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))
/X/ Definitive Proxy Statement
/ / 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)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(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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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials:
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/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid
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(2) Form, Schedule or Registration Statement No:
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(3) Filing Party:
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(4) Date Filed:
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WESTERN INVESTMENT HEDGED PARTNERS L.P.
August 22, 2006
Dear Fellow Stockholder:
Western Investment Hedged Partners L.P. ("Western Investment") together
with our fellow participants in this solicitation is the largest investor in
Tri-Continental Corporation ("Tri-Continental" or the "Company"). We made our
initial investment in Tri-Continental in 1999, and over time have increased the
amount of our investment. We write to you regarding the special meeting of
stockholders scheduled to be held at the offices of Venable LLP, 2 Hopkins
Plaza, 18th Floor, Baltimore, Maryland 21202, on September 28, 2006 at 9:30 a.m.
Western Investment does not believe that the current board of directors of the
Company is acting in your best interests. Western Investment is therefore
seeking your support at the special meeting of stockholders for the following
purposes:
1. To elect Western Investment's slate of nominees to the
Tri-Continental Board, each to hold office until the 2009 annual
meeting of the Company's stockholders and until their successors
are elected and qualify;
2. To oppose the Company's proposal to approve an amendment to the
Company's charter to provide that the presence in person or by
proxy of stockholders entitled to cast at least one-third (1/3)
of all of the votes entitled to be cast at a stockholder meeting
constitutes a quorum, unless a higher percentage is specified in
the bylaws of the Company; and
3. To transact such other business as may properly come before the
special meeting or any adjournment or postponement thereof.
Western Investment urges you to carefully consider the information
contained in the attached proxy statement and then support its efforts by voting
your shares today by telephone or via the Internet as detailed in the enclosed
GOLD proxy card, or by signing, dating and returning today the enclosed GOLD
proxy card in the postage paid envelope provided. The attached proxy statement
and GOLD proxy card are first being furnished to the stockholders on or about
August 22, 2006.
IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY TRI-CONTINENTAL
MANAGEMENT TO TRI-CONTINENTAL, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE BY
SIGNING, DATING AND RETURNING THE ENCLOSED GOLD PROXY CARD OR BY FOLLOWING THE
INSTRUCTIONS FOR TELEPHONE OR INTERNET VOTING DETAILED THEREON. ONLY YOUR LATEST
DATED PROXY CARD COUNTS!
If you have any questions or require assistance voting your shares,
please contact Innisfree M&A Incorporated, which is assisting us, at their
address and toll-free number listed on the following page.
Thank you for your support,
/s/ Arthur D. Lipson
-------------------------------------------
Arthur D. Lipson
Western Investment Hedged Partners L.P.
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If you have any questions or need assistance voting your shares, please call:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders Call Toll-Free at: (877) 456-3510
Banks and Brokers Call Collect at: (212) 750-5833
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PLEASE BE ADVISED:
o TRI-CONTINENTAL'S STOCK HAS UNDERPERFORMED THE S&P 500 INDEX ON A LONG-TERM
BASIS (page 6)
o TRI-CONTINENTAL'S NAV DISCOUNT IS UNACCEPTABLE (page 9)
o ALL OF THE CURRENT MEMBERS OF THE TRI-CONTINENTAL BOARD ARE A DIRECTOR OR
TRUSTEE OF AT LEAST 23 REGISTERED INVESTMENT COMPANIES MANAGED BY SELIGMAN,
TRI-CONTINENTAL'S MANAGER (page 10)
o ONGOING INQUIRY OF SELIGMAN BY THE OFFICE OF THE NEW YORK ATTORNEY GENERAL,
WHICH NAMES WILLIAM MORRIS AND SELIGMAN. MR. MORRIS IS ONE OF MANAGEMENT'S
NOMINEES FOR REELECTION TO THE BOARD AND IS CURRENTLY CHAIRMAN OF THE BOARD
(page 10)
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ADDITIONAL INFORMATION CAN BE FOUND AT:
WWW.FIXMYFUND.COM
2
SPECIAL MEETING OF STOCKHOLDERS
OF
TRI-CONTINENTAL CORPORATION
-------------------------
PROXY STATEMENT
OF
WESTERN INVESTMENT HEDGED PARTNERS L.P.
-------------------------
PLEASE VOTE YOUR SHARES TODAY BY TELEPHONE OR INTERNET, AS DESCRIBED IN
THE ENCLOSED GOLD PROXY CARD, OR BY SIGNING, DATING AND RETURNING
THE GOLD PROXY CARD IN THE POSTAGE PAID ENVELOPE PROVIDED.
Western Investment Hedged Partners L.P., a Delaware limited partnership
("Western Investment" or "we"), is a significant stockholder of Tri-Continental
Corporation, a Maryland corporation ("Tri-Continental" or the "Company").
Western Investment is writing to you in connection with the election of three
nominees to the board of directors of Tri-Continental (the "Tri-Continental
Board") at the special meeting of stockholders scheduled to be held at the
offices of Venable LLP, 2 Hopkins Plaza, 18th Floor, Baltimore, Maryland 21202,
on September 28, 2006 at 9:30 a.m., including any adjournments or postponements
thereof and any meeting which may be called in lieu thereof (the "special
meeting"). This proxy statement (the "proxy statement") and the enclosed GOLD
proxy card are first being furnished to stockholders on or about August 22,
2006.
This proxy statement and the enclosed GOLD proxy card are being
furnished to stockholders of Tri-Continental by Western Investment in connection
with the solicitation of proxies from Tri-Continental's stockholders for the
following proposals:
1. To elect Western Investment's slate of nominees to the
Tri-Continental Board, each to hold office until the 2009 annual
meeting of the Company's stockholders and until their successors
are elected and qualify;
2. To oppose the Company's proposal to approve an amendment to the
Company's charter to provide that the presence in person or by
proxy of stockholders entitled to cast at least one-third (1/3)
of all of the votes entitled to be cast at a stockholder meeting
constitutes a quorum, unless a higher percentage is specified in
the bylaws of the Company; and
3. To transact such other business as may properly come before the
special meeting or any adjournment or postponement thereof.
Western Investment, Western Investment LLC ("WILLC"), Arthur D. Lipson,
Western Investment Activism Partners LLC ("WIAP"), Western Investment Total
Return Master Fund Ltd. ("WITR"), Benchmark Plus Institutional Partners, L.L.C.
("BPIP"), Benchmark Plus Partners, L.L.C. ("BPP"), Benchmark Plus Management,
L.L.C. ("BPM"), Paradigm Partners, N.W., Inc. ("PPNW"), Scott Franzblau, Robert
Ferguson, Michael Dunmire, Paul DeRosa, David B. Ford and Elyse Nakajima are
members of a group (the "Group") formed in connection with this proxy
solicitation and are deemed participants in this proxy solicitation.
Tri-Continental has set the close of business on July 25, 2006 as the
record date (the "record date") for determining stockholders entitled to notice
of and to vote at the special meeting. The mailing address of the principal
1
executive offices of Tri-Continental is 100 Park Avenue, New York, New York
10017. Stockholders of record at the close of business on the record date will
be entitled to vote at the special meeting. According to Tri-Continental, as of
the record date, there were 105,533,774 shares of common stock outstanding, $.50
par value per share (the "Common Shares"), each Common Share entitled to one
vote per share, and there were 752,740 shares of $2.50 cumulative preferred
stock outstanding (the "Preferred Shares" and together with the Common Shares,
the "Shares"), each Preferred Share entitled to two votes per share. As of the
record date, Western Investment, along with all of the participants in this
solicitation, were the beneficial owners of an aggregate of 10,037,341 Common
Shares and 200 Preferred Shares, which represent approximately 9.4% of the votes
entitled to be cast at the special meeting (based on the Company's proxy
statement). The participants in this solicitation intend to vote such Shares for
the election of Western Investment's nominee directors, and against the
Company's Charter amendment proposal.
THIS SOLICITATION IS BEING MADE BY WESTERN INVESTMENT AND NOT ON BEHALF OF THE
BOARD OF DIRECTORS OR MANAGEMENT OF TRI-CONTINENTAL. WESTERN INVESTMENT IS NOT
AWARE OF ANY OTHER MATTERS TO BE BROUGHT BEFORE THE SPECIAL MEETING. SHOULD
OTHER MATTERS, WHICH WESTERN INVESTMENT IS NOT AWARE OF WITHIN A REASONABLE TIME
BEFORE THIS SOLICITATION, BE BROUGHT BEFORE THE SPECIAL MEETING, THE PERSONS
NAMED AS PROXIES IN THE ENCLOSED GOLD PROXY CARD WILL VOTE ON SUCH MATTERS IN
THEIR DISCRETION.
WESTERN INVESTMENT URGES YOU TO VOTE IN FAVOR OF THE ELECTION OF WESTERN
INVESTMENT'S NOMINEES AND AGAINST THE COMPANY'S CHARTER AMENDMENT PROPOSAL
DESCRIBED HEREIN, EITHER BY TELEPHONE OR BY INTERNET AS DESCRIBED IN THE
ENCLOSED GOLD PROXY CARD OR BY SIGNING, DATING AND RETURNING THE ENCLOSED GOLD
PROXY CARD TODAY.
IF YOU HAVE ALREADY GIVEN A PROXY TO TRI-CONTINENTAL MANAGEMENT, YOU MAY REVOKE
THAT PROXY AND VOTE IN FAVOR OF WESTERN INVESTMENT'S NOMINEES, AND AGAINST THE
COMPANY'S CHARTER AMENDMENT PROPOSAL DESCRIBED HEREIN, BY VOTING YOUR SHARES BY
TELEPHONE OR BY INTERNET AS DESCRIBED IN THE ENCLOSED GOLD PROXY CARD OR BY
SIGNING, DATING AND RETURNING THE ENCLOSED GOLD PROXY CARD. THE LATEST DATED
PROXY IS THE ONLY ONE THAT COUNTS. ANY PROXY MAY BE REVOKED AT ANY TIME PRIOR TO
THE SPECIAL MEETING BY AUTHORIZING A LATER PROXY BY TELEPHONE OR INTERNET OR BY
DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED PROXY FOR THE SPECIAL
MEETING TO WESTERN INVESTMENT, C/O INNISFREE M&A INCORPORATED, WHICH IS
ASSISTING IN THIS SOLICITATION, OR TO THE SECRETARY OF TRI-CONTINENTAL (WITH A
COPY TO INNISFREE M&A INCORPORATED), OR BY VOTING IN PERSON AT THE SPECIAL
MEETING.
2
IMPORTANT
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN.
IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY TRI-CONTINENTAL
MANAGEMENT TO TRI-CONTINENTAL, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE BY
SIGNING, DATING AND RETURNING THE ENCLOSED GOLD PROXY CARD OR BY FOLLOWING THE
INSTRUCTIONS FOR TELEPHONE OR INTERNET VOTING DETAILED THEREON. ONLY YOUR LATEST
DATED PROXY CARD COUNTS!
