
Director Nominating Committee. These Committees are comprised solely of
Directors who are not "interested persons" of the Corporation as that term is
defined in the Investment Company Act of 1940, as amended (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 four times in 1998. Members of the Committee are Messrs. Riordan
(Chairman), Galvin, McPherson, Merow, Pitney, Shafer and Whitson, Dr. Ilchman
and Ms. Michel.
Audit Committee. This Committee recommends the independent public
accountants for selection as auditors by the Board and Stockholder approval
annually. In addition, it reviews, with the auditors and such other persons as
it determines, (a) the scope of audit, (b) accounting and financial internal
controls, (c) quality and adequacy of the accounting staff and (d) reports of
the auditors. The Committee comments to the Board when warranted and at least
annually. It is directly available to the auditors and officers of the
Corporation for consultation on audit, accounting and related financial matters.
The Committee met twice in 1998. Members of this Committee are Messrs. Whitson
(Chairman), Galvin, McPherson and Merow and Ms. Michel.
Director Nominating Committee. This Committee recommends to the Board
persons to be nominated for election as Directors by the Stockholders and
selects and proposes nominees for election by the Board between Annual Meetings.
The Committee will consider suggestions from
11
<PAGE>
Stockholders submitted in writing to the Secretary of the Corporation. The
Committee met twice in 1998. Members of this Committee are Messrs. Pitney
(Chairman), Riordan and Shafer and Dr. Ilchman.
Each Director attended at least 75% of the aggregate number of meetings of
the Board of Directors and of the committees on which he or she serves.
Executive Officers of the Corporation
Information with respect to Executive Officers, other than Messrs. Morris
and Zino, is as follows:
Position with Corporation and Principal
Name Age Occupation During Past Five Years
- --------------------------------------------------------------------------------
Charles C. Smith, Jr. 42 Vice President and Portfolio Manager of
the Corporation since December 1994. Mr.
Smith is a Managing Director of the
Manager, a position he has held since
January, 1994. He is Vice President and
Portfolio Manager of Seligman Common
Stock Fund, Inc. and Seligman Income
Fund, Inc.; and Vice President of
Seligman Portfolios, Inc. and Portfolio
Manager of its Seligman Common Stock
Portfolio and Seligman Income Portfolio.
Charles W. Kadlec 53 Vice President of the Corporation since
May 1996. Mr. Kadlec is a Managing
Director of the Manager and Chief
Investment Strategist of Seligman
Advisors, Inc.
Lawrence P. Vogel 42 Vice President of the Corporation since
January 1992. Mr. Vogel is Senior Vice
President, Finance of the Manager. He is
Vice President of the other investment
companies in the Seligman Group. He is
also Senior Vice President, Finance of
Seligman Advisors, Inc. and Seligman
Data Corp.; Vice President and Treasurer
of Seligman International, Inc.; Vice
President of Seligman Services, Inc.;
and Treasurer of Seligman Henderson Co.
Frank J. Nasta 34 Secretary of the Corporation since March
1994. Mr. Nasta is General Counsel,
Senior Vice President, Law and
Regulation and Corporate Secretary of
the Manager. He is Secretary of the
other investment companies in the
Seligman Group. He is also Corporate
Secretary of Seligman Advisors, Inc.,
Seligman Services, Inc., Seligman
Henderson Co., Seligman International,
Inc., and Seligman Data Corp.
Thomas G. Rose 41 Treasurer of the Corporation since
November 1992. Mr. Rose is Treasurer of
the other investment companies in the
Seligman Group. He is also Treasurer of
Seligman Data Corp.
12
<PAGE>
All Officers are elected annually by the Board 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 from the Corporation retainer fees of $16,000 per year.
In addition, such Directors are currently paid a total of $2,000 for each day on
which they attend Board and/or Committee meetings, which is paid by the
Corporation and the other Seligman Group investment companies meeting on the
same day. The Directors are also reimbursed for the expenses of attending
meetings. Total Directors' fees paid by the Corporation for the year ended
December 31, 1998 were as follows:
Number of Directors Capacity in which Remuneration Aggregate Direct
in Group was Received Remuneration
------------------ ----------------------------- ---------------
9 Directors and Members of Committees $215,200
Director's attendance, retainer and/or committee fees paid to each Director
during 1998 were as follows:
<TABLE>
<CAPTION>
Aggregate Pension or Retirement Total Compensation
Compensation Benefits Accrued as From Corporation and
Name From Corporation Part of Corporation Expenses Fund Complex*
- ------------------------ ---------------- ---------------------------- --------------------
<S> <C> <C> <C>
John R. Galvin $24,800 -0- $79,000
Alice S. Ilchman 22,400 -0- 73,000
Frank A. McPherson 24,800 -0- 79,000
John E. Merow 24,000+ -0- 77,000
Betsy S. Michel 24,800 -0- 79,000
James C. Pitney 23,200+ -0- 75,000
James Q. Riordan 23,200 -0- 75,000
Robert L. Shafer 23,200 -0- 75,000
James N. Whitson 24,800+ -0- 79,000
--------
$215,200
========
</TABLE>
- ---------------
* There are 17 other investment companies in the Seligman Group.
+ Mr. Merow, who had deferred receiving his fees from the Corporation from
1991 up to 1997, has a balance as of December 31, 1998 of $124,695 in his
deferred plan, including earnings. Mr. Pitney, who had deferred receiving
his fees from the Corporation from 1983 up to 1993, has a balance as of
December 31, 1998 of $222,488 in his deferred plan, including earnings. Mr.
