SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c)
or section 240.14a-12
General American Investors Company, Inc.
(Name of Registrant as Specified in its Charter)
[Insert Name]
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
GENERAL AMERICAN INVESTORS Company, Inc.
450 Lexington Avenue . New York . N.Y. 10017
Notice of Annual Meeting of Stockholders
February 2, 1999
To the Stockholders of
GENERAL AMERICAN INVESTORS Company, Inc.
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of General
American Investors Company, Inc. will be held at The Century Association, 7 West
43rd Street, New York City, N.Y., on Wednesday, March 10, 1999 at 2:30 o'clock
in the afternoon, New York Time, for the purpose of
(a) Electing directors, ten to be elected by the holders of both
the Company's Common Stock and its 7.20% Tax-Advantaged
Cumulative Preferred Stock ("Preferred Stock") voting together
as a single class and two to be elected only by the holders of
the Company's Preferred Stock, to hold office until the annual
meeting of stockholders next ensuing after their election and
until their respective successors are elected and shall have
qualified; and
(b) Ratifying or rejecting the selection by the Board of Directors
of the Company of the firm of Ernst & Young LLP to be the
auditors of the Company for the year ending December 31, 1999;
and
(c) Transacting any and all such other business as may properly
come before the meeting or any adjournment or adjournments
thereof in connecting with the foregoing or otherwise.
The minute books of the Company, containing the minutes of all meetings of
the Board of Directors since the last annual meeting of the stockholders, will
be presented to the meeting and will there be open to the inspection of the
stockholders.
The close of business on January 25, 1999 has been fixed as the record date
for the determination of the stockholders entitled to notice of, and to vote at,
the meeting.
This notice and related proxy material is expected to be mailed on or about
February 2, 1999.
By Order of the Board of Directors,
Carole Anne Clementi
Secretary
If you do not expect to attend the meeting in person and wish your stock to be
voted, you are requested to fill in and sign the accompanying form of proxy and
return it in the accompanying envelope.
<PAGE>
GENERAL AMERICAN INVESTORS Company, Inc.
450 Lexington Avenue . New York . N.Y. 10017
PROXY STATEMENT
February 2, 1999
This statement is furnished in connection with the solicitation by the Board of
Directors of General American Investors Company, Inc. (hereinafter called the
"Company" or the "Corporation") of proxies to be used at the annual meeting of
stockholders of the Company, to be held at The Century Association, 7 West 43rd
Street, New York City, N.Y., on Wednesday, March 10, 1999 at 2:30 o'clock in the
afternoon (and at any adjournment or adjournments thereof) for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders. Stockholders
who execute proxies retain the right to revoke them at any time insofar as they
have not been exercised, by written notice to the Secretary of the Company or by
attendance at the Annual Meeting.
The close of business on January 25, 1999 has been fixed as the record date for
the determination of the stockholders entitled to notice of, and to vote at, the
meeting.
This proxy statement and the form of proxy are expected to be mailed on or about
February 2, 1999.
Proxies returned will be voted in accordance with the instructions thereon or,
if no instructions are indicated, in favor of the directors named herein and
to approve the appointment of Ernst & Young LLP as auditors.
As of January 25, 1999, the Company had outstanding 24,758,019 shares of Common
Stock, $1 par value, and 6,000,000 shares of 7.20% Tax-Advantaged Cumulative
Preferred Stock ("Preferred Stock"), $1 par value, each share carrying one vote.
A. Respecting the Election of Directors
At the meeting, twelve directors are to be elected to hold office until the
annual meeting of stockholders next ensuing after their election and until their
respective successors are elected and shall have qualified. Ten directors are to
be elected by the holders of both the Company's Common Stock and its Preferred
Stock, voting together as a single class, and two directors are to be elected
only by the holders of the Company's Preferred Stock. Directors are to be
elected by a plurality of the vote of shares present in person or represented by
proxy at the meeting and entitled to vote on Directors. Stockholders vote at the
meeting by casting ballots (in person or by proxy) which are tabulated by one or
two persons, appointed at the meeting, who serve as Inspectors of Election at
the meeting and who execute an oath to discharge their duties. It is the
intention of the persons named in the accompanying form of proxy to nominate and
to vote such proxy for the election of persons named below or, if any such
persons should be unable to serve, for the election of such other person or
persons as shall be determined by the persons named in the proxy in accordance
with their judgment. All of the persons named below are incumbent directors.
