GENERAL AMERICAN INVESTORS COMPANY, INC.
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450 Lexington Avenue New York N.Y. 10017
Notice of Annual Meeting of Stockholders
March 2, 2004
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 14, 2004 at 10:00 a.m.,
New York Time, for the purpose of
(a) Electing directors, eight 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, 2004; 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 23, 2004 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
March 2, 2004.
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
March 2, 2004
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 14, 2004 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 23, 2004 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 directors named herein and to
approve the appointment of Ernst & Young LLP as auditors.
As of February 23, 2004, the Company had outstanding 29,598,863 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, 2003, has previously been furnished to all
stockholders of the Company. This proxy statement and form of proxy are first
being mailed to stockholders on or about March 2, 2004. 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 customer's shares on these items of
business.
1
A. Respecting the Election of Directors
At the meeting, ten 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. Eight 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. Information in the following table is as
of December 31, 2003.
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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Lawrence B. Buttenwieser (72) Counsel since 2002 and
Director since 1967 Partner (1966-2002),
Chairman since 1995 Katten Muchin Zavis Rosenman
and predecessor firms(lawyers)
Arthur G. Altschul, Jr.(3) (39) Managing Member, Delta Opportunity Fund, Ltd., Director
Director since 1995 Diaz & Altschul Capital Medicis Pharmaceutical Corporation, Director
Management, LLC Neurosciences Research Foundation, Trustee
(investments and securities)
Lewis B. Cullman (85) Managing Member, Chess-in-the-Schools, Chairman, Board of Trustees
Director since 1961 Cullman Ventures LLC Metropolitan Museum of Art, Honorary Trustee
(formerly Cullman Ventures, Inc.) 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 (74) Member and Chairman of the Neurosciences Institute of the
Director since 1976 Department of Neurobiology, Neurosciences Research Foundation,
The Scripps Research Institute Director and President
John D. Gordan, III (58) Partner,
Director since 1986 Morgan, Lewis & Bockius LLP
(lawyers)
Sidney R. Knafel(3) (73) Managing Partner, BioReliance Corporation, Chairman, Board of Directors
Director since 1994 SRK Management Company IGENE Biotechnology, Inc., Director
(private investment company) Insight Communications Company, Inc.,
Chairman, Board of Directors
Richard R. Pivirotto (73) President, General Theological Seminary, Trustee
Director since 1971 Richard R. Pivirotto Co., Inc. The Greenwich Bank and Trust Company, Director
(self-employed consultant) Greenwich Hospital Corporation, Trustee
Immunomedics, Inc., Director
New York Life Insurance Company, Director
Princeton University, Charter Trustee Emeritus
2 (continued on page 3)
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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Joseph T. Stewart, Jr. (74) Corporate director and trustee Foundation of the University of
Director since 1987 Executive Consultant, Medicine and Dentistry of New Jersey, Trustee
Johnson & Johnson Marine Biological Laboratory, Member,
(1990-1999) Advisory Council
United States Merchant Marine Academy, Trustee,
Board of Advisors
Raymond S. Troubh (77) Financial Consultant Diamond Offshore Drilling, Inc., Director
Director since 1989 Enron Corp., Chairman, Board of Directors
Gentiva Health Services, Inc., Director
Petrie Stores Liquidating Trust, Trustee
Triarc Companies, Inc., Director
WHX Corporation, Director
Interested Director
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Spencer Davidson(4) (61) 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, 2003
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. 584,589(2) 1.98%
Lawrence B. Buttenwieser 757,979(3) 2.56
Lewis B. Cullman 83,422(4) .28
Spencer Davidson 870,292(2) 2.94
Gerald M. Edelman 2,210 .01
John D. Gordan, III 325,906(5) 1.10
Sidney R. Knafel 46,687 .16
Richard R. Pivirotto 2,236 .01
Joseph T. Stewart, Jr. 12,206 .04
Raymond S. Troubh 39,351(6) .13
Eugene L. DeStaebler, Jr. 5,113(7) .02
Directors and Officers as a Group 2,296,741(8) 7.76
3 (continued on page 4)