YOU MAY VOTE YOUR SHARES BY TELEPHONE OR INTERNET, AS DESCRIBED IN THE
ENCLOSED GOLD PROXY CARD, OR BY SIGNING, DATING AND RETURNING TODAY THE ENCLOSED
GOLD PROXY CARD, MARKED FOR THE ELECTION OF WESTERN INVESTMENT'S NOMINEES AND
AGAINST THE COMPANY'S CHARTER AMENDMENT PROPOSAL.
o If your Shares are registered in your own name, you may vote your Shares by
following the instructions for Internet voting detailed on the enclosed
GOLD proxy card, by calling the toll-free number contained therein, or by
signing, dating and mailing the enclosed GOLD proxy card in the enclosed
return envelope to Western Investment, c/o Innisfree M&A Incorporated, in
the enclosed postage-paid envelope today.
o If any of your Shares are held in the name of a brokerage firm, bank, bank
nominee or other institution on the record date, only it can vote such
Shares and only upon receipt of your specific instructions. Accordingly,
please provide your broker or bank with voting instructions to vote on your
behalf the GOLD proxy card. In addition, if you hold your Shares in a
brokerage or bank account, your broker or bank may allow you to provide
your voting instructions by telephone or Internet. Please consult the
materials you receive from your broker or bank prior to authorizing a proxy
by telephone or Internet. Western Investment urges you to confirm your
instructions in writing to the person responsible for your account and to
provide a copy of such instructions to Western Investment, c/o Innisfree
M&A Incorporated, who is assisting in this solicitation, at the address and
telephone numbers set forth below, and on the back cover of this proxy
statement, so that we may be aware of all instructions and can attempt to
ensure that such instructions are followed.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE VOTING YOUR SHARES, PLEASE CALL:
INNISFREE M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NY 10022
STOCKHOLDERS CALL TOLL-FREE AT: (877) 456-3510
BANKS AND BROKERS CALL COLLECT AT: (212) 750-5833
ADDITIONAL INFORMATION CAN BE FOUND AT:
WWW.FIXMYFUND.COM
3
PROPOSAL NO. 1
ELECTION OF DIRECTORS
As you may be aware, Tri-Continental held its 2006 Annual Meeting of
stockholders on May 4, 2006, at which we proposed three nominees for election to
the Tri-Continental Board. As you probably know, at the 2006 Annual Meeting
neither our nor the Company's nominees received enough votes to be elected.
Accordingly, the existing directors would have remained in office until the 2007
Annual Meeting when they would have again been up for election. For reasons
which we do not find compelling, the current Tri-Continental Board has
determined that it cannot let well enough alone, but that it needs to call an
unnecessary special meeting for the election of the three directors. There is no
requirement for this special meeting under either state law or the Company's
bylaws. Although we oppose disturbing you with an unnecessary election, as
significant long-term investors in Tri-Continental we are forced by the
directors' actions to move forward and again submit nominees as an alternative
to the Company's nominees.
WE BELIEVE THAT THIS COSTLY ELECTION IS THE MOST IMPORTANT EVENT THAT
TRI-CONTINENTAL STOCKHOLDERS HAVE EVER FACED, AND WILL AFFECT THE DIRECTION OF
TRI-CONTINENTAL FOR YEARS TO COME. It represents an opportunity to help restore
to Tri-Continental the values and vision which for many years made it a leading
fund. We believe that although for many years Tri-Continental has been an
excellent investment choice, under recent Tri-Continental management and board
of directors, leadership problems have developed, many of which are discussed in
this proxy statement. We do not believe that the current Tri-Continental Board
has vigorously represented the interests of all stockholders.
At this special meeting, the Company has announced that it will again
put forward the same three people for election to the Tri-Continental Board that
failed to be elected at the Company's 2006 Annual Meeting. We have proposed a
slate of three outstanding nominees for election at the September special
meeting. We believe our slate includes world class investors, and that their
election would clearly be in the best interests of all stockholders.
OUR NOMINEES
The following information sets forth the name, age, business address,
present principal occupation, and employment and material occupations,
positions, offices, or employments for the past five years of each of our three
nominee directors (the "Nominees").
PAUL DEROSA (AGE 64) has been a principal since November 1998 of Mt.
Lucas Management Corporation, an asset management company. 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 (ticker: IBCA), a highly successful 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. The business address
of Mr. DeRosa is c/o MT Lucas, LLC, 730 Fifth Avenue, New York, NY 10019. As of
the record date, Mr. DeRosa beneficially owned 100 Common Shares. For
information regarding purchases and sales during the past two years of
securities of Tri-Continental that are now or were once deemed to be
beneficially owned by Mr. DeRosa, see Schedule I to this proxy statement.
4
DAVID B. FORD (AGE 60) 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 world's leading
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. The business address of Mr. Ford is c/o DBF Associates, 375
Greenwich Street, New York, NY 10013. As of the record date, Mr. Ford
beneficially owned 100 Common Shares. For information regarding purchases and
sales during the past two years of securities of Tri-Continental that are now or
were once deemed to be beneficially owned by Mr. Ford, see Schedule I to this
proxy statement.
ARTHUR D. LIPSON (AGE 63) has been managing private investment
partnerships since 1995. He has been the sole managing member of WILLC, a
Delaware limited liability company that has acted 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 additional
substantial experience in sales & trading and research, including previously
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. The business address of Mr. Lipson is c/o Western Investment LLC,
2855 E. Cottonwood Parkway, Suite 110, Salt Lake City, UT 84121. As of the
record date, Mr. Lipson beneficially owned 6,998,416 Common Shares and 200
Preferred Shares, consisting of 901 Common Shares held directly by Mr. Lipson
and 6,997,515 Common Shares and 200 Preferred Shares beneficially owned by
WILLC. Mr. Lipson may be deemed to beneficially own the 6,997,515 Common Shares
and 200 Preferred Shares beneficially owned by WILLC by virtue of his ability to
vote and dispose such shares as the sole managing member of WILLC. For
information regarding purchases and sales during the past two years of
securities of Tri-Continental that are now or were once deemed to be
beneficially owned by WILLC, see Schedule I to this proxy statement.
The information provided above has been furnished to Western Investment
by the Nominees. The Nominees are citizens of the United States of America. None
of the Nominees are "interested persons" of the Company within the meaning of
Section 2(a)(19) of the Investment Company Act of 1940.
OUR INTERESTS ARE ALIGNED WITH YOURS
Western Investment and the other participants are significant investors
in Tri-Continental and remain committed to our investment in Tri-Continental. We
made our first investment in the Company as long ago as 1999, and currently are
Tri-Continental's largest stockholder. Our interests are aligned with the
interests of all stockholders-if our investment in Tri-Continental prospers, so
does yours. WE HAVE NO INTENTION OF SEEKING TO OPEN-END OR LIQUIDATE THE FUND.
Western Investment believes that our three Nominees together have extensive
experience in private and public investment, a history of outstanding investment
records, and have outstanding credentials, including having held senior
positions at The Goldman Sachs Group, Inc., Citibank NA, Lehman Brothers and
Paine Webber. If elected, the Nominees will work on behalf of all stockholders
to influence the Tri-Continental Board to take all actions necessary to maximize
the value of your Shares and to reduce Tri-Continental's share price net asset
value discount to less than 5% of the underlying value of its shares including,
without limitation, to consider additional market purchases or self-tenders.
5
TRI-CONTINENTAL'S STOCK HAS UNDERPERFORMED THE S&P 500 INDEX ON A LONG-TERM BASIS
Tri-Continental has underperformed the S&P 500 index in 12 of the last
15 years. If you had invested $100 in an S&P 500 index fund on December 31, 1990
instead of Tri-Continental, you would be almost $150 richer today. The chart
below shows the annual percentage amount since 1990 by which Tri-Continental's
net asset value ("NAV") return either fell short of the S&P 500 index return or
exceeded the S&P 500 index return.
[THE CHART CONTAINS THE DATA POINTS CONTAINED IN THE TABLE BELOW.]
Stockholder return at year-end. Tri-Continental NAV vs. S&P 500 Index
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
(2.56%) (0.20%) (1.12%) (3.52%) (6.78%) (1.51%) (6.71%) (2.78%) (10.37%) 0.81% 1.69% (4.25%) (2.85%) 2.48% (2.25%)
We find it unacceptable that for each year other than 2000, 2001 and
2004, Tri-Continental's NAV return has underperformed the S&P 500 index for the
past 15 years. Western Investment is particularly troubled that the active
management of the Company's manager, J. & W. Seligman & Co. Incorporated
("Seligman"), has produced such inferior NAV returns to those available by
investment in an S&P 500 index fund. While we consider the S&P 500 index a good
comparison, investors cannot invest directly in an index or an average, and
there are no expenses or fees involved in calculating an index return, unlike a
fund which pays fees and expenses.
Tri-Continental's NAV return has underperformed the S&P 500 index in 12
of the last 15 years. Since 1990, the S&P 500 index has appreciated
approximately 414% while an investment in Tri-Continental has only increased
approximately 264%. The table below measures Tri-Continental's annual NAV
6
performance against the S&P 500 index since 1990 (assuming a $100 investment on
December 31, 1990 and reinvestment of capital gains and dividends).
[THE CHART CONTAINS THE DATA POINTS CONTAINED IN THE TABLE BELOW.]
December 31 Tri-Continental NAV S&P 500 index
----------- ------------------- -------------
1990 $100.00 $100.00
1991 $127.91 $130.47
1992 $137.40 $140.41
1993 $149.70 $154.55
1994 $146.40 $156.59
1995 $191.50 $215.44
1996 $232.57 $264.90
1997 $294.55 $353.27
1998 $370.55 $454.24
1999 $410.09 $549.81
2000 $376.09 $499.78
2001 $337.73 $440.36
2002 $248.74 $343.04
2003 $313.01 $441.45
2004 $354.83 $489.49
2005 $364.27 $513.52
7
Amazingly, every $100 that was invested in Tri-Continental from
December 31, 1990 to December 31, 2005 led to almost $150 in underperformance
relative to the S&P 500 index.
Looked at another way, an investment in Tri-Continental NAV on December
31, 1990 has produced only approximately 71% of the gains that the S&P 500 index
has seen in the same period. The chart below measures the percentage investment
underperformance since 1990 of an investment in Tri-Continental NAV as compared
to the S&P 500 index.
[THE CHART CONTAINS THE DATA POINTS CONTAINED IN THE TABLE BELOW.]
Tri-Continental Percentage
Underperformance Since 1990
vs. S&P 500 Index
Year-End Percentage
1990 100.00%
1991 98.04%
1992 97.86%
1993 96.86%
1994 93.49%
1995 88.89%
8
1996 87.80%
1997 83.38%
1998 81.58%
1999 74.59%
2000 75.25%
2001 76.69%
2002 72.51%
2003 70.90%
2004 72.49%
2005 70.94%
SUB-PAR PERFORMANCE CONTINUES
For the six-month period ended June 30, 2006, Tri-Continental's NAV
return has been just 1.48%. In contrast, the S&P 500 index has seen a gain of
2.71% in the same period, significantly higher than Tri-Continental.
TRI-CONTINENTAL'S NAV DISCOUNT IS UNACCEPTABLE
Tri-Continental's share price has traded at a persistent double-digit
discount to its per share net asset value that ranged between 14% and 18% from
1995 to 2005 (as of year-end for each such year). Thus, when Tri-Continental
stockholders sell their shares they are forced to leave behind a sizeable
portion of the value underlying those shares. We believe that the persistence of
this discount is in part due to the failed management and disappointing
investment results generated by Seligman, the market's expectation that
substantially similar results will continue, and the perception that the
persistent and substantial NAV discount is not being, and will not be,
addressed. Tri-Continental stockholders are being damaged twice by the discount;
once with substandard returns on their investment and again, should they choose
to leave the fund, with the discounted market price they receive for their
shares. We believe the fair value of a share of common stock should be its NAV,
or a value very close.
The table below shows the discount of the Company's year-end stock
price to the Company's year-end NAV since 1995.
NAV
December 31 Discount
----------- --------
1995 -18%
1996 -18%
1997 -17%
1998 -16%
1999 -15%
2000 -18%
2001 -14%
2002 -16%
2003 -16%
2004 -16%
2005 -16%
9
As an existing Tri-Continental stockholder, Western Investment is
extremely concerned that Tri-Continental's common stock continues to trade at a
double-digit NAV discount. Assuming a NAV discount of 16% (the discount on
December 31, 2005), this had the effect that, for each $1 of underlying
Tri-Continental net asset value, a share of Tri-Continental common stock would
trade at approximately 84 cents. So long as the NAV discount persists, existing
Tri-Continental stockholders who sell their shares of common stock will sell
them at a discount to the underlying net asset value. Tri-Continental common
stock is traded on the New York Stock Exchange, and share prices are determined
by the market, which to date has determined share prices to be at a discount to
NAV.