They have agreed to serve if elected.
1 (continued on page 2)
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED DEC. 31, 1998**
------------------------------------------
NAME AND BUSINESS ADDRESS PRINCIPAL OCCUPATION*, BUSINESS EXPERIENCE BECAME COMMON PERCENT PREFERRED PERCENT
DURING PAST FIVE YEARS AND AGE DIRECTOR STOCK OF CLASS STOCK OF CLASS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Arthur G. Altschul, Jr. Mr. Altschul is co-chairman and managing member 1995 117,492 .47 -- --
Diaz & Altschul Group, LLC of Diaz & Altschul Group, LLC which was founded
(investments and securities) in May 1996. From 1992 to May 1996, he was
745 Fifth Avenue, Suite 3001 employed by SUGEN, Inc. (biopharmaceuticals),
New York, NY 10151 Redwood City, CA, most recently as senior
director of corporate affairs. He was assistant
secretary of SUGEN from May 1992 to May 1996.
Mr. Altschul has been managing general partner
of Altschul Investment Group, L.P. (a private
investment partnership), New York, NY since
1988. He is a director of Delta Opportunity
Fund, Ltd., Hamilton, Bermuda; Medicis
Pharmaceutical Corporation, Phoenix, AZ; the
New York Council for the Humanities, New York,
NY; and several privately owned companies. Mr.
Altschul is 34 years old.
Lawrence B. Buttenwieser Mr. Buttenwieser has been the Chairman of the 1967 802,434 3.24 -- --
Partner, Rosenman & Colin LLP Board of Directors of the Company since May 1995
(lawyers) and a director of the Company since 1967. Mr.
575 Madison Avenue Buttenwieser is 67 years old.
New York, NY 10022
Lewis B. Cullman Mr. Cullman has been president of Cullman 1961 2,087 .01 80,000 1.33
Cullman Ventures, Inc. Ventures, Inc. (formerly solely a holding
(calendars and catalogs) company) since 1968. He is chairman and a
767 Third Avenue trustee of Chess-in-the-Schools
New York, NY 10017 (charitable foundation), New York, NY. Mr.
Cullman is a trustee of the Metropolitan Museum
of Art, New York, NY and vice chairman of the
international council and an honorary trustee
of the Museum of Modern Art, New York, NY.
Mr. Cullman is 80 years old.
Spencer Davidson # Mr. Davidson has been President and Chief 1995 269,712 1.09 60,000 1.00
General American Investors Executive Officer of the Company since August
Company, Inc. 1995; prior thereto, he was senior investment
450 Lexington Avenue counselor since joining the Company in 1994. He
New York, NY 10017 was elected a Director of the Company in
September 1995. Before joining General American,
Mr. Davidson was the General Partner of The
Hudson Partnership (a private investment
partnership), New York, NY. He is a director of
Medicis Pharmaceutical Corporation, Phoenix, AZ;
and a trustee of the Innisfree Foundation, Inc.
(not-for-profit foundation), Millbrook, NY and
of the Neurosciences Research Foundation
(scientific research foundation), San Diego, CA.
Mr. Davidson is 56 years old.
</TABLE>
2 (continued on page 3)
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED DEC. 31, 1998**
------------------------------------------
NAME AND BUSINESS ADDRESS PRINCIPAL OCCUPATION*, BUSINESS EXPERIENCE BECAME COMMON PERCENT PREFERRED PERCENT
DURING PAST FIVE YEARS AND AGE DIRECTOR STOCK OF CLASS STOCK OF CLASS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gerald M. Edelman Dr. Edelman has been a member and the chairman 1976 1,366 .01 -- --
Department of Neurobiology of the Department of Neurobiology of The Scripps
The Scripps Research Institute Research Institute since July 1992; prior thereto,
10666 North Torrey Pines Rd. he was Vincent Astor Professor of The Rockefeller
La Jolla, CA 92037 University, New York, NY. Dr. Edelman is director
and president of the Neurosciences Institute of
the Neurosciences Research Foundation
(scientific research foundation), San Diego,
CA; president and a director of the
Neurosciences Support Corporation (scientific
research support foundation), San Diego, CA;
a director of Becton, Dickinson and Company,
Franklin Lakes, NJ; a member of the advisory group
for business and science of Mehta Partners LLC
(global health care investments), New York, NY;
and a member emeritus of the board of governors
of the Weizmann Institute of Science, Rehovot,
Israel. Dr. Edelman is 69 years old.
