SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY
(AS PERMITTED BY RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
TRI-CONTINENTAL CORPORATION
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(Name of Registrant as Specified In Its Charter)
[INSERT NAME]
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
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[LOGO] Tri-Continental Corporation
100 Park Avenue, New York, New York 10017
New York City Telephone (212) 850-1864
Toll-Free Telephone (800) 221-2450
Notice of Annual Meeting of Stockholders
to be held on May 20, 2004
To the Stockholders:
The 74th Annual Meeting of Stockholders (the "Meeting") of Tri-Continental
Corporation, a Maryland corporation (the "Corporation"), will be held at the
Four Seasons Hotel, One Logan Square, Philadelphia, Pennsylvania 19103, on May
20, 2004 at 9:00 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 2004; and
(3) To transact such other business as may properly come before the Meeting
or any adjournment thereof including acting upon one shareholder
proposal presented under the heading "Other Matters" in the Proxy
Statement accompanying this Notice, if the proposal is brought before
the Meeting;
all as set forth in the Proxy Statement accompanying this Notice.
The close of business on March 15, 2004 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 15, 2004
-----------------
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.
April 15, 2004
[LOGO] 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, 2004
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 74th
Annual Meeting of Stockholders (the "Meeting") to be held in Philadelphia,
Pennsylvania on May 20, 2004. 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 21, 2004.
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 return your
signed Proxy without instructions, your shares will be voted (i) for the
election of four Directors, (ii) for the ratification of the selection of
auditors, (iii) against the stockholder proposal and, (iv) at the discretion of
the Proxy holders, on any other matter that may properly have come before the
Meeting or any adjournment thereof. 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 15, 2004 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 117,131,704 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, 2004, 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.
1
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 to any Stockholder upon request to
Seligman Data Corp. at 1-800-221-2450.
If you have elected to receive one Proxy Statement for all accounts
maintained by members of your household, the Corporation will deliver promptly
upon written or oral request a separate copy of the Proxy Statement for a
separate account.
A. Election of Directors
(Proposal 1)
The Board of Directors is presently comprised of eleven Directors. The
Board is divided into three classes, two of which consist of four directors and
one of which consists of three directors. 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. Dr. Alice S.
Ilchman and Messrs. Frank A. McPherson, Leroy C. Richie and Brian T. Zino, each
of whose current term will expire at the 2004 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 2007.
It is the intention of the persons named in the accompanying form of Proxy
to nominate and to vote such Proxy for the election of Dr. Ilchman and Messrs.
McPherson, Richie and Zino. Dr. Ilchman has been a Director of the Corporation
since 1990, Mr. McPherson has been a Director of the Corporation since 1995,
Mr. Richie has been a Director of the Corporation since 2000, and Mr. Zino has
been Director and President of the Corporation since 1993 and 1995,
respectively, and Chief Executive Officer of the Corporation since 2002. Dr.
Ilchman and Messrs. McPherson, Richie and Zino were last elected by
Stockholders at the 2001 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 Director Nominating Committee and the Board of
Directors recommend.
Background information regarding Dr. Ilchman and Messrs. McPherson, Richie
and Zino, as well as the other Directors of the Corporation, follows.
2
Term of Number of
Office if Portfolios in
Elected and Principal Occupation(s) During Fund Complex
Name (Age) and Length of Past 5 Years, to be Overseen
Position With Corporation* Time Served Directorships and Other Information by Nominee
-------------------------- ------------ -------------------------------------------------------------------- --------------
Independent Director Nominees
Alice S. Ilchman (69) 2004-2007; President Emerita, Sarah Lawrence College, Bronxville, 61
Director 1990 to Date NY. Dr. Ilchman is a Director or Trustee of each of the investment
[PHOTO] companies of the Seligman Group of Funds+. She is also a Director
of the Jeannette K. Watson Fellowship (summer internships for
Alice S. Ilchman college students); a Trustee of Save the Children (non-profit child-
assistance organization); a Trustee of the Committee for Economic
Development; Governor, Court of Governors, London School of
Economics; and Director, Public Broadcasting Service (PBS). She
was formerly the Chairman of The Rockefeller Foundation
(charitable foundation); and a Director of the New York Telephone
Company.
Frank A. McPherson (71) 2004-2007; Retired Chairman of the Board and Chief Executive Officer of 61
Director 1995 to Date Kerr-McGee Corporation, Oklahoma City, OK (diversified
[PHOTO] energy and chemical company). Mr. McPherson is a Director or
Trustee of each of the investment companies of the Seligman Group
Frank McPheron of Funds+. He is also a Director of ConocoPhillips (integrated
international oil corporation), Integris Health (owner of various
hospitals), BOK Financial (bank holding company), 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. He was formerly a Director of Kimberly-Clark
Corporation (consumer products) and the Federal Reserve System's
Kansas City Reserve Bank.
3
Number of
Term of Office Portfolios in
if Elected and Principal Occupation(s) During Fund Complex
Name (Age) and Length of Past 5 Years, to be Overseen
Position With Corporation* Time Served Directorships and Other Information by Nominee
-------------------------- -------------- ------------------------------------------------------------------ --------------
Independent Director Nominee
Leroy C. Richie (62) 2004-2007; Chairman and Chief Executive Officer, Q Standards 60
Director 2000 to Date Worldwide, Inc., Birmingham, MI (library of technical
[PHOTO] standards). Mr. Richie is a Director or Trustee of each of the
investment companies of the Seligman Group of Funds+, with the
Leroy Richie exception of Seligman Cash Management Fund, Inc. He is also a
Director of Kerr-McGee Corporation (diversified energy and
chemical company) and Infinity, Inc. (oil and gas services and
exploration); and Director and Chairman of Highland Park
Michigan Economic Development Corp. He was formerly a
Trustee of New York University Law Center Foundation; Vice
Chairman of the Detroit Medical Center; Chairman and Chief
Executive Officer of Capital Coating Technologies, Inc. (applied
coating technologies); and Vice President and General Counsel,
Automotive Legal Affairs, of Chrysler Corporation.
Interested Director Nominee
Brian T. Zino** (51) 2004-2007; Director and President, J. & W. Seligman & Co. Incorporated, 61
Director, President and Dir.: 1993 New York, NY. Mr. Zino is President, Chief Executive Officer
Chief Executive Officer to Date and Director or Trustee of each of the investment companies of the
[PHOTO] Pres.: 1995 Seligman Group of Funds+. He is also a Director of Seligman
to Date Advisors, Inc. and Seligman Services, Inc. (broker-dealer);
Brian Zino CEO: Nov 2002 Chairman, Seligman Data Corp.; Member of the Board of
to Date Governors of the Investment Company Institute; and Chairman,
ICI Mutual Insurance Company.