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. 132,200(9) 1.65%
Lawrence B. Buttenwieser - -
Lewis B. Cullman - -
Spencer Davidson 148,000(9) 1.85
Gerald M. Edelman - -
John D. Gordan, III 1,000 .01
Sidney R. Knafel - -
Richard R. Pivirotto - -
Joseph T. Stewart, Jr. 3,000(10) .04
Raymond S. Troubh - -
Carole Anne Clementi 100 .00
Peter P. Donnelly 400(11) .01
Directors and Officers as a Group 176,700(12) 2.21
1 Unless otherwise indicated, the person holding the shares has sole voting and dispositive power over all shares shown.
2 Includes 4,039 shares of Common Stock (.01% of the class) over which Mr. Altschul has shared voting and dispositive power,
145,725 shares of Common Stock (.49% of the class) over which Mr. Altschul has shared voting power, 172,563 shares of Common
Stock (.58% of the class) over which Messrs. Altschul and Davidson have shared voting and dispositive power and 260,687 shares
of Common Stock (.88% of the class) over which Mr. Altschul has shared voting power and over which Mr. Davidson has shared
voting and dispositive power.
3 Includes 443,858 shares of Common Stock (1.50% of the class) over which Mr. Buttenwieser has shared voting and dispositive
power.
4 Includes 78,385 shares of Common Stock (.26% of the class) over which Mr. Cullman has shared voting and dispositive power. In
addition, his holdings include 1,658 shares of Common Stock (.01% of the class) owned by Mr. Cullman's wife in which he
disclaims any beneficial ownership.
5 Includes 317,318 shares of Common Stock (1.07% of the class) over which Mr. Gordan has shared voting and dispositive power. In
addition, his holdings include 1,732 shares of Common Stock (.01% of the class) owned by Mr.Gordan's wife in an individual
retirement account in which he disclaims any beneficial ownership.
6 Includes 7,533 shares of Common Stock (.03% of the class) held in a limited partnership in which Mr.Troubh has a 49% interest
and of which he is the general partner.
7 Includes 575 shares of Common Stock (.00% of the class) owned by Mr. DeStaebler's wife in which he disclaims any beneficial
ownership.
8 Total excludes duplication of 433,250 shares of Common Stock (1.46% of the class) over which both Mr. Altschul and Mr. Davidson
share joint voting and/or dispositive power.
9 Includes 9,200 shares of Preferred Stock (.12% of the class) over which Mr. Altschul has shared voting and dispositive power,
15,000 shares of Preferred Stock (.19% of the class) over which Mr. Altschul has shared voting power, 78,000 shares of Preferred
Stock (.98% of the class) over which Messrs. Altschul and Davidson have shared voting and dispositive power, and 30,000 shares
of Preferred Stock (.38% of the class) over which Mr. Altschul has shared voting power and over which Mr. Davidson has shared
voting and dispositive power.
10 Shares owned by Mr. Stewart's wife in which he disclaims any beneficial ownership.
11 Includes 200 shares of Preferred Stock (.00% of the class) owned by Mr. Donnelly's wife in which he disclaims any beneficial
ownership.
12 Total excludes duplication of 108,000 shares of Preferred Stock (1.35% 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 579,649 shares of Common
Stock (1.96% of the class) held by the trustee for the Company's Employees' Thrift Plan, as described below.
4
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, 2003 is as follows:
Dollar Range of
Equity Securities
Name of Director in the Company
-----------------------------------------------------
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
Joseph T. Stewart, Jr. Over $100,000
Raymond S. Troubh Over $100,000
Interested Director
-------------------
Spencer Davidson Over $100,000
Meetings of Committees of the Board of Directors
During 2003 the Company's Board of Directors held six meetings.
The Audit Committee consists of the following directors: Mr. Sidney R.
Knafel, Chairman, Mr. Arthur G. Altschul, Jr., Mr. Lawrence B.