Anthony M. Frank Mr. Frank has been chairman of Belvedere Capital 1992 6,304 .03 -- --
Belvedere Capital Partners Partners since 1994. He has been chairman of
(private financial consulting) Acrogen Inc. (biotechnology company), Oakland, CA
One Maritime Plaza since March 1992; prior thereto, he was The
Suite 825 Postmaster General of the United States from
San Francisco, CA 94104 March 1988. Prior to entering government service,
he was chairman of First Nationwide Bank. Mr.
Frank is a director of Bedford Properties,
Lafayette, CA; Cotelligent Group, Inc., San
Francisco, CA; Crescent Real Estate Equities,
Inc., New York, NY; Financial Security
Assurance Holdings Ltd., New York, NY; Irvine
Apartment Communities, Inc., Newport Beach,
CA; The Schwab (Charles) Corporation, San
Francisco, CA and Temple-Inland, Inc., Diboll,
TX. Mr. Frank is 67 years old.
John D. Gordan, III Mr. Gordan has been a partner of Morgan, Lewis 1986 5,790 .02 1,000 .02
Morgan, Lewis and Bockius LLP and Bockius LLP since October 1994; prior thereto,
(lawyers) he was a partner of Lord Day & Lord, Barrett
101 Park Avenue Smith and predecessor firm from 1979.
New York, NY 10178 Mr. Gordan is 53 years old.
Bill Green ## Mr. Green represented the 15th New York 1993 2,310 .01 7,000 .12
Corporate Director and Congressional District (east side of Manhattan)
Trustee in the U.S. House of Representatives from 1978
14 E. 60th Street - Suite 702 through 1992. He is a director of ClientSoft,
New York, NY 10022 Inc., Tarrytown, NY; Commercial Capital Corp.,
New York, NY; and Energy Answers Corporation,
Albany, NY. He is also a member of the New
York City Campaign Finance Board, New York, NY
and a member and vice chair of the New York
City Housing Development Corporation, New York,
NY. Mr. Green is 69 years old.
Sidney R. Knafel ## Mr. Knafel has been managing partner of SRK 1994 18,316 .07 -- --
SRK Management Company Management Company since 1981. He is chairman
(private investment company) of the board of directors of BioReliance
126 East 56th Street Corporation, Rockville, MD and Insight
New York, NY 10022 Communications, Inc., New York, NY. Mr. Knafel
is a director of Cellular Communications
International, Inc., New York, NY; Cellular
Communications of Puerto Rico, Inc., New York, NY;
CoreComm Incorporated, New York, NY; IGENE
Biotechnology, Inc., Columbia, MD;
NTL Incorporated, New York, NY; and several
privately owned companies.
Mr. Knafel is 68 years old.
</TABLE>
3 (continued on page 4)
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED DEC. 31, 1998**
------------------------------------------
NAME AND BUSINESS ADDRESS PRINCIPAL OCCUPATION*, BUSINESS EXPERIENCE BECAME COMMON PERCENT PREFERRED PERCENT
DURING PAST FIVE YEARS AND AGE DIRECTOR STOCK OF CLASS STOCK OF CLASS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard R. Pivirotto Mr. Pivirotto was chairman of the board of 1971 1,383 .01 -- --
President, Richard R. directors of Associated Dry Goods Corporation,
Pivirotto Co., Inc. New York, NY from 1976 until his retirement in
(self-employed consultant) 1981. He is a director of CBS Inc., New York,
111 Clapboard Ridge Road NY; The Gillette Company, Boston, MA; The
Greenwich, CT 06830 Greenwich Bank and Trust Company, Greenwich, CT;
Immunomedics, Inc. (biopharmaceuticals),Morris
Plains, NJ; Infinity Broadcasting Corporation,
New York, NY; and New York Life Insurance Company,
New York, NY. He is a trustee of the General
Theological Seminary, New York, NY; Greenwich
Hospital Corporation, Greenwich, CT; and Yale New
Haven Health Systems, New Haven, CT; and a charter
trustee emeritus of Princeton University,
Princeton, NJ. Mr. Pivirotto is 68 years old.