4
Other Directors
The other Directors of the Corporation whose terms will not expire in 2004
are:
Term of Number of
Office Portfolios in
and Length Principal Occupation(s) During Fund Complex
Name (Age) and of Time Past 5 Years, Overseen by
Position With Corporation* Served Directorships and Other Information Director
-------------------------- ------------ ------------------------------------------------------------------- -------------
Independent Directors
Robert B. Catell (67) 2003-2006; Chairman, Chief Executive Officer and Director of KeySpan 60
Director 2003 to date Corporation, Brooklyn, NY (diversified energy, gas and electric
company). Mr. Catell is a Director or Trustee of each of the
investment companies of the Seligman Group of Funds+, with the
exception of Seligman Cash Management Funds, Inc. He is also a
Director or Trustee of Alberta Northeast Gas, Ltd., Boundary Gas
Inc., The Houston Exploration Company (oil and gas exploration,
development and production companies), Edison Electric Institute,
New York State Energy Research and Development Authority,
Independence Community Bank, Business Council of New York
State, Inc., New York City Partnership and the Long Island
Association (business and civic organizations).
John R. Galvin (74) 2003-2006; Dean Emeritus, Fletcher School of Law and Diplomacy at Tufts 61
Director 1995 to Date University, Medford, MA. General Galvin is a Director or Trustee
of each of the investment companies of the Seligman Group of
Funds+. He is also Chairman Emeritus, American Council on
Germany. He was formerly a Director of USLIFE Corporation (life
insurance) and of Raytheon Co. (defense and commercial electronics)
and Governor of the Center for Creative Leadership. From June 1987
to June 1992, General Galvin was the Supreme Allied Commander,
Europe and the Commander-in-Chief, United States European
Command.
5
Term of Number of
Office Portfolios in
and Length Principal Occupation(s) During Fund Complex
Name (Age) and of Time Past 5 Years, Overseen by
Position With Corporation* Served Directorships and Other Information Director
-------------------------- ------------ --------------------------------------------------------------------- -------------
John E. Merow (74) 2002-2005; Retired Chairman and Senior Partner, Sullivan & Cromwell LLP, 61
Director 1991 to Date New York, NY (law firm). Mr. Merow is a Director or Trustee of each
of the investment companies of the Seligman Group of Funds+. He is
also a Director of Commonwealth Industries, Inc. (manufacturer of
aluminum sheet products); Director Emeritus of the Municipal Art
Society of New York; Executive Committee Member and Secretary of
the U.S. Council for International Business; Trustee of the New York-
Presbyterian Hospital; Trustee and Vice Chairman of the New York-
Presbyterian Healthcare System, Inc. and a Member of the American
Law Institute and the Council on Foreign Relations.
Betsy S. Michel (61) 2002-2005; Attorney, Gladstone, NJ. Ms. Michel is a Director or Trustee of 61
Director 1985 to Date each of the investment companies of the Seligman Group of Funds+.
She is also a Trustee of The Geraldine R. Dodge Foundation
(charitable foundation) and World Learning, Inc. (international
educational training). She was formerly Chairman of the Board of
Trustees of St. George's School (Newport, RI).
Robert L. Shafer (71) 2003-2006; Retired Vice President, Pfizer Inc., New York, NY 61
Director 1991 to Date (pharmaceuticals). Mr. Shafer is a Director or Trustee of each of the
investment companies of the Seligman Group of Funds+. He was
formerly a Director of USLIFE Corporation (life insurance).
James N. Whitson (69) 2002-2005; Retired Executive Vice President and Chief Operating Officer of 61
Director 1993 to Date Sammons Enterprises, Inc., Dallas, TX (diversified holding
company). Mr. Whitson is a Director or Trustee of each of the
investment companies of the Seligman Group of Funds+. He is also a
Director of CommScope, Inc. (manufacturer of coaxial cable). Mr.
Whitson was formerly a Director and Consultant of Sammons
Enterprises, Inc. and a Director of C-SPAN (cable television
network).
6
Term of Number of
Office Portfolios in
and Length Principal Occupation(s) During Fund Complex
Name (Age) and of Time Past 5 Years, Overseen by
Position With Corporation* Served Directorships and Other Information Director
-------------------------- ------------ -------------------------------------------------------------------- -------------
Interested Director
William C. Morris** (66) 2003-2006; Chairman, J. & W. Seligman & Co. Incorporated, New York, NY. 61
Director and Chairman 1988 to Date Mr. Morris is Chairman of the Board and Director or Trustee of each
of the Board of the investment companies of the Seligman Group of Funds+;
Chairman of Seligman Advisors, Inc., Seligman Services, Inc.
(broker-dealer), and Carbo Ceramics Inc. (manufacturer of ceramic
proppants for oil and gas industry); a Director of Seligman Data
Corp.; and President and Chief Executive Officer of The Metropolitan
Opera Association. He was formerly a Director of Kerr-McGee
Corporation (diversified energy and chemical company) and Chief
Executive Officer of each of the investment companies of the
Seligman Group of Funds.
-----------------
+ The Seligman Group of Funds currently consists of twenty-three registered
investment companies, including the Corporation.
* The address for each Director or Nominee is 100 Park Avenue, New York, New
York 10017.
** Mr. Morris and Mr. Zino are considered "interested persons" of the
Corporation, as defined in the Investment Company Act of 1940, as amended
("1940 Act"), by virtue of their positions with the Manager and its
affiliates.
7
Beneficial Ownership of Shares of the Corporation and Funds of Complex
As of February 27, 2004, each Director (or Nominee) beneficially owned
shares of the Corporation and the investment companies of the Seligman Group of
Funds as follows:
Aggregate Dollar Range of
Shares Owned
by Director or Nominee of
Dollar Range of Common All Funds Overseen or to
Shares Owned by Director be Overseen by Director
Name of Director (or or Nominee of the or Nominee of Seligman
Nominee) Corporation Group of Funds
-------- ------------------------- -------------------------
Independent Directors/Nominees
Robert B. Catell $10,001-$50,000 $50,001-$100,000
John R. Galvin $10,001-$50,000 $50,001-$100,000
Alice S. Ilchman Over $100,000 Over $100,000
Frank A. McPherson Over $100,000 Over $100,000
John E. Merow Over $100,000 Over $100,000
Betsy S. Michel $10,001-$50,000 Over $100,000
Leroy C. Richie $10,001-$50,000 $10,001-$50,000
Robert L. Shafer $50,001-$100,000 Over $100,000
James N. Whitson Over $100,000 Over $100,000
Interested Directors/Nominees
William C. Morris Over $100,000 Over $100,000
Brian T. Zino Over $100,000 Over $100,000
At February 27, 2004, all Directors and officers of the Corporation as a
group owned beneficially less than 1% of the Corporation's Common Stock.
Section 16(a) Beneficial Ownership Reporting Compliance
During the year ended December 31, 2003, (i) two transactions in the
Corporation's common stock by Mr. Zino were not reported on a timely basis and
(ii) one transaction each in the Corporation's common stock by Messrs. Catell,
James Q. Riordan (a former Director of the Corporation), Thomas G. Rose (a Vice
President of the Corporation) and David F. Stein (Vice Chairman of the Manager)
was not reported on a timely basis. The necessary filing for each such
stockholder was made no later than the next month end.
8
Board Committees
The Board of Directors met seven times during the year ended December 31,
2003. The standing committees of the Board include the Board Operations
Committee, Audit Committee and Director Nominating Committee (the "Nominating
Committee"). These Committees are comprised solely of Directors who are not
"interested persons" of the Corporation as that term is defined in the 1940
Act. The duties of these Committees are described below.
Board Operations Committee. This Committee has authority generally to
direct the operations of the Board, including the nomination of members of
other Board Committees and the selection of legal counsel for the Corporation.