The persistence and scale of the NAV discount is especially damaging to
those long-term Tri-Continental stockholders who may need to cash out their
Tri-Continental investment in order to meet their retirement living needs. A
survey of stockholders in the Company's annual report for the year ended
December 31, 2004 reported that over 75% of the stockholders surveyed were aged
65 or older. Company stockholders who are seniors may wish to realize their
Tri-Continental investment in the near term. However, the presence of a steep
NAV discount means that these stockholders cannot receive the underlying value
of their investment. Tri-Continental should be managed with the best interests
of its stockholders in mind, including the interests of its large senior
investor base.
ALL OF THE CURRENT MEMBERS OF THE TRI-CONTINENTAL BOARD ARE A DIRECTOR OR
TRUSTEE OF AT LEAST 23 REGISTERED INVESTMENT COMPANIES MANAGED BY SELIGMAN,
TRI-CONTINENTAL'S MANAGER
According to the Tri-Continental proxy statement, all incumbent
independent Tri-Continental directors are a director or trustee of each of at
least 23 registered investment companies in the group of funds managed by
Seligman and six of the seven independent incumbent directors are a director or
trustee of each of 24 registered investment companies in the Seligman group of
funds. The Tri-Continental proxy statement advises that the 24 registered
investment companies in the Seligman group of funds comprise 58 separate
portfolios. Other than Messrs. Zino and Morris, the President and Chief
Executive Officer and Chairman, respectively, WE BELIEVE THAT NONE OF THE
COMPANY'S NOMINEES OR OTHER DIRECTORS HAS ANY DIRECT PROFESSIONAL INVESTMENT
EXPERIENCE, other than through their involvement as a director or trustee of the
registered investment companies in the Seligman group of funds.
While the current composition of the Tri-Continental Board appears to
satisfy applicable securities and investment company laws, we question whether
service by each of Tri-Continental's independent directors as a trustee or
director of at least 23 registered investment companies is in the best interests
of Tri-Continental's stockholders. We do not believe that an independent
director should be a director or trustee of 23 or more funds managed by
Seligman. How do Tri-Continental's directors have time to adequately monitor
Tri-Continental's multi-billion dollar portfolio when they are serving as
directors or trustees of at least 23 investment companies? We believe that in
serving as trustee or director of so many registered investment companies
managed by Seligman, inherent conflicts may arise. For example, we believe it is
possible for a person serving in such multiple positions to become unduly
beholden to Seligman, and less inclined to act in the best interests of
Tri-Continental stockholders, although we have no evidence that any of
Tri-Continental directors have acted in this way. Are the current directors,
with at best limited investment experience, the best people to perform the
essential task of evaluating Seligman's performance as manager?
ONGOING INQUIRY OF SELIGMAN BY THE OFFICE OF THE NEW YORK ATTORNEY GENERAL
Perhaps most disturbing of all is the action which the Office of the
New York State Attorney General (the "Attorney General's Office") has determined
to commence against Seligman and a related investigation by the Securities and
Exchange Commission. The Company has disclosed that since February 2004,
Seligman, the manager of Tri-Continental, has been in discussions with the New
10
York staff of the Securities and Exchange Commission and the Attorney General's
Office in connection with trading in certain of the Seligman group of funds. The
Attorney General's Office has said that its inquiry concerns apparent fraudulent
conduct in Seligman's secret arrangements with certain preferred customers,
permitting these preferred customers to engage in mutual fund timing activities
that negatively impacted the investment returns to long-term shareholders in the
Seligman funds affected. The Attorney General's Office is also examining whether
Seligman or others engaged in fraudulent conduct relating to Seligman's advisory
fees. No settlement has been reached and the SEC staff has indicated that it is
considering recommending to the Commissioners of the SEC the initiation of a
formal action against Seligman and Seligman Advisors, Inc. While none of the
trading arrangements being investigated appear to involve the Company, we are
concerned about this inquiry as it involves other funds managed by Seligman. We
are concerned that the existence of such an inquiry may distract Seligman senior
management and make it more difficult to attract and retain talented
professional staff. The Attorney General's Office has been forced to go to state
court to obtain documents and information from Seligman relating to its inquiry
into trading practices involving the Seligman group of funds. Separately,
Seligman has filed suit in Federal court seeking to stop the Attorney General's
Office from pursuing its inquiry as to the advisory fees paid by the Seligman
group of funds to Seligman. The affidavit submitted by the Attorney General's
Office to state court in connection with its seeking documents that are material
and necessary to its market timing inquiry has raised a number of matters which
cause us grave concern. The affidavit states, among other things, that:
o "The "dilution" of the value of the Seligman group of funds due to timing
activity is estimated to be in excess of $80 million since 1998."
o "Based on his investigation to date, ....... the Attorney General believes
that Seligman engaged in 'fraud, deception, concealment, suppression [and]
false pretense' in violation of" New York's General Business Law.
o The boards of directors of the Seligman group of funds "are subservient to
Seligman."
o "Seligman's high costs are the result of the Boards' failure to negotiate
at arms' length with Seligman."
In its court papers, the Attorney General's Office says that it
believes that Seligman and its co-respondents, William C. Morris, the chairman
of the Company's board, and Brian T. Zino, President and Chief Executive Officer
and a director of the Company, engaged in separate frauds relating to mutual
fund timing activities in the Seligman group of funds. First, according to the
Attorney General's Office court papers, the respondents expressly permitted and
knowingly tolerated mutual fund timing activities that violated the terms of the
Seligman group of funds' prospectuses and harmed shareholders of the affected
funds. Second, following an industry-wide investigation, the respondents issued
a press release that grossly understated the amount of market-timing activities
in the Seligman group of funds and that created the false impression that
shareholders of affected Seligman funds had been fully compensated through a
restitution payment of less than $2 million divided among three Seligman funds,
and a fee reduction on another Seligman fund. The Attorney General's Office
affidavit states that the "dilution" of the value of the Seligman group of funds
due to timing activity is estimated to be in excess of $80 million since 1998.
The Attorney General's Office is also examining whether Seligman or others
engaged in fraudulent conduct relating to Seligman's advisory fees.
According to the court papers, Messrs. Morris and Zino own an aggregate
of approximately 85% of Seligman.
11
IN LIGHT OF THESE ALLEGATIONS AGAINST MR. MORRIS AND SELIGMAN, EVERY STOCKHOLDER
MUST QUESTION THE JUDGMENT AND INDEPENDENCE OF THE DIRECTORS WHO AGAIN NOMINATED
MR. MORRIS FOR REELECTION AS A DIRECTOR.
TRI-CONTINENTAL HAS DISCLOSED THAT ANY RESOLUTION OF THESE MATTERS WITH
REGULATORY AUTHORITIES MAY INCLUDE, BUT NOT BE LIMITED TO, SANCTIONS, PENALTIES,
INJUNCTIONS REGARDING SELIGMAN, RESTITUTIONS TO MUTUAL FUND STOCKHOLDERS OR
CHANGES IN PROCEDURES. SELIGMAN CLAIMS THAT THESE MATTERS DO NOT AFFECT
TRI-CONTINENTAL BUT, ASK YOURSELF, IS IT IN THE STOCKHOLDERS' BEST INTERESTS TO
HAVE A FUND MANAGER BURDENED WITH THIS INQUIRY AND ALLEGATIONS?
Tri-Continental has also disclosed that Seligman believes it may have
violated applicable requirements for certain orders to buy and sell portfolio
securities with brokerage firms in recognition of their sales of Seligman's
mutual funds as a result of compensation arrangements Seligman had with certain
brokerage firms. Seligman has refunded $637,118 to Tri-Continental while denying
that Tri-Continental has suffered loss from Seligman's possible violations.
Would Seligman have made this payment if its hands were clean?
Tri-Continental has disclosed that there can be no assurance that the
SEC's investigation or the Attorney General Office's inquiry and any related
publicity will not result in reduced demand for shares of the Seligman group of
funds or other adverse consequences.
ADDITIONAL INFORMATION ABOUT THE NOMINEES
As of August 21, 2006, the dollar range of shares of the Company
beneficially owned by each Nominee is as follows:
Aggregate Dollar Range of Equity
Securities in All Funds to be
Dollar Range of Equity Overseen by Nominee in Seligman
Name of Nominee Securities in the Company Family of Investment Companies*
Arthur D. Lipson Over $100,000 Over $100,000
Paul DeRosa $1 to $10,000 $1 to $10,000
David B. Ford $1 to $10,000 $1 to $10,000
---------------------
* If elected to the Tri-Continental Board, the Nominees would not
oversee any registered investment company within the Seligman family
of investment companies other than the Company.
There can be no assurance that the election of our Nominees will
improve the Company's business or otherwise enhance stockholder value. Your vote
to elect the Nominees will have the legal effect of replacing three incumbent
directors of Tri-Continental with our Nominees. Mr. DeRosa is an investor in
Western Investment and Mr. Ford is an investor in WIAP.
Other than as stated herein, the Nominees will not receive any
compensation from Western Investment for their services as directors of
Tri-Continental, nor are there any arrangements or understandings between
12
Western Investment and any of the Nominees or any other person or persons
pursuant to which the nomination described herein is to be made, other than the
consent by each of the Nominees to be named in this proxy statement and to serve
as a director of Tri-Continental if elected as such at the special meeting. None
of the Nominees is a party adverse to Tri-Continental or any of its subsidiaries
or has a material interest adverse to Tri-Continental or any of its subsidiaries
in any material pending legal proceedings.
Western Investment does not expect that the Nominees will be unable to
stand for election, but, in the event that such persons are unable to serve or
for good cause will not serve, the Shares represented by the enclosed GOLD proxy
card will be voted for substitute nominees. In addition, Western Investment
reserves the right to nominate substitute persons if Tri-Continental makes or
announces any changes to its bylaws or takes or announces any other action that
has, or if consummated would have, the effect of disqualifying the Nominees. In
any such case, Shares represented by the enclosed GOLD proxy card will be voted
for such substitute nominees. Western Investment reserves the right to nominate
additional persons if Tri-Continental increases the size of the Tri-Continental
Board above its existing size, increases the number of directors whose terms
expire at the special meeting or calls a meeting to fill any vacancies on the
Tri-Continental Board. Additional nominations made pursuant to the preceding
sentence are without prejudice to the position of Western Investment that any
attempt to increase the size of the current Tri-Continental Board or to
reconstitute or reconfigure the classes on which the current directors serve
constitutes an unlawful manipulation of Tri-Continental's corporate machinery.
YOU ARE URGED TO VOTE FOR THE ELECTION OF WESTERN INVESTMENT'S NOMINEES ON
THE ENCLOSED GOLD PROXY CARD.
PROPOSAL NO. 2
CHARTER AMENDMENT PROPOSAL
Tri-Continental is seeking stockholder approval of a proposal to
approve an amendment to the Company's Charter to provide that the presence in
person or by proxy of stockholders entitled to cast one-third (1/3) of all of
the votes entitled to be cast at a meeting of stockholders constitutes a quorum
and, with respect to any matter that, under applicable statutes or regulatory
requirements or the Company's Charter, requires approval by a separate vote of
one or more classes of stock, the presence in person or by proxy of the holders
of shares entitled to cast one-third (1/3) of the votes entitled to be cast by
such class on such matter constitutes a quorum, unless a higher percentage is
specified in the bylaws of the Company.
We are gravely concerned about this proposed amendment. We believe a
core concept of corporate democracy is that stockholders have the right to act
to effect fundamental corporate decisions such as the election of directors, and
other important items. Crucial to having the stockholders act is for a
substantial number of stockholders to participate in taking any such action. The
quorum is the number of stockholders required to be present to hold a valid
meeting. Once convened, in many cases just over 50% of the quorum can represent
action by the stockholders. If the quorum is lowered to one-third (1/3) of all
of the votes entitled to be cast, stockholder action in many instances could be
taken by stockholders holding as few as 17% of the votes entitled to be cast. We
believe that this threshold is just too low. If management does not have the
support of more than 17% of the votes entitled to be cast, then we do not
believe such action should be approved. Otherwise, it is too easy for management
to get its way by courting a minority of stockholders who share its views.