Joseph T. Stewart, Jr. Mr. Stewart has been an executive consultant 1987 14,954 .06 2,000 .03
Corporate Director and to Johnson & Johnson, New Brunswick, NJ since
Trustee September 1990; prior thereto, he was a
147 Rolling Hill Road consultant to Bristol-Myers Squibb Company
Skillman, NJ 08558 from January 1990 to March 1990. Mr. Stewart
was senior vice president, corporate affairs
of Squibb Corporation from 1982 until he
retired in January 1990. He was a director of
Squibb Corporation from 1984 until its merger
into Bristol-Myers Squibb Company in 1989. He
is a director of Liposome Co., Inc.,
Princeton, NJ, a trustee of the Foundation of
the University of Medicine and Dentistry of
New Jersey, Newark, NJ, and a member of the
advisory council to the Marine Biological
Laboratory, Woods Hole, MA.
Mr. Stewart is 69 years old.
Raymond S. Troubh Mr. Troubh has been a financial consultant 1989 19,641 .08 -- --
10 Rockefeller Plaza since 1974. He is a director of Ariad
Suite 712 Pharmaceuticals, Inc., Cambridge, MA; Becton,
New York, NY 10020 Dickinson and Company, Franklin Lakes, NJ;
Diamond Offshore Drilling, Inc., Houston, TX;
Foundation Health Systems, Inc., Woodland Hills,
CA; Olsten Corporation, Westbury, NY; Triarc
Companies, Inc., New York, NY; and WHX
Corporation, New York, NY. He is a trustee of
MicroCap Liquidating Trust, New York, NY; Petrie
Stores Liquidating Trust, Secaucus, NJ; and
Starwood Hotels & Resort, White Plains NY.
Mr. Troubh is 72 years old.
<FN>
* If the principal occupation shown has been held for less than five
years, additional background information relating to the director's
principal occupation is included in the supplemental paragraph together
with his other directorships.
** This information has been furnished by each director. In addition to
shares owned beneficially, shares as to which directors have or
share the power to vote or dispose are as follows:
</FN>
</TABLE>
<TABLE>
Common Percent Preferred Percent
Name Shares of Class Shares of Class
- ---- ------ -------- --------- --------
<S> <C> <C> <C> <C>
Arthur G. Altschul, Jr. 370,863 1.50 18,000 .30
Arthur G. Altschul, Jr. and
Spencer Davidson 31,819 .13 20,000 .33
Arthur G. Altshcul, Jr. and
John D. Gordan, III 122,218 .49 -- --
Lewis B. Cullman 75,000 .30 -- --
Spencer Davidson 33,153 .13 10,000 .17
John D. Gordan, III 215,792 .87 -- --
Sidney R. Knafel 10,512 .04 -- --
4 (continued on page 5)
<PAGE>
<FN>
# Mr. Davidson is an "interested person" of the Company, as defined
under Section 2a(19) of the Investment Company Act of 1940, as amended,
by reason of his being an officer of the Company.
## Messrs. Green and Knafel have been designated as the Preferred Stock
directors and are to be elected only by the holders of the Company's
Preferred Stock.
</FN>
</TABLE>
The directors and officers as a group owned beneficially or have or share
the power to vote or dispose of an aggregate 2,123,952 shares of Common Stock
(8.58% of the class) and 198,380 shares of Preferred Stock (3.31% of the class).
In addition, the Company has the power to vote 359,576 shares of Common Stock
(1.45% of the class) held by the trustee for the Company's Employees' Thrift
Plan, as described below.
Meetings of Committees of the Board of Directors
During 1998, the Company's Board of Directors held seven meetings.
The Audit Committee of the Board of Directors consists of the following
directors, all of whom are "non-interested" directors: Mr. Sidney R. Knafel,
Chairman, Mr. Arthur G. Altschul, Jr., Mr. Lawrence B. Buttenwieser, Mr. Lewis
B. Cullman, Mr. John D. Gordan, III, Mr. Bill Green, and Mr. Raymond S. Troubh;
and Mr. Anthony M. Frank, alternate. Generally, for the Company, the Audit
Committee monitors financial reporting, reviews reports on the system of
internal accounting control, reviews the scope of the audit work, reviews fees
in relation to services performed by the auditors, reviews the results of
auditors' work, reviews and oversees responses to recommendations, if any, made
to the Company by the auditors, recommends the selection of the auditors to the
Board of Directors and acts as a liaison between the Board of Directors and the
auditors and management personnel. The Committee met two times during the fiscal
year, on March 11 and December 9, 1998.