The Committee met six times during the year ended December 31, 2003. Members of
the Committee are Messrs. McPherson (Chairman), Catell, Galvin, Merow, Richie,
Shafer and Whitson, and Dr. Ilchman and Ms. Michel.
Audit Committee. This Committee assists the Board in its oversight of the
Corporation's financial reporting process and operates pursuant to a written
charter most recently amended on March 18, 2004, a copy of which is attached as
Appendix 1. The Committee met three times during the year ended December 31,
2003. Members of this Committee are Messrs. Whitson (Chairman), Galvin, Merow
and Richie, and Ms. Michel. The members of this Committee are "independent" as
required by applicable listing standards of the New York Stock Exchange. The
report of the Audit Committee, as approved on March 18, 2004, is attached to
this Proxy Statement as Appendix 2.
Director Nominating Committee. Members of the Nominating Committee are
Messrs. Shafer (Chairman), Catell, McPherson and Dr. Ilchman. The Nominating
Committee met once during the year ended December 31, 2003. The members of the
Nominating Committee are not "interested persons" of the Corporation as defined
in Section 2(a)(19) of the 1940 Act.
On March 18, 2004, the Board of Directors adopted a charter for the
Nominating Committee, a copy of which is attached as Appendix 3. Pursuant to
the charter, the Nominating Committee identifies, evaluates, selects and
nominates, or recommends for nomination, candidates for the Board. It also may
set standards or qualifications for Directors. The Nominating Committee may
consider candidates for the Board submitted by current Directors, the
Corporation's investment adviser, the stockholders and other appropriate
sources.
The Nominating Committee will consider candidates submitted by a
stockholder or group of stockholders who have owned at least $10,000 of the
Corporation's outstanding common stock for at least one year at the time of
submission and who timely provide specified information about the candidates
and the nominating stockholder or group. To be timely for consideration by the
Nominat-
9
ing Committee, the submission, including all required information, must be
submitted in writing to the attention of the Secretary at 100 Park Avenue, New
York, NY 10017 not less than 120 days before the date of the proxy statement
for the previous year's annual meeting of stockholders. The Nominating
Committee will consider only one candidate submitted by such a stockholder or
group for nomination for election at an annual meeting of stockholders. The
Nominating Committee will not consider self-nominated candidates or candidates
nominated by members of a candidate's family, including such candidate's
spouse, children, parents, uncles, aunts, grandparents, nieces and nephews.
The Nominating Committee will consider and evaluate candidates submitted by
stockholders on the basis of the same criteria as those used to consider and
evaluate candidates submitted from other sources. These criteria may include
the candidate's relevant knowledge, experience, and expertise, the candidate's
ability to carry out his or her duties in the best interests of the Corporation
and the candidate's ability to qualify as a disinterested Director. A detailed
description of the criteria used by the Nominating Committee as well as
information required to be provided by stockholders submitting candidates for
consideration by the Nominating Committee is included in Appendix 3.
Procedures for Communications to the Board of Directors
The Board of Directors has adopted a process for stockholders to send
communications to the Board. To communicate with the Board of Directors or an
individual Director, a stockholder must send written communications to 100 Park
Avenue, New York, NY 10017, addressed to the Board of Directors of
Tri-Continental Corporation or the individual Director. All stockholder
communications received in accordance with this process will be forwarded to
the Board of Directors or the individual Director. Each member of the Board of
Directors is encouraged to attend the Corporation's annual meeting of
stockholders. There were eleven members of the Board of Directors in attendance
at the Corporation's 2003 annual meeting of stockholders.
10
Executive Officers of the Corporation
Information with respect to Executive Officers, other than Messrs. Morris
and Zino, is as follows:
Name (Age) and Position Term of Office and
With the Corporation Length of Time Served* Principal Occupation During Past Five Years
-----------------------------------------------------------------------------------------------------
Richard R. Schmaltz (63) 2003 to Date Mr. Schmaltz is a Managing Director and Chief
Vice President and Investment Officer of the Manager and a Vice
Portfolio Manager President and Portfolio Manager of Seligman
Common Stock Fund, Inc. and a Vice President
and Co-Portfolio Manager of Seligman Income
and Growth Fund, Inc. He is also a Vice President
of Seligman Portfolios, Inc., as well as Portfolio
Manager of its Common Stock Portfolio and a Co-
Portfolio Manager of its Income and Growth
Portfolio. Prior to his early retirement in 2001, Mr.
Schmaltz was Managing Director and Director of
Investments of the Manager.
Charles W. Kadlec (58) 1996 to Date Mr. Kadlec is a Managing Director of the
Vice President Manager and Chief Investment Strategist of
Seligman Advisors, Inc. He is also Vice
President and Portfolio Manager of Seligman
Time Horizon/Harvester Series, Inc.
Lawrence P. Vogel (47) VP: 1992 to Date; Mr. Vogel is Senior Vice President and Treasurer,
Vice President and Treas: 2000 to Date Investment Companies, of the Manager and is
Treasurer Vice President and Treasurer of each of the
investment companies of the Seligman Group of
Funds and of Seligman Data Corp. He was
formerly Senior Vice President, Finance, of the
Manager, 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.
11
Name (Age) and Position Term of Office and
With the Corporation Length of Time Served* Principal Occupation During Past Five Years
----------------------------------------------------------------------------------------------
Thomas G. Rose (46) 2000 to Date Mr. Rose is Senior Vice President, Finance, of
Vice President the Manager, Seligman Advisors, Inc. and
Seligman Data Corp. He is a Vice President of
each of the investment companies of the
Seligman Group of Funds. He is also Vice
President of Seligman International, Inc. and
Seligman Services, Inc. Formerly, he was
Treasurer of each of the investment companies
of the Seligman Group of Funds and Seligman
Data Corp.
Frank J. Nasta (39) 1994 to Date Mr. Nasta is a Managing Director, General
Secretary Counsel and Corporate Secretary of the
Manager. He is Secretary of each of the
investment companies of the Seligman Group of
Funds. He is also Corporate Secretary of
Seligman Advisors, Inc., Seligman Services,
Inc., Seligman International, Inc. and Seligman
Data Corp. He was formerly Corporate
Secretary of Seligman Henderson Co.
-----------------
* All officers are elected annually by the Board of Directors and serve until
their successors are elected and qualify or their earlier resignation. The
address of each of the foregoing officers is 100 Park Avenue, New York, New
York 10017.
12
Remuneration of Directors and Officers
Directors of the Corporation who are not employees of the Manager or its
affiliates each receive an annual retainer fee of $60,000, the amount of which
is shared by the Corporation and the other investment companies in the Seligman
Group of Funds. For the year ended December 31, 2003, the Corporation paid each
Director an aggregate retainer fee of $16,164 (other than with respect to Mr.
Catell who received an aggregate retainer fee of $10,171). In addition, such
Directors are currently paid a total of $3,000 for each day on which they
attend Board and/or Committee meetings ($1,500 for telephonic attendance at
certain meetings), the amount of which is shared by the Corporation and the
other investment companies of the Seligman Group of Funds meeting on the same
day. The Directors are also reimbursed for the expenses of attending meetings.