13
We do not believe the requirement that holders of a majority of all of
the votes entitled to be cast be present at a meeting is an unreasonable
threshold for holding a stockholder meeting to determine fundamental issues of
vital importance to stockholders.
For the above reasons, we ask stockholders to oppose the Charter
amendment proposal.
YOU ARE URGED TO VOTE AGAINST THE CHARTER AMENDMENT PROPOSAL ON THE
ENCLOSED GOLD PROXY CARD.
14
VOTING AND PROXY PROCEDURES
Only stockholders of record on the record date will be entitled to
notice of and to vote at the special meeting. Each Common Share is entitled to
one vote. Each Preferred Share is entitled to two votes. Stockholders who sell
Shares before the record date (or acquire them without voting rights after the
record date) may not vote such Shares. Stockholders of record on the record date
will retain their voting rights in connection with the special meeting even if
they sell such Shares after the record date. Based on publicly available
information, Western Investment believes that the only outstanding classes of
securities of Tri-Continental entitled to vote at the special meeting are the
Common Shares and the Preferred Shares.
Stockholders, including those who expect to attend the special meeting,
are urged to vote their Shares today by following the instructions for Internet
voting detailed on the enclosed GOLD proxy card, by calling the toll-free number
contained therein, or by signing, dating and mailing the enclosed GOLD proxy
card in the enclosed return envelope to Western Investment, c/o Innisfree M&A
Incorporated, in the enclosed postage-paid envelope.
Authorized proxies will be voted at the special meeting as marked and,
in the absence of specific instructions, will be voted FOR the election of
Western Investment's Nominees, AGAINST the Charter amendment proposal, and in
the discretion of the person named as proxy on all other matters as may properly
come before the special meeting.
We are asking you to vote FOR the election of Western Investment's
Nominees and AGAINST the Charter amendment proposal. The enclosed GOLD proxy
card may only be voted for our Nominees and does not confer voting power with
respect to the Company's nominees. Stockholders should refer to the Company's
proxy statement for the names, backgrounds, qualifications and other information
concerning the Company's nominees. The participants in this solicitation intend
to vote all of their Shares for the election of Western Investment's Nominees
and against the Charter amendment proposal and will not vote their Shares in
favor of any of Tri-Continental's director nominees.
QUORUM
In order to conduct any business at the special meeting, a quorum must
be present in person or represented by valid proxies. The presence in person or
by proxy of stockholders entitled to cast a majority of all the votes entitled
to be cast at the special meeting constitutes a quorum. All Shares that are
voted "FOR", "AGAINST" or "ABSTAIN" (or "WITHHOLD" in the case of election of
directors) on any matter will count for purposes of establishing a quorum and
will be treated as Shares entitled to be voted at the special meeting.
VOTES REQUIRED FOR APPROVAL
ELECTION OF DIRECTORS. Under the Company's bylaws, if a quorum is
present at the special meeting, nominees receiving the affirmative vote of a
plurality of the votes cast at the special meeting will be elected as directors
of the Company.
CHARTER AMENDMENT PROPOSAL. The Company has advised that under Maryland
law, to become effective, the Charter amendment proposal must be approved by the
affirmative vote of a majority of all votes entitled to be cast on the proposal.
15
ABSTENTIONS
Abstentions will be counted for the purpose of determining whether a
quorum is present. Abstentions will not be counted as votes cast on any proposal
set forth in this proxy statement. For purposes of the vote on the election of
each nominee for director, abstentions and broker non-votes, if any, will have
no effect on the result of the vote. For purposes of the vote on the Charter
amendment proposal, abstentions and broker non-votes, if any, will have the
effect of a vote against such proposal.
REVOCATION OF PROXIES
Stockholders of Tri-Continental may revoke their proxies at any time
prior to exercise by attending the special meeting and voting in person
(although attendance at the special meeting will not in and of itself constitute
revocation of a proxy), by delivering a later-dated proxy by Internet, by
telephone or by mail, or by delivering a written notice of revocation. The
delivery of a later-dated proxy which is properly completed will constitute a
revocation of any earlier proxy. The revocation may be delivered either to
Western Investment in care of Innisfree M&A Incorporated at the address set
forth on the back cover of this proxy statement or to Tri-Continental at 100
Park Avenue, New York, New York 10017 or any other address provided by
Tri-Continental. Although a revocation is effective if delivered to
Tri-Continental, Western Investment requests that either the original or
photostatic copies of all revocations be mailed to Western Investment in care of
Innisfree M&A Incorporated at the address set forth on the back cover of this
proxy statement so that Western Investment will be aware of all revocations and
can more accurately determine if and when proxies have been received from the
holders of record on the record date of a majority of the outstanding Shares.
Additionally, Innisfree M&A Incorporated may use this information to contact
stockholders who have revoked their proxies in order to solicit later-dated
proxies for the election of the Nominees and approval of other proposals
described herein.
IF YOU WISH TO VOTE FOR THE ELECTION OF THE NOMINEES TO THE TRI-CONTINENTAL
BOARD OR AGAINST THE CHARTER AMENDMENT PROPOSAL, PLEASE VOTE YOUR SHARES BY
TELEPHONE OR INTERNET, AS DESCRIBED IN THE ENCLOSED GOLD PROXY CARD, OR BY
SIGNING, DATING AND RETURNING PROMPTLY THE ENCLOSED GOLD PROXY CARD, IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
16
SOLICITATION OF PROXIES
The solicitation of proxies pursuant to this proxy statement is being
made by Western Investment. Proxies may be solicited by mail, facsimile,
telephone, Internet, in person and by advertisements.
Western Investment has entered into an agreement with Innisfree M&A
Incorporated for solicitation and advisory services in connection with this
solicitation, for which Innisfree M&A Incorporated will receive a fee not to
exceed $75,000, together with reimbursement for its reasonable out-of-pocket
expenses, and will be indemnified against certain liabilities and expenses,
including certain liabilities under the federal securities laws. Innisfree M&A
Incorporated will solicit proxies from individuals, brokers, banks, bank
nominees and other institutional holders. Western Investment has requested
banks, brokerage houses and other custodians, nominees and fiduciaries to
forward all solicitation materials to the beneficial owners of the Shares they
hold of record. Western Investment will reimburse these record holders for their
reasonable out-of-pocket expenses in so doing. It is anticipated that Innisfree
M&A Incorporated will employ approximately 25 persons to solicit
Tri-Continental's stockholders for the special meeting.
The entire expense of soliciting proxies is being borne by WILLC,
subject to certain limitations, pursuant to the terms of the Joint Filing and
Solicitation Agreement described below. Western Investment, WIAP, WITR BPIP,
BPM, BPP and PPNW have separately agreed to reimburse WILLC on a pro rata basis
for these expenses. Because WILLC believes that Tri-Continental's stockholders
will benefit from the Solicitation (defined below), WILLC intends to seek
reimbursement from Tri-Continental, to the fullest extent permitted by law, of
all expenses it incurs in connection with the Solicitation. If necessary, WILLC
will ask the Company to submit an application in this regard to, and obtain an
order or a no-action letter from, the Securities and Exchange Commission. WILLC
does not intend to submit the question of such reimbursement to a vote of
security holders of the Company unless otherwise required by law. Costs of this
solicitation of proxies are currently estimated to be approximately $375,000.
Western Investment estimates that through the date hereof, its expenses in
connection with this Solicitation are approximately $100,000.
OTHER PARTICIPANT INFORMATION
Each member of the Group is a participant in this Solicitation. Arthur
D. Lipson is the managing member of WILLC, a Delaware limited liability company.
WILLC, a Delaware limited liability company, is the general partner, managing
member or investment manager, as the case may be, of Western Investment, WIAP
and WITR, respectively. The principal business address of Mr. Lipson, Western
Investment, WIAP and WITR is c/o Western Investment LLC, 2855 E. Cottonwood
Parkway, Suite 110, Salt Lake City, UT 84121. The principal business address of
Mr. DeRosa is c/o MT Lucas, LLC, 730 Fifth Avenue, New York, NY 10019. The
principal business address of Mr. Ford is c/o DBF Associates, 375 Greenwich
Street, New York, NY 10013. Ms. Nakajima does not have a principal business
address.
As of the record date, Western Investment, WIAP, and WITR beneficially
owned 3,175,015 Common Shares, 3,256,300 Common Shares and 200 Preferred Shares,
and 566,200 Common Shares, respectively, constituting approximately 3.0%, 3.0%
and 0.5%, respectively, of the votes entitled to be cast at the special meeting.
Mr. Lipson directly owned 901 Common Shares, constituting less than 1% of the
votes entitled to be cast at the special meeting. As the general partner,
managing member, or investment manager, as the case may be, of Western
Investment, WIAP and WITR, WILLC may be deemed to beneficially own the 6,997,515
Common Shares and 200 Preferred Shares owned in the aggregate by Western
Investment, WIAP and WITR as of the record date. As the managing member of
WILLC, Mr. Lipson may be deemed to beneficially own the 6,997,515 Common Shares
17
and 200 Preferred Shares beneficially owned by WILLC as of the record date, in
addition to the 901 Common Shares owned directly by Mr. Lipson as of the record
date. As of the record date, Mr. DeRosa, Mr. Ford and Ms. Nakajima each
beneficially owned 100 Common Shares.
Messrs. Franzblau, Ferguson and Dunmire are managing members of BPM, a
Delaware limited liability company. BPM is the managing member of BPIP, a
Delaware limited liability company. PPNW, a Washington corporation, is the
managing member of BPP, a Delaware limited liability company. Messrs. Ferguson
and Dunmire are the President and Chairman of the Board, respectively, of PPNW.
The principal business address of BPIP, BPM, BPP, PPNW, Mr. Franzblau, Mr.
Ferguson and Mr. Dunmire is 820 A Street, Suite 700, Tacoma, WA 98402.
As of the record date, BPIP and BPP beneficially owned 1,515,850 and
1,522,775 Common Shares, respectively, constituting approximately 1.4% and 1.4%,
respectively, of the votes entitled to be cast at the special meeting. As the
managing member of BPIP, BPM may be deemed to beneficially own the 1,515,850
Common Shares owned by BPIP. As the managing members of BPM, Messrs. Franzblau,
Ferguson and Dunmire may be deemed to beneficially own the 1,515,850 Common
Shares beneficially owned by BPM. As the managing member of BPP, PPNW may be
deemed to beneficially own the 1,522,775 Common Shares owned by BPP. As the
President and Chairman of the Board, respectively, Messrs. Ferguson and Dunmire
may be deemed to beneficially own the 1,522,775 Common Shares beneficially owned
by PPNW.
WILLC provides recommendations from time to time to BPIP and BPP with
respect to purchases and sales of Common Shares of the Company, pursuant to an
oral agreement between WILLC and BPIP, and between WILLC and BPP. Each of
Western Investment, WILLC, Mr. Lipson, WIAP and WITR disclaim beneficial
ownership of the Common Shares beneficially owned by the other members of the
Group. Each of BPIP, BPM and Mr. Franzblau disclaim beneficial ownership of the
Shares beneficially owned by the other members of the Group. Each of BPP and
PPNW disclaim beneficial ownership of the Shares beneficially owned by the other
members of the Group. Each of Mr. Ferguson and Mr. Dunmire disclaim beneficial
ownership of the Shares beneficially owned by the other members of the Group,
with the exception of BPIP, BPM, BPP and PPNW. Each of Mr. DeRosa, Mr. Ford and
Ms. Nakajima disclaims beneficial ownership of the Shares beneficially owned by
the other members of the Group.