The Compensation Committee of the Board of Directors consists of the
following directors: Mr. Bill Green, Chairman, Mr. Arthur G. Altschul, Jr., Mr.
Lawrence B. Buttenwieser, Mr. Anthony M. Frank, Mr. Sidney R. Knafel, Mr.
Richard R. Pivirotto, Mr. Joseph T. Stewart, Jr. and Mr. Raymond S. Troubh; and
Mr. Lewis B. Cullman and Dr. Gerald M. Edelman, alternates. Generally, for the
Company, the Compensation Committee reviews the operations of the Company and
performance and contributions made during each year by its officers and
employees, reviews management proposals for year-end supplemental compensation
and levels of compensation for the ensuing year, reviews comparable operating
and compensation data of other companies in the investment industry, and makes
recommendations on matters of compensation to the Board of Directors. The
Committee met once during the fiscal year, on December 9, 1998.
The Executive Committee/Nominating Committee of the Board of Directors
consists of the following Directors: Mr. Richard R. Pivirotto, Chairman, Mr.
Lawrence B. Buttenwieser, Mr. Spencer Davidson, Dr. Gerald M. Edelman, and
Mr. Joseph T. Stewart, Jr.; and Mr. John D. Gordan, III, and Mr. Bill Green,
alternates. In addition to functioning as an Executive Committee with authority
to exercise the powers of the Board of Directors in the management of the
business and affairs of the Company when the Board is not in session, the
Executive Committee/Nominating Committee is responsible for identifying
individuals who may be nominated to serve as Directors of the Company,
responding to inquiries relating to nominations to the Board and making
recommendations to the Board with respect to individuals to be nominated to
serve as Directors. The Committee met once during the fiscal year, on December
9, 1998.
Each Director attended at least seventy-five percent of the aggregate
number of meetings of the Board of Directors and of the committee(s) on which he
serves.
Section 16(a) of the Securities Exchange Act of 1934
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors and certain other persons to file timely
certain reports regarding ownership of, and transactions in, the Company's
securities with the Securities and Exchange Commission. Copies of the required
filings must also be furnished to the Company.
Based solely on its review of such forms received by it, or written
representations from certain reporting persons, the Company believes that during
1998 all applicable Section 16(a) filing requirements were met, except that the
Form 5 filed by John D. Gordan, III for December 1997 did not include 496
shares, which
5
<PAGE>
were received in payment of optional dividends by the custodian for his account,
due to the custodian's improper processing of Mr. Gordan's instructions, which
requested the custodian to receive the dividends in cash only, and the Form 4
filed by Mr. Gordan for September 1998 did not include these shares. In January
1999, when Mr. Gordan became aware of this matter, he filed amended forms
reflecting the 496 shares. In addition, the Form 4 required to be filed by
Joseph T. Stewart, Jr. for several transactions in August 1998 was filed
approximately 20 days late.
Executive Officers
In addition to Mr. Spencer Davidson, President and Chief Executive Officer
of the Company, information with respect to whom is set forth above, the
executive officers of the Company include the following. (Officers are elected
each year by the Board of Directors at its annual organization meeting in
March.)
Mr. Andrew V. Vindigni, 39, Vice-President since September 1995 and, prior
thereto, Assistant Vice-President from January 1991, has been a security analyst
with the Company since 1988. Mr. Vindigni is principally responsible for
securities in the financial services industry.
Mr. Eugene L. DeStaebler, Jr., 60, has been Vice-President, Administration
since January 1978. Mr. DeStaebler is president of the Closed-End Fund
Association, Inc., Kansas City, MO.
Mr. Peter P. Donnelly, 50, Vice-President since January 1991 and, prior
thereto, Assistant Vice-President from January 1984, has been the securities
trader for the Company since 1974.
Mrs. Diane G. Radosti, 46, Treasurer since January 1990, has been an
employee of the Company since 1980.
Ms. Carole Anne Clementi, 52, Secretary since October 1994 and, prior
thereto, Assistant Secretary from July 1993, has been an employee of the Company
since 1982.
Executive Compensation
The following table sets forth the compensation received during 1998 from
the Company by its executive officers and directors.