Total Directors' fees paid by the Corporation to the Directors listed below for
the year ended December 31, 2003 were as follows:
Number of Directors Aggregate Direct
in Group Capacity in which Remuneration was Received Remuneration
--------------------------------------------------------------------------------
9 Directors and Members of Committees $269,943
Director's attendance, retainer and/or committee fees paid to each Director
during 2003 were as follows:
Aggregate Pension or Retirement Total Compensation
Compensation Benefits Accrued as From Corporation and
Name From Corporation Part of Corporation Expenses Fund Complex*
---- ---------------- ---------------------------- --------------------
Robert B. Catell+ $ 17,492 -0- $ 59,913
John R. Galvin 31,858 -0- 102,000
Alice S. Ilchman 30,637 -0- 99,000
Frank A. McPherson 30,637 -0- 100,500
John E. Merow+ 33,086 -0- 105,000
Betsy S. Michel 30,631 -0- 100,500
Leroy C. Richie 33,086 -0- 105,000
Robert L. Shafer 29,430 -0- 96,000
James N. Whitson+ 33,086 -0- 105,000
--------
$269,943
========
-----------------
* For the year ended December 31, 2003, there were twenty-three registered
investment companies in the Seligman Group of Funds.
+ Mr. Catell was elected to the Corporation's Board of Directors on May 15,
2003.
+ Mr. Merow, who deferred receiving his fees from the Corporation and other
investment companies of the Seligman Group of Funds from 1991 to 1997, had a
balance as of December 31, 2003 of $42,810 in his deferred plan account, net
of earnings/losses. Mr. Whitson, who deferred receiving his fees from the
Corporation and other investment companies of the Seligman Group of Funds,
from 1993 to 2002, had a balance as of December 31, 2003 of $215,268 in his
deferred plan account, net of earnings/losses.
13
No compensation is paid by the Corporation to Directors or officers of the
Corporation who are employees of the Manager.
The affirmative vote of a plurality of the votes cast at the Meeting is
required to approve the election of each of the Nominees.
Your Board of Directors Unanimously Recommends that the Stockholders Vote FOR
the Election of Each of the Nominees to Serve as Director of the Corporation.
B. Ratification of Selection of Auditors
(Proposal 2)
The Audit Committee of the Board of Directors has 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 2004. 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.
Deloitte & Touche LLP, in accordance with Independence Standards Board
Standard No. 1, has confirmed to the Audit Committee that they are independent
auditors with respect to the Corporation. Deloitte & Touche LLP has audited the
annual financial statements of the Corporation and provided tax and other
non-audit services to the Corporation. Deloitte & Touche LLP has also rendered
non-audit services to the Manager, Seligman Advisors, Inc., an affiliate of the
Manager, and Seligman Data Corp. ("SDC"), the stockholder service agent for the
Corporation, which is partially owned by the Corporation (together, the
"Affiliated Service Providers").
In making its recommendation, the Audit Committee considered whether the
provision by the independent auditors to the Corporation of non-audit services
to the Corporation or of professional services to the Affiliated Service
Providers is compatible with maintaining the auditors' independence and has
discussed the auditors' independence with them.
14
Principal Accountant Fees and Services
Aggregate fees billed to the Corporation for the last two fiscal years for
professional services rendered by Deloitte & Touche LLP were as follows:
2003 2002
------- -------
Audit Fees........................................ $56,336 $54,850
Audit-Related Fees................................ -- --
Tax Fees.......................................... 2,100 2,000
All Other Fees.................................... 1,897 2,609
Audit fees include amounts related to the audit of the Corporation's annual
financial statements and services normally provided by Deloitte & Touche LLP in
connection with statutory and regulatory filings. Tax fees include amounts
related to tax compliance, tax planning, and tax advice. Other fees include the
Corporation's pro-rata share of amounts for services related to documentation
of certain internal control procedures for the Corporation and other investment
companies advised by the Manager.
Aggregate fees billed by Deloitte & Touche LLP for the last two fiscal
years for non-audit services provided to the Manager and any affiliate of the
Manager that provides ongoing services to the Corporation, where the engagement
related directly to the operations and financial reporting of the Corporation,
were as follows:
2003 2002
------- --------
Audit-Related Fees................................ $89,130 $105,355
Tax Fees.......................................... 7,500 18,450
Audit-related fees include amounts for (i) attestation services for SDC;
(ii) review of certain internal controls of SDC's sub-agent; and (iii)
actuarial services provided prior to May 6, 2003 to the Manager and SDC (such
services were no longer permitted to be performed for SDC after May 5, 2003).
Tax fees include amounts related to tax compliance, tax planning, and tax
advice for and an evaluation of certain tax reporting procedures of SDC.
The Audit Committee is required to preapprove audit and non-audit services
performed for the Corporation by Deloitte & Touche LLP in order to assure that
the provision of such services does not impair the Deloitte & Touche LLP's
independence. The Audit Committee also is required to preapprove certain
non-audit services performed for the Manager and certain of its affiliates that
provide services directly related to the operations and financial reporting of
the Corporation. Unless
15
a type of service to be provided by Deloitte & Touche LLP has received
preapproval, it will require specific preapproval by the Audit Committee. The
Audit Committee has delegated preapproval authority to Mr. James N. Whitson,
the Audit Committee's Chairman. Mr. Whitson will report any preapproval
decisions to the Audit Committee at its next scheduled meeting. Notwithstanding
the foregoing, under certain circumstances, preapproval of non-audit services
of a de minimis amount is not required.
The aggregate fees billed for the most recent fiscal year and the preceding
fiscal year by the Deloitte & Touche LLP for non-audit services rendered to the
Corporation, the Manager, and any of the Manager's affiliates that provided
ongoing services to the Corporation were $100,627 and $128,414, respectively.
All non-audit services discussed above were preapproved by the Audit Committee,
who considered whether these services were compatible with maintaining Deloitte
& Touche LLP's independence.
The affirmative vote of a majority of the votes cast at the Meeting is
required to ratify the selection of auditors.
Your Board of Directors Unanimously Recommends that the Stockholders
Vote FOR the Ratification of the Selection of Deloitte & Touche LLP
as Auditors of the Corporation.
C. Other Matters
The Corporation has received one proposal from a Stockholder for inclusion
in this year's proxy materials, which is set forth below. The Corporation will
provide the name and address of such Stockholder and the number of shares of
the Corporation's common stock owned by him upon oral or written request.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
AGAINST THE STOCKHOLDER PROPOSAL. THE BOARD'S REASONING IS SET FORTH FOLLOWING
THE PROPOSAL IN A STATEMENT OF OPPOSITION. STOCKHOLDERS ARE URGED TO READ
CAREFULLY THE PROPOSAL, THE SUPPORTING STATEMENT AND THE STATEMENT OF
OPPOSITION.
16
Stockholder Proposal
RESOLVED: That the shareholders of Tri-Continental Corporation, assembled
in Annual Meeting in person and by proxy, hereby request the Board of Directors
to take the necessary steps to provide for cumulative voting in the election of
directors, which means each shareholder shall be entitled to as many votes as
shall equal the number of shares he or she owns multiplied by the number of
directors to be elected, and he or she may cast all of such votes for a single
candidate or any two or more candidates as he or she may see fit.
The Stockholder has submitted the following statement in support of his
proposal:
SUPPORTING STATEMENT: Some states have mandatory cumulative voting, so do
national banks. In addition, many corporations have adopted cumulative voting.