Whitson has elected to defer receiving his fees from the Corporation. From
1993 through December 31, 1998, Mr. Whitson has a balance of $132,345 in
his deferred plan, including earnings.
13
<PAGE>
No compensation is paid by the Corporation to Directors or Officers of the
Corporation who are employees of, or consultants to, the Manager.
The affirmative vote of a plurality of the votes cast at the Meeting is
required to approve the election of the proposed Directors.
Your Board of Directors Unanimously Recommends that the
Stockholders Vote FOR the Election of Each of the
Nominees to Serve as Directors of the Corporation.
B. Ratification of Selection of Auditors
----------------------------------------
(Proposal 2)
In accordance with the requirements of the 1940 Act, the Board of Directors
is required to select independent public accountants as auditors of the
Corporation for 1999, subject to ratification or rejection by Stockholders.
The Audit Committee of the Board of Directors has recommended, 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 1999. The
firm of Deloitte & Touche LLP has extensive experience in investment company
accounting and auditing. It is expected that a representative of Deloitte &
Touche LLP will be present at the Meeting and will have the opportunity to make
a statement and respond to questions.
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.
C. Consideration of Increase in Number of Authorized Shares of Common Stock
---------------------------------------------------------------------------
(Proposal 3)
The Board of Directors believes it advisable to amend the Corporation's
Charter to increase the authorized number of shares of Common Stock of the
Corporation from 129,000,000 to 159,000,000. As of March 18, 1999 there were
116,605,918 shares of Common Stock outstanding and 246,526 shares reserved for
issuance upon the exercise of outstanding Stock Purchase Warrants, leaving
12,147,556 shares presently available for future issue.
14
<PAGE>
Authorized but unissued shares have regularly been issued to Stockholders
who take shares for the distributions of realized gain each year. From May 1997
(the last time the number of authorized shares of Common Stock was increased)
through 1998, the Corporation issued 20,766,749 shares in connection with its
gain distributions. Also, shares are issued to satisfy the requirements of
Automatic Dividend Investment and Cash Purchase Plans, Individual Retirement
Account Trusts, Retirement Plans for Self-Employed Individuals, the Seligman
Data Corp. Employees' Thrift Plan and the J. & W. Seligman & Co. Incorporated
Matched Accumulation Plan (collectively the "Plans"). Shares will be issued at a
price equal to the lower of (i) the closing sale or bid price, plus commission,
on the New York Stock Exchange on the ex-dividend date or the date of issuance
and (ii) the greater of net asset value and 95% of the closing sale or bid price
on such date. In November 1998, the Corporation implemented a share repurchase
program. Shares repurchased pursuant to this program reduce the Corporation's
outstanding shares, and the number of shares repurchased become available for
reissuance under the Plans. However, the number of shares that have been
repurchased and that the Corporation expects to be repurchased are not enough to
meet the anticipated issuance pursuant to the Plans. Issuance by the Corporation
of these additional shares for consideration will not affect the rights of
existing Stockholders, except that the relative voting power of a Stockholder
who does not acquire additional shares will be reduced if there is an increase
in the number of shares of Common Stock outstanding.
The Board believes it is advisable to amend the Corporation's Charter to
authorize a reasonable number of additional shares, in particular in order that
the Corporation may continue to be able to satisfy the requirements of its
capital gain distributions and of the Plans described above. Therefore, the
Board proposes that the first sentence of Article FIFTH of the Charter be
revised as follows (underscoring indicates additions and brackets deletions):
"FIFTH. The total amount of authorized capital stock of the Corporation is
160,000,000 [130,000,000] shares, having an aggregate par value of
$129,500,000 [$114,500,000], of which 1,000,000 shares of the par value of
$50 each, amounting in the aggregate to $50,000,000, are $2.50 Cumulative
Preferred Stock (hereinafter called the preferred stock) and 159,000,000
[129,000,000] shares of the par value of $0.50 each, amounting in the
aggregate to $79,500,000 [$64,500,000], are Common Stock (hereinafter
called the common stock)."
The adoption of this Proposal requires the affirmative vote of the holders
of a majority of the voting power of the outstanding Preferred Stock and Common
Stock of the Corporation. If the Charter is so amended, the Board will have
authority to issue the authorized shares without further approval of
Stockholders. The Board has no present intention of issuing additional shares
except in connection with capital gains distributions and the Plans.
Your Board of Directors Unanimously Recommends
that the Stockholders Vote FOR the Increase in
the Number of Authorized Shares of
Common Stock.
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D. Other Matters
----------------
Tri-Continental received four proposals from Stockholders for inclusion in
this year's proxy material, three of which are set forth below. Mr. Nathan
Lipson has submitted proposals for six consecutive years. Mrs. Eleanor Lipson
has submitted proposals for five consecutive years. Mr. Thomas S. Shea has
submitted proposals for four consecutive years. Your Board of Directors
unanimously recommends that you vote Against each of the Stockholder proposals.
The Board's reasoning is set forth following each proposal in a statement of
opposition which you are urged to read carefully.
Stockholder Proposal No. 1
(Proposal 4)
Mrs. Eleanor Lipson, 3040 Foxcroft Road, Ann Arbor, Michigan 48104 is the
registered owner of 30,271 shares of the Corporation's Common Stock and has
notified the Corporation that she intends to introduce the following proposal at
the meeting:
Resolved, that the shareholders recommend that the board of directors take
the steps necessary to cause a tax-free exchange or merger of Tri-Continental
with an open-end, equity-based, mutual fund, the exchange to be based on the net
asset value of Tri-Continental shares.