<TABLE>
<CAPTION>
Pension or
Name of Individual Capacities retirement
or number of persons in which Aggregate benefits accrued
in group served Compensation during 1998 *
- -------------------- ----------- ------------- -----------------
<S> <C> <C> <C>
Spencer Davidson President and $1,200,000 $54,000
Chief Executive Officer
Andrew V. Vindigni Vice-President 600,000 36,000
Eugene L. DeStaebler, Jr. Vice-President, Administration 400,000 30,000
7 executive officers
as a group 3,070,000 201,168
12 directors as
a group 168,000 **
<FN>
* The amounts shown in this column represent the Company's payments
made during 1998 to the trustee of the Company's Employees' Thrift
Plan, as described below, or accounting reserves established during
1998 under the Company's Excess Contribution Plan, as described
below, on behalf of the respective individuals or group members.
** Each director who is not a paid officer of the Company received a
fee of $10,000 as an annual retainer, a fee of $500 for attendance
at each Directors' meeting and $500 for each Committee meeting
which he attended in his capacity as a Director.
</FN>
</TABLE>
With respect to the Company's Employees' Thrift Plan, the Company matches
150% of an employee's contributions up to 8% of basic salary to the plan.
Company contributions are invested in shares of the Company's common stock. An
employee's interest in Company contributions to his account is fully vested
after six years of service. Partial vesting begins after two years of
participation in the plan. All employees, including officers, are eligible to
participate in the Thrift Plan after six months of service with the Company.
Employees whose annual compensation exceeds $150,000 are required to invest
their future contributions to the plan in shares of the Company's common stock,
and their existing plan balances will be converted into the Company's common
stock over the three years next succeeding the attainment of that compensation
level.
6
<PAGE>
The Company has an Employees' Retirement Plan which is broadly
characterized as a defined benefit plan. The Company contributes to the trustee
for the plan annual costs which include actuarially determined current service
costs and amortization of prior service costs. Retirement benefits are based on
final average earnings (basic salary, exclusive of overtime, bonuses,
commissions, pension, retainer fees, fees under contracts or any other forms of
additional or special compensation, for the five consecutive years in which the
participant had the highest basic salary during the last ten years of service)
and years of credited service, less an offset for social security covered
compensation, plus an additional amount equal to $50 for each year of credited
service. All employees, including officers, over age 21 commence participation
in the plan after one year of service and are fully vested after six years of
service. Partial vesting begins after two years of service. Participants are
eligible to receive normal retirement benefits at age 65. In certain instances,
a reduced benefit may begin upon retirement between ages 55 and 65.
The following table shows the estimated annual retirement benefits
(including amounts attributable to the Company's Excess Benefit Plan, as
described below), which are subject to a deduction based on a portion of social
security covered compensation, payable on a straight life annuity basis, at
normal retirement date to all eligible employees, including officers, in
specified compensation and years-of-service classifications:
<TABLE>
<CAPTION>
Estimated Annual Benefits Based Upon Years of Credited Service
-------------------------------------------------------------
Final Average 10 20 30 40
Earnings
<S> <C> <C> <C> <C>
$ 50,000 $ 8,685 $ 17,375 $ 26,060 $ 32,035
100,000 16,830 33,665 50,495 61,900
150,000 24,975 49,955 74,930 91,765
200,000 33,120 66,245 99,365 121,630
250,000 41,265 82,535 123,800 151,495
300,000 49,410 98,825 148,235 181,360
350,000 57,555 115,115 172,670 211,225
400,000 65,700 131,405 197,105 241,090
450,000 73,845 147,695 221,540 270,955
</TABLE>
For each of the officers of the Company listed in the compensation table on
page 6, the following indicates his years of credited service in the Company's
Retirement Plan and basic salary for 1998. Spencer Davidson (4) $450,000,
Andrew V. Vindigni (10) $300,000 and Eugene L. DeStaebler, Jr. (22) $250,000.
The Company also has Excess Contribution and Excess Benefit Plans. Under
such plans, the Company may establish accounting reserves and make payments
directly to selected participants in the Company's Thrift and Retirement Plans,
respectively, to the extent the levels of contributions or benefits for such
participants under such plans are limited by sections 415, 416 and/or 401(a)(17)
of the Internal Revenue Code. Such benefits commence at the time benefits
commence under the related tax-qualified plan. Messrs. Davidson, Vindigni and
DeStaebler are participants in both the Excess Contribution and Excess Benefit
Plans.
