GENERAL AMERICAN INVESTORS COMPANY, INC.
--------------------------------------------------------------------------------
450 LEXINGTON AVENUE NEW YORK N.Y. 10017
Notice of Annual Meeting of Stockholders
February 28, 2007
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, April 11, 2007 at 10:00 a.m.,
New York Time, for the purpose of
(A) Electing directors, seven to be elected by the holders of both the
Company's Common Stock and its 5.95% Cumulative Preferred Stock,
Series B ("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 appointment by the Audit Committee of the
Company (which was approved 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, 2007; and
(C) Transacting any and all such other business as may properly come
before the meeting or any adjournment or adjournments thereof in
connection 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 be open to the inspection of the
stockholders.
The close of business on February 20, 2007 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 28, 2007.
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.
GENERAL AMERICAN INVESTORS COMPANY, INC.
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450 LEXINGTON AVENUE NEW YORK N.Y. 10017
PROXY STATEMENT
February 28, 2007
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, April 11, 2007 at 10:00 a.m. (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 February 20, 2007 has been fixed as the record date for
the determination of the stockholders entitled to notice of, and to vote at, the
meeting.
Proxies returned will be voted in accordance with the instructions thereon or,
if no instructions are indicated, in favor of the nominees named herein and to
approve the appointment of Ernst & Young LLP as auditors.
As of February 20, 2007, the Company had outstanding 29,589,198 shares of Common
Stock, $1 par value, and 8,000,000 shares of 5.95% Cumulative Preferred Stock,
Series B ("Preferred Stock"), $1 par value, each share carrying one vote.
The Annual Report of the Company, including audited financial statements for the
fiscal year ended December 31, 2006, is enclosed in this mailing. This proxy
statement and form of proxy are first being mailed to stockholders on or about
February 28, 2007. The Company will provide, without charge, additional copies
of the Annual Report to any stockholder upon request by calling Carole Anne
Clementi, Corporate Secretary of the Company, at 1-800-436-8401.
The Company intends to treat properly executed proxies that are marked "abstain"
or "withhold," including "broker non-votes" (that is, a proxy from a broker or
nominee indicating that such person has not received instructions from the
beneficial owner or other person entitled to vote shares on a particular matter
with respect to which the broker or nominee does not have discretionary power),
as present for purposes of determining the existence of a quorum for the
transaction of business. A quorum will consist of a majority of the shares of
stock of the Company entitled to vote on a matter at the meeting, present in
person or represented by proxy. The election of the Company's directors requires
a plurality of the votes of the shares present or represented by proxy at the
meeting and entitled to vote on the election. In the election of directors,
votes may be cast in favor of or withheld with respect to any or all nominees;
votes that are withheld will be excluded entirely from the vote and will have no
effect on the outcome of the vote. The affirmative vote of the holders of a
majority of the outstanding shares present in person or represented by proxy and
entitled to vote on the matter is required to ratify the appointment of Ernst &
Young LLP. In accordance with Delaware law, only votes cast "for" a matter
constitute affirmative votes. Accordingly, votes that are withheld or
abstentions from voting are not votes cast "for" a particular matter, and such
votes have the same effect as negative votes or votes "against" a particular
matter. Because of the routine nature of the items of business presented in this
proxy statement, the rules of The New York Stock Exchange, Inc. permit member
brokers who do not receive instructions from their customers who are beneficial
owners of the Company's shares to vote their customers' shares on these items of
business.
1
A. Respecting the Election of Directors
At the meeting, nine 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. Seven 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. Mr. Lawrence B. Buttenwieser, Chairman, is