Mrs. Lipson has submitted the following statement in support of her
proposal:
By exchanging Tri-Continental shares for an open-end mutual fund, on the
basis of the net asset value of our shares, this proposal would immediately
eliminate the present large market discount on the value of our shares. As of
November 20, 1998, Tri-Continental shares traded at a 17.8% discount from their
actual net asset value. On November 25, 1998, while Tri-Continental Common
shares were worth $36.00, they traded at $29.50. The shareholders should have
the opportunity to obtain this $6.50 per share difference.
Shareholders have been burdened by this persistent discount for many years.
J. & W. Seligman & Co., our investment advisor, has tolerated this situation.
The open-ending of our shares by a merger with another fund with better
management, could cause both immediate and long term increases in the value of
our investments.
In addition, merger with another fund could result in cost savings by
increasing the asset base used as the basis for management fees. Such savings
could be used to increase our dividends.
Tri-Continental prices, like share prices of all publicly-traded companies,
are established by the value determined by the investing public. Supply and
demand, as decided by investors, decide the price of Tri-Continental stock. It
appears to me that the public believes that Tri-Continental's
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management will do no better in the future than in the past. It follows that,
barring a significant change in structure and management, the discount will
continue. This could be quickly reversed by merger with an open-end fund.
If you want an immediate increase in the value of your Tri-Continental
investment, you should support this proposal. As a long-term shareholder with a
significant investment in Tri-Continental, I urge your support.
Your Board of Directors Unanimously Recommends that
You Vote AGAINST this Stockholder Proposal
for the Reasons Set Forth Below.
Tri-Continental was organized in 1929 and has operated successfully as a
closed-end investment company providing investors with favorable returns for
many years. The Stockholders of the Corporation have overwhelmingly rejected
similar types of proposals on eight prior occasions, most recently in 1995,
1996, 1997 and 1998. The Directors continue to believe that the proposal to
convert the Corporation into an open-end (mutual) fund, whether through charter
amendments or a business combination with a mutual fund as Mrs. Lipson proposes,
is not in the best interests of Tri-Continental Stockholders. The stockholders
of other closed-end investment companies have considered and, in many cases,
rejected similar proposals to convert to open-end status. The effect of such a
change might be to provide some Stockholders with a quick, one-time profit, but
it would be at the expense of other Stockholders who have invested for the
longer term and wish to remain in a closed-end fund.
A principal reason offered in support of proposals to convert closed-end
funds to open-end status is the elimination of the discount from net asset value
at which the stocks of most closed-end investment companies (including
Tri-Continental) have traded in the market in recent years. While a merger or
tax free exchange of shares at net asset value with an open-end mutual fund
would eliminate the discount, long-term Stockholders would then find that their
money was invested in an entity with many characteristics different from -- and
possibly less attractive than -- the one in which they had purchased shares.
Closed-end investment companies have a fixed amount of capital. As a
result, portfolio managers are not burdened by non-investment considerations
such as continuous sales or redemptions of shares, and virtually all of a
closed-end fund's net assets may be invested in securities. In contrast,
open-end funds may receive inflows of new money at inopportune times from an
investment point of view. They also must seek to maintain cash reserves to
provide for stockholder redemptions in amounts that cannot be anticipated and
often occur at inopportune times. Purchases and redemptions of mutual fund
shares can be affected by investor psychology and sentiment as well as market
and economic factors and can be extremely volatile and unpredictable.
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It has been the experience of other closed-end funds that conversion to
open-end status results in the short term in significant redemptions which may
force liquidation of portfolio investments, and the realization of capital gains
or losses, to the disadvantage of continuing stockholders. In October 1995,
Global Privatization Fund merged with and into Alliance Worldwide Privatization
Fund to form a combined open-end fund with net assets of approximately $1
billion. Within the first week of the merger, the resulting open-end fund
experienced redemptions of approximately $200 million. Within three months of
the merger, the redemptions totaled $400 million. In 1996, Emerging Tigers Fund
(now Merrill Lynch Emerging Tigers Fund) experienced redemptions of
approximately 40% of its net assets within six months of its conversion.
Alliance Global Environment Fund suffered redemptions of more than 50% of its
net assets within three weeks of conversion to open-end status in October 1997.
Significant redemptions could adversely affect the performance of the
Corporation's assets in several ways if the Corporation were to merge into an
open-end fund:
o Redemptions might force the sale of portfolio securities in
amounts and at times that result in unfavorable prices and
therefore could be disadvantageous for non-redeeming
Stockholders.
o Redemptions could force the merged entity to realize capital
gains that would not otherwise have been realized by the
Corporation, with unfavorable tax consequences to continuing
Stockholders.
o Greater liquidity would have to be maintained by the merged fund
against the possibility of continuing redemptions. Liquidity
concerns would constrain the portion of the fund's assets that
could be invested in less liquid securities that may be highly
attractive from an investment point of view.
o The merged mutual fund would likely have in place a "Rule 12b-1
plan" in order to discourage redemptions and encourage sales.
Such a plan would involve material expenses not currently
incurred by the Corporation's Stockholders and result in a
materially higher expense ratio.
o Because a portion of the merged entity's operating expenses would
remain relatively constant as its assets expand or contract, the
merged mutual fund's expense ratio (the ratio of operating
expenses to average net assets) would increase as redemptions
took place.
o Continuous sales and redemptions of the merged entity's shares
could result in shareholder service costs not currently faced by
the Corporation's Stockholders and result in
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an increase in the expense ratio. Such an increase in the expense
ratio would have a direct adverse effect on dividend yield and
total return.
