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Tri-Continental Corporation
September 2006
Tri-Continental
I.
Special Meeting
II.
Lipson’s Slate — The Wrong Choice
I.
Interests Not Aligned with Stockholders — Conflicted Loyalties
II.
A History of Misleading and Conflicting Statements
III.
Detrimental to Long-Term Stockholders
III.
Tri-Continental’s Slate — The Right Choice
I.
Improved Investment Results
II.
Addressing the Discount
III.
Quality and Integrity of Directors
IV.
Responsive to Long-Term Stockholders
V.
A Vote of Confidence
IV.
Amend Quorum Threshold
V.
Board’s Recommendations
VI.
Appendix
Special Meeting: September 28, 2006
1.
Election of Three Directors
2.
Amend Quorum Threshold
Lipson’s Slate — The Wrong Choice
Interests Not Aligned with Stockholders — Conflicted Loyalties
A History of Misleading and Conflicting Statements
Detrimental to Long-Term Stockholders
Interests Not Aligned with Stockholders —
Conflicted Loyalties
Lipson’s hedge funds have 38% of their public equity securities
invested in Tri-Continental
Lipson’s hedge funds’ positions in Tri-Continental are hedged
Actual Tri-Continental investment results are of little consequence to
Lipson and his hedge funds
Lipson’s nominees are all investors in his hedge funds
How can hedge fund economics not bias Lipson and his slate of
nominees?
A History of Misleading and
Conflicting Statements
Mischaracterization of Seligman regulatory inquiry
Misrepresents nature and length of Tri-Continental stock ownership
Knowingly omits extensive prior financial services experience of
William C. Morris, Chairman
Now claims he does not intend to open-end or liquidate Tri-
Continental
Ignores Tri-Continental’s more recent performance
Duplicitous criticism of Stockholder Meeting expenses
Detrimental to Long-Term Stockholders
What are Lipson’s Actual Objectives?
Additional Market Purchases?
Self Tender Offers?
Liquidating the Corporation?
Open-ending the Corporation?
Any of these actions would favor investors who currently plan to liquidate their shares
to the detriment of continuing long-term investors. Adverse effects may include:
Disruption of management of Tri-Continental’s portfolio
Increased portfolio turnover
Forced realization of capital gains and losses
Reduced assets
Increased expenses and expense ratio
Addition of 12b-1 fees
Tri-Continental’s Slate — The Right Choice
Improved Investment Results
Addressing the Discount
Quality and Integrity of Directors
Responsive to Long-Term Stockholders
A Vote of Confidence
Improved Investment Results
Investment Results as of August 31, 2006
Performance data quoted in this presentation represent past performance and does not guarantee or indicate future investment results. The rates of return will vary and the principal value
of an investment
will fluctuate. Shares, if sold, may be worth more or less than their original costs. Current performance may be lower or higher than the performance data quoted. Total
returns of the Corporation as of the most recent month end will be made available at
www.seligman.com by the seventh business day following that month end. Returns reflect changes
in market price or net asset value, as applicable and assume reinvestment of distributions. Performance
data quoted does not reflect the deduction of taxes that investors may pay on
distributions or the sale of shares.