Each of WILLC and Mr. Lipson is deemed to have sole voting and
dispositive power over the Shares reported as beneficially owned by Western
Investment, WIAP and WITR by virtue of their respective positions described
above. Each of BPM, Mr. Franzblau, Mr. Ferguson and Mr. Dunmire is deemed to
have sole voting and dispositive power over the Common Shares beneficially owned
by BPIP by virtue of their respective positions described above. Each of PPNW,
Mr. Ferguson and Mr. Dunmire is deemed to have sole voting and dispositive power
over the Common Shares reported as beneficially owned by BPP by virtue of their
respective positions described above. Neither Western Investment, WILLC, Mr.
Lipson, WIAP nor WITR has voting or dispositive control over the Common Shares
beneficially owned by the other members of the Group. Neither BPIP, BPM nor Mr.
Franzblau has voting or dispositive control over the Shares beneficially owned
by the other members of the Group. Neither BPP nor PPNW has voting or
dispositive control over the Shares beneficially owned by the other members of
the Group. Neither Mr. Ferguson nor Mr. Dunmire has voting or dispositive
control over the Shares beneficially owned by Western Investment, WILLC, WIAP,
WITR, Mr. Lipson, Mr. DeRosa, Mr. Ford and Ms. Nakajima.
The principal business of WILLC is acting as the general partner,
managing member and investment manager, as the case may be, of Western
Investment, WIAP and WITR. The principal occupation of Mr. Lipson is acting as
managing member of WILLC. The principal business of Western Investment, WIAP and
WITR is acquiring, holding and disposing of investments in various companies.
18
The principal business of BPM is acting as the managing member of BPIP. The
principal business of BPIP is acquiring, holding and disposing of investments in
various companies. The principal business of PPNW is acting as the managing
member of BPP. The principal business of BPP is acquiring, holding and disposing
of investments in various companies. The principal occupation of Scott Franzblau
is acting as a managing member of BPM. The principal occupation of Robert
Ferguson is acting as a managing member of BPM and as the President and director
of PPNW. The principal occupation of Michael Dunmire is acting as a managing
member of BPM and as Chairman of the Board of PPNW. The principal occupation of
Mr. DeRosa is serving as a principal of Mt. Lucas Management Corporation, an
asset management company. The principal occupation of Mr. Ford is private
investor. The principal occupation of Ms. Nakajima is opera singer.
For information regarding purchases and sales of securities of
Tri-Continental during the past two years by Western Investment, Mr. Lipson,
WILLC, WIAP, WITR, Mr. DeRosa, Mr. Ford, Ms. Nakajima, BPIP, BPM, BPP, PPNW, Mr.
Franzblau, Mr. Ferguson, and Mr. Dunmire and affiliates of Western Investment
that no longer own any Shares, see Schedule I to this proxy statement. Western
Investment, WIAP, WITR, BPIP and BPP purchased their Shares in margin accounts,
where they are held together with other publicly traded securities.
On July 3, 2006, the members of the Group entered into a Joint Filing
and Solicitation Agreement in which, among other things, (a) the parties agreed
to the joint filing on behalf of each of them of statements on Schedule 13D with
respect to the securities of Tri-Continental to the extent required by
applicable law, (b) the parties agreed to solicit proxies or written consents
for the election of the Nominees, or any other person(s) nominated by Western
Investment and Mr. Lipson, to the Tri-Continental Board at the special meeting
(the "Solicitation"), (c) WILLC agreed to indemnify and hold each of Paul DeRosa
and David B. Ford harmless from and against any and all claims of any nature,
whenever brought, arising from the Nominee's nomination for election as a
director of Tri-Continental, and the related proxy solicitation by Western
Investment, Arthur Lipson and certain of their affiliates and any related
transactions, irrespective of the outcome, and (d) WILLC agreed to bear all
expenses incurred in connection with the Group's activities, including approved
expenses incurred by any of the parties in connection with the Solicitation,
subject to certain limitations. Western Investment, WIAP, WITR BPIP, BPM, BPP
and PPNW have separately agreed to reimburse WILLC on a pro rata basis for
expenses incurred in connection with the Solicitation. Because WILLC believes
that Tri-Continental's stockholders will benefit from the Solicitation, WILLC
intends to seek reimbursement from Tri-Continental, to the fullest extent
permitted by law, of all expenses it incurs in connection with the Solicitation.
If necessary, WILLC will ask the Company to submit an application in this regard
to, and obtain an order or a no-action letter from, the Securities and Exchange
Commission. WILLC does not intend to submit the question of such reimbursement
to a vote of security holders of the Company.
Except as set forth in this proxy statement (including the Schedules
hereto), (i) during the past 10 years, no participant in this Solicitation has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors); (ii) no participant in this Solicitation directly or indirectly
beneficially owns any securities of Tri-Continental; (iii) no participant in
this Solicitation owns any securities of Tri-Continental which are owned of
record but not beneficially; (iv) no participant in this Solicitation has
purchased or sold any securities of Tri-Continental during the past two years;
(v) no part of the purchase price or market value of the securities of
Tri-Continental owned by any participant in this Solicitation is represented by
funds borrowed or otherwise obtained for the purpose of acquiring or holding
such securities; (vi) other than a Joint Filing and Solicitation Agreement dated
January 6, 2006 in respect of the Company's 2006 annual meeting, with the
participants (other than WITR and David B. Ford), Western Investment
Institutional Partners LLC, Dr. Marlene A. Plumlee and Matthew S. Crouse party
thereto, no participant in this Solicitation is, or within the past year was, a
party to any contract, arrangements or understandings with any person with
respect to any securities of Tri-Continental, including, but not limited to,
19
joint ventures, loan or option arrangements, puts or calls, guarantees against
loss or guarantees of profit, division of losses or profits, or the giving or
withholding of proxies; (vii) no associate of any participant in this
Solicitation owns beneficially, directly or indirectly, any securities of
Tri-Continental; (viii) no participant in this Solicitation owns beneficially,
directly or indirectly, any securities of any parent or subsidiary of
Tri-Continental; (ix) no participant in this Solicitation or any of his/her/its
associates was a party to any transaction, or series of similar transactions,
since the beginning of Tri-Continental's last fiscal year, or is a party to any
currently proposed transaction, or series of similar transactions, to which
Tri-Continental or any of its subsidiaries was or is to be a party, in which the
amount involved exceeds $60,000; (x) no participant in this Solicitation or any
of his/her/its associates has any arrangement or understanding with any person
with respect to any future employment by Tri-Continental or its affiliates, or
with respect to any future transactions to which Tri-Continental or any of its
affiliates will or may be a party; and (xi) no person, including the
participants in this Solicitation, who is a party to an arrangement or
understanding pursuant to which the Nominees are proposed to be elected has a
substantial interest, direct or indirect, by security holdings or otherwise in
any matter to be acted on at the special meeting.
OTHER MATTERS AND ADDITIONAL INFORMATION
Western Investment is unaware of any other matters to be considered at
the special meeting. However, should other matters, which Western Investment is
not aware of a reasonable time before this Solicitation, be brought before the
special meeting, the person named as a proxy on the enclosed GOLD proxy card
will vote on such matters in their discretion.
Western Investment has omitted from this proxy statement certain
disclosure required by applicable law that is already included in the Company's
proxy statement. This disclosure includes, among other things, biographical
information on Tri-Continental's directors and executive officers, the dollar
range of shares owned by directors of the Company and information on committees
of the Tri-Continental Board. Stockholders should refer to the Company's proxy
statement in order to review this disclosure.
According to the Company's proxy statement, the Company's manager is J.
& W. Seligman & Co. Incorporated, 100 Park Avenue, New York, NY 10017.
See Schedule II of this proxy statement for information regarding
persons who beneficially own more than 5% of the Shares and the ownership of the
Shares by the management of Tri-Continental.
The information concerning Tri-Continental contained in this proxy