not standing for re-election. Mr. Richard R. Pivirotto passed away on January 8,
2007. Information in the following table is as of December 31, 2006.
Directors
Name, Address(1), Age,
Position(s) with Company and Principal Occupation(s)
Length of Time Served(2) During Past 5 Years Other Directorships and Affiliations
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Independent Directors
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Arthur G. Altschul, Jr.(3) (42) Managing Member, Delta Opportunity Fund, Ltd., Director
Director since 1995 Diaz & Altschul Capital Diversified Natural Products, Inc., Director
Management, LLC Medicis Pharmaceutical Corporation, Director
(private investment company) Medrium, Inc., Chairman, Board of Directors
National Public Radio Foundation, Trustee
Neurosciences Research Foundation, Trustee
The Overbrook Foundation, Director
Lewis B. Cullman (88) Philanthropist Chess-in-the-Schools, Chairman, Board of Trustees
Director since 1961 Metropolitan Museum of Art, Honorary Trustee
Museum of Modern Art, Vice Chairman,
International Council and Honorary Trustee
Neurosciences Research Foundation, Vice Chairman,
Board of Trustees
The New York Botanical Garden, Senior Vice Chairman,
Board of Managers
Gerald M. Edelman (77) Member, Professor and Chairman Neurosciences Institute of the
Director since 1976 of the Department of Neurobiology, Neurosciences Research Foundation,
The Scripps Research Institute Director and President
John D. Gordan, III (61) Partner,
Director since 1986 Morgan, Lewis & Bockius LLP
(lawyers)
Sidney R. Knafel(3) (76) Managing Partner, IGENE Biotechnology, Inc., Director
Director since 1994 SRK Management Company Insight Communications Company, Inc.,
(private investment company) Chairman, Board of Directors
VirtualScopics, Inc., Director
Vocollect, Inc., Director
D. Ellen Shuman (51) Vice President and Chief Bowdoin College, Trustee
Director since 2004 Investment Officer, Edna McConnell Clark Foundation, Investment Advisor
Carnegie Corporation of The Investment Fund for Foundations, Director
New York
(continued)
2
Name, Address(1), Age,
Position(s) with Company and Principal Occupation(s)
Length of Time Served(2) During Past 5 Years Other Directorships and Affiliations
---------------------------------------------------------------------------------------------------------------------------
Joseph T. Stewart, Jr. (77) Corporate director and trustee Foundation of the University of
Director since 1987 Medicine and Dentistry of New Jersey, Trustee
Marine Biological Laboratory, Member,
Advisory Council
United States Merchant Marine Academy, Trustee,
Board of Advisors
United States Merchant Marine Academy Foundation,
Trustee
Raymond S. Troubh (80) Financial Consultant Diamond Offshore Drilling, Inc., Director
Director since 1989 Gentiva Health Services, Inc., Director
Sun-Times Media Group, Inc., Director
Triarc Companies, Inc., Director
Interested Director
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Spencer Davidson(4) (64) President and Chief Executive Medicis Pharmaceutical Corporation, Director
Director, President and Chief Officer, Neurosciences Research Foundation, Trustee
Executive Officer since 1995 General American Investors
Company, Inc.
(1) The address of each director is: c/o General American Investors Company, Inc., 450 Lexington Avenue, Suite 3300,
New York, NY 10017.
(2) Each director is elected for a one year term of office.
(3) Messrs. Altschul 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.
(4) Mr. Davidson is an "interested person," as defined in the Investment Company Act of 1940, as
amended, because he is an officer of the Company.
Security Ownership of Management
The following table sets forth certain information as of December 31, 2006 with
respect to the beneficial ownership of the Company's Common Stock and Preferred
Stock by each person who is known to the Company to have beneficial ownership of
more than 5% of the outstanding shares of Common Stock or Preferred Stock, each
director, each officer and all directors and officers of the Company as a group.
Name of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership(1) Percent of Class
-----------------------------------------------------------------------------------------------------------------------------
Common Stock Arthur G. Altschul, Jr. 622,650(2) 2.10%
Lawrence B. Buttenwieser* 629,222(3) 2.13
Lewis B. Cullman 5,953(4) .02
Spencer Davidson 1,154,683(2) 3.90
Gerald M. Edelman 2,612 .01
John D. Gordan, III 368,829(5) 1.19
Sidney R. Knafel 39,714(6) .13
Richard R. Pivirotto** 2,642 .01
D. Ellen Shuman 1,182 .00
Joseph T. Stewart, Jr. 14,432 .05
Raymond S. Troubh 46,528(7) .16
Craig A. Grassi 22(8) .00
Maureen E. LoBello 1,263(9) .00
Eugene S. Stark 569 .00
Directors and Officers as a Group 2,423,105(10) 8.19
3
Name of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership(1) Percent of Class
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Preferred Stock Arthur G. Altschul, Jr. 98,600(11) 1.23%
Spencer Davidson 87,400(11) 1.09
John D. Gordan, III 1,000 .00
Joseph T. Stewart, Jr. 3,000(12) .04
Carole Anne Clementi 100 .00
Peter P. Donnelly 400(13) .00
Maureen E. LoBello 1,000(9) .01
Directors and Officers as a Group 104,100(14) 1.30
*Incumbent director not standing for re-election at the forthcoming stockholder meeting.
**Deceased as of January 8, 2007.
(1) Unless indicated, the person holding the shares has sole voting and dispositive power over all shares shown.
(2) Includes 153,611 shares (.52% of the class) over which Mr. Altschul has shared voting power, 202,247 shares
(.68% of the class) over which Messrs. Altschul and Davidson have shared voting and dispositive
power and 264,949 shares (.90% of the class) over which Mr. Altschul has shared voting power and over which Mr. Davidson
has shared voting and dispositive power.
(3) Includes 485,239 shares (1.64% of the class) over which Mr. Buttenwieser has shared voting and dispositive power.