Buttenwieser, Mr. Lewis B. Cullman and Mr. John D. Gordan, III. 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 (Exhibit A), which has been reviewed by the Audit
Committee and approved and adopted by the Board of Directors. 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 in
Exhibit B. The Audit Committee met three times during the fiscal year, on
January 15, July 21 and December 10, 2003, and once after the end of the
fiscal year, on January 14, 2004.
The Compensation Committee consists of the following directors: Mr.
Joseph T. Stewart, Jr., Chairman, Mr. Arthur G. Altschul, Jr., Mr. Lawrence
B. Buttenwieser, Mr. Sidney R. Knafel, Mr. Richard R. Pivirotto 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 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 10, 2003.
The Executive Committee consists of the following directors: Mr.
Richard R. Pivirotto, Chairman, Mr. Lawrence B. Buttenwieser, Mr. Spencer
Davidson (an "interested person" of the Company), Dr. Gerald M. Edelman,
and Mr. Joseph T. Stewart, Jr.; 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 met once during the fiscal
year, on March 3, 2003.
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): Mr. Richard R. Pivirotto, Chairman, Mr. Arthur G. Altschul, Jr.,
Mr. Lawrence B. Buttenwieser, Mr. Lewis B. Cullman, Dr. Gerald M. Edelman,
Mr. John D. Gordan, III, Mr. Sidney R. Knafel, 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,
5
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, Mr. Richard R. Pivirotto, at the office of the
Company. The Committee did not meet during the fiscal year. The meeting
scheduled to be held in December 2003 was postponed in order to accommodate
new requirements regarding nominating committees adopted by the Securities
and Exchange Commission on November 24, 2003 and the Nominating Committee
met once following the end of the fiscal year, on January 14, 2004.
The Pension Committee consists of the following directors: Mr. John D.
Gordan, III, Chairman, Mr. Lewis B. Cullman, Dr. Gerald M. Edelman, Mr.
Richard R. Pivirotto, and Mr. Raymond S. Troubh; and Mr. Sidney R. Knafel
and Mr. Joseph T. Stewart, Jr., alternates. The Pension Committee is
responsible for the general administration of the Company's Employees'
Retirement Plan and establishes and carries out a funding policy and method
consistent with the objectives of the Plan. The Committee met once during
the fiscal year, on July 9, 2003.
Each Director, except Mr. Buttenwieser, 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.
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
9, 2003, all of the Directors were in attendance.
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
2003 all applicable Section 16(a) filing requirements were met, except that the
Form 4 required to be filed by Lawrence B. Buttenwieser for a transaction on
December 24, 2003 was filed late.
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
officers of the Company include the following. (Officers are elected each year
by the Board of Directors at its annual organization meeting in April.) The
address of each officer is: c/o General American Investors Company, Inc., 450
Lexington Avenue, Suite 3300, New York, NY 10017.
Mr. Andrew V. Vindigni, 44, 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., 65, has been Vice-President, Administration
since 1978 and was appointed Principal Financial Officer in 2002. Mr. DeStaebler
is a director and a member of the executive committee of the Closed-End Fund
Association, Inc., Kansas City, MO.
Mr. Peter P. Donnelly, 55, 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, 51, has been Treasurer since January 1990 and was
appointed Principal Accounting Officer in 2003. She has been an employee of the
Company since 1980.
Ms. Carole Anne Clementi, 57, Secretary since October 1994 and, prior
thereto, Assistant Secretary from July 1993, has been an employee of the Company
since 1982.