statement and the Schedules attached hereto has been taken from, or is based
upon, publicly available information.
WESTERN INVESTMENT HEDGED PARTNERS L.P.
AUGUST 22, 2006
20
SCHEDULE I
PURCHASES AND SALES IN THE COMMON STOCK OF TRI-CONTINENTAL
DURING THE PAST TWO YEARS
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
WESTERN INVESTMENT HEDGED PARTNERS L.P.
Buy 8,700 10/04/04 16.9404
Buy 8,200 10/05/04 16.8862
Buy 12,300 10/06/04 16.9110
Buy 14,600 10/07/04 16.8854
Buy 3,000 10/08/04 16.7602
Buy 6,100 10/12/04 16.6721
Buy 1,500 10/13/04 16.7425
Buy 400 10/19/04 16.4910
Buy 13,000 10/20/04 16.3751
Buy 13,500 10/21/04 16.5128
Buy 18,600 10/22/04 16.5008
Buy 3,100 10/25/04 16.3207
Buy 21,900 10/26/04 16.5234
Buy 17,500 10/27/04 16.6873
Buy 12,800 10/28/04 16.8541
Buy 300 10/29/04 16.9352
Buy 27,500 11/01/04 16.9027
Buy 32,600 11/02/04 17.0161
Buy 8,300 11/02/04 16.9971
Buy 4,000 11/12/04 17.6973
Buy 5,000 11/15/04 17.7822
Buy 36,400 12/15/04 18.0468
Buy 8,400 12/27/04 18.1645
Buy 12,200 12/28/04 18.1363
Buy 16,000 12/31/04 18.2800
Buy 62,900 12/31/04 18.2800
Buy 700 01/10/05 17.9328
Buy 2,600 01/11/05 17.8423
Buy 3,000 01/13/05 17.6618
Buy 10,900 01/14/05 17.7564
Buy 17,500 01/18/05 17.7912
Buy 9,600 01/19/05 17.8072
Buy 2,000 01/21/05 17.6535
Buy 2,500 01/24/05 17.4681
Buy 200 01/27/05 17.5835
Buy 10,600 01/28/05 17.5634
Buy 7,500 01/31/05 17.6454
Buy 6,900 02/02/05 17.7666
Buy 24,400 04/18/05 17.2760
Buy 11,500 04/19/05 17.3535
I-1
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
Buy 10,700 04/20/05 17.1833
Buy 17,900 05/20/05 17.8302
Buy 13,800 05/23/05 17.9107
Buy 11,300 05/24/05 17.8940
Buy 26,500 05/25/05 17.8479
Buy 56,400 05/26/05 17.9034
Buy 5,300 05/27/05 17.9496
Buy 1,700 05/27/05 17.9585
Buy 2,000 06/03/05 18.0011
Sell 1,000 07/18/05 18.2707
Sell 1,300 07/21/05 18.4107
Buy 400 07/29/05 18.4800
Buy 2,300 10/04/05 18.2565
Buy 19,000 10/05/05 18.1118
Buy 30,400 10/06/05 17.9522
Buy 17,200 10/07/05 17.9067
Buy 1,800 10/10/05 17.8944
Buy 300 10/11/05 17.8200
Buy 2,700 10/12/05 17.6804
Buy 100 10/13/05 17.6200
Buy 27,600 10/14/05 17.6910
Buy 31,800 10/17/05 17.7842
Buy 59,800 10/18/05 17.8096
Buy 95,300 10/19/05 17.8047
Buy 5,400 10/20/05 17.9100
Buy 47,200 10/21/05 17.7650
Buy 76,500 10/24/05 17.8869
Buy 7,300 10/25/05 17.9377
Buy 8,200 10/26/05 17.9571
Buy 500 10/27/05 17.8360
Buy 11,300 10/28/05 17.8881
Buy 12,400 10/31/05 18.0410
Buy 5,900 11/02/05 18.1234
Buy 1,400 11/08/05 18.2100
Buy 6,800 11/09/05 18.2501
Buy 1,000 12/01/05 18.7680
Buy 315 12/02/05 18.7100
Buy 500 12/27/05 18.7300
Buy 15,100 12/27/05 18.7342
Buy 3,800 12/29/05 18.6602
Sell 400,000 01/06/06 19.1589
Buy 10,000 01/19/06 19.7500
Buy 5,000 01/20/06 19.7470
Buy 10,700 01/26/06 19.6019
Buy 8,600 01/27/06 19.7293
Buy 6,600 01/27/06 19.5998
Buy 9,600 01/30/06 19.7462
I-2
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
Buy 5,000 02/01/06 19.7170
Buy 19,800 02/02/06 19.6575
Buy 7,500 02/03/06 19.4568
Buy 17,200 02/06/06 19.4471
Buy 31,900 02/08/06 19.3886
Buy 9,300 02/09/06 19.5183
Buy 33,600 02/13/06 19.4685
Buy 68,100 02/14/06 19.5387
Buy 32,900 02/15/06 19.6410
Buy 30,000 03/01/06 19.9024
Buy 19,800 03/07/06 19.8846
Buy 25,200 03/08/06 19.8854
Buy 6,500 03/09/06 19.9822
Buy 64,200 03/10/06 19.9879
Buy 12,700 03/13/06 19.9850
Buy 22,500 03/14/06 20.0925
Buy 2,100 03/14/06 20.0698
Buy 16,400 03/15/06 20.1656
Buy 1,500 03/24/06 20.2985
Buy 31,200 03/30/06 20.2727
Buy 9,300 03/31/06 20.3070
Buy 19,000 04/03/06 20.3504
Buy 21,500 04/04/06 20.4136
Buy 65,500 04/05/06 20.5568
Buy 115,800 04/05/06 20.5550
Buy 1,900 04/06/06 20.5676
Sell 800 04/06/06 20.6009
Buy 3,200 04/07/06 20.5028
Buy 7,400 04/10/06 20.4461
Buy 20,400 04/11/06 20.2968
Buy 30,400 04/12/06 20.3140
Buy 16,300 04/13/06 20.2925
Buy 58,300 04/17/06 20.2629
Buy 37,200 04/18/06 20.3394
Buy 46,600 04/19/06 20.5013
Buy 38,800 04/20/06 20.5273
Buy 29,000 04/21/06 20.5664
Buy 40,500 04/24/06 20.5094
Buy 5,200 04/25/06 20.4547
Buy 21,300 04/26/06 20.5862
Buy 29,300 04/27/06 20.5772
Buy 22,100 04/28/06 20.5514
Buy 10,500 05/01/06 20.6084
Buy 27,300 05/02/06 20.5953
Buy 400,000 05/04/06 20.5625
Buy 30,000 05/04/06 20.5189
Buy 24,500 05/05/06 20.6690
I-3
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
Sell 5,300 05/05/06 20.6635
Sell 900 05/05/06 20.6594
Buy 39,800 05/08/06 20.6475
Buy 59,300 05/15/06 20.0425
Buy 20,100 05/16/06 20.1099
Buy 34,400 05/17/06 19.8080
Buy 42,100 05/18/06 19.7895
Buy 39,500 05/19/06 19.7235
Buy 59,100 05/22/06 19.6808
Buy 22,900 05/23/06 19.7540
Buy 30,000 05/24/06 19.5736
Sell 12,000 06/06/06 19.5978
Sell 500 06/07/06 19.5544
Sell 200 06/08/06 19.2194
Transferred as Gift 200 07/05/06 N/A
WESTERN INVESTMENT INSTITUTIONAL PARTNERS LLC
Buy 8,100 10/05/04 16.8862
Buy 12,300 10/06/04 16.9117
Buy 5,300 12/03/04 17.9389
Buy 11,900 12/07/04 17.8839
Buy 15,000 12/08/04 17.7830
Buy 14,100 12/09/04 17.8686
Buy 3,000 12/10/04 17.8785
Buy 3,000 12/10/04 17.8585
Buy 42,600 12/10/04 17.8571
Buy 21,100 12/13/04 17.9713
Buy 70,000 12/15/04 18.0466
Buy 3,200 12/22/04 18.0429
Buy 6,400 12/23/04 18.1597
Buy 42,000 12/27/04 18.1635
Buy 22,500 12/29/04 18.1905
Buy 6,000 12/30/04 18.2264
Buy 4,300 12/30/04 18.2279
Buy 400 12/31/04 18.2835
Sell 5,300 03/29/05 17.6185
Sell 11,900 03/29/05 17.6185
Sell 15,000 03/29/05 17.6185
Sell 14,100 03/29/05 17.6185
Sell 42,600 03/29/05 17.6185
Sell 21,100 03/29/05 17.6185
Sell 10,000 03/29/05 17.6185
Sell 1,300 07/21/05 18.4107
Sell 116,300 01/04/06 18.8591*
---------------------
* Shares purchased by Western Investment Activism Partners LLC from Western
Investment Institutional Partners LLC.
I-4
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
Sell 716,200 01/04/06 18.8593*
WESTERN INVESTMENT ACTIVISM PARTNERS LLC
Buy 2,100 11/02/04 17.0084
Buy 8,500 11/03/04 17.1680
Buy 5,600 11/04/04 17.2500
Buy 52,400 11/04/04 17.3245
Buy 27,600 11/05/04 17.5197
Buy 30,500 11/05/04 17.5075
Buy 700 11/08/04 17.5028
Buy 9,200 11/10/04 17.5350
Buy 5,500 11/11/04 17.5808
Buy 7,500 11/12/04 17.7413
Buy 15,900 11/12/04 17.6966
Buy 19,300 11/15/04 17.7817
Buy 5,400 11/23/04 17.5320
Buy 5,500 12/03/04 17.9445
Buy 8,700 12/06/04 17.8893
Buy 27,100 12/06/04 17.8657
Buy 24,000 12/08/04 17.7823
Buy 20,900 12/13/04 17.9710
Buy 1,800 12/14/04 18.0085
Buy 9,100 12/14/04 18.0289
Buy 3,000 12/16/04 18.1185
Buy 5,400 12/16/04 18.0866
Buy 7,100 12/17/04 18.0631
Buy 9,000 12/23/04 18.1587
Buy 61,000 12/28/04 18.2007
Buy 30,200 12/29/04 18.1908
Buy 6,000 01/03/05 18.2943
Buy 6,000 01/04/05 17.8693
Buy 3,000 02/03/05 17.6802
Buy 9,200 02/04/05 17.7951
Buy 3,600 02/07/05 17.9199
Buy 3,000 02/09/05 17.9302
Sell 300 02/09/05 17.9242
Buy 5,400 02/15/05 18.0863
Buy 198,000 01/03/06 18.6467
Buy 832,500 01/04/06 18.8603*
Buy 52,500 01/04/06 18.8811
Buy 14,300 01/05/06 18.9374
Sell 4,200 01/05/06 18.9800
Buy 400,000 01/06/06 19.1605
Buy 1,161,000 01/06/06 19.3298
---------------------
* Shares purchased by Western Investment Activism Partners LLC from Western
Investment Institutional Partners LLC.
I-5
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
Buy 164,900 01/06/06 19.1342
Sell 1,600 01/06/06 19.1394
WESTERN INVESTMENT TOTAL RETURN MASTER FUND LTD.
Buy 44,900 09/27/04 16.4402
Sell 5,700 12/31/04 18.2796
Sell 3,000 12/31/04 18.2796
Sell 1,000 12/31/04 18.2796
Sell 2,100 12/31/04 18.2796
Sell 500 12/31/04 18.2796
Sell 500 12/31/04 18.2796
Sell 600 12/31/04 18.2796
Sell 1,300 12/31/04 18.2796
Sell 500 12/31/04 18.2796
Sell 400 12/31/04 18.2796
Sell 400 12/31/04 18.2796
Sell 1,000 12/31/04 18.2800
Sell 1,700 12/31/04 18.2800
Sell 2,600 12/31/04 18.2800
Sell 500 12/31/04 18.2800
Sell 1,500 12/31/04 18.2800
Sell 1,200 12/31/04 18.2800
Sell 800 12/31/04 18.2800
Sell 2,000 12/31/04 18.2800
Sell 1,200 12/31/04 18.2800
Sell 2,800 12/31/04 18.2800
Sell 500 12/31/04 18.2800
Sell 1,700 12/31/04 18.2800
Sell 500 12/31/04 18.2800
Sell 44,900 12/31/04 18.2800
Buy 1,600 06/08/06 19.3963
Buy 3,300 06/09/06 19.3296
Buy 14,400 06/12/06 19.2739
Buy 9,200 06/13/06 18.8823
Buy 6,600 06/15/06 19.1582
Buy 12,600 06/16/06 19.1948
Buy 3,100 06/19/06 19.0917
Buy 23,100 06/20/06 19.1099
Sell 400 06/21/06 19.2494
Buy 3,500 06/22/06 19.1228
Buy 14,300 06/26/06 19.0804
Buy 16,900 06/27/06 19.0449
Buy 27,600 06/28/06 19.0252
Buy 45,300 06/29/06 19.3292
Buy 45,700 06/30/06 19.4613
Buy 36,600 07/03/06 19.5610
Buy 17,200 07/05/06 19.5003
I-6
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
Buy 6,900 07/06/06 19.5522
Buy 50,600 07/07/06 19.5210
Buy 29,700 07/10/06 19.4460
Buy 16,600 07/11/06 19.4179
Buy 4,000 07/13/06 19.1375
Buy 1,300 07/14/06 18.8919
Buy 53,100 07/17/06 18.9185
Buy 42,400 07/18/06 18.9227
Buy 10,500 07/19/06 19.1424
Buy 29,300 07/19/06 19.2811
Buy 7,100 07/20/06 19.3516
Buy 19,200 07/24/06 19.2967
Sell 3,000 07/24/06 19.2211
Buy 17,900 07/25/06 19.3654
Buy 22,500 07/26/06 19.4883
Buy 12,200 07/27/06 19.6288
Buy 23,100 07/28/06 19.6993
Buy 3,900 07/31/06 19.7273
Buy 7,400 08/01/06 19.6111
Buy 11,700 08/02/06 19.6929
Buy 21,900 08/03/06 19.7309
Buy 1,400 08/07/06 19.5721
Buy 6,500 08/08/06 19.6008
Buy 20,300 08/09/06 19.6371
Buy 39,900 08/10/06 19.4416
Buy 7,000 08/14/06 19.5791
BENCHMARK PLUS PARTNERS, L.L.C.