(4) Includes 1,959 shares (.01% of the class) owned by Mr. Cullman's wife in which he disclaims any beneficial ownership.
(5) Includes 359,364 shares (1.21% of the class) over which Mr. Gordan has shared voting and dispositive power. In addition, his
holdings include 2,046 shares (.01% of the class) owned by Mr. Gordan's wife in an individual retirement account in which he
disclaims any beneficial ownership.
(6) Includes 4,631 shares (.02% of the class) in which Mr. Knafel has voting power and disclaims beneficial ownership.
(7) Includes 8,906 shares (.03% of the class) held in a limited partnership in which Mr. Troubh has a 44% interest and of which he
is the general partner.
(8) Shares owned by Mr. Grassi's nephew in a custodial account in which he disclaims any beneficial ownership.
(9) Shares owned by Mrs. LoBello's mother in a family trust in which she disclaims any beneficial ownership.
(10)Total excludes duplication of 467,196 shares (1.58% of the class) over which both Mr. Altschul and Mr. Davidson share joint
voting and/or dispositive power.
(11)Includes 11,200 shares (.14% of the class) over which Mr. Altschul has shared voting power, 75,400 shares (.94% of the class)
over which Messrs. Altschul and Davidson have shared voting and dispositive power, and 12,000 shares (.15% of the class)
over which Mr. Altschul has shared voting power and over which Mr. Davidson has shared voting and dispositive power.
(12)Shares owned by Mr. Stewart's wife in which he disclaims any beneficial ownership.
(13)Includes 200 shares (0% of the class) owned by Mr. Donnelly's wife in which he disclaims any beneficial ownership.
(14)Total excludes duplication of 87,400 shares (1.09% of the class) over which both Mr. Altschul and Mr. Davidson share joint
voting and/or dispositive power.
In addition to the holdings reflected in the foregoing table, the Company
has the power to vote 495,421 shares of Common Stock (1.67% of the class) held
by the trustee for the Company's Employees' Thrift Plan, as described below.
Director Share Ownership Table
The dollar range of the value of equity securities of the Company
beneficially owned by each Director as of December 31, 2006 is as follows:
Dollar Range of Equity
Name of Director Securities in the Company
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Independent Directors
Arthur G. Altschul, Jr. Over $100,000
Lawrence B. Buttenwieser* Over $100,000
Lewis B. Cullman Over $100,000
Gerald M. Edelman $50,001-$100,000
John D. Gordan, III Over $100,000
Sidney R. Knafel Over $100,000
Richard R. Pivirotto** $50,001-$100,000
D. Ellen Shuman $10,001-$50,000
Joseph T. Stewart, Jr. Over $100,000
Raymond S. Troubh Over $100,000
Interested Director
Spencer Davidson Over $100,000
* Incumbent director not standing for re-election at the forthcoming stockholder meeting.
** Deceased as of January 8, 2007.
4
Meetings of Committees of the Board of Directors
During 2006 the Company's Board of Directors held six meetings.
The Audit Committee consists of the following directors: Chairman: Mr.
Sidney R. Knafel, Mr. Arthur G. Altschul, Jr., Mr. Lawrence B. Buttenwieser*,
Mr. Lewis B. Cullman, Mr. John D. Gordan, III and Ms. D. Ellen Shuman. These
directors are independent of management and the Company. Each of them is also
"independent" as such term is defined in The New York Stock Exchange listing
standards applicable to the Company. The organization and responsibilities of
the Audit Committee are set forth in the Audit Committee Charter located on the
Company's website at www.generalamericaninvestors.com. Generally, the Audit
Committee assists the Board of Directors in its oversight of the Company's
accounting and financial reporting and internal controls, the independent audit
of the Company's financial statements, the selection of the independent auditors
and the evaluation of the independence of the independent auditors. The Report
of the Audit Committee is set forth as an Exhibit on page 10. The Audit
Committee met three times during the fiscal year, on January 18, July 12, and
December 13, 2006, and once after the end of the fiscal year, on January 17,
2007.
The Compensation Committee consists of the following directors: Chairman:
Mr. Joseph T. Stewart, Jr., Mr. Arthur G. Altschul, Jr., Mr. Lawrence B.
Buttenwieser*, Mr. Sidney R. Knafel, and Mr. Raymond S. Troubh; and Mr. Lewis B.
Cullman and Dr. Gerald M. Edelman, alternates. Generally, 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 including information and
trends provided by an outside consulting firm, and makes recommendations on
matters of compensation to the Board of Directors. The Committee met once during
the fiscal year on December 13, 2006.
The Compliance Committee consists of the following directors: Chairman: Ms.