6
Executive Compensation
The following table sets forth the compensation received during 2003 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 2003(1)
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Spencer Davidson President and Chief Executive Officer, Director (C) $2,600,000 $72,000
Andrew V. Vindigni Vice-President 1,200,000 48,000
Eugene L. DeStaebler, Jr. Vice-President, Administration 550,000 36,000
Arthur G. Altschul, Jr. Director (A)(B)(D) 15,000 -
Lawrence B. Buttenwieser Director, Chairman of the Board (A)(B)(C)(D) 14,000 -
Lewis B. Cullman Director (A)(D)(E) 15,000 -
Gerald M. Edelman Director (C)(D)(E) 13,500 -
John D. Gordan, III Director (A)(D)(E)(F) 17,000 -
Sidney R. Knafel Director (A)(B)(D)(F) 17,500 -
Richard R. Pivirotto Director (B)(C)(D)(E) 14,500 -
Joseph T. Stewart, Jr. Director (B)(C)(D) 14,500 -
Raymond S. Troubh Director (A)(B)(D)(E)(F) 17,500 -
(A) Member of Audit Committee
(B) Member of Compensation Committee
(C) Member of Executive Committee
(D) Member of Nominating Committee
(E) Member of Pension Committee
(F) Member of Capital Structure and Pricing Committees formed for purposes of
the redemption and issuance of shares of the Company's preferred stock. The
Committees are no longer standing.
1 The amounts shown in this column represent the Company's payments made
during 2003 to the trustee of the Company's Employees' Thrift Plan, as
described below, or accounting reserves established during 2003 under the
Company's Excess Contribution Plan, as described below, on behalf of the
respective individuals.
During 2003, each director who was 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. Beginning in 2004, the annual retainer will remain
at $10,000 and the fee for attendance at each Directors' or Committee meeting
will increase to $1,000 ($750 if participation is 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.
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.
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, but only
for non-highly compensated employees, exclusive of bonuses for highly
compensated employees, 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 $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:
7
Estimated Annual Benefits Based Upon Years of Credited Service
-----------------------------------------------------------------------------------------------------------
Final Average 10 20 30 40
Earnings
$100,000 $16,830 $33,665 $50,495 $61,900
200,000 33,120 66,245 99,365 121,630
300,000 49,410 98,825 148,235 181,360
400,000 65,700 131,405 197,105 241,090
500,000 81,990 163,985 245,975 300,820
600,000 98,280 196,565 294,845 360,550
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 2003. Spencer Davidson (9) $600,000, Andrew
V. Vindigni (15) $400,000 and Eugene L. DeStaebler, Jr. (27) $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
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) 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, 2004.
"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 2004 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, 2004; 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, 2004; 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 2004; 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 2003 and 2002 were $64,500 and $57,500,
respectively.
Audit-Related Fees
The aggregate fees paid or accrued by the Company for audit-related
professional services rendered by Ernst & Young LLP for 2003 and 2002 were
$49,400 and $31,500, respectively. Such services and related fees for 2003 and
2002 included: review of registration statement related to preferred stock
offering and provision of comfort letter and consent ($21,150 in 2003),
performance of agreed upon procedures relating to the preferred stock basic
maintenance reports ($12,750 and $16,000, respectively), review of quarterly
employee security transactions and issuance of report thereon ($12,000 in each
year) and other audit-related services ($3,500 in each year).
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 2003 and 2002 were
$12,000 and $11,000, respectively.
All Other Fees
No such fees were billed to the Company by Ernst & Young LLP for 2003 or
2002.
The aggregate fees paid or accrued by the Comany for non-audit professional
services rendered by Ernst & Young LLP to the Company for 2003 and 2002 were
$61,400 and $42,500, 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 2003 and 2002
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. Michael D. DiLecce, 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.
D. Allocation of Portfolio Brokerage
Brokerage commissions paid by the Company during 2003 were $713,090.
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, 2003 was 18.62%.
F. Stockholder Proposals
In order for a stockholder proposal to be considered for inclusion in the
Company's proxy material relating to its 2005 annual meeting of stockholders,
the stockholder proposal must be received by the Company no later than November
2, 2004, and must comply with certain other rules and regulations promulgated by
the Securities and Exchange Commission.
The persons named as appointees for the 2005 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 16, 2005, 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 A
---------
Audit Committee Charter
Committee Membership:
---------------------
The Audit Committee of General American Investors Company, Inc. (the "Company")
shall be comprised of at least three directors, each of whom shall not be an
"interested person," as defined in Section 2(a)19 of the Investment Company Act
of 1940, as amended, (the "1940 Act") of the Company and who is otherwise
"independent" under Rule 10A-3 under the Securities Exchange Act of 1934, as
amended.(1) The Board of Directors (the "Board") shall determine that each
member is "financially literate," and that at least one member of the Audit
Committee has "accounting or related financial management expertise," as such
qualifications are interpreted by the Board in its business judgment. In
addition, the Board shall determine whether any member of the Audit Committee is
an "audit committee financial expert," as defined by the Securities and Exchange
Commission (the "SEC").