Buy 1,100 09/07/04 16.6800
Buy 1,900 09/08/04 16.6700
Buy 24,900 09/09/04 16.6491
Buy 20,300 09/13/04 16.7549
Buy 17,200 09/14/04 16.7595
Buy 5,300 09/15/04 16.6670
Buy 9,700 09/16/04 16.6727
Buy 12,700 09/20/04 16.7035
Buy 11,900 09/21/04 16.7356
Buy 300 09/22/04 16.6100
Buy 100 09/23/04 16.5100
Buy 17,100 09/24/04 16.5025
Buy 18,800 09/27/04 16.4260
Buy 17,100 09/28/04 16.4936
Buy 7,000 09/29/04 16.5233
Buy 36,800 09/30/04 16.5586
Buy 32,900 10/01/04 16.7452
Buy 1,900 10/25/04 16.3500
Buy 10,600 10/26/04 16.5300
I-7
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
Buy 11,000 10/27/04 16.7375
Buy 14,400 11/22/04 17.6445
Buy 9,600 11/23/04 17.6415
Buy 11,700 11/24/04 17.7291
Buy 10,300 11/26/04 17.8250
Buy 3,500 11/29/04 17.8229
Buy 3,400 11/30/04 17.7088
Buy 12,700 12/14/04 18.0650
Buy 9,000 02/15/05 18.1029
Buy 3,100 02/16/05 18.1014
Buy 16,625 02/17/05 18.0405
Buy 13,700 02/18/05 18.0168
Buy 29,500 02/22/05 17.8765
Buy 41,200 02/23/05 17.8677
Buy 19,600 02/24/05 17.9110
Buy 10,000 02/25/05 18.1343
Buy 13,200 02/28/05 18.0367
Buy 8,300 03/01/05 18.1270
Buy 18,700 03/02/05 18.1543
Buy 2,000 03/02/05 18.1300
Buy 800 03/03/05 18.1750
Buy 12,300 03/03/05 18.1712
Buy 15,400 03/04/05 18.3163
Buy 13,000 03/07/05 18.4154
Buy 10,900 03/08/05 18.3435
Buy 7,000 03/09/05 18.2186
Buy 4,000 03/10/05 18.1409
Buy 4,000 03/11/05 18.1417
Buy 4,900 03/14/05 18.0937
Buy 1,700 03/15/05 18.1881
Buy 2,900 03/23/05 17.5895
Buy 3,600 03/24/05 17.6830
Buy 11,300 03/28/05 17.6806
Buy 7,500 03/29/05 17.6043
Buy 11,900 03/30/05 17.6705
Buy 5,100 03/31/05 17.7907
Buy 3,900 04/01/05 17.6739
Buy 6,500 04/04/05 17.6396
Buy 4,300 04/05/05 17.8015
Buy 1,800 04/06/05 17.9002
Buy 2,500 04/07/05 17.9313
Buy 1,800 04/08/05 17.8366
Buy 3,100 04/11/05 17.7921
Buy 5,500 04/12/05 17.7106
Buy 2,500 04/13/05 17.7822
Buy 12,600 04/14/05 17.6489
Buy 5,700 04/15/05 17.4753
I-8
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
Buy 700 04/18/05 17.2760
Buy 26,400 04/21/05 17.3440
Buy 4,900 04/22/05 17.3303
Buy 31,700 04/25/05 17.4545
Buy 17,300 04/26/05 17.4420
Buy 17,800 04/27/05 17.2971
Buy 17,600 04/29/05 17.3154
Buy 3,600 05/02/05 17.4098
Buy 1,800 05/03/05 17.4200
Buy 7,200 05/04/05 17.5924
Buy 17,800 05/05/05 17.6490
Buy 5,000 05/06/05 17.6689
Buy 14,800 05/09/05 17.6438
Buy 20,500 05/10/05 17.5859
Buy 27,100 05/11/05 17.5609
Buy 33,600 05/12/05 17.5536
Buy 29,200 05/13/05 17.4242
Buy 58,400 05/16/05 17.4859
Buy 48,000 05/17/05 17.5502
Buy 10,700 05/18/05 17.7169
Buy 24,000 05/27/05 17.9496
Buy 19,700 05/31/05 17.8876
Buy 17,900 06/01/05 17.9896
Buy 1,900 06/02/05 17.9994
Buy 3,250 06/03/05 18.0011
Buy 500 06/07/05 18.0594
Buy 1,400 06/09/05 17.9495
Buy 4,700 06/10/05 17.9077
Buy 6,500 06/13/05 17.9750
Buy 5,500 06/14/05 17.9682
Buy 2,600 06/15/05 17.9993
Buy 5,200 06/16/05 18.0634
Buy 7,600 06/17/05 18.1829
Buy 6,200 06/20/05 18.1638
Buy 16,100 06/21/05 18.1730
Buy 17,000 06/22/05 18.1789
Buy 23,000 06/23/05 18.1218
Buy 5,000 06/24/05 17.9375
Buy 1,300 06/27/05 17.8266
Buy 4,100 07/05/05 17.8661
Buy 700 07/06/05 17.8917
Buy 3,000 07/07/05 17.8001
Buy 4,200 07/08/05 17.9972
Buy 4,900 07/11/05 18.1280
Buy 4,200 07/12/05 18.1842
Buy 9,800 07/13/05 18.1949
Buy 2,800 07/15/05 18.2989
I-9
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
Buy 2,600 07/20/05 18.3866
Buy 1,100 07/27/05 18.4300
Buy 5,700 07/28/05 18.5230
Buy 1,200 08/01/05 18.4268
Buy 5,000 08/02/05 18.5069
Buy 600 08/04/05 18.4879
Buy 3,200 08/09/05 18.4103
Buy 6,500 08/10/05 18.5466
Buy 800 08/11/05 18.4636
Buy 1,000 09/09/05 18.4800
Buy 3,000 09/19/05 18.2570
Buy 13,000 03/01/06 19.9024
Buy 19,500 03/03/06 20.0710
Buy 2,100 03/06/06 20.0300
Buy 46,000 03/14/06 20.0925
Buy 7,500 03/17/06 20.3200
Buy 13,200 03/20/06 20.2923
Buy 1,000 03/20/06 20.3050
Buy 5,000 03/21/06 20.2962
Buy 17,000 03/27/06 20.2796
Buy 13,900 03/28/06 20.3101
Buy 23,100 03/29/06 20.3029
Buy 2,600 03/29/06 20.3088
Buy 7,200 03/31/06 20.2826
Buy 6,500 04/03/06 20.3516
Buy 20,200 05/24/06 19.4931
Buy 5,100 05/25/06 19.6645
Buy 400 05/30/06 19.7900
Buy 6,700 05/31/06 19.6307
Buy 9,300 06/02/06 19.9484
BENCHMARK PLUS INSTITUTIONAL PARTNERS, L.L.C.
Buy 17,000 03/10/05 18.1409
Buy 15,800 03/11/05 18.1417
Buy 19,400 03/14/05 18.0937
Buy 6,600 03/15/05 18.1881
Buy 200 03/16/05 17.9400
Buy 11,400 03/23/05 17.5895
Buy 14,600 03/24/05 17.6830
Buy 44,000 03/28/05 17.6806
Buy 29,800 03/29/05 17.6043
Buy 120,000 03/29/05 17.6209
Buy 47,700 03/30/05 17.6705
Buy 20,200 03/31/05 17.7907
Buy 15,400 04/01/05 17.6739
Buy 25,600 04/04/05 17.6396
Buy 17,200 04/05/05 17.8015
I-10
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
Buy 7,300 04/06/05 17.9002
Buy 10,200 04/07/05 17.9313
Buy 7,200 04/08/05 17.8366
Buy 12,500 04/11/05 17.7921
Buy 21,800 04/12/05 17.7106
Buy 9,900 04/13/05 17.7822
Buy 29,300 04/14/05 17.6489
Buy 22,700 04/15/05 17.4753
Buy 31,300 04/18/05 17.2760
Buy 8,000 04/21/05 17.3440
Buy 2,200 04/22/05 17.3303
Buy 10,600 04/25/05 17.4545
Buy 5,700 04/26/05 17.4420
Buy 6,000 04/27/05 17.2971
Buy 5,800 04/29/05 17.3154
Buy 1,200 05/02/05 17.4098
Buy 600 05/03/05 17.4200
Buy 1,800 05/04/05 17.5924
Buy 4,400 05/05/05 17.6490
Buy 1,200 05/06/05 17.6689
Buy 3,700 05/09/05 17.6438
Buy 5,100 05/10/05 17.5859
Buy 19,700 05/31/05 17.8876
Buy 17,900 06/01/05 17.9896
Buy 10,500 06/02/05 17.9994
Buy 4,250 06/03/05 18.0011
Buy 7,000 06/06/05 17.9114
Buy 3,000 06/07/05 18.0594
Buy 6,500 06/08/05 17.9800
Buy 7,700 06/09/05 17.9495
Buy 26,900 06/10/05 17.9077
Buy 36,600 06/13/05 17.9750
Buy 31,000 06/14/05 17.9682
Buy 14,600 06/15/05 17.9993
Buy 20,800 06/16/05 18.0634
Buy 31,300 06/17/05 18.1829
Buy 24,800 06/20/05 18.1638
Buy 64,500 06/21/05 18.1730
Buy 69,500 06/22/05 18.1789
Buy 84,300 06/23/05 18.1218
Buy 20,600 06/24/05 17.9375
Buy 5,100 06/27/05 17.8266
Buy 1,300 07/01/05 17.7731
Buy 16,600 07/05/05 17.8661
Buy 2,900 07/06/05 17.8917
Buy 11,100 07/07/05 17.8001
Buy 9,000 07/08/05 17.9972
I-11
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
Buy 19,500 07/11/05 18.1280
Buy 16,900 07/12/05 18.1842
Buy 39,000 07/13/05 18.1949
Buy 300 07/14/05 18.2800
Buy 11,300 07/15/05 18.2989
Buy 10,500 07/20/05 18.3866
Buy 3,300 07/27/05 18.4300
Buy 22,800 07/28/05 18.5230
Buy 4,800 08/01/05 18.4268
Buy 19,800 08/02/05 18.5069
Buy 700 08/03/05 18.4700
Buy 2,200 08/04/05 18.4879
Buy 12,800 08/09/05 18.4103
Buy 26,200 08/10/05 18.5466
Buy 3,100 08/11/05 18.4636
Buy 1,600 08/17/05 18.3700
Buy 1,400 08/18/05 18.3300
Buy 200 08/22/05 18.3900
Buy 200 09/06/05 18.2800
Buy 1,000 09/09/05 18.4800
Buy 600 09/16/05 18.3700
Buy 12,200 09/19/05 18.2570
Buy 17,500 02/16/06 19.7394
Buy 6,800 02/17/06 19.8256
Buy 9,800 02/21/06 19.8003
Buy 16,600 02/22/06 19.8837
Buy 7,900 02/23/06 19.9168
Buy 5,700 02/24/06 19.8868
Buy 27,000 02/27/06 19.9745
Buy 16,400 05/26/06 19.8188
Buy 27,600 06/01/06 19.8313
Buy 9,300 06/02/06 19.9484
Buy 20,000 08/15/06 19.7221
Buy 19,100 08/16/06 19.9379
Buy 27,200 08/17/06 20.0425
Buy 38,300 08/18/06 20.2663
ARTHUR D. LIPSON
Buy 1,000 12/02/05 18.7613
Transferred as Gift 100 02/24/06 N/A
ELYSE NAKAJIMA
Received as Gift 100 02/24/06 N/A
PAUL DEROSA
Received as Gift 100 07/05/06 N/A
I-12
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
DAVID B. FORD
Received as Gift 100 07/05/06 N/A
PURCHASES AND SALES IN THE PREFERRED STOCK OF TRI-CONTINENTAL
DURING THE PAST TWO YEARS
Western Investment Activism Partners LLC
Transaction Quantity Date Price ($)
----------- -------- ---- ---------
Buy 200 07/21/06 42.0585
Buy 300 07/26/06 41.9600
Buy 500 08/02/06 42.2265
Buy 100 08/07/06 42.2700
Buy 1,900 08/09/06 42.2137
Buy 1,100 08/17/06 42.9345
Buy 100 08/18/06 43.1085
I-13
SCHEDULE II
THE FOLLOWING TABLE IS DERIVED FROM THE COMPANY'S PROXY STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ON JULY 27, 2006
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below sets forth the beneficial ownership of (1) each person
known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of the Company's common stock as of July 11, 2006, and (2)
each director and executive officer of the Company as of June 30, 2006. Each
person had sole or shared voting or dispositive powers with respect to such
shares.
Number of
Common Shares
Owned Percentage
Name (rounded) Owned
---- --------- -----
John R. Galvin 1,174 *
Alice S. Ilchman 7,442 *
Betsy S. Michel 2,282 *
Frank A. McPherson 56,425 *
William C. Morris 118,225 *
Leroy C. Richie 1,000 *
Robert L. Shafer 3,066 *
James N. Whitson 34,071 *
Brian T. Zino 45,119 *
John B. Cunningham 2,500 *
Michael F. McGarry 1,250 *
Charles W. Kadlec 7,595 *
Frank J. Nasta 1,041 *
Marco Acosta 2,649 *
A Group consisting of Western Investment LLC 9,855,541 9.32%
and including 14 other members(1)
---------------------
* LESS THAN 1%
(1) The Group consists of Western Investment LLC, Arthur D. Lipson, Western
Investment Hedged Partners L.P., 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.