D. Ellen Shuman (effective January 17, 2007; Richard R. Pivirotto prior to his
death on January 8, 2007), Mr. Lawrence B. Buttenwieser*, Dr. Gerald M. Edelman,
Mr. John D. Gordan, III (alternate through January 17, 2007), and Mr. Joseph T.
Stewart, Jr. The organization and responsibilities of the Compliance Committee
are set forth in the Compliance Committee Charter located on the Company's
website at www.generalamericaninvestors.com. The Compliance Committee was
established to work with management to finalize a compliance policies and
procedures manual, to assist management with a presentation of the policies and
procedures to the Board of Directors for its consideration, and to review and
monitor compliance with those policies and procedures on an ongoing basis. The
Compliance Committee meets at least annually to review with management the
Company's policies and procedures designed to prevent violations of Federal
Securities Laws. The Committee met once during the fiscal year on October 11,
2006.
The Executive Committee consists of the following directors: Chairman: Mr.
Joseph T. Stewart, Jr. (effective January 17, 2007; Richard R. Pivirotto prior
to his death on January 8, 2007), Mr. Lawrence B. Buttenwieser*, Mr. Spencer
Davidson (an "interested person" of the Company) and Dr. Gerald M. Edelman; and
Mr. John D. Gordan, III, alternate. The Executive Committee has the 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 Committee did
not meet during the fiscal year.
The Nominating Committee consists of the following directors (all of the
Company's directors who are not "interested persons" of the Company, as defined
in Section 2(a)(19) of the Investment Company Act of 1940, as amended):
Chairman: Mr. Arthur G. Altschul, Jr. (effective January 17, 2007; Richard R.
Pivirotto prior to his death on January 8, 2007), Mr. Lawrence B. Buttenwieser*,
Mr. Lewis B. Cullman, Dr. Gerald M. Edelman, Mr. John D. Gordan, III, Mr. Sidney
R. Knafel, Ms. D. Ellen Shuman, Mr. Joseph T. Stewart, Jr. and Mr. Raymond S.
Troubh. The organization and responsibilities of the Nominating Committee are
set forth in the Nominating Committee Charter located on the Company's website
at www.generalamericaninvestors.com. Generally, the Nominating Committee is
responsible for directing the process whereby individuals are selected and
nominated to serve as directors of the Company. This includes canvassing,
recruiting, interviewing and soliciting independent director candidates and
making recommendations to the Board with respect to individuals to be nominated
to serve as directors. In addition, the Committee will consider nominees
recommended by, and respond to related inquiries received from, stockholders.
The Committee does not expect to consider self-nominating stockholders. Criteria
associated with candidates include factors such as judgment, skill, diversity,
experience, the interplay of the candidate's experience with the experience of
other board members and the extent to which the candidate would be a desirable
addition to the board. All recommendations of a nominee must include
biographical data regarding the nominee and the qualifications of the nominee,
as well as the basis on which a nominee is or is not an "interested person" of
the Company. Recommendations of nominees should be submitted in writing to the
Chairman of the Nominating Committee at the office of the Company. The Committee
met once during the fiscal year on January 18, 2006.
5
The Pension Committee consists of the following directors: Chairman: Mr.
John D. Gordan, III, Vice-Chairman: Richard R. Pivirotto (deceased January 8,
2007), Mr. Lewis B. Cullman, Dr. Gerald M. Edelman, and Mr. Raymond S. Troubh;
and Mr. Sidney R. Knafel and Mr. Joseph T. Stewart, Jr., alternates. The
organization and responsibilities of the Pension Committee are set forth in the
Pension Committee Charter located on the Company's website at
www.generalamericaninvestors.com. Generally, the Pension Committee is
responsible for oversight of the investment management and general
administration of the Company's Employees' Retirement and Thrift Plans. The
Committee met twice during the fiscal year, on January 18, 2006 and July 12,
2006.
During 2006, 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/she serves except for Mr. Richard R. Pivirotto.
* Incumbent director not standing for re-election at the forthcoming
stockholder meeting.
** Deceased as of January 8, 2007.
Stockholder Communications with the Board of Directors
The Board of Directors provides a process for the Company's Stockholders to
send communications to the Board. This can be accomplished by addressing a
communication to the Board of Directors or to one or more individual Directors
at the office of the Company. Items marked "personal and confidential" would be
forwarded to the addressee, unopened; otherwise, communications would be opened
and reviewed by the Company's Corporate Secretary who would draft a response
with the assistance of other corporate officers and individual Directors (or the
entire Board), as deemed necessary. Copies of responses, together with the
related original communication, would be provided to each member of the Board,
the Chairman of the Board or individual Directors, as deemed appropriate.
All Directors are encouraged to attend the annual meeting of the
Stockholders of the Company. Last year, at the Company's annual meeting on April
12, 2006, all of the Directors were in attendance except for Mr. Richard R.
