TY Tri Continental Corp

Arthur Lipson of Western Investment Hedged Partners L.P. announced that it is nominating a slate of directors for election at the September 28, 2006 special meeting of stockholders called by the Board of Tri-Continental Corporation (NYSE:TY). Mr. Lipson also mailed a letter to registered stockholders, which is available below, describing some of his concerns regarding the disappointing management of J. & W. Seligman & Co. Incorporated, Tri-Continental's manager. Mr. Lipson noted in the letter that William Morris, Tri-Continental's Chairman, is named in an investigation by the New York State Attorney General, and that the Attorney General has determined to commence an action against Seligman for fraud relating to alleged mutual fund timing activities in certain funds managed by Seligman. In the letter to stockholders, Art Lipson of Western Investment commented that while he was opposed to Tri-Continental's decision to call the unnecessary special election so soon after the Company's Annual Meeting in May and to the squandering "of stockholder money for this unnecessary election, estimated by Tri-Continental to cost at least $1.4 million," he felt compelled to nominate a slate of directors composed of outstanding nominees, to offer an alternative to Tri-Continental's stockholders. Mr. Lipson further noted that Tri-Continental had underperformed the S&P 500 Index in 12 out of the last 15 years, with S&P 500 Index returns during this period 56% higher than Tri-Continental's returns. Western Investment has filed a preliminary proxy statement with the Securities and Exchange Commission and anticipates mailing it to stockholders as soon as it is finalized. The text of the letter from Art Lipson to the registered stockholders of Tri-Continental follows: -0- *T August 9, 2006 Dear Stockholders of Tri-Continental Corporation: I am writing this letter to introduce myself and explain why I believe there is a problem at Tri-Continental Corporation. My name is Art Lipson. I am a fellow stockholder and I am leading a group that has owned Tri-Continental stock since 1999. We care about Tri-Continental's performance certainly as much as anyone else since we are the largest stockholder. I began working on Wall Street in 1968 and remember when Tri-Continental's manager, J. & W. Seligman & Co. Incorporated, was one of the most prestigious and respected names in the investment management business. I do not believe that remains the case. In 1988, William Morris gained control of Seligman, and is presently Chairman of Seligman as well as Chairman of Tri-Continental. Mr. Morris is seeking reelection as a Director. -- William Morris, Tri-Continental's Chairman, is named in an investigation by the New York State Attorney General. As you probably know, the New York State Attorney General has determined to commence against Seligman an action for fraud relating to alleged mutual fund timing activities in certain funds managed by Seligman. The Attorney General has alleged that in excess of $80 million was "diluted" from the value of these funds during Mr. Morris's tenure. Since 1991, Tri-Continental's cumulative investment performance has been very disappointing. Tri-Continental has underperformed the S&P 500 index in 12 out of the last 15 years. The performance by Seligman as manager during the last 15 years, under Mr. Morris's direction, has been abysmal. During this period, the S&P 500 index returns were 56% higher than Tri-Continental's returns. -- Tri-Continental underperformed the S&P 500 index in 12 of the last 15 years - we believe your investment deserves better management. Morningstar, the well-respected rating company for mutual funds, recently rated the Seligman family of open-end mutual funds with an "F" for corporate governance, the lowest possible grade. Morningstar also recommends that investors "proceed with caution" concerning an investment in Seligman open-end mutual funds. We put forward an alternative state of directors at Tri-Continental's Annual Meeting just last May, where neither our nor Tri-Continental's directors were elected. Tri-Continental spent a great deal of stockholder money in a failed attempt to elect Mr. Morris and the rest of its slate in that election. Tri-Continental also engaged in illegal conduct, forcing us to sue to obtain what stockholders have a right by law to receive in such elections -- the stockholders' list. Now, only a few months later, the Tri-Continental Board has decided to hold another election without providing a compelling reason. We object to the use of stockholder money for this unnecessary election, estimated by Tri-Continental to cost at least $1.4 million. To make matters worse, because Tri-Continental has made inaccurate and misleading statements about our positions in its proxy statement, we have been forced to notify the Securities and Exchange Commission about these misstatements. -- While distorting our position, Tri-Continental's proxy fails to disclose, (a) the cost to stockholders of the last election; (b) the actual investment performance of Tri-Continental for the first six months of 2006 (which again lags the S&P 500 index); and (c) the fact that its Chairman, William Morris, and its President, Chief Executive Officer and Director, Brian Zino, have been named in the investigation by the New York State Attorney General. As Tri-Continental has called an unnecessary election, I am compelled to nominate a slate of directors. Joining me as proposed directors are two outstanding individuals, Paul DeRosa and David B. Ford, who have long and distinguished records in investment management and who are committed to acting in the best interest of all stockholders. We have provided information about each of our nominees on the next page. No one on our slate is beholden to Seligman. Each of us is dedicated to working hard to improve Tri-Continental. Each of us is independent of Seligman and will vigorously represent all stockholders in all matters, including the fund's relationship with Seligman. Our interests are aligned with yours. -- We need an independent