II-1
IMPORTANT
Tell your Board what you think! Your vote is important. No matter how
many Shares you own, please give Western Investment your proxy FOR the election
of Western Investment's Nominees and AGAINST the Charter amendment proposal
described in this proxy statement by voting your Shares by telephone or Internet
as described in the enclosed GOLD proxy card or by signing and dating the
enclosed GOLD proxy card, and returning it in the postage-paid envelope
provided.
If any of your Shares are held in the name of a brokerage firm, bank,
bank nominee or other institution, only it can vote such Shares and only upon
receipt of your specific instructions. Accordingly, please contact the person
responsible for your account and instruct that person to execute the GOLD proxy
card representing your Shares. In addition, if you hold your shares in a
brokerage or bank account, your broker or bank may allow you to provide your
voting instructions by telephone or Internet. Please consult the materials you
receive from your broker or bank prior to authorizing a proxy by telephone or
Internet. Western Investment urges you to confirm in writing your instructions
to Western Investment in care of Innisfree M&A Incorporated at the address
provided below so that Western Investment will be aware of all instructions
given and can attempt to ensure that such instructions are followed.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE VOTING YOUR SHARES, PLEASE CALL:
INNISFREE M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NY 10022
STOCKHOLDERS CALL TOLL-FREE AT: (877) 456-3510
BANKS AND BROKERS CALL COLLECT AT: (212) 750-5833
GOLD PROXY
PLEASE VOTE TODAY!
SEE REVERSE SIDE FOR THREE EASY WAYS TO VOTE.
TO VOTE BY MAIL PLEASE DETACH PROXY CARD HERE
--------------------------------------------------------------------------------
PREFERRED STOCK
TRI-CONTINENTAL CORPORATION
SPECIAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF WESTERN INVESTMENT HEDGED PARTNERS L.P.
THE BOARD OF DIRECTORS OF TRI-CONTINENTAL CORPORATION
IS NOT SOLICITING THIS PROXY
The undersigned appoints Arthur D. Lipson and Scott Franzblau, and each of them,
as the undersigned's attorneys and agents with full power of substitution to
vote all shares of preferred stock of Tri-Continental Corporation (the
"Company") which the undersigned would be entitled to vote if personally present
at the special meeting of stockholders of the Company scheduled to be held at
the offices of Venable LLP, 2 Hopkins Plaza, 18th Floor, Baltimore, Maryland
21202, on September 28, 2006 at 9:30 a.m., and including at any adjournments or
postponements thereof and at any meeting called in lieu thereof (the "Special
Meeting").
The undersigned hereby revokes any other proxy or proxies heretofore given to
vote or act with respect to the shares of preferred stock of the Company held by
the undersigned, and hereby ratifies and confirms all actions the herein named
attorneys and proxies, their substitutes, or any of them may lawfully take by
virtue hereof. If properly executed, this Proxy will be voted as directed on the
reverse and in the discretion of such attorneys and proxies and their
substitutes with respect to any other matters as may properly come before the
Special Meeting. Mark each vote with an X in the box.
IF NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSALS ON THE REVERSE, THIS
PROXY WILL BE VOTED FOR PROPOSAL NO. 1 AND AGAINST PROPOSAL NO. 2.
This Proxy will be valid until the sooner of one year from the date indicated on
the reverse side and the completion of the Special Meeting.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
TRI-CONTINENTAL CORPORATION
SOLICITATION OF PROXIES BY WESTERN INVESTMENT HEDGED PARTNERS L.P.
YOUR VOTE IS IMPORTANT
Please take a moment now to vote your shares of
Tri-Continental Corporation preferred stock for the
upcoming Special Meeting of stockholders.
PLEASE REVIEW THE PROXY STATEMENT
AND VOTE TODAY IN ONE OF THREE WAYS:
1. VOTE BY TELEPHONE - Please call toll-free from the U.S. or Canada at
1-866-849-9667, on a touch-tone telephone. If outside the U.S. or Canada,
call 1-215-521-1346. Please follow the simple recorded instructions. You
will be required to provide the unique control number shown below.
OR
2. VOTE BY INTERNET - Please ACCESS HTTPS://WWW.PROXYVOTENOW.COM/TY, and
follow the simple instructions. Please note you must type an "s" after
http. You will be required to provide the unique control number shown
below.
-----------------------
CONTROL NUMBER:
-----------------------
You may vote by telephone or Internet 24 hours a day, 7 days a week.
Your telephone or Internet vote authorizes the named
proxies to vote your shares in the same manner
as if you had marked, signed and returned a proxy card.
OR
3. VOTE BY MAIL - If you do not wish to vote by telephone or over the
Internet, please sign, date and return the GOLD proxy card in the envelope
provided, and mail to: Western Investment Hedged Partners L.P., c/o
Innisfree M&A Incorporated, FDR Station, P.O. Box 5155, New York, NY
10150-5155.
TO VOTE BY MAIL PLEASE DETACH PROXY CARD HERE
--------------------------------------------------------------------------------
GOLD PROXY CARD
PREFERRED STOCK
WESTERN INVESTMENT HEDGED PARTNERS L.P. ("WESTERN") RECOMMENDS A VOTE FOR
PROPOSAL NO. 1 AND AGAINST PROPOSAL NO. 2.
1. PROPOSAL NO. 1: Western's proposal to elect its slate of director nominees,
each to hold office until the 2009 annual meeting of the Company's
stockholders and until their successors are elected and qualify.
Nominees: FOR ALL WITHHOLD AUTHORITY TO FOR ALL EXCEPT NOMINEE(S)
(01) Arthur D. Lipson, NOMINEES VOTE FOR ALL NOMINEES WRITTEN BELOW
(02) Paul DeRosa, [ ] [ ] ________________________
(03) David B. Ford ________________________
2. PROPOSAL NO. 2: The Company's proposal to approve an
amendment to the Company's charter to provide that the
presence in person or by proxy of stockholders entitled
to cast at least one-third (1/3) of all of the votes
entitled to be cast at a stockholder meeting
constitutes a quorum, unless a higher percentage is FOR AGAINST ABSTAIN
specified in the Bylaws of the Company. [ ] [ ] [ ]
3. To vote and otherwise represent the undersigned on any other matter that
may properly come before the Special Meeting or any adjournment or
postponement thereof, including voting on adjournment of the Special
Meeting with respect to one or more matters in the discretion of the proxy
holder.
DATE: ____________________________
------------------------------------
(Signature)
------------------------------------
(Signature, if held jointly)
------------------------------------
(Title)
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS
SHOULD EACH SIGN. EXECUTORS, ADMINISTRATORS,
TRUSTEES, ETC. SHOULD INDICATE THE CAPACITY IN
WHICH SIGNING. PLEASE SIGN EXACTLY AS NAME
APPEARS ON THIS PROXY.
GOLD PROXY
PLEASE VOTE TODAY!
SEE REVERSE SIDE FOR THREE EASY WAYS TO VOTE.
TO VOTE BY MAIL PLEASE DETACH PROXY CARD HERE
--------------------------------------------------------------------------------
COMMON STOCK
TRI-CONTINENTAL CORPORATION
SPECIAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF WESTERN INVESTMENT HEDGED PARTNERS L.P.
THE BOARD OF DIRECTORS OF TRI-CONTINENTAL CORPORATION
IS NOT SOLICITING THIS PROXY
The undersigned appoints Arthur D. Lipson and Scott Franzblau, and each of them,
as the undersigned's attorneys and agents with full power of substitution to
vote all shares of common stock of Tri-Continental Corporation (the "Company")
which the undersigned would be entitled to vote if personally present at the
special meeting of stockholders of the Company scheduled to be held at the
offices of Venable LLP, 2 Hopkins Plaza, 18th Floor, Baltimore, Maryland 21202,
on September 28, 2006 at 9:30 a.m., and including at any adjournments or
postponements thereof and at any meeting called in lieu thereof (the "Special
Meeting").
The undersigned hereby revokes any other proxy or proxies heretofore given to
vote or act with respect to the shares of common stock of the Company held by
the undersigned, and hereby ratifies and confirms all actions the herein named
attorneys and proxies, their substitutes, or any of them may lawfully take by
virtue hereof. If properly executed, this Proxy will be voted as directed on the
reverse and in the discretion of such attorneys and proxies and their
substitutes with respect to any other matters as may properly come before the
Special Meeting. Mark each vote with an X in the box.
IF NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSALS ON THE REVERSE, THIS
PROXY WILL BE VOTED FOR PROPOSAL NO. 1 AND AGAINST PROPOSAL NO. 2.
This Proxy will be valid until the sooner of one year from the date indicated on
the reverse side and the completion of the Special Meeting.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
TRI-CONTINENTAL CORPORATION
SOLICITATION OF PROXIES BY WESTERN INVESTMENT HEDGED PARTNERS L.P.
YOUR VOTE IS IMPORTANT
Please take a moment now to vote your shares of Tri-Continental Corporation
common stock for the upcoming Special Meeting of stockholders.
PLEASE REVIEW THE PROXY STATEMENT
AND VOTE TODAY IN ONE OF THREE WAYS:
1. VOTE BY TELEPHONE - Please call toll-free from the U.S. or Canada at
1-866-849-9667, on a touch-tone telephone. If outside the U.S. or Canada,
call 1-215-521-1346. Please follow the simple recorded instructions. You
will be required to provide the unique control number shown below.
OR
2. VOTE BY INTERNET - Please access HTTPS://WWW.PROXYVOTENOW.COM/TY, and
follow the simple instructions. Please note you must type an "s" after
http. You will be required to provide the unique control number shown
below.
-----------------------
CONTROL NUMBER:
-----------------------
You may vote by telephone or Internet 24 hours a day, 7 days a week.
Your telephone or Internet vote authorizes the named
proxies to vote your shares in the same manner
as if you had marked, signed and returned a proxy card.
OR
3. VOTE BY MAIL - If you do not wish to vote by telephone or over the
Internet, please sign, date and return the GOLD proxy card in the envelope
provided, and mail to: Western Investment Hedged Partners L.P., c/o
Innisfree M&A Incorporated, FDR Station, P.O. Box 5155, New York, NY
10150-5155.
TO VOTE BY MAIL PLEASE DETACH PROXY CARD HERE
--------------------------------------------------------------------------------
GOLD PROXY CARD
COMMON STOCK
WESTERN INVESTMENT HEDGED PARTNERS L.P. ("WESTERN") RECOMMENDS A VOTE FOR
PROPOSAL NO. 1 AND AGAINST PROPOSAL NO. 2.
1. PROPOSAL NO. 1: Western's proposal to elect its slate of director nominees,
each to hold office until the 2009 annual meeting of the Company's
stockholders and until their successors are elected and qualify.
Nominees: FOR ALL WITHHOLD AUTHORITY TO FOR ALL EXCEPT NOMINEE(S)
(01) Arthur D. Lipson, NOMINEES VOTE FOR ALL NOMINEES WRITTEN BELOW
(02) Paul DeRosa, [ ] [ ] ________________________
(03) David B. Ford ________________________
2. PROPOSAL NO. 2: The Company's proposal to approve an
amendment to the Company's charter to provide that the
presence in person or by proxy of stockholders entitled
to cast at least one-third (1/3) of all of the votes
entitled to be cast at a stockholder meeting
constitutes a quorum, unless a higher percentage is FOR AGAINST ABSTAIN
specified in the Bylaws of the Company. [ ] [ ] [ ]
3. To vote and otherwise represent the undersigned on any other matter that
may properly come before the Special Meeting or any adjournment or
postponement thereof, including voting on adjournment of the Special
Meeting with respect to one or more matters in the discretion of the proxy
holder.
DATE: ____________________________
------------------------------------
(Signature)
------------------------------------
(Signature, if held jointly)
------------------------------------
(Title)
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS
SHOULD EACH SIGN. EXECUTORS, ADMINISTRATORS,
TRUSTEES, ETC. SHOULD INDICATE THE CAPACITY IN
WHICH SIGNING. PLEASE SIGN EXACTLY AS NAME
APPEARS ON THIS PROXY.