Pivirotto.
Section 16(a) 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
2006 all applicable Section 16(a) filing requirements were met.
Officers
Officers are elected each year by the Board of Directors at its annual
organization meeting in April. In addition to Mr. Spencer Davidson, President
and Chief Executive Officer of the Company, information with respect to whom is
set forth above, the current officers of the Company include the following. The
address of each officer is: c/o General American Investors Company, Inc., 450
Lexington Avenue, Suite 3300, New York, NY 10017.
Ms. Carole Anne Clementi, 60, Secretary since October 1994 and, prior
thereto, Assistant Secretary from July 1993, has been an employee since 1982.
Mr. Peter P. Donnelly, 58, Vice-President since January 1991 and, prior
thereto, Assistant Vice-President from January 1984, has been the securities
trader since 1974.
Mr. Craig A. Grassi, 38, Assistant Vice-President since January 2005, has
been an employee since 1991.
Ms. Maureen E. LoBello, 56, Assistant Secretary since January 2005, has
been an employee since 1992.
Dr. Sally A. Lynch, 47, Vice-President since January 2006, has been an
employee since May 1997. Dr. Lynch is principally responsible for securities in
the biotechnology and pharmaceutical industries.
Ms. Diane G. Radosti, 54, has been Treasurer since January 1990 and was
appointed Principal Accounting Officer in 2003. She has been an employee since
1980.
Mr. Eugene S. Stark, 49, has been Vice-President, Administration and
Principal Financial Officer since July 2005. He was appointed Chief Compliance
Officer in 2006. Prior thereto, he was Chief Financial Officer of Prospect
Energy Corporation (2005) and a Vice-President of Prudential Financial, Inc.
(1987 to 2004).
Mr. Jesse R. Stuart, 40, Vice-President since January 2006, has been an
employee since March 2003. Mr. Stuart is principally responsible for general
industry securities analysis. Prior thereto he was a portfolio manager and
equity analyst at Scudder, Stevens and Clark and successor companies
(1996-2003).
6
Mr. Andrew V. Vindigni, 47, Senior Vice-President since December 2006 and,
prior thereto, Vice-President since September 1995 and 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.
Executive Compensation
The following table sets forth the compensation received during 2006 from
the Company by its three highest-paid officers and by its directors.
Pension or
retirement
Aggregate benefits accrued
Name of individual Position compensation during 2006(1)
------------------------------------------------------------------------------------------------------------------------------------
Spencer Davidson President and Chief Executive Officer, Director (D) $2,600,000 $72,000
Andrew V. Vindigni Senior Vice-President 1,350,000 48,000
Jesse Stuart Vice-President 1,350,000 36,000
Arthur G. Altschul, Jr. Director (A)(B)(E) 28,250 -
Lawrence B. Buttenwieser* Director, Chairman of the Board (A)(B)(C)(D)(E) 30,000 -
Lewis B. Cullman Director (A)(E)(F) 30,750 -
Gerald M. Edelman Director (C)(D)(E)(F) 26,750 -
John D. Gordan, III Director (A)(E)(F) 31,250 -
Sidney R. Knafel Director (A)(B)(E) 28,250 -
Richard R. Pivirotto** Director (B)(C)(D)(E)(F) 21,000 -
D. Ellen Shuman Director (A)(C)(E) 25,000 -
Joseph T. Stewart, Jr. Director (B)(C)(D)(E) 25,750 -
Raymond S. Troubh Director (B)(E)(F) 25,750 -
(A) Member of Audit Committee
(B) Member of Compensation Committee
(C) Member of Compliance Committee
(D) Member of Executive Committee
(E) Member of Nominating Committee
(F) Member of Pension Committee
* Incumbent director not standing for re-election at the forthcoming stockholder meeting.
** Deceased as of January 8, 2007.
(1) The amounts shown in this column represent the Company's payments made during 2006 to the trustee of the Company's
Employees' Thrift Plan, as described below, or accounting reserves established during 2006 under the Company's Excess
Contribution Plan, as described below, on behalf of the respective individuals.
During 2006, each director who was not a paid officer of the Company
received a fee of $15,000 as an annual retainer, a fee of $1,250 for attendance
at each Directors' meeting and $1,250 for each Committee meeting which he or she
attended in his or her capacity as a Director ($750 if participation was by
telephone).
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.