The Directors believe that the Corporation's investment performance is more
important than the discount to most long-term investors. However, the
Corporation has regularly investigated the possible reasons for the discount and
possible approaches for reducing it, including share repurchase programs and
managed distribution policies. A detailed discussion, including references to
the share repurchase program approved by the Directors in November 1998, is
included in the Corporation's 1998 Annual Report. The Corporation has also
reviewed the opinions of industry experts and various academic studies on the
subject of closed-end fund discounts. The Board has reviewed these matters and
intends to review them on an ongoing basis in the future. It should be noted
that the discounts for all closed-end funds have tended to fluctuate over a wide
range. The shares of the Corporation have sometimes traded in excess of net
asset value and at other times the shares have traded at a discount from net
asset value that is not significant. While there can be no assurance that there
will be a substantial reduction in the current discount, there is likewise no
reason to believe that, in the future, shares will not trade at a narrower
discount or at or above their net asset value as they have in the past.
While discounts persist, investors are able to purchase shares in the
market and put more than a dollar of net assets to work for them for every
dollar invested. In fact, 81% of the registered holders of the Corporation's
Common Stock are currently taking advantage of this situation either by
participating in a plan that allows Stockholders to take the Corporation's
dividends, year-end gain distributions, or both, in additional shares, or by
purchasing additional shares through one of the plans offered by the
Corporation. This opportunity to invest at a discount would be lost after
open-ending.
The Stockholders have overwhelmingly voted against proposals to open-end
the Corporation at eight prior annual meetings. In 1998, 1997, 1996 and 1995,
proposals substantially similar to the current proposal were rejected by 84%,
83%, 83% and 87%, respectively, of the votes cast. The Stockholders also
overwhelmingly voted against proposals to convert to open-end status at the
meetings in 1966, 1967, 1977 and 1978.
Stockholders of several other closed-end investment companies have
considered and rejected similar stockholder proposals. For example, in 1995,
1996 and 1997, the stockholders of Putnam Intermediate Government Income Trust
and General American Investors Company rejected similar proposals. In 1997, the
stockholders of Templeton Global Governments Income Trust, Templeton Global
Income Fund and Templeton Dragon Fund rejected similar proposals. And in 1998,
the
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stockholders of Clemente Global Growth Fund, Templeton Dragon Fund and INVESCO
Global Health Sciences Fund rejected similar proposals.
Unlike most closed-end equity funds, the Corporation has outstanding both
Preferred Stock and warrants to purchase Common Stock. If the Corporation were
to convert to open-end status, the Preferred Stock and warrants would have to be
redeemed, resulting in an outflow of capital to pay for the redemptions. It is
not even clear whether it would be possible to redeem the outstanding warrants
or make other appropriate provision to protect the warrantholders. The
Corporation's Charter does not provide for redemption of the warrants under any
circumstances.
Even assuming that these issues could be resolved, the costs of the process
of conversion to an open-end fund, including the legal, accounting and printing
costs, would be significant. These costs would be borne by the Common
Stockholders. The Corporation has historically had an unusually low expense
ratio, and this benefit to Stockholders would be jeopardized by open-ending.
In summary, the Directors believe that an important continuing service is
provided to the investing public by maintaining Tri-Continental as a large and
broadly diversified closed-end investment fund. Your vote against this proposal
will help to ensure Tri-Continental's continuity as a closed-end fund in the
long-term interest of all its Stockholders.
This proposal will not be adopted unless the votes cast in favor of such
proposal 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 consideration by the Board.
The Directors believe that your vote AGAINST this proposal will be in the
best interests of the Corporation and its Stockholders.
Stockholder Proposal No. 2
(Proposal 5)
Mr. Nathan Lipson, 3040 Foxcroft Road, Ann Arbor, Michigan 48104 is the
registered owner of 38,434 shares of the Corporation's Common Stock and has
notified the Corporation that he intends to introduce the following proposal at
the meeting:
RESOLVED, that the shareholders recommend that the board of directors take
the steps necessary to provide that in future board of directors elections,
except for officers and employees of J. & W. Seligman & Co., Inc. and
Tri-Continental Corporation (the "inside directors" or "interested
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persons"), no person who is a member of a board of directors of a corporation
managed by J. & W. Seligman & Co., Inc. shall qualify to serve on the board of
directors of Tri-Continental Corporation.
Mr. Lipson has submitted the following statement in support of his
proposal:
The directors of Tri-Continental Corporation serve on all boards of
directors of the mutual funds managed by J. & W. Seligman & Co., i.e., on a
total of 17 Seligman boards! Since the other Seligman-run funds have different
objectives than Tri-Continental, this proposal could avoid possible conflicts of
interest on our board.
The identical-board device, which concentrates control of all Seligman-run
funds in the hands of a single board of directors, could cause our board to give
more weight to the views of the manager and other fund considerations than to
the interests of Tri-Continental shareholders. Some of the outside directors do
not have long association with our company. There are many qualified director
candidates outside of those who run the other Seligman funds.
Many of the "outside" directors on our board also serve on other company
boards. The Blue Ribbon Commission on Director Professionalism of the National
Association of Corporate Directors has urged that outside directors serve on no
more than 6 corporate boards. They estimate that a director should typically
spend a month per year to effectively watch for weak executives and poor company
performance. The New York Times of November 16, 1996, ran an article, "When
Directors Play Musical Chairs -- Seats on Too Many Boards Spell Problems for
Investors." We should not tolerate multiple directors at Tri-Continental.