As the 2002 Annual Report from the Corporation states, during the past five
years we the shareholders have suffered an annual loss of 3.08% on the market
price of our shares and 3.32% on the asset value. Living with Tri-Continental
for the past 5 years has not been a pleasant experience.
For this performance last year we paid $16,295,925 in total costs, or about 34%
of the income of the fund or .67% of the average assets of the fund for the
year. The only people sure to make money from the fund are the fund's managers.
We provide the money, we take the risk, why do they charge so much for managing
the fund?
Wherever I have brought up the unsatisfactory performance of the fund and the
cost of managing the fund with the directors at shareholder's past meetings, I
have been met with silence or a defense of the fund.
It is my opinion the problem we active shareholder's have is that the fund has
so many passive shareholders, it makes it difficult, if not impossible, for us
to vote for someone who does not have the blessing of Seligman. Many of
Tri-Continental's present directors serve on more than one Seligman Fund, would
this influence their objective responsibilities to us the shareholders? It is
my hope that this proposal will enhance the influence of the active
shareholders. Please vote yes on this proposal.
-----------------
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST THIS
STOCKHOLDER PROPOSAL FOR THE REASONS SET FORTH BELOW.
For the reasons set forth below, your Board of Directors believes that the
adoption of this proposal would not be in the best interests of the Corporation
or its stockholders.
17
The present system of voting for directors provides the best assurance that
the decisions of the directors will be in the interests of all stockholders,
and that each director will be elected by a majority of the stockholders and
will not owe any allegiance toward a particular group of minority stockholders.
The stockholders considered and rejected a similar proposal regarding
adoption of cumulative voting at the 1996 annual meeting. Approximately 87% of
the votes cast were cast against the proposal at that meeting. Your Board of
Directors believes that the reasons for rejecting the proposal in 1996 remain
valid today.
Cumulative voting might make it possible for a special interest group to
elect one or more directors whose loyalty might be directed more to the narrow
interests of that particular group of stockholders rather than to the interests
of all stockholders. It introduces the possibility of partisanship among your
Corporation's Board of Directors and could impair the Board's ability to work
effectively as a cohesive unit. The present voting system, long utilized by the
Corporation and by most leading corporations, prevents the "stacking" of votes
behind a single nominee for director and thereby promotes the election of each
director on the basis of representing the interests of the Corporation and the
stockholders as a whole.
The Proponent incorrectly states that "[s]ome states have mandatory
cumulative voting so do national banks. In addition, many corporations have
adopted cumulative voting." The State of Maryland, in which the Corporation is
incorporated, does not require cumulative voting. Moreover, according to the
Investor Responsibility Research Center (IRRC), only six states make cumulative
voting mandatory under their corporation law statutes. According to the IRRC,
only 9.2% percent of the 1,500 major U.S. companies tracked by it allowed
cumulative voting in 2002 (the most recent year for which IRRC has published
this information).
The Proponent states that "[m]any of Tri-Continental's present directors
serve on more than one Seligman Fund, would this influence their objective
responsibilities to us the shareholders?" Each of the Corporation's directors
is well aware that he or she owes, and each strives to fulfill, the same
fiduciary duties to each of the Seligman investment companies on whose board he
or she sits. Their service as directors of other investment funds does not
affect their commitment to the Corporation. In fact, your directors believe
that the insight gained from serving as directors for investment funds with
differing investment objectives helps provide a valuable perspective that would
otherwise be unavailable.
18
This proposal will not be adopted unless the votes cast in its favor exceed
the votes cast against it. Abstentions and broker non-votes will not be counted
as either for or against the proposal. If not otherwise specified, Proxies will
be voted AGAINST approval of the proposal. The adoption of the proposal would
not in itself result in any action, but would simply amount to a request for
action by the Board. In order to implement the proposal, the Board would need
to approve an amendment to the Corporation's charter providing for cumulative
voting, and the amendment would then have to be submitted to stockholders for
approval. Approval of a charter amendment to permit cumulative voting would
require the affirmative vote of a majority of all outstanding shares of stock
of the Corporation.
Your Directors believe that your vote AGAINST this proposal will be in the
best interests of the Corporation and all its stockholders.
-----------------
The Corporation knows of no other matters which are to be brought before
the Meeting. However, if any other matters come before the Meeting, it is
intended that the persons named in the enclosed form of Proxy, or their
substitutes, will vote the Proxy in accordance with their judgment on such
matters. The persons named in the form of Proxy, or their substitutes, will
have discretionary authority to vote on any Stockholder proposal of which the
Corporation's first received notice after March 7, 2004. In addition, the
Corporation's By-laws permit the Corporation to exclude from consideration at
the Meeting any Stockholder proposal first brought to the attention of the
Corporation after March 16, 2004.
Notice is hereby given that, under the Securities Exchange Act's
stockholder proposal rule (Rule 14a-8), any Stockholder proposal that may
properly be included in the Proxy solicitation material for the next Annual
Meeting, now scheduled for May 2005, must be received by the Corporation no
later than December 22, 2004. Timely notice of Stockholder proposals submitted
outside of the Rule 14a-8 process must be received by the Corporation no
earlier than February 19, 2005 and no later than March 21, 2005, to be eligible
for presentation at the May 2005 Annual Meeting.
D. Expenses
The Corporation will bear the cost of soliciting Proxies. In addition to
the use of the mails, Proxies may be solicited personally or via facsimile or
telegraph by Directors, officers and employees of the Corporation, the Manager,
Seligman Advisors, Inc., Seligman Services, Inc. and SDC, and the
19
Corporation may reimburse persons holding shares in their names or names of
their nominees for their expenses in sending solicitation material to their
beneficial owners. The Corporation has engaged 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.
20
APPENDIX 1
TRI-CONTINENTAL CORPORATION
(The "Company")
AUDIT COMMITTEE CHARTER
I. Composition of the Audit Committee: The Audit Committee shall be composed
of at least three directors, each of whom shall satisfy the independence
requirements of Rule 10A-3 under the Securities Exchange Act of 1934, and
shall otherwise satisfy any applicable membership requirements under the
rules or the New York Stock Exchange, Inc., as such requirements are
interpreted by the Board of Directors (the "Board") in its business
judgment.
II. The Audit Committee: The function of the Audit Committee is oversight. The
purposes of the Audit Committee are to:
1. assist Board oversight of (i) the integrity of the Company's financial
statements, (ii) the Company's compliance with legal and regulatory
requirements, (iii) the independent auditors' qualifications and
independence, and (iv) the performance of the independent auditors; and
2. prepare an audit committee report for inclusion in the Company's annual
proxy statement, if such proxy statement is required by applicable SEC
rules.
