SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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TRI-CONTINENAL CORPORATION
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
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Tri-Continental Corporation
MID-YEAR REPORT 2006
August 24, 2006
To the Stockholders:
Your mid-year Stockholder report for Tri-Continental Corporation follows this
letter. The report contains the Corporation's investment results, portfolio of
investments, and financial statements. For the six months ended June 30, 2006,
Tri-Continental posted a total return of 1.48% based on net asset value, and
5.48% based on market price. During the same period, the S&P 500 Index returned
2.71% and the Lipper Closed-End Growth & Income Funds Average returned 4.10%.
Since June 30th, Tri-Continental's investment performance has continued to
improve. We are pleased to report that, as of the date of this letter, total
return year-to-date based on net asset value is in line with the S&P 500 Index.
On June 19, 2006, the independent inspectors of election for the Annual Meeting
of Stockholders, held on May 4, 2006, released their final report. Although the
Directors seeking re-election were supported by a significant plurality of votes
cast, they were not elected because no candidate received at least 50% of the
votes entitled to be cast, as required under the Corporation's Bylaws. The final
results of the vote held at the Annual Meeting can be found on page 23 of this
report.
Under Maryland law, the incumbent Directors could legally remain in office until
the Corporation's 2007 Annual Meeting, at which time an election would be held
for their successors. Following the 2006 Annual Meeting, however, the Board
determined that it would be in the best interests of the Corporation and its
Stockholders to have all directors duly elected by Stockholders. The Board has
called for a Special Meeting, to be held in September, to provide Stockholders
with another opportunity to elect directors without having to wait until the
2007 Annual Meeting. The Board has also approved an amendment to the
Corporation's Charter to reduce the quorum requirement at a meeting of
Stockholders from a majority of votes entitled to be cast to one-third of the
votes entitled to be cast, unless a higher percentage is specified in the Bylaws
of the Corporation. This amendment to the Charter is subject to Stockholder
approval at the Special Meeting, the details of which are provided in the
Corporation's proxy materials, which were mailed to Stockholders in July.
We are continuing to make progress at offsetting the Corporation's accumulated
tax loss carryforward. The loss carryforward per share has decreased from $2.60
on December 31, 2005 to $0.91 on August 24, 2006. Once the loss carryforward is
eliminated, the Corporation will again be able to make capital gain payments to
Stockholders.
We thank you for your continued support of Tri-Continental Corporation, and look
forward to serving your investment needs for many years to come.
By order of the Board of Directors,
/s/ William C. Morris /s/ Brian T. Zino
William C. Morris Brian T. Zino
Chairman President