No director may serve as a member of the Audit Committee if such director serves
on the audit committees of more than two other public companies unless the Board
determines that such simultaneous service would not impair the ability of such
director to effectively serve on the Audit Committee.
Members shall be appointed by the Board and shall serve at the pleasure of the
Board and for such term or terms as the Board may determine.
Committee Purposes:
-------------------
The purposes of the Audit Committee are to:
1. assist Board oversight of (i) the integrity of the Company's
financial statements, (ii) the Company's compliance with
legal and regulatory requirements, (iii) the independent
auditors' qualifications and independence, and (iv) the
performance of the independent auditors; and
2. prepare an audit committee report as required by the SEC for
inclusion in the Company's annual proxy statement.
The function of the Audit Committee is oversight. The management of the Company
is responsible for the preparation, presentation and integrity of the Company's
financial statements and for effectiveness of internal control over financial
reporting. Management is responsible for maintaining appropriate accounting and
financial reporting principles and policies and internal controls and procedures
designed to assure compliance with accounting standards and applicable laws and
regulations. The independent auditors are responsible for planning and carrying
out proper audits and reviews of the Company's financial statements. In
fulfilling their responsibilities hereunder, it is recognized that members of
the Audit Committee are not full-time employees of the Company and are not, and
do not represent themselves to be, performing the functions of auditors or
accountants. As such, it is not the duty or responsibility of the Audit
Committee or its members to conduct "field work" or other types of auditing or
accounting reviews or procedures or to set auditor independence standards.
The independent auditors shall submit to the Company annually a formal written
statement (the "Auditors' Statement") describing: the auditors' internal
quality-control procedures; any material issues raised by the most recent
internal quality-control review or peer review of the auditors, or by any
inquiry or investigation by governmental or professional authorities, within the
preceding five years, respecting one or more independent audits carried out by
the auditors, and any steps taken to deal with any such issues; and (to assess
the auditors' independence) all relationships between the independent auditors
and the Company, including at least the matters set forth in Independence
Standards Board Standard No. 1.
The independent auditors shall submit to the Company annually a formal written
statement of the fees billed in each of the last two fiscal years for each of
the following categories of services rendered by the independent auditors: (i)
the audit of the Company's annual financial statements and the review(s) of the
Company's interim financial statements or services that normally are provided by
the independent auditors in connection with statutory and regulatory filings or
engagements; (ii) assurance and related services not included in clause (i) that
are reasonably related to the performance of the audit or review of the
Company's financial statements, in the aggregate and by each service; (iii) tax
compliance, tax advice and tax planning services, in the aggregate and by each
service; and (iv) all other products and services rendered by the independent
auditors, in the aggregate and by each service.
---------------------------------------
(1)To be considered "independent" under Rule 10A-3 an audit committee member may
not (other than in his capacity as a member of the audit committee, the board of
directors, or any other board committee) accept directly or indirectly any
consulting, advisory, or other compensatory fee from the Company. Compensatory
fees do not include the receipt of fixed amounts of compensation under a
retirement plan (including deferred compensation) for prior service with the
Company (provided that such compensation is not contingent in any way on
continued service). An audit committee member also may not be an "interested
person" under the 1940 Act.
