SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CENTRAL SECURITIES CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
CENTRAL SECURITIES CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MARCH 10, 1999
NOTICE is hereby given that the Annual Meeting of Stockholders of Central
Securities Corporation will be held at the office of the Corporation, 1209
Orange Street, Wilmington, Delaware on Wednesday, March 10, 1999 at 11 A.M.,
for the following purposes:
1. To elect a board of five directors;
2. To act upon a proposal to ratify the selection of KPMG LLP as
independent auditors for the Corporation for the ensuing year; and
3. To act upon such other matters as may properly come before the
meeting.
The Board of Directors has fixed the close of business on January 22, 1999
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting, and only stockholders of record on such date are
entitled to vote on these matters at the meeting or any adjournment thereof.
By order of the Board of Directors
KAREN E. RILEY
SECRETARY
New York, New York
February 2, 1999
PROXY STATEMENT
FEBRUARY 2, 1999
CENTRAL SECURITIES CORPORATION
375 PARK AVENUE
NEW YORK, NEW YORK 10152
(TEL. NO. 212-688-3011)
This Proxy Statement and the enclosed proxy card are first being mailed to
stockholders on or about February 2, 1999 in connection with the solicitation
of proxies by the Board of Directors of Central Securities Corporation (the
"Corporation") for use at the Annual Meeting of Stockholders of the Corporation
to be held on March 10, 1999, or any adjournment thereof (the "Meeting").
Properly executed proxies received by the Corporation prior to the Meeting will
be voted in accordance with the specific voting instructions indicated on the
proxy. If no instructions are specified, the shares will be voted for the
nominees for director and in favor of proposal (2). Any proxy may be revoked at
any time before it is exercised at the Meeting by the delivery or mailing of
written notice to the Secretary of the Corporation, by executing and delivering
a later-dated proxy or by appearing and voting in person by ballot at the
Meeting.
The record date for stockholders entitled to vote at the Meeting is the
close of business on January 22, 1999. On that date, the Corporation had
outstanding 359,445 shares of Convertible Preference Stock, $2.00 Series D (the
"Preference Stock"), and 14,872,742 shares of Common Stock.
On all matters except the election of the directors of the Corporation, or
as otherwise provided by law, the holders of the Corporation's Preference Stock
and Common Stock, voting together as one class, shall be entitled to one vote
per share. The presence, in person or by proxy, of a majority of the issued and
outstanding stock of the Corporation shall constitute a quorum for the
transaction of business at the Meeting.
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, OF
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS,
AND OF EXECUTIVE OFFICERS
The following table sets forth information as of December 31, 1998
regarding the share ownership of each person who is known to the Corporation to
have been a beneficial owner of more than five percent of any class of stock of
the Corporation, of each nominee for election to the Board of Directors of the
Corporation, and of all directors and executive officers as a group:
NAME OF NOMINEE TO
THE BOARD OF DIRECTORS AMOUNT AND PERCENT
OR NAME AND ADDRESS NATURE OF BENEFICIAL OF
OF BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP (1) CLASS (2)
- ----------------------------------------------- ------------------ ---------------------------- ---------------
Donald G. Calder* ............................. Preference Stock 612(3)
Common Stock 12,120(3)
Jay R. Inglis* ................................ Preference Stock 14
Common Stock 1,030(4)
Christian A. Johnson
Endeavor Foundation (5) ..................... Preference Stock 249,237 69.3(6)
1060 Park Avenue Common Stock 5,330,177(7) 35.8(6)
New York, New York 10028
Dudley D. Johnson* ............................ Common Stock 35,631(8)
Wilmot H. Kidd* ............................... Preference Stock 54,501(9)(10) 15.2(11)
375 Park Avenue Common Stock 1,687,226(9)(10) 11.3(11)
New York, New York 10152
Mrs. Wilmot H. Kidd ........................... Preference Stock 54,501(9)(10) 15.2(11)
1060 Park Avenue Common Stock 1,687,226(9)(10) 11.3(11)
New York, New York 10028
C. Carter Walker, Jr.* ........................ Preference Stock 3,551(10)(12) 1.0(13)
Common Stock 487,244(10)(12) 3.3(13)
All directors and officers as a group ......... Preference Stock 55,127(10) 15.3(14)
Common Stock 1,868,566(10)(15) 12.6(14)
- -----------
* Indicates nominee for election to the Board of Directors.
(1) Except as otherwise indicated, to the Corporation's knowledge the
beneficial owner had sole investment power and sole voting power with respect
to the shares shown opposite the name of such beneficial owner.