B. Respecting the Ratification and Approval of Appointment of Auditors
by the Board of Directors
Proposal (b) set forth in the accompanying Notice of Annual Meeting of
Stockholders is the ratification or rejection of the action taken in the
following resolutions unanimously adopted by the Board of Directors (a majority
of non-interested directors voting in person) appointing the firm of Ernst &
Young LLP to be the auditors of the Company for the fiscal year ending December
31, 1999.
"RESOLVED, that the firm of Ernst & Young LLP be and they hereby
are appointed the auditors of the Company with respect to its
operations for the year 1999; and further
"RESOLVED, that such auditors be and they hereby are authorized
and instructed to conduct an audit, in accordance with generally
accepted auditing standards, of the financial statements of the Company
as of and for the year ending December 31, 1999; and further
"RESOLVED, that such auditors be and they hereby are authorized
and instructed to conduct a review, in accordance with standards
established by the American Institute of Certified Public Accountants,
of the interim financial statements of the Company as of and for the
six months ending June 30, 1999; and further
"RESOLVED, that such appointment shall terminate (without penalty
to the Company) in the event that it shall be rejected at the annual
meeting of the stockholders of the Company in 1999; and further
7
<PAGE>
"RESOLVED, that such appointment shall terminate (without penalty
to the Company) if a majority (as defined in the Investment Company Act
of 1940) of the outstanding voting securities of the Company at any
meeting called for the purpose shall vote to terminate such
appointment; and further
"RESOLVED, that the report of such auditors expressing their
opinion with respect to the financial statements above described and
the report of such auditors with respect to the review above described
shall be addressed to the Board of Directors of the Company and to the
stockholders thereof."
Ernst & Young LLP were the auditors for the Company for 1998. A
representative of Ernst & Young LLP will attend the Annual Meeting to respond to
appropriate questions and will have the opportunity to make a statement.
Stockholders who wish to submit questions in advance to the auditors may do so
in writing to Mr. Michael D. DiLecce, Partner, Ernst & Young LLP, 787 Seventh
Avenue, New York, N.Y. 10019.
C. Respecting Other Matters Which May Come Before the Meeting
The Board of Directors of the Company does not know of any other matters
which may come before the meeting. However, if any other matters, of which the
Board of Directors is not now aware, are properly presented for action before
the meeting, including any questions as to the adjournment of the meeting, it is
the intention of the persons named in the accompanying form of proxy to vote
such proxy in accordance with their judgment on such matters.
D. Allocation of Portfolio Brokerage
Brokerage commissions paid by the Company during 1998 were $459,033,
including $84,154 (18.33%) paid to Goldman, Sachs & Co. The Chairman Emeritus of
the Company is a limited partner of The Goldman Sachs Group, L.P. which is an
affiliate of Goldman, Sachs & Co. Of the aggregate dollar amount of the
Company's transactions involving brokerage commissions during 1998, 19.93% were
effected through Goldman, Sachs & Co.
The Company's general policy regarding the execution of securities
transactions is to select brokers and dealers on the basis of the most favorable
markets, prices and execution of orders. A certain amount of the Company's
securities transactions are placed with brokers and dealers who provide
brokerage and research services and in these circumstances the commissions paid
may be higher than those which might otherwise have been paid to another broker
or dealer if those services had not been provided.
Research services generally include receipt of written reports, attendance
at meetings or participation in discussions with respect to specific subjects,
such as a company, an industry or the economic outlook. Block availability is
also a consideration in determining the selection of brokers.
In negotiating brokerage commissions on securities transactions, the
Company's trader, with his awareness of competitive rates, negotiates the most
favorable commission to effect a particular transaction. Size of order and
difficulty of execution are considerations in the negotiation. All transactions,
including the commission factor, are subject to supervision and review by the
Company's officers.
E. Portfolio Turnover Rate
The annual rate of the total portfolio turnover for the fiscal year ended
December 31, 1998 was 34.42%.
F. Stockholder Proposals
In order for a stockholder proposal to be considered for inclusion in the
Company's proxy material relating to its 2000 annual meeting of stockholders,
the stockholder proposal must be received by the Company no later than October
5, 1999, and must comply with certain other rules and regulations promulgated by
the Securities and Exchange Commission.
- -------------------------------------------------------------------------------
The expense of the solicitation of proxies for this meeting will be borne
by the Company. In addition to mailing copies of this material to stockholders,
the Company will request persons who hold stock for others, in their names or
custody or in the names of nominees, to forward copies of such material to those
persons for whom they hold stock of the Company and to request authority for the
execution of the proxies. The Company may reimburse such persons for their
out-of-pocket expenses incurred in connection therewith.