A-1
Committee Duties and Responsibilities:
--------------------------------------
To carry out its purposes, the Audit Committee shall have the following duties
and responsibilities:
1. with respect to the independent auditors,
(i) to be directly responsible for the appointment, compensation,
retention and oversight of the work of the independent auditors
(including the resolution of disagreements between management and the
independent auditors regarding financial reporting), who shall report
directly to the Audit Committee; provided that the auditor appointment
shall be subject to ratification by the Board;
(ii) to be directly responsible for the appointment, compensation,
retention and oversight of the work of any registered public
accounting firm, other than the independent auditors, engaged for the
purpose of preparing or issuing an audit report or to perform audit,
review or attestation services, which firm shall report directly to
the Audit Committee;
(iii) to pre-approve, or to adopt appropriate procedures to pre-approve,
all audit and non-audit services to be provided by the independent
auditors;
(iv) to ensure that the independent auditors prepare and deliver annually
an Auditors' Statement (it being understood that the independent
auditors are responsible for the accuracy and completeness of this
Statement), and to discuss with the independent auditors any
relationships or services disclosed in this Statement that may impact
the quality of audit services or the objectivity and independence of
the Company's independent auditors;
(v) to obtain from the independent auditors in connection with any audit a
timely report relating to the Company's annual audited financial
statements describing all critical accounting policies and practices
used, all alternative treatments within generally accepted accounting
principles for policies and practices related to material items that
have been discussed with management, ramifications of the use of such
alternative disclosures and treatments, and the treatment preferred by
the independent auditors, and any material written communications
between the independent auditors and management, such as any
"management" letter or schedule of unadjusted differences;
(vi) to review and evaluate the qualifications, performance and
independence of the lead partner of the independent auditors;
(vii) to discuss with management the timing and process for implementing
the rotation of the lead audit partner, the concurring partner and any
other active audit engagement team partner, and consider whether there
should be a regular rotation of the audit firm itself; and
(viii) to take into account the opinions of management in assessing the
independent auditors' qualifications, performance and independence;
2. with respect to accounting principles and policies, financial
reporting and internal control over financial reporting,
(i) to advise management and the independent auditors that they are
expected to provide to the Audit Committee a timely analysis of
significant issues and practices relating to accounting principles and
policies, financial reporting and internal control over financial
reporting;
(ii) to consider any reports or communications (and management's responses
thereto) submitted to the Audit Committee by the independent auditors
required by or referred to in SAS 61 (as codified by AU Section 380),
as may be modified or supplemented, or required by other professional
standards including reports and communications related to:
- deficiencies noted in the audit in the design or operation of
internal controls;
- consideration of fraud in a financial statement audit;
- detection of illegal acts;
- the independent auditors' responsibility under auditing
standards generally accepted in the U.S.;
- any restriction on audit scope;
- significant accounting policies;
- significant issues discussed with the national office
respecting auditing or accounting issues presented by the
engagement;
- management judgments and accounting estimates;
- any accounting adjustments arising from the audit that were
noted or proposed by the auditors but were passed (as
immaterial or otherwise);
- the responsibility of the independent auditors for other
information in documents containing audited financial
statements;
- disagreements with management;
- consultation by management with other accountants;
- major issues discussed with management prior to retention of
the independent auditors;
- difficulties encountered with management in performing the
audit;
- the independent auditors' judgments about the quality of the
entity's accounting principles; and
- reviews of interim financial statements conducted by the
independent auditors;
(iii) to meet with management and/or the independent auditors:
- to discuss the scope of the annual audit;
- to discuss the annual audited financial statements and interim
financial statements, as applicable;
- to discuss the report of the outside auditors on the Company's
system of internal control required to be filed with the
Company's Form N-SAR;
A - 2
- to discuss any significant matters arising from any audit,
including any audit problems or difficulties, whether raised by
management or the independent auditors, relating to the
Company's financial statements;
- to discuss any difficulties the independent auditors
encountered in the course of the audit, including any
restrictions on their activities or access to requested
information and any significant disagreements with management;
- to discuss any "management" or "internal control" letter
issued, or proposed to be issued, by the independent auditors
to the Company;
- to review the form of opinion the independent auditors propose
to render to the Board of Directors and shareholders;