The independent auditors shall submit to the Audit Committee at least
annually formal written statements (the "Auditors' Statements") describing:
(i) the auditors' internal quality-control procedures, and any material
issues raised by the most recent internal quality-control review or peer
review of the auditors, or by any inquiry or investigation by governmental
or professional authorities, within the preceding five years, respecting
one or more independent audits carried out by the auditors, and any steps
taken to deal with any such issues; and (ii) (to assess the auditors'
independence) all relationships between the independent auditors and the
Company, J. & W. Seligman & Co. Incorporated ("Seligman") and any entity
controlling, controlled by or under common control with Seligman (the
"Seligman Affiliates"), whether or not they provide ongoing services to the
Company, and including at least the matters set forth in Independence
Standards Board Standard No. 1 and any other required information. The
description of relationships should include a description of the non-audit
services, including the fees associated therewith, that were not
pre-approved by the Company's Audit Committee. Seligman Data Corp. shall be
considered a Seligman Affiliate for purposes of this Charter. The Audit
Committee shall consider whether any relationship or service, including
non-audit services, disclosed in these Statements, may impact the quality
of services or the objectivity and independence of the independent auditors.
1-i
III. Meetings of the Audit Committee: The Audit Committee shall meet
semi-annually, or more frequently if circumstances dictate, to discuss
with management and the independent auditors the annual audited financial
statements and to address the matters set forth in Article IV. The Audit
Committee should meet separately at least annually with each of management
and the independent auditors to discuss any matters that the Audit
Committee or any of these persons or firms believe should be discussed
privately.
IV. Duties and Powers of the Audit Committee: To carry out its purposes, the
Audit Committee shall have the following duties and powers:
1. with respect to the independent auditors,
(i) to be directly responsible for the appointment, compensation,
retention and oversight of the work of the independent auditors
(including the resolution of disagreements between management and
the independent auditors regarding financial reporting), and any
other registered public accounting firm engaged for the purpose of
preparing or issuing an audit report or to perform audit, review or
attestation services; the independent auditor and any other such
registered public accounting firm shall each report directly to the
Audit Committee; provided that the independent auditor appointment
shall be subject to ratification by the Board members who are not
interested persons;
(ii) to pre-approve, or to adopt appropriate procedures to pre-approve,
all audit and non-audit services to be provided by the independent
auditors;
(iii) to obtain from the independent auditors in connection with any audit
a timely report relating to the Company's annual audited financial
statements describing all critical accounting policies and practices
used, all alternative treatments within generally accepted
accounting principles for policies and practices related to material
items that have been discussed with management, ramifications of the
use of such alternative disclosures and treatments, and the
treatment preferred by the independent auditors, and any material
written communications between the independent auditors and
management, such as any "management" letter or schedule of
unadjusted differences; and
(iv) to discuss with management the timing and process for implementing
the rotation of the lead audit partner, the concurring partner and
any other active audit engagement team partner;
2. with respect to accounting principles and policies, financial reporting
and internal controls over financial reporting,
1-ii
(i) to advise management, relevant service providers and the independent
auditors that they are expected to provide or cause to be provided
to the Audit Committee a timely analysis of significant issues and
practices relating to accounting principles and policies, financial
reporting and internal control over financial reporting, and to
advise the independent auditors that they must disclose to the Audit
Committee any significant communications between the audit team and
the independent auditor's national office respecting auditing or
accounting issues presented by the engagement;
(ii) to consider any reports or communications (and management's and/or
applicable service providers' responses thereto) submitted to the
Audit Committee by the independent auditors required by or referred
to in Statement of Auditing Standards No. 61 (as codified by AU
Section 380) or other applicable auditing literature, as may be
modified or supplemented;
(iii) to meet with management and/or the independent auditors and, if
appropriate, the relevant service providers:
. to discuss the scope of the annual audit or any audit or review
of periodic financial statements;
. to discuss the annual audited financial statements and other
periodic financial statements, if any, including any Company
disclosure relating to management's discussion of fund
performance;
. to discuss any significant matters arising from any audit or
report or communication referred to in item 2(ii) above,
including any audit problems or difficulties, whether raised by
management, relevant service providers, or the independent
auditors, relating to the Company's financial statements;
. to discuss any problems or difficulties the independent auditors
encountered in the course of the audit, including any
restrictions on their activities or access to requested
information and management's responses to such problems or
difficulties, and to resolve significant disagreements with
management and the independent auditors;
. to discuss any "management" or "internal control" letter issued,
or proposed to be issued, by the independent auditors to the
Company;
. to discuss, as appropriate: (a) any major issues regarding
accounting principles and financial statement presentations,
including any significant changes in the Company's selection or
application of accounting principles, and major issues as to the
adequacy of the Company's internal controls and any special audit
steps
1-iii
adopted in light of material control deficiencies;
(b) analyses prepared by management and/or the independent
auditors setting forth significant financial reporting issues and
judgments made in connection with the preparation of the
financial statements, including analyses of the effects of
alternative GAAP methods on the financial statements; and (c) the
effect of regulatory and accounting initiatives on the financial
statements of the Company; and
. to discuss guidelines and policies governing the process by which
management of the Company and the relevant service providers of
the Company assess and manage the Company's exposure to risk, and
to discuss the Company's most significant financial risk
exposures and the steps management has taken to monitor and
control such exposures;
(iv) to inquire of the Company's chief executive officer and chief
financial officer as to the existence of any significant
deficiencies or material weaknesses in the design or operation of
internal control over financial reporting which are reasonably
likely to adversely affect the Company's ability to record, process,
summarize and report financial information and as to the existence
of any fraud, whether or not material, that involves management or
service providers that have a significant role in the Company's
internal control over financial reporting;
(v) to establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters, and for the confidential,
anonymous submission by Company or Seligman employees, or employees
of any applicable service provider that provides accounting related
services to the Company, of concerns regarding questionable
accounting or auditing matters; and
(vi) to review policies of Seligman, the Seligman Affiliates and any
other entity within the Company's Investment Company Complex, as
such term is defined in Regulation S-X, for hiring employees or
former employees of the independent auditors whose responsibilities
are to include an accounting role or financial reporting oversight
role with respect to the Company.
3. with respect to Seligman Data Corp., to perform such of the duties set
forth in this Article IV in respect of the Company as are appropriate,
and to exercise such powers as are provided in this Charter, as are
appropriate in respect of the accounting principles and policies,
financial reporting and internal controls over financial reporting, the
financial statements and the audit thereof, management and the
independent auditors of Seligman Data Corp.
1-iv
4. with respect to reporting, recommendations and other matters,
(i) to prepare any report or other disclosures, including any
recommendation of the Audit Committee, required by the rules of the
Securities and Exchange Commission to be included in the Company's
annual proxy statement, if any;
(ii) to prepare and review with the Board an annual performance
evaluation of the Audit Committee, which evaluation shall compare
the performance of the Audit Committee with the requirements of this
Charter;
(iii) to report its activities to the full Board on a regular basis and to
make such recommendations with respect to the above and other
matters (including changes to this Charter) as the Audit Committee
may deem necessary or appropriate; and
(iv) to perform such other functions and to have such other powers as may
be necessary or appropriate in the efficient and lawful discharge of
the foregoing.
V. Delegation to Subcommittee: The Audit Committee may, in its discretion,
delegate all or a portion of its duties and responsibilities to a
subcommittee of the Audit Committee. The Board and the Audit Committee have
authorized the Chairman of the Audit Committee (or any other Audit
Committee member to whom this responsibility has been delegated) to
pre-approve any audit or non-audit services to be performed by the
independent auditors, provided that any such approvals are presented to the
Audit Committee at its next scheduled meeting.