Over the long term, Tri-Continental's total return has lagged behind the
Standard & Poor's 500 Composite Stock Index and below the performance of many
open-end mutual funds. This helps explain the persistent double-digit discount
from net asset value in the market price of our shares. The present board of
directors has tolerated this situation.
In prior years many shareholders supported this reform. As more
shareholders recognize that management accountability could be accomplished by a
board that includes more disinterested and dedicated outside directors, this
proposal could carry in 1999. Changes are needed to involve the average
shareholder in the operation of our corporation. As a long-term shareholder with
a significant investment in Tri-Continental, I urge your support for democracy
in the governance of our corporation.
Your Board of Directors Unanimously Recommends that
You Vote AGAINST this Stockholder Proposal
for the Reasons Set Forth Below.
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The Board of Directors is very concerned about imposing additional
qualification requirements on potential Directors. Such limits would have the
effect of reducing the pool of well-qualified candidates from which your
Directors are chosen. If the proposal were implemented, it would immediately
result in nine of the Corporation's current Directors becoming disqualified to
stand in future elections unless they resigned their directorships and
trusteeships in the other investment companies managed by Seligman. Loss of any
of these valuable Directors would result in the loss of important Board
continuity and of a significant depth of expertise, talent and experience.
Maintaining such continuity and having the benefit of such expertise, talent and
experience are tremendous assets and are in the best interests of the
Corporation and its Stockholders.
Stockholders have considered this proposal submitted by either Mr. Lipson
or Mrs. Lipson at the 1995, 1996, 1997 and 1998 annual meetings, and 83%, 78%,
80% and 80% of the votes cast, respectively, were cast against the proposal.
Many corporations, including Tri-Continental, have found it beneficial to
have directors who are also directors of other companies. This is particularly
true among groups of investment funds, many of which have long recognized that
common boards provide numerous benefits, including cost savings and other
efficiencies, to each fund in their group individually. Directors on common
boards have the important benefit of a much broader knowledge of the investment
company business, and the group's investment adviser, than a director of only
one fund. In addition, similar issues often confront the boards of various
investment companies in a complex of funds.
The Corporation has found that directors serving on the boards of other
funds bring experience, insight and understanding to issues involving the
Corporation, which is in the best interests of Tri-Continental's Stockholders.
The Directors believe that this experience and insight would be unavailable to
the Corporation if this proposal were adopted.
There is no requirement that Directors of the Corporation serve as
directors of other funds managed by Seligman, and every Director is fully
accountable to the Stockholders of Tri-Continental Corporation whether or not he
or she serves on the board of another company. Each year a portion of the Board
must be nominated and re-elected. Nominations are made by the Director
Nominating Committee comprised of Directors who are not "interested persons" of
Tri-Continental. Under the present system, Stockholders have the ability to
elect the Directors of their choice. Adoption of the artificial qualifications
required under this proposal would limit that choice.
The investment objectives and policies of the Corporation are fully
understood by the Directors. Their service as directors of other investment
funds does not affect their commitment to such objectives and policies. In fact,
the Directors believe that the insight gained from serving as directors for
investment funds with differing investment objectives and policies helps provide
a perspective that would otherwise be unavailable.
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The compensation of the Corporation's Directors is set having regard to the
fact that they serve on the boards of other funds managed by Seligman, and if
they were not directors of such other funds, the Corporation would find it
necessary to increase Director remuneration significantly, thus increasing the
expenses of the Corporation.
Mr. Lipson suggests that the report (the "Report") of the Blue Ribbon
Commission on Director Professionalism of the National Association of Corporate
Directors (the "NACD") supports his proposal. We disagree. First, the NACD has
not "urged that outside directors serve on no more than 6 corporate boards," as
Mr. Lipson claims. Rather, the Report recommends that corporations consider
establishing guidelines to avoid potential "director over-commitment." Although
the Report mentions that "[b]oards should prefer individuals who hold no more
than five or six public-company directorships," it cautions against a
"one-size-fits-all" approach and clearly states that "[t]hese guidelines, like
all of this Report's recommendations, should be adapted by individual boards to
individual corporate circumstances." Moreover, the Report does not even imply
that the unique requirements of service on investment company boards were
addressed or considered by the NACD. In addition, Mr. Lipson's claim that the
NACD "estimate[s] that a director should typically spend a month per year" in
executing their duties is misleading because the Report makes no such estimate;
rather, the Report mentions in a footnote that directors spend various amounts
of time "preparing for and attending board and committee meetings, to as much as
190 hours per year."
This proposal will not be adopted unless the votes cast in favor of such
proposal 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 consideration by the Board.
The Directors believe that your vote AGAINST this proposal will be in the
best interests of the Corporation and its Stockholders.
Stockholder Proposal No. 3
(Proposal 6)
Mr. Thomas S. Shea, Route 1, Box 117, Secor, Illinois 61771-9730 is the
owner of 1,313 shares of the Corporation's common stock and has notified the
Corporation that he intends to introduce the proposal set forth below at the
meeting.
RESOLVED that the Shareholders of The Tri-Continental Corporation assembled
in annual meeting in person and by proxy recommend to and authorize the Board of
Directors to not renew the
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contract with J. & W. Seligman & Company for portfolio management and investment
advisor and to solicit proposals from others that have no affiliation with
Seligman.
