sec document
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant | |
Filed by a Party other than the Registrant |X|
Check the appropriate box:
| | Preliminary Proxy Statement
| | Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
| | Definitive Proxy Statement
|X| Definitive Additional Materials
| | Soliciting Material Under Rule 14a-12
TRI-CONTINENTAL CORPORATION
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(Name of Registrant as Specified in Its Charter)
WESTERN INVESTMENT HEDGED PARTNERS L.P.
WESTERN INVESTMENT LLC
WESTERN INVESTMENT ACTIVISM PARTNERS LLC
WESTERN INVESTMENT TOTAL RETURN MASTER FUND LTD.
BENCHMARK PLUS INSTITUTIONAL PARTNERS, L.L.C.
BENCHMARK PLUS PARTNERS, L.L.C.
BENCHMARK PLUS MANAGEMENT, L.L.C.
PARADIGM PARTNERS, N.W., INC.
ARTHUR D. LIPSON
SCOTT FRANZBLAU
ROBERT FERGUSON
MICHAEL DUNMIRE
PAUL DEROSA
DAVID B. FORD
ELYSE NAKAJIMA
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(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
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Western Investment Hedged Partners L.P. ("Western Investment") is
filing materials contained in this Schedule 14A with the Securities and Exchange
Commission relating to a proxy statement and accompanying proxy cards to be used
in connection with the special meeting of stockholders of Tri-Continental
Corporation (the "Company") scheduled to be held on September 28, 2006 (the
"Annual Meeting") to solicit votes in support of the election of Western
Investment's slate of director nominees and against certain of the Company's
proposals at the special meeting.
Item 1: On or about August 9, 2006, Western Investment mailed the
following letter to stockholders of the Company:
August 9, 2006
Dear Stockholders of Tri-Continental Corporation:
I am writing this letter to introduce myself and explain why I believe
there is a PROBLEM at Tri-Continental Corporation.
My name is Art Lipson. I am a fellow stockholder and I am leading a
group that has owned Tri-Continental stock since 1999. We care about
Tri-Continental's performance certainly as much as anyone else since we are the
largest stockholder. I began working on Wall Street in 1968 and remember when
Tri-Continental's manager, J. & W. Seligman & Co. Incorporated, was one of the
most prestigious and respected names in the investment management business. I do
not believe that remains the case. In 1988, William Morris gained control of
Seligman, and is presently Chairman of Seligman as well as Chairman of
Tri-Continental. Mr. Morris is seeking reelection as a Director.
o WILLIAM MORRIS, TRI-CONTINENTAL'S CHAIRMAN, IS NAMED IN AN
INVESTIGATION BY THE NEW YORK STATE ATTORNEY GENERAL. AS YOU
PROBABLY KNOW, THE NEW YORK STATE ATTORNEY GENERAL HAS DETERMINED
TO COMMENCE AGAINST SELIGMAN AN ACTION FOR FRAUD RELATING TO
ALLEGED MUTUAL FUND TIMING ACTIVITIES IN CERTAIN FUNDS MANAGED BY
SELIGMAN. THE ATTORNEY GENERAL HAS ALLEGED THAT IN EXCESS OF $80
MILLION WAS "DILUTED" FROM THE VALUE OF THESE FUNDS DURING MR.
MORRIS'S TENURE.
Since 1991, Tri-Continental's cumulative investment performance has
been very disappointing. Tri-Continental has underperformed the S&P 500 index in
12 out of the last 15 years. The performance by Seligman as manager during the
last 15 years, under Mr. Morris's direction, has been abysmal. During this
period, the S&P 500 index returns were 56% higher than Tri-Continental's
returns.
o TRI-CONTINENTAL UNDERPERFORMED THE S&P 500 INDEX IN 12 OF THE LAST
15 YEARS - WE BELIEVE YOUR INVESTMENT DESERVES BETTER MANAGEMENT.
Morningstar, the well-respected rating company for mutual funds,
recently rated the Seligman family of open-end mutual funds with an "F" for
corporate governance, the lowest possible grade. Morningstar also recommends
that investors "proceed with caution" concerning an investment in Seligman
open-end mutual funds.