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 and, beginning in 2000, bonuses for
non-highly compensated employees, exclusive of overtime, 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 $150 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:
7
Estimated Annual Benefits Based Upon Years of Credited Service
-------------------------------------------------------------------------------------------------------------------------------
Final Average 10 20 30 40
Earnings
$100,000 $17,920 $35,840 $53,760 $66,250
200,000 34,210 68,420 102,630 125,980
300,000 50,500 101,000 151,500 185,710
400,000 66,790 133,580 200,370 245,440
500,000 83,080 166,160 249,240 305,170
600,000 99,370 198,740 298,110 364,900
For each of the officers of the Company listed in the compensation table on
page 7, the following indicates his years of credited service in the Company's
Retirement Plan and basic salary for 2006. Spencer Davidson (12) $600,000,
Andrew V. Vindigni (18) $400,000 and Jesse Stuart (3) $300,000.
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
Stuart 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) approving the appointment by the
Audit Committee of the Company of the firm of Ernst & Young LLP to be the
auditors of the Company for the fiscal year ending December 31, 2007.
"RESOLVED, that the appointment by the Audit Committee of the firm of
Ernst & Young LLP to be the auditors of the Company with respect to its
operations for the year 2007 be and it hereby is approved; and further
"RESOLVED, that such auditors be and they hereby are authorized and
instructed to conduct an audit, in accordance with auditing standards
generally accepted in the United States, of the financial statements of the
Company as of and for the year ending December 31, 2007; and further
"RESOLVED, that such auditors be and they hereby are authorized and
instructed to conduct a review, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), of the interim
financial statements of the Company as of and for the six months ending
June 30, 2007; 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 2007; and further
"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."
While the rules under the Investment Company Act of 1940, as amended, would
permit the Company not to submit to stockholders the ratification of the
selection of Ernst & Young LLP as the Company's auditors, it is being done
because it continues the Company's long-standing practice to do so and the
Company believes that it is good corporate practice.
Audit Fees
The aggregate fees paid and accrued by the Company for professional
services rendered by its independent auditors, Ernst & Young LLP, for the audit
of the Company's annual financial statements and the review of the Company's
semi-annual financial statements for 2006 and 2005 were $80,600 and $75,000,
respectively.
Audit-Related Fees
The aggregate fees paid or accrued by the Company for audit-related
professional services rendered by Ernst & Young LLP for 2006 and 2005 were
$25,400 and $23,700, respectively. Such services and related fees for 2006 and
2005 included: performance of agreed upon procedures relating to the preferred
stock basic maintenance reports ($6,400 and $6,000, respectively), review of
quarterly employee security transactions and issuance of report thereon ($15,000
and $14,000, respectively) and other audit-related services ($4,000 and $3,700,
respectively).
8
Tax Fees
The aggregate fees paid or accrued by the Company for professional services
rendered by Ernst & Young LLP for the review of the Company's federal, state and
city income tax returns and excise tax calculations for 2006 and 2005 were
$13,500 and $13,000, respectively.
All Other Fees
No such fees were billed to the Company by Ernst & Young LLP for 2006 or
2005.
The aggregate fees paid or accrued by the Company for non-audit
professional services rendered by Ernst & Young LLP to the Company for 2006 and
2005 were $38,900 and $36,700, respectively.
Audit Committee Pre-Approval Policy
All services to be performed for the Company by Ernst & Young LLP must be
pre-approved by the Audit Committee. All services performed during 2006 and 2005
were pre-approved by the Committee.
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. Christopher D. Votta, Partner, Ernst & Young LLP, 5
Times Square, New York, NY 10036.
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.
--------------------
In order for a stockholder proposal to be considered for inclusion in the
Company's proxy material relating to its 2008 annual meeting of stockholders,
the stockholder proposal must be received by the Company no later than October
31, 2007, and must comply with certain other rules and regulations promulgated
by the Securities and Exchange Commission.
In accordance with a notice sent to certain stockholders of the Company,
who share a single address, only one copy of the Proxy Statement and our 2006
Annual Report is being sent to that address unless we received contrary
instructions from any stockholder at that address. This practice, known as
"householding," is designed to reduce our printing and postage costs. However,
if any stockholder residing at such an address wishes to receive a separate copy
of this Proxy Statement or our 2006 Annual Report, he or she may contact us at
General American Investors Company, Inc., 450 Lexington Avenue, Suite 3300, New
York, NY 10017, Attn: Carole Anne Clementi, Corporate Secretary, telephone:
1-800-436-8401, e-mail: InvestorRelations@gainv.com, and we will deliver those
documents to such stockholder promptly upon receiving the request. Any such
stockholder may also contact Ms. Clementi, if he or she would like to receive
separate proxy statements and annual reports in the future and to revoke his or
her consent to householding. If any stockholder revokes his or her consent, we
will begin sending such stockholder individual copies of these documents within
30 days after we receive the revocation notice. If you are receiving multiple
copies of our annual report and proxy statement, you may request householding in
the future by contacting our Corporate Secretary.