Mr. Shea has submitted the following statement in support of his proposal:
1. The significant discount to net asset value persists. According to the
summary of closed-end funds printed in the 11/29/98 edition of the New York
Times, our shares closed Friday 11/27 at 17.84% discount to net asset value,
viz., 36.14 of assets selling for 29.75.
Of the 21 general equity funds published in the weekly summary, TY was 19th
out of 21 (only 2 others sold at a greater discount on a percentage basis).
Of the 21 funds, 5 were at a premium to net asset value (one at 11%,
another at 18% premium). 2 were at a discount of less than 5%; 8 were at a
discount of 6%-10%; 2 were in the range of 11%-15%; 3 (including TY) were in the
16%-20% group; one was over 20%.
There is a persistent pattern of TY being near the bottom of the list (i.e.
greater discount) for at least the past four years.
The effect of this for anyone who needs/wants to sell some shares is that
the seller gets approximately 83% of the real-value for their share of the
"corporate-pie".
2. Looking at it from a little different perspective, the discount means that TY
is a "leveraged situation".
For every dollar invested in the purchase/ownership of TY stock, there are
1.20 worth of assets working.
Would it not be reasonable to expect this "leverage" to give us a better
return than the market averages?
That might be a reasonable expectation but the historic facts are that TY's
annualized returns have been less than those of the S&P 500 for at least the
last four years.
Management's explanation for this "lagging performance" is that the TY
portfolio has less volatility (lower beta) than the S&P 500. Hence, TY with
lower volatility and presumably lower risk, returns less (risk being equated
with return). This explanation is true but it ignores the fact of the 120%
leverage.
3. At the last four annual meetings the Management cannot explain the
persistence and the magnitude of the discount to net asset value.
At the '98 meeting I suggested that at least a partial explanation might be
found in the observation of Dr. J. Mark Mobius in his '96 book ("Mobius on
Emerging Markets").
On pg. 224 of that work, Dr. Mobius is speaking of closed-end funds (same
structure as TY) in emerging markets. He states: "A continuous discount
indicates investor perception that the manager
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of the fund is not adding value to the fund, while a premium indicates that
investors believe the fund manager's efforts enhance the value of the fund
assets."
(Dr. Mobius was named Closed-End Fund Manager of the Year in '93 by
"Morning Star".)
4. Seligman has been the only manager and investment advisor since the inception
of TY (1929).
5. The Board of Directors has the responsibility to obtain the best portfolio
management and advisors and to evaluate the performance of these contractors on
a regular and timely basis.
Our Board includes three officers of Seligman and all of the other Board
members are also directors of sixteen other Seligman funds. Also, the fees paid
by TY to Seligman are not negligible.
Objective evaluation might be difficult in these circumstances. Hence, I am
offering this resolution for your consideration and urging your affirmative
vote.
Your Board of Directors Unanimously Recommends that
You Vote AGAINST this Stockholder Proposal
for the Reasons Set Forth Below.
This Stockholder proposal, if adopted, would recommend that the Board of
Directors effectively terminate the Corporation's 70 year relationship with the
Manager, and select and propose for Stockholder approval a new and unnamed
manager for the Corporation. The Board believes that this proposal is
inappropriate and adverse to the interests of the Corporation and its
Stockholders, and strongly urges its defeat.
Each year, as mandated by law, the Board carefully considers whether the
Corporation's management agreement with the Manager should be continued for
another one year period. In the past (most recently in November 1998) your
Directors have concluded that such continuance is in the best interests of the
Corporation and its Stockholders. Under the management of J. & W. Seligman & Co.
Incorporated, Tri-Continental has operated successfully as a closed-end
investment company since 1929, providing investors with favorable returns over
time. For the year ended March 31, 1999, the Corporation returned 14.82% based
on net asset value and 15.88% based on market price. For the five- and ten-year
periods ended March 31, 1999, the Corporation's average annual total returns
were 21.14% and 17.05%, respectively, based on net asset value and 21.34% and
16.00%, respectively, based on market price. The Corporation's returns based
both on net asset value and market price exceeded the net asset value
performance of the Corporation's peers, as measured by the Lipper Closed-End
Growth & Income Funds Average, for the same one-, five- and ten-year periods. In
addition, over the same periods, the Corporation's returns based both on net
asset value and market price also exceeded the performance of the Lipper Growth
& Income Funds Average (which measures the performance of open-end funds with
investment objectives similar to those of
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the Corporation). Today Tri-Continental is the nation's largest publicly-traded,
diversified closed-end equity investment company, with approximately $4 billion
in assets.
In his supporting statement, Mr. Shea expresses frustration that the
Corporation's shares currently trade at a discount to their net asset value, and
suggests, without any factual support, that replacement of the Manager is likely
to result in a reduction in the Corporation's discount. Your Board of Directors
disagrees. As discussed in numerous Annual Reports to Stockholders, in this and
prior Proxy Statements, and at presentations at Annual Meetings of Stockholders,
the Manager and Board of Directors devote a great deal of attention to the
discount issue. The Manager regularly makes presentations to the Board regarding
the Corporation's market discount and possible explanations therefor, as well as
similar information regarding other funds in Tri-Continental's competitive
universe. The Board and the Manager have reviewed numerous theories and studies
addressing the trading price of closed-end fund shares, and closely monitor the
steps that other closed-end funds have taken in an attempt to reduce their
trading discounts. The Board is willing to consider actions that might have a
discount reducing effect, but will not approve any plan unless it concludes that
implementation would be in the best interests of the Corporation and its
Stockholders. For example, in 1997, your Board carefully considered, and then
rejected, a proposed "managed distribution plan" for your Corporation because
the Directors did not believe that such a plan would be in the best interests of
the Corporation and its Stockholders. More recently, your Board authorized a
stock repurchase program in November 1998. One of the considerations in
approving this program was its potential to modestly reduce the discount over
time.