(2) As calculated on the basis of 359,445 shares of Preference Stock and
14,872,742 shares of Common Stock outstanding on December 31, 1998, Messrs.
Calder and Inglis each owned less than 1% of the outstanding Preference Stock
and Common Stock and Mr. Johnson owned less than 1% of the outstanding Common
Stock.
(3) Includes 606 shares of Preference Stock and 2,442 shares of Common
Stock owned by Mr. Calder's wife or held for the benefit of their children. He
disclaims beneficial ownership of such shares. Does not include 2,233 shares of
Common Stock that would have been issuable upon conversion of the Preference
Stock.
(4) Does not include 51 shares of Common Stock that would have been
issuable upon conversion of the Preference Stock.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
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(FOOTNOTES CONTINUED FROM PREVIOUS PAGE)
(5) Mrs. W. H. Kidd, whose husband is the President of the Corporation, is
President and Trustee of the Christian A. Johnson Endeavor Foundation (the
"Foundation").
(6) On a combined basis, the Foundation owned approximately 36.6% of the
voting stock of the Corporation.
(7) Does not include 910,213 shares of Common Stock that would have been
issuable upon conversion of the Preference Stock.
(8) Includes 13,991 shares of Common Stock held in the Young & Franklin
Inc. Retirement Income Trust of which Mr. Johnson is trustee. He disclaims
beneficial ownership of such shares.
(9) An aggregate of 54,501 shares of Preference Stock and 1,687,226 shares
of Common Stock were included in the shares beneficially owned by each of Mr.
and Mrs. Kidd. The shares set forth for each of Mr. Kidd and Mrs. Kidd include
5,703 shares of Preference Stock and 297,674 shares of Common Stock owned by
Mr. Kidd as to which Mr. and Mrs. Kidd had shared investment power and shared
voting power and as to which Mrs. Kidd disclaims beneficial ownership; 19,263
shares of Preference Stock and 603,645 shares of Common Stock owned by Mrs.
Kidd or held in trusts for her benefit as to which Mr. and Mrs. Kidd had shared
investment power and shared voting power and as to which Mr. Kidd disclaims
beneficial ownership; and 25,984 shares of Preference Stock and 563,539 shares
of Common Stock owned by Mr. and Mrs. Kidd's children or held in trusts for
their benefit or for the benefit of other family members as to which Mr. and
Mrs. Kidd had shared investment power and shared voting power and as to which
Mr. and Mrs. Kidd disclaim beneficial ownership. The shares set forth for each
of Mr. and Mrs. Kidd also include 155,582 shares of Common Stock held in the
estate of Mrs. Christian A. Johnson, Mrs. Kidd's mother, of which Mrs. Kidd is
executrix and a beneficiary, as to which Mr. Kidd disclaims beneficial
ownership; and 3,551 shares of Preference Stock and 66,786 shares of Common
Stock held in trust for the benefit of Mr. and Mrs. Kidd's children as to which
Mr. and Mrs. Kidd had no voting or investment power and as to which Mr. and
Mrs. Kidd disclaim beneficial ownership. The shares set forth for Mr. and Mrs.
Kidd do not include 199,034 shares of Common Stock that would have been
issuable upon conversion of the Preference Stock.
(10) An aggregate of 3,551 shares of Preference Stock, 354,685 shares of
Common Stock, and 12,968 shares of Common Stock that would have been issuable
upon conversion of the Preference Stock were included in the shares
beneficially owned by each of Mr. Kidd, Mrs. Kidd, and Mr. C. Carter Walker,
Jr.
(11) On a combined basis, Mr. and Mrs. Kidd together owned approximately
11.4% of the voting stock of the Corporation.
(12) Includes 56,080 shares of Common Stock owned by Mr. Walker's wife or
held in trusts for the benefit of their children as to which Mr. Walker had
shared investment power and shared voting power, 25,925 shares of Common Stock
held in trust for the benefit of his children as to which Mr. Walker had no
voting or investment power, and 3,551 shares of Preference Stock and 354,685
shares of Common Stock held in trusts for the benefit of Mrs. Wilmot H. Kidd or
her children as to which Mr. Walker had shared investment power and shared
voting power. Mr. Walker disclaims beneficial ownership of all such shares.
Does not include 12,968 shares of Common Stock that would have been issuable
upon conversion of the Preference Stock.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
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(FOOTNOTES CONTINUED FROM PREVIOUS PAGE)
(13) On a combined basis, Mr. Walker owned approximately 3.2% of the
voting stock of the Corporation.
(14) On a combined basis, all officers and directors as a group owned
approximately 12.6% of the voting stock of the Corporation.