We put forward an alternative state of directors at Tri-Continental's
Annual Meeting just last May, where neither our nor Tri-Continental's directors
were elected. Tri-Continental spent a great deal of stockholder money in a
failed attempt to elect Mr. Morris and the rest of its slate in that election.
Tri-Continental also engaged in illegal conduct, forcing us to sue to obtain
what stockholders have a right by law to receive in such elections -- the
stockholders' list. Now, only a few months later, the Tri-Continental Board has
decided to hold another election without providing a compelling reason. We
object to the use of stockholder money for this unnecessary election, estimated
by Tri-Continental to cost at least $1.4 million. To make matters worse, because
Tri-Continental has made inaccurate and misleading statements about our
positions in its proxy statement, we have been forced to notify the Securities
and Exchange Commission about these misstatements.
o WHILE DISTORTING OUR POSITION, TRI-CONTINENTAL'S PROXY FAILS TO
DISCLOSE, (A) THE COST TO STOCKHOLDERS OF THE LAST ELECTION; (B)
THE ACTUAL INVESTMENT PERFORMANCE OF TRI-CONTINENTAL FOR THE FIRST
SIX MONTHS OF 2006 (WHICH AGAIN LAGS THE S&P 500 INDEX); AND (C)
THE FACT THAT ITS CHAIRMAN, WILLIAM MORRIS, AND ITS PRESIDENT,
CHIEF EXECUTIVE OFFICER AND DIRECTOR, BRIAN ZINO, HAVE BEEN NAMED
IN THE INVESTIGATION BY THE NEW YORK STATE ATTORNEY GENERAL.
As Tri-Continental has called an unnecessary election, I am compelled
to nominate a slate of directors. JOINING ME AS PROPOSED DIRECTORS ARE TWO
OUTSTANDING INDIVIDUALS, PAUL DEROSA AND DAVID B. FORD, WHO HAVE LONG AND
DISTINGUISHED RECORDS IN INVESTMENT MANAGEMENT AND WHO ARE COMMITTED TO ACTING
IN THE BEST INTEREST OF ALL STOCKHOLDERS. We have provided information about
each of our nominees on the next page. No one on our slate is beholden to
Seligman. Each of us is dedicated to working hard to improve Tri-Continental.
Each of us is independent of Seligman and will vigorously represent all
stockholders in all matters, including the fund's relationship with Seligman.
Our interests are aligned with yours.
o WE NEED AN INDEPENDENT SET OF EYES TO PROTECT OUR INVESTMENT AND
TO SEE TO IT THAT SELIGMAN DOES THE JOB THAT IT IS PAID TO DO.
I have listened to stockholder concerns and want to make it clear that,
despite statements made by the Tri-Continental Board, my goal is NOT to open-end
or liquidate Tri-Continental. When Tri-Continental tells you to the contrary it
is misstating my position. I am committed to improving Tri-Continental to return
it to being an excellent company rather than being sub-par.
The Board of Directors is supposed to be independent and a protector of
stockholder interests. Instead, we believe the Tri-Continental Board has failed
its stockholders by consistently choosing Seligman as its manager despite
Seligman's truly terrible performance record and its legal challenges resulting
from alleged fraudulent market timing activities in other funds under its
management.
WE URGE YOU NOT TO VOTE YOUR SHARES until you have received our proxy
statement and GOLD proxy card. Please do not sign any white proxy card you may
receive from Tri-Continental until all of the facts are before you. Thank you
for keeping an open mind. We hope that with your support we can restore
Tri-Continental to its former prominence.
Very truly yours,
/s/ Arthur D. Lipson
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Arthur D. Lipson
THE WESTERN INVESTMENT NOMINEES
We have proposed a slate of three outstanding nominees for election at
the September special meeting. Each member of our slate has a career of top-tier
investment experience, and we believe our slate's election will be in the best
interests of all stockholders. Set forth below is biographical information on
each member of our slate of nominee directors.