Mr. Shea suggests that the Manager, whose investment advice to
Tri-Continental over the last 70 years has resulted in the Corporation's
enviable performance record, is to blame for the current discount. One of the
features of a closed-end fund is that its shares trade at market prices
determined by supply and demand, and that such prices frequently differ from the
net asset value of such shares. The discount or premium varies over time and
affects an investor's total return. As discussed in Tri-Continental's current
Annual Report to Stockholders, the Corporation's discount has varied
significantly in recent years, as have the market discounts of many other
closed-end funds. No single variable or factor can explain why many closed-end
investment companies typically sell at discounts or the levels of discounts of
particular funds or why they may change significantly over time.
The Manager will continue its ongoing study of the discount issue and
industry developments, including the levels of discounts of particular funds and
why they may change significantly over time, and your Board will continue to
monitor the situation and to review possible actions, such as the stock
repurchase program implemented in November 1998, that might be taken and which
are consistent with the best interests of Tri-Continental and its Stockholders.
Your Board believes that
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any such actions should be in keeping with the Corporation's investment
objectives of long-term growth of capital and income with reasonable current
income, and should not sacrifice the investment advantages that Tri-Continental
and its Stockholders now derive from the Corporation's closed-end structure,
some of which are discussed in the response to the first stockholder proposal
above.
In his supporting statement Mr. Shea argues that the Corporation's current
discount should result in a boosted return to stockholders because of the
"leverage" that he believes is implied by the discount. The Board of Directors
believes that Mr. Shea is incorrect. While a Stockholder's market return will be
affected by changes in the Corporation's discount or premium after the date
shares are purchased, this is clearly not analogous to leverage. For example, if
shares with a net asset value of $100 are purchased at $85 (a 15% discount) and
sold one year later at the same 15% discount after a 30% increase in the
underlying net asset value (i.e., to $130), the investor will have proceeds of
$110.50, which is 30% more than $85. A market discount to net asset value has no
leveraging effect on performance as Mr. Shea asserts.
The quote from Dr. Mark Mobius' book in the third paragraph of Mr. Shea's
supporting statement is taken from an extremely brief and conclusory discussion
in Dr. Mobius' book on emerging markets and should not be taken as an
authoritative statement on the cause of discounts from net asset value. As noted
above, closed-end fund discounts have been the subject of numerous and extensive
studies, none of which has purported to explain discounts by a single factor or
variable, although some have found that various factors, such as the extent of
embedded potential capital gains tax liability, may have a statistically
significant influence on a fund's discount. None of these studies is referenced
in the brief discussion cited by Mr. Shea. The Corporation questions Mr. Shea's
assertion that Dr. Mobius is of the view that investor perception of a
closed-end fund's manager is the sole factor in determining whether a fund
trades at a discount or premium, particularly since four of the six closed-end
funds for which he is listed as the portfolio manager are currently trading at
discounts of more than 17%, with one at a discount of more than 20% (based on
prices as of Friday, April 9, 1999).
Each November your Corporation's Board of Directors considers whether or
not to approve the continuance of the management agreement between
Tri-Continental and the Manager, as required by the 1940 Act and in accordance
with the terms of such agreement. In determining whether to approve such
continuance, the Directors consider a large number of factors and a great deal
of information, including information regarding investment performance, and are
subject to fiduciary and other duties under applicable law. The Directors who
are not affiliated with the Manager meet separately and consult with counsel
that is independent of the Manager. Under the 1940 Act, the Manager has a duty
to provide, and the Directors have a duty to request, all information relevant
to
27
<PAGE>
making their determination on the continuance of the Corporation's management
contract. This process, and the diligence with which the Board undertakes its
responsibilities, ensures a careful and thorough review of the management
contract every year. Mr. Shea suggests that Stockholders second guess this
review by the Directors they have elected.
A management agreement with any new adviser would require Stockholder
approval, which could only occur once a new manager had been selected, and after
considerable Stockholder expense. During this time, your investment in the
Corporation could be harmed.
This proposal will not be adopted unless it receives the affirmative votes
of the holders of a majority of the votes cast on such proposal. 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 Directors believe that your vote AGAINST this proposal will be in the
best interests of the Corporation and 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 the Proxy in accordance with their judgment on such
matters.
Notice is hereby given that, under the Securities and Exchange Commission'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 2000, must be received by the Corporation no
later than December 20, 1999. Timely notice of Stockholder proposals submitted
outside of the Rule 14a-8 process must be received by the Corporation no later
than March 21, 2000 to be eligible for presentation at the May 2000 Annual
Meeting.
28
<PAGE>
E. Expenses
-----------
The Corporation will bear the cost of soliciting Proxies. In addition to
the use of the mails, Proxies may be solicited personally or by telephone or
telegraph by Directors, Officers and employees of the Corporation, the Manager,
Seligman Advisors, Inc., Seligman Services, Inc. and Seligman Data Corp., 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
principals. The Corporation has engaged Morrow & Co., Inc., 445 Park Avenue, New
York, N.Y. 10022 to assist in soliciting for a fee of $4,000, plus expenses.