VI. Resources and Authority of the Audit Committee: The Audit Committee shall
have the resources and authority appropriate to discharge its duties and
responsibilities, including the authority to select, retain, terminate, and
approve the fees and other retention terms of special or independent
counsel, accountants or other experts and advisors, as it deems necessary
or appropriate, without seeking approval of the Board or management.
Amended and Restated on March 18, 2004.
1-v
APPENDIX 2
TRI-CONTINENTAL CORPORATION
(the "Fund")
AUDIT COMMITTEE REPORT
The Audit Committee operates pursuant to a written charter that was last
amended and restated by the Fund's Board of Directors on March 18, 2004. The
purposes of the Audit Committee are to 1) assist the Board of Directors in its
oversight of (i) the integrity of the Fund's financial statements; (ii) the
Fund's compliance with legal and regulatory requirements; and (iii) the
independent auditors' independence, qualifications and performance; and 2) to
prepare this report. Management of the Fund is responsible for the preparation,
presentation and integrity of the Fund's financial statements, the Fund's
accounting and financial reporting principles and internal controls and
procedures designed to assure compliance with accounting standards and
applicable laws and regulations. The independent auditors are responsible for
auditing the Fund's financial statements and expressing an opinion as to their
conformity with generally accepted accounting principles.
In the performance of its oversight function, the Audit Committee has
considered and discussed the audited financial statements with management and
the independent auditors of the Fund. The Audit Committee has also discussed
with the independent auditors the matters required to be discussed by Statement
on Auditing Standards No. 61, Communication with Audit Committees, as currently
in effect. The Audit Committee has also considered whether the provision of any
non-audit services not pre-approved by the Audit Committee provided by the
Fund's independent auditors to the Adviser or Manager and to any entity
controlling, controlled by or under common control with the Adviser or Manager
that provides ongoing services to the Fund is compatible with maintaining the
auditors' independence. Finally, the Audit Committee has received the written
disclosures and the letter from the independent auditors required by
Independence Standards Board Standard No. 1, Independence Discussions with
Audit Committees, as currently in effect, and has discussed with the auditors
the auditors' independence.
The members of the Audit Committee are not full-time employees of the Fund
and are not performing the functions of auditors or accountants. As such, it is
not the duty or responsibility of the Audit Committee or its members to conduct
"field work" or other types of auditing or accounting reviews or procedures or
to set auditor independence standards. Members of the Audit Committee
necessarily rely on the information provided to them by management and the
independent auditors. Accordingly, the Audit Committee's considerations and
discussions referred to above do not assure
2-i
that the audit of the Fund's financial statements has been carried out in
accordance with generally accepted auditing standards, that the financial
statements are presented in accordance with generally accepted accounting
principles or that the Fund's auditors are in fact "independent."
Based upon the reports and discussions described in this report, and
subject to the limitations on the role and responsibilities of the Audit
Committee referred to above, the Audit Committee recommended to the Board of
Directors of the Fund that the audited financial statements of the Fund be
included in the Fund's annual report to stockholders for the most recent fiscal
period.
SUBMITTED BY THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
John R. Galvin
John E. Merow
Betsy S. Michel
Leroy C. Richie
James N. Whitson
As approved on March 18, 2004.
2-ii
APPENDIX 3
SELIGMAN QUALITY MUNICIPAL FUND, INC.
SELIGMAN SELECT MUNICIPAL FUND, INC.
TRI-CONTINENTAL CORPORATION
The Board of Directors (each a "Board") of each of the registered
investment companies listed above (each, separately, a "Fund" and,
collectively, the "Funds"), has adopted this Charter to govern the activities
of the Nominating Committee (the "Committee") of the particular Board. This
Charter applies separately to each Fund and its particular Board and Committee.
Statement of Purposes and Responsibilities
The primary purposes and responsibilities of the Committee are (i) to
identify individuals qualified to become members of the Board in the event that
a position is vacated or created, (ii) to consider all candidates proposed to
become members of the Board, subject to the procedures and policies set forth
in this Charter, the Fund's Bylaws or resolutions of the Board, (iii) to select
and nominate, or recommend for nomination by the Board, candidates for election
as Directors (iv) to set any necessary standards or qualifications for service
on the Board, and (v) to make recommendations with respect to compensation of
the Independent Directors (as defined below).
Organization and Governance
The Committee shall be composed of as many Directors as the Board shall
determine in accordance with the Fund's Bylaws, but in any event not less than
two (2) Directors. The Committee must consist entirely of Board members who are
not "interested persons" of the Fund, as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended ("Independent Directors"). The Board
may remove or replace any member of the Committee at any time in its sole
discretion.
One or more members of the Committee may be designated by the Board as the
Committee's chairman or co-chairman, as the case may be.
Committee meetings shall be held in accordance with the Fund's Bylaws as
and when the Committee or the Board determines necessary or appropriate. Except
as may be otherwise set forth in the Fund's Bylaws, the chairman, a
co-chairman, any two members of the Committee or the Fund's secretary may set
the time and place of its meeting unless the Board shall otherwise provide.
3-i
Criteria for Director Nominees
The Committee may take into account a wide variety of factors in
considering Director candidates, including (but not limited to): (i) the
candidate's knowledge in matters relating to the investment company industry;
(ii) any experience possessed by the candidate as a director or senior officer
of other public or private companies; (iii) the candidate's educational
background; (iv) the candidate's reputation for high ethical standards and
personal and professional integrity; (v) any specific financial, technical or
other expertise possessed by the candidate, and the extent to which such
expertise would complement the Board's existing mix of skills and
qualifications; (vi) the candidate's perceived ability to contribute to the
ongoing functions of the Board, including the candidate's ability and
commitment to attend meetings regularly, work collaboratively with other
members of the Board and carry out his or her duties in the best interests of
the Fund; (vii) the candidate's ability to qualify as an Independent Director;
and (viii) such other criteria as the Nominating Committee determines to be
relevant in light of the existing composition of the Board and any anticipated
vacancies or other factors.
Identification of Nominees
In identifying potential nominees for the Board, the Committee may consider
candidates recommended by one or more of the following sources: (i) the Fund's
Directors, (ii) the Fund's officers, (ii) the Fund's investment adviser(s),
(iv) the Fund's stockholders (see below) and (v) any other source the Committee
deems to be appropriate. The Committee will not consider self-nominated
candidates or candidates nominated by members of a candidate's family,
including such candidate's spouse, children, parents, uncles, aunts,
grandparents, nieces and nephews. The Committee may, but is not required to,
retain a third party search firm at the Fund's expense to identify potential
candidates.
Consideration of Candidates Recommended by Stockholders
The Committee will consider and evaluate nominee candidates properly
submitted by stockholders on the same basis as it considers and evaluates
candidates recommended by other sources. Appendix A to this Charter, as it may
be amended from time to time by the Committee, sets forth qualifications and
procedures that must be met or followed by stockholders to properly submit a
nominee candidate to the Committee (recommendations not properly submitted in
accordance with Appendix A will not be considered by the Committee).
3-ii
Appendix A
Procedures for Stockholders to Submit Nominee Candidates
(As of March 18, 2004)
A Fund stockholder must follow the following procedures to properly submit
a nominee recommendation for the Committee's consideration.