The persons named as appointees for the 2008 annual meeting of stockholders
will have discretionary authority to vote on any matter presented by a
stockholder for action at that meeting unless the Company receives notice of the
matter by January 15, 2008, in which case these persons will not have
discretionary voting authority except as provided in the Securities and Exchange
Commission's rules governing stockholder proposals.
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.
----------------------
9
EXHIBIT
Report of the Audit Committee of
The Board of Directors of General American Investors Company, Inc.
The purposes of the Company's Audit Committee are set forth in the
Committee's Charter. The purposes include assisting the Board of Directors in
its oversight of the Company's financial reporting process and internal
controls, the Company's financial statements and the selection of the Company's
independent auditors. Management, however, is responsible for the preparation,
presentation and integrity of the Company's financial statements, and the
independent auditors are responsible for planning and carrying out proper audits
and reviews.
In connection with the audited financial statements as of and for the year
ended December 31, 2006 included in the Company's Annual Report for the year
ended December 31, 2006 (the "Annual Report"), at a meeting held on January 17,
2007, the Audit Committee considered and discussed the audited financial
statements with management and the independent auditors, and discussed the audit
of such financial statements with the independent auditors.
In addition, the Audit Committee discussed with the independent auditors
the quality, and not just the acceptability under generally accepted accounting
principles, of the accounting principles applied by the Company, and such other
matters brought to the attention of the Audit Committee by the independent
auditors required by Statement of Auditing Standards No. 61, as amended, as
adopted by the Public Company Accounting Oversight Board in Rule 3200T. The
Audit Committee also received from the independent auditors the written
disclosures and the letter required by Independence Standards Board Standard No.
1, as adopted by the Public Accounting Oversight Board in Rule 3600T, considered
whether the provision of nonaudit services by the independent auditors is
compatible with maintaining the auditors' independence and discussed with the
auditors the auditors' independence.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and are not experts in the fields of
accounting or auditing, including in respect of auditor independence. Moreover,
the Committee relies on and makes no independent verification of the facts
presented to it or representations made by management or the independent
auditors. Accordingly, the Audit Committee's oversight does not provide an
independent basis to determine that management has maintained appropriate
accounting and financial reporting principles and policies, or internal controls
and procedures, designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions referred to above do not assure that the audit of
the Company's financial statements has been carried out in accordance with
auditing standards generally accepted in the United States, that the financial
statements are presented in accordance with accounting principles generally
accepted in the United States or that the Company's auditors are in fact
"independent."
Based on its consideration of the audited financial statements and the
discussions referred to above with management and the independent auditors and
subject to the limitations on the responsibilities and role of the Audit
Committee set forth in the Committee's Charter and those discussed above, the
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report.
Sidney R. Knafel, Chairman
Arthur G. Altschul, Jr.
Lawrence B. Buttenwieser
Lewis B. Cullman
John D. Gordan, III
D. Ellen Shuman
January 17, 2007
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 S. Stark as Proxies, each with full power to appoint his
substitute, and hereby authorizes each of them to represent and vote as
designated on the reverse side, all shares of Common Stock of the above Company
which the undersigned is entitled to vote, at the Annual Meeting of Stockholders
on April 11, 2007, and at any adjournment thereof. The undersigned hereby
acknowledges receipt of the 2007 Notice of Annual Meeting of Stockholders and of
the accompanying Proxy Statement.
(Continued and to be signed on the reverse side)
--------------------------------------------------------------------------------
COMMENTS:
--------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS OF
GENERAL AMERICAN INVESTORS COMPANY, INC.
April 11, 2007
COMMON STOCK
PROXY VOTING INSTRUCTIONS
MAIL - Date, sign and mail your proxy card in the ----------------------------
---- envelope provided as soon as possible. |COMPANY NUMBER | |
-or- ----------------------------
TELEPHONE - Call toll-free 1-800-PROXIES |ACCOUNT NUMBER | |
--------- (1-800-776-9437) from any touch-tone ----------------------------
telephone and follow the instructions. Have your | | |
proxy card available when you call. ----------------------------
-or-
INTERNET - Access "www.voteproxy.com" and follow
-------- the on-screen instructions. Have your
proxy card available when you access the web page.
--------------------------------------------------------------------------------
You may enter your proxy voting instructions at 1-800-PROXIES or
www.voteproxy.com up until 11:59 PM Eastern Time the day before the cut-off
or meeting date.