PAUL DEROSA has been a principal since November 1998 of Mt. Lucas
Management Corporation, an asset management company. Mt. Lucas has returned over
17% annually to its investors since its inception in 1996. From March 1988 to
July 1995, Mr. DeRosa served as Managing Director of Eastbridge Capital Inc., a
bond trading company. Previously, Mr. DeRosa served in various capacities with
Citibank NA, including as a Division Head of Citicorp Investment Bank where he
was entrusted with the responsibility of managing Citibank's proprietary bond
portfolio. He also has extensive experience supervising the investment
management process. Mr. DeRosa is currently a director of Intervest Bancshares
Corporation, a financial holding company. Mr. DeRosa received a Ph.D. in
Economics from Columbia University and has served as a staff economist for the
Federal Reserve Bank of New York.
DAVID B. FORD was a partner and then a managing director from 1986 to
2003, and co-head of Global Asset Management from 1994 to 2003, with The Goldman
Sachs Group, Inc., a leading international investment banking and securities
firm. As co-head, Mr. Ford was integrally involved in Goldman's investment
management business, including the selection and review of portfolio managers.
Goldman Sachs is widely considered to be one of the leading global asset
managers. Mr. Ford currently serves on Wharton's Board of Overseers and is a
member of the Board of Trustees for Florida State University. Mr. Ford received
a Bachelor of Science from Florida State University and a Masters of Business
Administration from the Wharton School at the University of Pennsylvania.
ARTHUR D. LIPSON has been managing private investment partnerships
since 1995. He has been the sole managing member of Western Investment LLC, a
Delaware limited liability company that acts as the general partner, managing
member or investment manager, as the case may be, of private investment
partnerships in the Western Investment funds since 1997. Western Investment
specializes in investing in undervalued companies. Mr. Lipson has substantial
experience in sales & trading and research, including heading all fixed income
research for Lehman Brothers and for Paine Webber, was a known leader in the
industry, and created, among other things, the Lehman Brothers bond indices. Mr.
Lipson received a Masters of Science from Columbia University and a Bachelor of
Science from the California Institute of Technology.
CERTAIN INFORMATION CONCERNING WESTERN INVESTMENT
Western Investment Hedged Partners L.P. ("Western Investment"), together with
the other Participants (as defined below), intends to make a filing shortly with
the SEC of a proxy statement (the "Proxy Statement") and accompanying proxy
cards to be used, among other things, to solicit votes in support of the
election of the Participants' slate of director nominees and against certain of
Tri-Continental Corporation's (the "Company") proposals at the special meeting
(the "special meeting") of the Company scheduled for September 28, 2006.
Western Investment advises all stockholders of the Company to read the Proxy
Statement and other proxy materials relating to the special meeting as they
become available because they contain important information. Such proxy
materials are available at no charge on the SEC's web site at
http://www.sec.gov. In addition, the Participants in the solicitation will
provide copies of the proxy materials, without charge, upon request. Requests
for copies should be directed to the Participants' proxy solicitor, Innisfree
M&A Incorporated, at its toll-free number: (877) 456-3510 or by e-mail at:
mbrinn@innisfreema.com.
The Participants in the proxy solicitation are Western Investment, Western
Investment LLC, Arthur D. Lipson, Western Investment Activism Partners LLC,
Western Investment Total Return Master Fund Ltd., Benchmark Plus Institutional
Partners, L.L.C., Benchmark Plus Partners, L.L.C., Benchmark Plus Management,
L.L.C., Paradigm Partners, N.W., Inc., Scott Franzblau, Robert Ferguson, Michael
Dunmire, Paul DeRosa, David B. Ford and Elyse Nakajima (the "Participants").
Information regarding the Participants and their direct or indirect interests is
available in the Schedule 13D jointly filed with the SEC on January 6, 2006, as
subsequently amended on January 10, 2006, February 15, 2006, March 3, 2006, May
12, 2006, and July 12, 2006, and the Proxy Statement.