It is important that proxies be returned promptly. Therefore, stockholders
who do not expect to attend in person and who wish their stock to be voted are
urged to fill in, sign and return the accompanying form of proxy in the enclosed
envelope.
8
<PAGE>
COMMON STOCK COMMON STOCK
GENERAL AMERICAN INVESTORS COMPANY, INC.
450 Lexington Avenue
New York, NY 10017
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Lawrence B. Buttenwieser, Spencer Davidson
and Eugene L. DeStaebler, Jr. as Proxies, each with the power to appoint his
substitute, and hereby authorizes each of them to represent and to vote, as
designated below, all shares of Common Stock of the above Company which the
undersigned is entitled to vote, at the annual meeting of stockholders on March
10, 1999, and at any adjournment thereof.
The shares represented by this proxy will be voted as directed by the
shareholder. If no direction is given when the duly executed proxy is returned,
such shares will be voted "FOR all nominees" in item A and "FOR" item B.
Please mark your votes as indicated in this example [X]
COMMON STOCK
The Board of Directors recommends a vote "FOR ALL NOMINEES" in item A and "FOR"
item B.
A. Election of the following nominees as Directors:
Mr. Altschul, Mr. Buttenwieser, Mr. Cullman, Mr. Davidson, Dr. Edelman,
Mr. Frank, Mr. Gordan, Mr. Pivirotto, Mr. Stewart and Mr. Troubh
[ ] FOR all nominees except any indicated
[ ] WITHHOLD AUTHORITY to vote for all listed nominees
(Instruction: To withhold authority to vote for individual nominees, write
the nominee's names on the line below)
_________________________________________________________________________
B. Ratification of the selection of Ernst & Young LLP as auditors.
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
C. In their discretion, the appointees are authorized to vote upon any other
matters which may properly come before the meeting or any adjournments
thereof.
Signature __________________________________________
Signature __________________________________________
Date______________________
Please date and sign your name as it appears above and return in the enclosed
envelope. When signing as an attorney, executor, administrator, trustee, or
guardian, please give title as such. If a signer is a corporation, please sign
full corporate name by authorized officer and attach corporate seal. For joint
accounts, each joint owner should sign.
<PAGE>
PREFERRED STOCK PREFERRED STOCK
GENERAL AMERICAN INVESTORS COMPANY, INC.
450 Lexington Avenue
New York, NY 10017
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Lawrence B. Buttenwieser, Spencer Davidson
and Eugene L. DeStaebler, Jr. as Proxies, each with the power to appoint his
substitute, and hereby authorizes each of them to represent and to vote, as
designated below, all shares of 7.20% Tax-Advantaged Cumulative Preferred Stock
of the above Company which the undersigned is entitled to vote, at the annual
meeting of stockholders on March 10, 1999, and at any adjournment thereof.
The shares represented by this proxy will be voted as directed by the
shareholder. If no direction is given when the duly executed proxy is returned,
such shares will be voted "FOR all nominees" in item A and "FOR" item B.
Please mark your votes as indicated in this example [X]
PREFERRED STOCK
The Board of Directors recommends a vote "FOR ALL NOMINEES" in item A and "FOR"
item B.
A. Election of the following nominees as Directors:
Mr. Altschul, Mr. Buttenwieser, Mr. Cullman, Mr. Davidson, Dr. Edelman,
Mr. Frank, Mr. Gordan, Mr. Green, Mr. Knafel, Mr. Pivirotto, Mr. Stewart
and Mr. Troubh
[ ] FOR all nominees except any indicated
[ ] WITHHOLD AUTHORITY to vote for all listed nominees
(Instruction: To withhold authority to vote for individual nominees, write
the nominee's names on the line below)
_________________________________________________________________________
B. Ratification of the selection of Ernst & Young LLP as auditors.
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
C. In their discretion, the appointees are authorized to vote upon any other
matters which may properly come before the meeting or any adjournments
thereof.
Signature __________________________________________
Signature __________________________________________
Date______________________
Please date and sign your name as it appears above and return in the enclosed
envelope. When signing as an attorney, executor, administrator, trustee, or
guardian, please give title as such. If a signer is a corporation, please sign
full corporate name by authorized officer and attach corporate seal. For joint
accounts, each joint owner should sign.