Source: J. & W. Seligman & Co. and FactSet
Improved Investment Results
Lead Portfolio Manager: John B. Cunningham
Joined Tri-Continental in September 2004
Seligman’s Chief Investment Officer
Chartered Financial Analyst (CFA)
Former Group Head of Salomon Brothers Asset Management Equity Team
Former Portfolio Manager for the highly regarded Salomon Brothers Investors
Value Fund
Member of New York Society of Security Analysts (NYSSA)
MBA from the Amos Tuck School of Business Administration, Dartmouth College
BA from University of Virginia
Improved Investment Results
The Investment Team: 90 Years of Combined Experience
Sector Responsibility
Industry Experience
Title
8
Senior Vice President
Francis Fay
Equity Trader
Consumer Staples, Discretionary,
Industrials, and Materials
15
Vice President
Edward Mehalick
Security Analyst
Consumer Staples and Discretionary
6
Vice President
Chris V. Kagaoan
Security Analyst
Heath Care, Utilities, and Energy
18
Senior Vice President
Brian M. Turner
Security Analyst
Information Technology
9
Senior Vice President
Christopher J. Boova
Security Analyst
Finance, Telecommunications Services,
and Telecommunications Equipment
16
Managing Director
Michael F. McGarry
Co-Portfolio Manager
18 years
Managing Director
John B. Cunningham
Portfolio Manager
Addressing the Discount
Discounts are a well-known feature of closed-end funds
Continuous consideration of alternatives to address the discount
In depth annual discount review presented to Tri-Continental’s Board of
Directors since 1994
Virtually all of Tri-Continental’s stockholders acquired their stock at a
discount to NAV, including Lipson and his hedge funds
Addressing the Discount
Steps taken that benefit all stockholders:
Stock Repurchase Program since 1998
Investor Relations Program
Founding member of the Closed-end Fund Association
Ongoing marketing activities
Quality and Integrity of Directors
75% of Directors are Independent (6 out of 8 currently)
Highly Qualified Independent Directors with experience as:
Chairman/CEO of Fortune 500 company
Directors of multiple NYSE listed companies
Dean of leading college
Director, New York Regional Office, Federal Trade Commission
Director, Federal Reserve System, Kansas City Reserve Bank
U.N. Ambassador
Supreme Allied Commander, NATO
Diverse Professional Experience:
Business: Pharmaceutical, Financial Services, Consumer Products, Energy, Media
Legal
Academia
Government/Military
Philanthropy
Quality and Integrity of Directors
Nominees proposed by the Director Nominating Committee
Extensive experience in investments and business
General John R. Galvin: Independent TY director since 1995; Dean Emeritus of Fletcher
School of Law and Diplomacy of Tufts University; Formerly
Supreme Allied Commander,
NATO, and Commander-in-Chief, United States European Command; Formerly Director
of Raytheon Co. and USLIFE Corporations; current independent member of Board of
investment companies of the Seligman Group of Funds.
William C. Morris: TY Director and Chairman of the Fund since 1988; Chairman of
J. & W. Seligman & Co. Incorporated; Chairman Carbo Ceramics, Inc.; Former Head of
Investment Banking and member
of the Executive Committee of Lehman Brothers and
its successor firms; President and CEO of the Metropolitan Opera Association.
Ambassador Robert L. Shafer: Independent TY Director since 1991; Ambassador and
Permanent Observer of the Sovereign Military Order of Malta to the United Nations;
former director of USLIFE Corporation
and Vice President of Pfizer Inc.; current
independent member of Boards of investment companies of Seligman Group of Funds.
Quality and Integrity of Directors
Six regularly scheduled Board meetings each year (only four
required by law)
Recent ICI study shows 72% of funds have four regularly scheduled meetings
Independent Board committees meet in executive session at each
meeting
Board Operations Committee
Audit Committee
Director Nominating Committee
Unitary Board — Consistent with good governance
Quality and Integrity of Directors
Board Operations Committee
All six Independent Directors
Directs operation of the full Board
In existence for 25 years
Chaired by Frank A. McPherson, Lead Independent Director
Audit Committee
Four Independent Directors
Oversight of financial reporting process
Chaired by James N. Whitson, 1940 Act “Audit Committee Financial Expert”
Director Nominating Committee
Two Independent Directors
Identifies and evaluates candidates for the Board
Chaired by Ambassador Robert L. Shafer
Responsive to Long-Term Stockholders
Closed-end fund structure has been fundamental to meeting the
Fund's investment objective since 1929
Closed-end fund structure is necessary to maintain the Fund’s low
expense ratio
Improved investment results
The Board has taken steps that benefit all stockholders
A Vote of Confidence
Stockholders have voted to keep Tri-Continental’s closed-end
structure on nine prior occasions (most recently in 1999)
63% of registered stockholders participate in one of Tri-Continental’s
investment plans
Multiple surveys of Tri-Continental stockholders over recent years
shows that the majority of stockholders are:
Not concerned about the discount
Somewhat or very satisfied with Tri-Continental as an investment
Somewhat or very satisfied with Tri-Continental’s stockholder services
A Vote of Confidence
In the May 2006 contested election, stockholders voted
overwhelmingly to reelect Tri-Continental’s existing Directors
Amend Quorum Threshold
Safeguards the Democratic Process
Protects stockholder voting rights
Promotes good corporate governance
Lipson has a History of Subverting the Democratic Process
Refused to cast votes in an attempt to deny a necessary quorum
Disenfranchises other stockholders
Impairs a corporation’s ability to conduct business
Board Recommendations
Proposal 1: FOR election of General John R. Galvin,
Mr. William C. Morris and
Ambassador Robert L. Shafer
Proposal 2: FOR amendment of quorum threshold to one-third
Appendix
History and Tradition
A closed-end investment company established in January 1929, by
J. & W. Seligman & Co.
One of the nation’s oldest and largest diversified equity closed-end
funds with $2.5 billion in assets
Listed on the New York Stock Exchange for 77 years (NYSE: TY)
The average stockholder has held his or her shares for more than 20
years
62 consecutive years of paying dividends
Has among the lowest expense ratio in its investment category
(0.74% vs. 1.12%)*
*Source: Morningstar
Independent Directors
General John R. Galvin
Independent TY director since 1995; Dean Emeritus of Fletcher School of Law and Diplomacy of Tufts University; Formerly
Supreme Allied Commander, NATO, and Commander-in-Chief, United States European Command;
Formerly Director of
Raytheon Co. and USLIFE Corporation; current independent member of Board of investment companies of the Seligman
Group of Funds.
Frank A. McPherson
Retired Chairman of the Board and Chief Executive Officer of Kerr-McGee Corporation; Director, DCP Midstream GP, LLP;
Integris Health; Oklahoma Chapter of the Nature Conservancy, Oklahoma Medical Research
Foundation, Boys and Girls
Clubs of Oklahoma, Oklahoma City Public Schools Foundation, and Oklahoma Foundation for Excellence in Education.
Formerly, Director, ConocoPhillips; Kimberly-Clark Corporation; BOK Financial; Director, the Federal Reserve
System’s
Kansas City Reserve Bank; current independent member of Board of investment companies of the Seligman Group of
Funds.
Betsy S. Michel
Attorney; Trustee, The Geraldine R. Dodge Foundation. Formerly, Chairman of the Board of Trustees of St. George’s
School; Trustee, World Learning, Inc.; Trustee, Council of New Jersey Grantmakers;
current independent member of Board
of investment companies of the Seligman Group of Funds.
Independent Directors
Leroy C. Richie
Counsel, Lewis & Munday, P.C.; Chairman and Chief Executive Officer, Q Standards Worldwide, Inc.; Director, Kerr-McGee
Corporation; Director, Infinity, Inc.; Director, Vibration Control Technologies,
LLC; Lead Outside Director, Digital Ally Inc.;
Director and Chairman, Highland Park Michigan Economic Development Corp.; Chairman, Detroit Public Schools
Foundation. Formerly, Trustee, New York University Law Center Foundation; Director, New York Regional
Office, Federal
Trade Commission; Vice Chairman, Detroit Medical Center and Detroit Economic Growth Corp.; Vice President and
General Counsel, Automotive Legal Affairs, Chrysler Corporation; current independent member of Board of investment
companies
of the Seligman Group of Funds.
Ambassador Robert L. Shafer
Independent TY Director since 1991; Ambassador and Permanent Observer of the Sovereign Military Order of Malta to the
United Nations; former director of USLIFE Corporation and Vice President of Pfizer Inc.;
current independent member of
Boards of investment companies of Seligman Group of Funds.
James N. Whitson
Retired Executive Vice President and Chief Operating Officer, Sammons Enterprises, Inc.; Director, CommScope, Inc.
Formerly, Director and Consultant, Sammons Enterprises, Inc. and a Director of C-SPAN;
current independent member of
Board of investment companies of the Seligman Group of Funds