- to discuss the Company's compliance with Subchapter M of the
Internal Revenue Code of 1986, as amended;
- to discuss with management and the outside auditors their
respective procedures to assess the representativeness of
securities prices provided by external pricing services;
- to discuss with outside auditors their conclusions as to the
reasonableness of procedures employed to determine the fair
value of securities for which readily available market
quotations are not available, management's adherence to such
procedures and the adequacy of supporting documentation; and
- to discuss, as appropriate: (a) any major issues regarding
accounting principles and financial statement presentations,
including any significant changes in the Company's selection or
application of accounting principles, and major issues as to
the adequacy of the Company's internal controls and any special
audit steps adopted in light of material control deficiencies;
(b) analyses prepared by management and/or the independent
auditors setting forth significant financial reporting issues
and judgments made in connection with the preparation of the
financial statements, including analyses of the effects of
alternative GAAP methods on the financial statements; and (c)
the effect of regulatory and accounting initiatives, as well as
off-balance sheet structures, on the financial statements of
the Company;
(iv) to inquire of the Company's chief executive officer and chief
financial officer as to the existence of any significant
deficiencies or material weaknesses in the design or operation of
internal control over financial reporting which are reasonably
likely to adversely affect the Company's ability to record,
process, summarize and report financial information and as to the
existence of any fraud, whether or not material, that involves
management or other employees who have a significant role in the
Company's internal control over financial reporting;
(v) to discuss guidelines and policies governing the process by which
senior management of the Company and the relevant departments of
the Company assess and manage the Company's exposure to risk, and
to discuss the Company's major financial risk exposures and the
steps management has taken to monitor and control such exposures;
(vi) to obtain from the independent auditors assurance that the audit
was conducted in a manner consistent with Section 10A of the
Securities Exchange Act of 1934, as amended, which sets forth
certain procedures to be followed in any audit of financial
statements required under the Securities Exchange Act of 1934;
(vii) to discuss with the Company's legal advisors any significant legal
compliance or regulatory matters that may have a material effect
on the financial statements or the Company's business, financial
statements or compliance policies, including material notices to
or inquiries received from governmental agencies;
(viii) to discuss and review the type and presentation of information to
be included in earnings press releases;
(ix) to discuss and review the types of financial information provided
pursuant to rating agency guidelines;
(x) to establish procedures for the receipt, retention and treatment
of complaints received by the Company regarding accounting,
internal accounting controls or auditing matters, and for the
confidential, anonymous submission by Company employees of
concerns regarding questionable accounting or auditing matters;
(xi) to review and discuss any reports concerning material violations
submitted to it by outside counsel pursuant to the SEC attorney
professional responsibility rules, or otherwise;
(xii) to establish hiring policies for employees or former employees of
the independent auditors; and
3. with respect to reporting and recommendations,
(i) to prepare any report or other disclosures, including any
recommendation of the Audit Committee, required by the rules of
the SEC to be included in the Company's annual proxy statement;
(ii) to prepare and issue the evaluation required under "Performance
Evaluation" below; and
(iii) to report its activities to the full Board of Directors on a
regular basis and to make such recommendations with respect to
the above and other matters as the Audit Committee may deem
necessary or appropriate.
A-3
Committee Structure and Operations:
-----------------------------------
The Board shall designate one member of the Committee as its chairperson. The
Audit Committee shall meet once each fiscal year, or more frequently if
circumstances dictate, to discuss with management the annual audited financial
statements. The Audit Committee should meet separately periodically with
management and the independent auditors to discuss any matters that the Audit
Committee or any of these persons or firms believe should be discussed
privately. The Audit Committee may request any officer or employee of the
Company or the Company's outside counsel or independent auditors to attend a
meeting of the Audit Committee or to meet with any members of, or consultants
to, the Audit Committee. Members of the Audit Committee may participate in a
meeting of the Audit Committee by means of conference call or similar
communications equipment by means of which all persons participating in the
meeting can hear each other.
Delegation to Subcommittee:
---------------------------
The Audit Committee may, in its discretion, delegate all or a portion of its
duties and responsibilities to a subcommittee of the Audit Committee. The Audit
Committee may, in its discretion, delegate to one or more of its members the
authority to pre-approve any audit or non-audit services to be performed by the
independent auditors, provided that any such approvals are presented to the
Audit Committee at its next scheduled meeting.