1. A stockholder or group of stockholders (referred to in either case as a
"Nominating Stockholder") that, individually or as a group, has
beneficially owned at least $10,000 of the Fund's common stock for at least
one year prior to the date the Nominating Stockholder submits a candidate
for nomination as a Director may submit one candidate to the Committee for
consideration at an annual meeting or other meeting of stockholders at
which directors will be elected. Nominations will not be considered except
in connection with such meetings of stockholders.
2. The Nominating Stockholder must submit any such recommendation (a
"Stockholder Recommendation") in writing to the Fund via first class mail,
to the attention of the Secretary, at the address of the principal
executive offices of the Fund.
3. The Stockholder Recommendation must be mailed via first class mail and
received at the principal executive offices of the Fund not less than one
hundred twenty (120) calendar days before the date of the Fund's proxy
statement released to stockholders in connection with the previous year's
annual meeting. If an annual meeting of stockholders was not held in the
previous year, the Stockholder Recommendation must be so delivered or
mailed and received by a date specified in a public notice by the Fund.
Such public notice shall be made at least 30 calendar days prior to the
deadline for submission of Stockholder Recommendations for the upcoming
annual meeting of stockholders (for this purpose, a special meeting at
which directors will be elected shall be considered an annual meeting),
which is expected under normal circumstances to be approximately 120
calendar days prior to the anticipated date of the proxy statement for such
meeting. Such public notice may be given in a stockholder report or other
mailing to stockholders or by any other means deemed by the Nominating
Committee or the Board of Directors to be reasonably calculated to inform
stockholders.
4. The Stockholder Recommendation must include:
(i) a statement in writing setting forth
3-iii
A) the name, date of birth, business address and residence address of
the person recommended by the Nominating Stockholder (the
"candidate");
B) any position or business relationship of the candidate, currently or
within the preceding five years, with the Nominating Stockholder or
an Associated Person of the Nominating Stockholder;
C) the class or series and number of all shares of the Fund owned of
record or beneficially by the candidate, as reported to such
Nominating Stockholder by the candidate;
D) any other information regarding the candidate that is required to be
disclosed about a nominee in a proxy statement or other filing
required to be made in connection with the solicitation of proxies
for election of Directors pursuant to Section 14 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the rules
and regulations promulgated thereunder;
E) whether the Nominating Stockholder believes that the candidate is or
will be an "interested person" of the Fund (as defined in the
Investment Company Act of 1940, as amended) and, if believed not to
be an "interested person," information regarding the candidate that
will be sufficient for the Fund to make such determination; and
F) information as to the candidate's knowledge of the investment
company industry, experience as a director or senior officer of
public or private companies, directorships on the boards of other
registered investment companies and educational background;
(ii) the written and signed consent of the candidate to be named as a
nominee and to serve as a Director if elected;
(iii) the written and signed agreement of the candidate to complete a
directors' and officers' questionnaire if elected;
(iv) the Nominating Stockholder's name as it appears on the Fund's books and
consent to be named as such by the Fund;
(v) the class or series and number of all shares of the Fund owned
beneficially and of record by the Nominating Stockholder and any
Associated Person of the Nominating Stockholder and the dates on which
such shares were acquired, specifying the number of shares owned
beneficially but not of record by each and identifying the nominee
holders for the Nominating Stockholder and each such Associated Person
of the Nominating Stockholder; and
3-iv
(vi) a description of all arrangements or understandings between the
Nominating Stockholder (including any member of a group that
constitutes a Nominating Stockholder), the candidate and/or any other
person or persons (including their names) pursuant to which the
recommendation is being made by the Nominating Stockholder.
"Associated Person of the Nominating Stockholder" as used in this paragraph
4 means any person required to be identified pursuant to clause (vi) and
any other person controlling, controlled by or under common control with,
directly or indirectly, the Nominating Stockholder or any person required
to be identified pursuant to clause (vi).
5. The Committee may require the Nominating Stockholder to furnish such other
information as it may reasonably require or deem necessary to verify any
information furnished pursuant to paragraph 4 above or to determine the
qualifications and eligibility of the candidate proposed by the Nominating
Stockholder to serve on the Board. If the Nominating Stockholder fails to
provide such other information in writing within seven days of receipt of
written request from the Committee, the recommendation of such candidate as
a nominee will be deemed not properly submitted and will not be considered
by the Committee.
3-v
[LOGO] Tri-Continental Corporation
Managed by
J. & W. SELIGMAN & CO.
INCORPORATED
INVESTMENT MANAGERS AND ADVISORS
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
[LOGO] Tri-Continental
Corporation
Notice of Annual Meeting of Stockholders and Proxy Statement
Time:May 20, 2004 9:00 A.M.
Place:Four Seasons Hotel
One Logan Square
Philadelphia, Pennsylvania 19103
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.
[LOGO] J&WS
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, 2004 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 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.
--------------------------------------------------------------------------------
[ ] 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.)
--------------------------------------------------------------------------------
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 of the Board of Directors and FOR Proposal 2 and
AGAINST Proposal 3. THE SOLICITATION OF THIS PROXY IS MADE ON BEHALF OF THE
BOARD OF DIRECTORS.
YOUR VOTE IS IMPORTANT. Complete, sign on reverse side and return this card as
soon as possible. Mark each vote with an X in the box.
The Board of Directors recommends a vote FOR proposals 1 and 2 and AGAINST
proposal 3.
1. ELECTION OF DIRECTORS FOR WITHHOLD
all nominees all nominees
NOMINEES: Alice S. Ilchman, Frank A. [ ] [ ]
McPherson, Leroy C. Richie
and Brian T. Zino
Instruction: To withhold authority to vote for one
or more individual nominees, write the name(s) of
such person(s) below:
----------------------------------------------------
2. Ratification of the selection of FOR AGAINST ABSTAIN
Deloitte & Touche LLP as Auditors. [ ] [ ] [ ]
3. Stockholder proposal regarding cumulative FOR AGAINST ABSTAIN
voting for directors. [ ] [ ] [ ]
DATED:_____________________________________ , 2004
__________________________________________________
Signature
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.
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, 2004 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 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.
--------------------------------------------------------------------------------
[ ] 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.)
--------------------------------------------------------------------------------
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 of the Board of Directors and FOR Proposal 2 and
AGAINST Proposal 3. THE SOLICITATION OF THIS PROXY IS MADE ON BEHALF OF THE
BOARD OF DIRECTORS.
YOUR VOTE IS IMPORTANT. Complete, sign on reverse side and return this card as
soon as possible. Mark each vote with an X in the box.
The Board of Directors recommends a vote FOR proposals 1 and 2 and AGAINST
proposal 3.
1. ELECTION OF DIRECTORS FOR WITHHOLD
all nominees all nominees
NOMINEES: Alice S. Ilchman, Frank A. [ ] [ ]
McPherson, Leroy C. Richie
and Brian T. Zino
Instruction: To withhold authority to vote for one
or more individual nominees, write the name(s) of
such person(s) below:
----------------------------------------------------
2. Ratification of the selection of FOR AGAINST ABSTAIN
Deloitte & Touche LLP as Auditors. [ ] [ ] [ ]
3. Stockholder proposal regarding cumulative FOR AGAINST ABSTAIN
voting for directors. [ ] [ ] [ ]
DATED:_____________________________________ , 2004
__________________________________________________
Signature
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.