set of eyes to protect our investment and to see to it that Seligman does the job that it is paid to do. I have listened to stockholder concerns and want to make it clear that, despite statements made by the Tri-Continental Board, my goal is not to open-end or liquidate Tri-Continental. When Tri-Continental tells you to the contrary it is misstating my position. I am committed to improving Tri-Continental to return it to being an excellent company rather than being sub-par. The Board of Directors is supposed to be independent and a protector of stockholder interests. Instead, we believe the Tri-Continental Board has failed its stockholders by consistently choosing Seligman as its manager despite Seligman's truly terrible performance record and its legal challenges resulting from alleged fraudulent market timing activities in other funds under its management. We urge you not to vote your shares until you have received our proxy statement and GOLD proxy card. Please do not sign any white proxy card you may receive from Tri-Continental until all of the facts are before you. Thank you for keeping an open mind. We hope that with your support we can restore Tri-Continental to its former prominence. Very truly yours, Arthur D. Lipson *T THE WESTERN INVESTMENT NOMINEES We have proposed a slate of three outstanding nominees for election at the September special meeting. Each member of our slate has a career of top-tier investment experience, and we believe our slate's election will be in the best interests of all stockholders. Set forth below is biographical information on each member of our slate of nominee directors. Paul DeRosa has been a principal since November 1998 of Mt. Lucas Management Corporation, an asset management company. Mt. Lucas has returned over 17% annually to its investors since its inception in 1996. From March 1988 to July 1995, Mr. DeRosa served as Managing Director of Eastbridge Capital Inc., a bond trading company. Previously, Mr. DeRosa served in various capacities with Citibank NA, including as a Division Head of Citicorp Investment Bank where he was entrusted with the responsibility of managing Citibank's proprietary bond portfolio. He also has extensive experience supervising the investment management process. Mr. DeRosa is currently a director of Intervest Bancshares Corporation, a financial holding company. Mr. DeRosa received a Ph.D. in Economics from Columbia University and has served as a staff economist for the Federal Reserve Bank of New York. David B. Ford was a partner and then a managing director from 1986 to 2003, and co-head of Global Asset Management from 1994 to 2003, with The Goldman Sachs Group, Inc., a leading international investment banking and securities firm. As co-head, Mr. Ford was integrally involved in Goldman's investment management business, including the selection and review of portfolio managers. Goldman Sachs is widely considered to be one of the leading global asset managers. Mr. Ford currently serves on Wharton's Board of Overseers and is a member of the Board of Trustees for Florida State University. Mr. Ford received a Bachelor of Science from Florida State University and a Masters of Business Administration from the Wharton School at the University of Pennsylvania. Arthur D. Lipson has been managing private investment partnerships since 1995. He has been the sole managing member of Western Investment LLC, a Delaware limited liability company that acts as the general partner, managing member or investment manager, as the case may be, of private investment partnerships in the Western Investment funds since 1997. Western Investment specializes in investing in undervalued companies. Mr. Lipson has substantial experience in sales & trading and research, including heading all fixed income research for Lehman Brothers and for Paine Webber, was a known leader in the industry, and created, among other things, the Lehman Brothers bond indices. Mr. Lipson received a Masters of Science from Columbia University and a Bachelor of Science from the California Institute of Technology. CERTAIN INFORMATION CONCERNING WESTERN INVESTMENT Western Investment Hedged Partners L.P. ("Western Investment"), together with the other Participants (as defined below), has made a preliminary filing with the SEC of a proxy statement (the "Proxy Statement") and accompanying proxy cards to be used, among other things, to solicit votes in support of the election of the Participants' slate of director nominees and against certain of Tri-Continental Corporation's (the "Company") proposals at the special meeting (the "special meeting") of the Company scheduled for September 28, 2006. Western Investment advises all stockholders of the Company to read the Proxy Statement and other proxy materials relating to the special meeting as they become available because they contain important information. Such proxy materials are available at no charge on the SEC's web site at http://www.sec.gov. In addition, the Participants in the solicitation will provide copies of the proxy materials, without charge, upon request. Requests for copies should be directed to the Participants' proxy solicitor, Innisfree M&A Incorporated, at its toll-free number: (877) 456-3510 or by e-mail at: mbrinn@innisfreema.com. The Participants in the proxy solicitation are Western Investment, Western Investment LLC, Arthur D. Lipson, Western Investment Activism Partners LLC, Western Investment Total Return Master Fund Ltd., Benchmark Plus Institutional Partners, L.L.C., Benchmark Plus Partners, L.L.C., Benchmark Plus Management, L.L.C., Paradigm Partners, N.W., Inc., Scott Franzblau, Robert Ferguson, Michael Dunmire, Paul DeRosa, David B. Ford and Elyse Nakajima (the "Participants"). Information regarding the Participants and their direct or indirect interests is available in the Schedule 13D jointly filed with the SEC on January 6, 2006, as subsequently amended on January 10, 2006, February 15, 2006, March 3, 2006, May 12, 2006, and July 12, 2006, and the Proxy Statement. For additional information, please visit: www.fixmyfund.com.