By order of the Board of Directors,
/s/Frank J. Nasta
------------------------------
Secretary
----------
It is important that Proxies be returned promptly. All Stockholders,
including those who expect to attend the Meeting, are urged to date, fill in,
sign and mail the enclosed form of Proxy in the enclosed return envelope which
requires no postage if mailed in the United States. A Proxy is not required for
admission to the Meeting.
29
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<PAGE>
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<PAGE>
Tri-Continental Corporation
Managed by
[GRAPHIC]
J. & W. SELIGMAN & CO.
INCORPORATED
INVESTMENT MANAGERS AND ADVISORS
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
-----------------------------------------------
Tri-Continental
Corporation
Notice of Annual Meeting
of Stockholders
and
Proxy Statement
----------------------------------
Time: May 20, 1999
10:00 A.M.
----------------------------------
Place: Four Seasons Resort
2800 South Ocean Boulevard
Palm Beach, Florida 33840
-----------------------------------------------
-----------------------------------------------
Please date, fill in and sign the enclosed form
of Proxy and mail it in the enclosed return
envelope which requires no postage if
mailed in the United States.
-----------------------------------------------
[GRAPHIC]
<PAGE>
PROXY TRI-CONTINENTAL CORPORATION PREFERRED
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 to be held May 20, 1999 and appoints JOHN E. MEROW,
WILLIAM C. MORRIS and BRIAN T. ZINO (and each of them) proxies, with power of
substitution to attend the Annual Meeting (and any adjournments thereof) and
vote all shares the undersigned is entitled to vote upon the matters indicated
and on any other business that may properly come before the Meeting.
This proxy when properly executed will be voted in the manner directed by the
undersigned. If no instructions are given, your proxies will vote FOR the
election of the nominees to the Board of Directors, FOR Proposals 2 and 3 and
AGAINST Proposals 4, 5 and 6.
THE SOLICITATION OF THIS PROXY IS MADE ON BEHALF OF THE BOARD OF DIRECTORS
The Board of Directors recommends you vote FOR each of the Nominees and FOR
Proposals 2 and 3
To vote for all items AS RECOMMENDED BY THE BOARD OF DIRECTORS, mark this
box, sign, date and return this Proxy. (NO ADDITIONAL VOTE IS NECESSARY.)
1. ELECTION OF DIRECTORS
NOMINEES: John E. Merow, Betsy S. Michel, James C. Pitney, and
James N. Whitson
[ ] FOR [ ] AGAINST [ ] WITHHOLDING AUTHORITY
all nominees all nominees for individual nominees listed below
---------------------------------------------------------------------
2. Ratification of the selection of Deloitte & Touche llp as Auditors
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of amendment to the Charter to increase the authorized shares
of Common Stock
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Board of Directors recommends that you vote AGAINST proposals 4, 5 and 6
4. Stockholder proposal relating to open-ending
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Stockholder proposal imposing additional qualification requirements on
potential Directors
FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. Stockholder proposal relating to removing J. & W. Seligman & Co.
Incorporated as manager
FOR [ ] AGAINST [ ] ABSTAIN [ ]
DATED_________________________________________, 1999
Signature _____________________________________________________________
___________________________________________________________________
Signature (if jointly held)
Please sign exactly as your name(s) appear(s) on this proxy. Only one
signature is required in case of a joint account. When signing in a
representative capacity, please give title.
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.
<PAGE>
PROXY TRI-CONTINENTAL CORPORATION COMMON
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 to be held May 20, 1999 and appoints JOHN E. MEROW,
WILLIAM C. MORRIS and BRIAN T. ZINO (and each of them) proxies, with power of
substitution to attend the Annual Meeting (and any adjournments thereof) and
vote all shares the undersigned is entitled to vote upon the matters indicated
and on any other business that may properly come before the Meeting.
This proxy when properly executed will be voted in the manner directed by the
undersigned. If no instructions are given, your proxies will vote FOR the
election of the nominees to the Board of Directors, FOR Proposals 2 and 3 and
AGAINST Proposals 4, 5 and 6.
THE SOLICITATION OF THIS PROXY IS MADE ON BEHALF OF THE BOARD OF DIRECTORS
The Board of Directors recommends you vote FOR each of the Nominees and FOR
Proposals 2 and 3
To vote for all items AS RECOMMENDED BY THE BOARD OF DIRECTORS, mark this
box, sign, date and return this Proxy. (NO ADDITIONAL VOTE IS NECESSARY.)
1. ELECTION OF DIRECTORS
NOMINEES: John E. Merow, Betsy S. Michel, James C. Pitney, and
James N. Whitson
[ ] FOR [ ] WITHHOLD [ ] WITHHOLDING AUTHORITY all nominees
all nominees for individual nominees listed below
---------------------------------------------------------------------
2. Ratification of the selection of Deloitte & Touche llp as Auditors
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of amendment to the Charter to increase the authorized shares of
Common Stock
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Board of Directors recommends that you vote AGAINST proposals 4, 5 and 6
4. Stockholder proposal relating to open-ending
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Stockholder proposal imposing additional qualification requirements on
potential Directors
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. Stockholder proposal relating to removing J. & W. Seligman & Co.
Incorporated as manager
[ ] FOR [ ] AGAINST [ ] ABSTAIN
DATED __________________________________________________, 1999
Signature _______________________________________________________________
_______________________________________________________________
Signature (if jointly held)
Please sign exactly as your name(s) appear(s) on this proxy.
Only one signature is required in case of a joint account. When signing in a
representative capacity, please give title.
Your Vote Is Important.
Please complete, sign and return this card as soon as possible. Mark each vote
with an X in the box.