--------------------------------------------------------------------------------
| Please detach along perforated line and mail in the envelope provided IF |
V you are not voting via telephone or the Internet. V
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES" IN ITEM 1 AND
THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE RECOMMEND A VOTE "FOR" ITEM 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
--------------------------------------------------------------------------------
1. Election of the following nominees as Directors:
NOMINEES:
[ ]FOR ALL NOMINEES ()Mr. Cullman
()Mr. Davidson
[ ]WITHHOLD AUTHORITY ()Dr. Edelman
FOR ALL NOMINEES ()Mr. Gordan
()Ms. Shuman
[ ]FOR ALL EXCEPT ()Mr. Stewart
(See instructions ()Mr. Troubh
below)
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
----------- "FOR ALL EXCEPT" and fill in the circle next to each nominee you
wish to withhold, as shown here:(o)
-------------------------------------------------------------------------------
2. Ratification of the selection of the Ernst & Young LLP as auditors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
--------------------------------------------------------------------------------
3. In their discretion, the appointees are authorized to vote upon any other
matters which may properly come before the meeting or any adjournments thereof.
--------------------------------------------------------------------------------
The shares represented by this proxy will be voted as directed by the share-
holder. If no direction is given when the duly executed proxy is returned, such
shares will be voted "FOR ALL NOMINEES" in Item 1 and "FOR" Item 2.
TO INCLUDE ANY COMMENTS, USE THE COMMENTS BOX ON THE REVERSE SIDE OF THIS CARD.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
To change the address on your account, please check the box at right and [ ]
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method.
--------------------------------------------------------------------------------
Signature of Stockholder____________________ Date:______________________________
Signature of Stockholder____________________ Date:______________________________
Note: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give
full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such.
If signer is a partnership, please sign in partnership name by
authorized person.
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 S. Stark as Proxies, each with full power to appoint his substitute, and
hereby authorizes each of them to represent and vote as designated on the
reverse side, all shares of 5.95% Cumulative Preferred Stock, Series B of the
above Company which the undersigned is entitled to vote, at the Annual Meeting
of Stockholders on April 11, 2007, and at any adjournment thereof. The
undersigned hereby acknowledges receipt of the 2007 Notice of Annual Meeting of
Stockholders and of the accompanying Proxy Statement.
(Continued and to be signed on the reverse side)
--------------------------------------------------------------------------------
COMMENTS:
--------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS OF
GENERAL AMERICAN INVESTORS COMPANY, INC.
April 11, 2007
PREFERRED STOCK
PROXY VOTING INSTRUCTIONS
MAIL - Date, sign and mail your proxy card in the ----------------------------
---- envelope provided as soon as possible. |COMPANY NUMBER | |
-or- ----------------------------
TELEPHONE - Call toll-free 1-800-PROXIES |ACCOUNT NUMBER | |
--------- (1-800-776-9437) from any touch-tone ----------------------------
telephone and follow the instructions. Have your | | |
proxy card available when you call. ----------------------------
-or-
INTERNET - Access "www.voteproxy.com" and follow
-------- the on-screen instructions. Have your
proxy card available when you access the web page.
--------------------------------------------------------------------------------
You may enter your proxy voting instructions at 1-800-PROXIES or
www.voteproxy.com up until 11:59 PM Eastern Time the day before the cut-off
or meeting date.
--------------------------------------------------------------------------------
| Please detach along perforated line and mail in the envelope provided IF |
V you are not voting via telephone or the Internet. V
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES" IN ITEM 1 AND
THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE RECOMMEND A VOTE "FOR" ITEM 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
--------------------------------------------------------------------------------
1. Election of the following nominees as Directors:
NOMINEES:
[ ]FOR ALL NOMINEES ()Mr. Altschul
()Mr. Cullman
()Mr. Davidson
[ ]WITHHOLD AUTHORITY ()Dr. Edelman
FOR ALL NOMINEES ()Mr. Gordan
()Mr. Knafel
()Ms. Shuman
[ ]FOR ALL EXCEPT ()Mr. Stewart
(See instructions ()Mr. Troubh
below)
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
----------- "FOR ALL EXCEPT" and fill in the circle next to each nominee you
wish to withhold, as shown here:(o)
-------------------------------------------------------------------------------
2. Ratification of the selection of the Ernst & Young LLP as auditors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
--------------------------------------------------------------------------------
3. In their discretion, the appointees are authorized to vote upon any other
matters which may properly come before the meeting or any adjournments thereof.
--------------------------------------------------------------------------------
The shares represented by this proxy will be voted as directed by the share-
holder. If no direction is given when the duly executed proxy is returned, such
shares will be voted "FOR ALL NOMINEES" in Item 1 and "FOR" Item 2.
TO INCLUDE ANY COMMENTS, USE THE COMMENTS BOX ON THE REVERSE SIDE OF THIS CARD.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
To change the address on your account, please check the box at right and [ ]
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method.
--------------------------------------------------------------------------------
Signature of Stockholder____________________ Date:______________________________
Signature of Stockholder____________________ Date:______________________________
Note: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give
full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such.
If signer is a partnership, please sign in partnership name by
authorized person.