Performance Evaluation:
-----------------------
The Audit Committee shall prepare and review with the Board an annual
performance evaluation of the Audit Committee, which evaluation shall compare
the performance of the Audit Committee with the requirements of this charter.
The performance evaluation shall also recommend to the Board any improvements to
the Audit Committee's charter deemed necessary or desirable by the Audit
Committee. The performance evaluation by the Audit Committee shall be conducted
in such manner as the Audit Committee deems appropriate. The report to the Board
may take the form of an oral report by the chairperson of the Audit Committee or
any other member of the Audit Committee designated by the Audit Committee to
make the report.
Resources and Authority of the Audit Committee
----------------------------------------------
The Audit Committee shall have the resources and authority appropriate to
discharge its duties and responsibilities, including the authority to select,
retain, terminate, and approve the fees and other retention terms of special or
independent counsel, accountants or other experts and advisors, as it deems
necessary or appropriate, without seeking approval of the Board or management.
The Company shall provide for appropriate funding, as determined by the Audit
Committee, in its capacity as a committee of the Board, for payment of:
1. Compensation to the independent auditors and any other public accounting
firm engaged for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for the Company;
2. Compensation of any advisers employed by the Audit Committee; and
3. Ordinary administrative expenses of the Audit Committee that are
necessary or appropriate in carrying out its duties.
A-4
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EXHIBIT B
---------
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 included as Exhibit A. 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, 2003 included in the Company's Annual Report for the year
ended December 31, 2003 (the "Annual Report"), at a meeting held on January 14,
2004, 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 currently
modified or supplemented. The Audit Committee also received from the independent
auditors the written statement regarding independence as required by
Independence Standards Board Standard No. 1, 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
January 14, 2004
B-1
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 April
14, 2004, and at any adjournment thereof. The undersigned hereby acknowledges
receipt of the 2004 Notice of Annual Meeting of Stockholders and of the
accompanying Proxy Statement.
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.
(Continued and to be signed on reverse side)
Address Change/Comments ( Mark the corresponding box on the reverse side)
Please Mark Here for Address Change or Comments [ ]
SEE REVERSE SIDE
COMMON STOCK
The Board of Directors recommends a vote "FOR ALL NOMINEES" in Item A and the
Board of Directors and Audit Committee recommmend a vote "FOR" Item B.
A. Election of the following nominees as Directors:
01 Mr. Buttenwieser, 02 Mr. Cullman, 03 Mr. Davidson,
04 Dr. Edelman, 05 Mr. Gordan, 06 Mr. Pivirotto,
07 Mr. Stewart and 08 Mr. Troubh
[ ] FOR all nominees except any indicated
[ ] WITHHOLD AUTHORITY to vote for all listed nominees
(Instruction: To withhold authority to vote for any individual nominee, write
the nominee's name 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.
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 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 14, 2004, and at any adjournment thereof. The
undersigned hereby acknowledges receipt of the 2004 Notice of Annual Meeting of
Stockholders and of the accompanying Proxy Statement.
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.
(Continued and to be signed on reverse side)
Address Change/Comments (Mark the corresponding box on the reverse side)
Please Mark Here for Address Change or Comments [ ]
SEE REVERSE SIDE
PREFERRED STOCK
The Board of Directors recommends a vote "FOR ALL NOMINEES" in Item A and the
Board of Directors and the Audit Committee recommend a vote "FOR" Item B.
A. Election of the following nominees as Directors:
01 Mr. Altschul, 02 Mr. Buttenwieser, 03 Mr. Cullman,
04 Mr. Davidson, 05 Dr. Edelman, 06 Mr. Gordan,
07 Mr. Knafel, 08 Mr. Pivirotto, 09 Mr. Stewart and
10 Mr. Troubh
[ ] FOR all nominees except any indicated
[ ] WITHHOLD AUTHORITY to vote for all listed nominees
(Instruction: To withhold authority to vote for any individual nominee, write
the nominee's name 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.