(15) Does not include 201,318 shares of Common Stock that would have been
issuable upon conversion of the Preference Stock.
The share ownership of Wilmot H. Kidd, President of the Corporation, is
given above. No other executive officer of the Corporation owns, beneficially
or otherwise, any shares of stock of the Corporation.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors, executive officers and persons who own more than ten
percent of a registered class of the Corporation's equity securities to file
with the Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of Preference Stock and Common
Stock of the Corporation. Officers, directors and greater than ten percent
beneficial owners are required by SEC regulation to furnish the Corporation
with copies of all Section 16(a) forms they file.
To the Corporation's knowledge, based solely on review of copies of such
reports furnished to the Corporation and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were
complied with.
VOTING PROCEDURES
The election of directors by the holders of Preference Stock and the
election of directors by the holders of Common Stock each requires the
affirmative vote of a majority of the shares of each such class of stock, taken
separately, present in person or represented by proxy at the Meeting and
entitled to so vote. Shares of Preference Stock or Common Stock represented by
proxies which are marked "withhold authority" with respect to the election of
any one or more nominees for election as director by such class will be counted
for the purpose of determining the number of shares of such class present and
entitled to vote, and shall therefore have the same effect as if the shares
represented thereby were voted against such election. The ratification of the
selection of independent auditors of the Corporation requires the affirmative
vote of a majority of the shares of Common Stock and Preference Stock, voting
together as one class, present in person or represented by proxy at the Meeting
and entitled to so vote. Shares of Preference Stock or Common Stock represented
by proxies which are marked "abstain" with respect to any matter to be voted
upon will be counted for the purpose of determining the number of shares
present and entitled to vote, and shall therefore have the same effect as if
the shares represented thereby were voted against such matter. Broker non-votes
(where a nominee holding shares for a beneficial owner has not received voting
instructions from the beneficial owner and such nominee does not possess or
choose to exercise his
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discretionary authority with respect thereto) will be treated as present but
not entitled to vote at the Meeting for the purpose of determining the number
of votes needed with respect to each item to be voted upon, and shall therefore
have no effect on such vote.
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors recommends the election of five directors to hold
office until the next Annual Meeting of Stockholders and until their successors
are elected and qualified. If any nominee for director is unable or declines to
serve, for any reason not now foreseen, the discretionary authority provided in
the proxy will be exercised to vote for a substitute. All the nominees have
consented to become directors and all were elected at the last Annual Meeting
of Stockholders.
The holders of Preference Stock, voting as a class, are entitled
exclusively to elect two directors of the Corporation and are not entitled to
participate in the election of the remaining directors. Duly authorized proxies
for Preference Stock will be voted for the election of Mr. Donald G. Calder and
Mr. Jay R. Inglis.
The holders of Common Stock, voting as a class, are entitled exclusively
to elect all directors of the Corporation other than those elected by the
holders of Preference Stock. Duly authorized proxies for Common Stock will be
voted for the election of Mr. Dudley D. Johnson, Mr. Wilmot H. Kidd and Mr. C.
Carter Walker, Jr.
The following table indicates the age, principal occupations during the
last five years and positions (if any) with the Corporation, and the year each
nominee was first elected to the Board of Directors:
PRINCIPAL OCCUPATIONS DIRECTOR OF
(LAST FIVE YEARS) CORPORATION
AND POSITION (IF ANY) CONTINUOUSLY
NOMINEE AGE WITH THE CORPORATION SINCE
- ------------------------------- ----- -------------------------------------------------- -------------
Donald G. Calder .............. 61 President, G. L. Ohrstrom & Co., Inc. (private 1982
investment firm) since 1997, Vice President from
1996 to 1997, and Partner of its predecessor from
1970 to 1996; Director of Brown-Forman
Corporation, Carlisle Companies Incorporated and
Roper Industries, Inc. and Chairman and Director
of Harrow Industries, Inc. (manufacturing
companies)
Jay R. Inglis ................. 64 Executive Vice President, Holt Corporation 1973
(insurance holding company)
Dudley D. Johnson ............. 59 President, Young & Franklin Inc. (private 1984
manufacturing company)
Wilmot H. Kidd* ............... 57 Investment and research -- President, Central 1972
Securities Corporation; Director of Winthrop
Opportunity Funds and DLJ High Yield Fund
(investment companies)
C. Carter Walker, Jr. ......... 64 Private Investor 1974
- -----------
* Mr. Kidd is an "interested person" within the meaning of Section 2(a)(19) of
the Investment Company Act of 1940.
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The Board of Directors had ten regular meetings and one special meeting in
1998. The Board of Directors has an Audit Committee, consisting of Messrs.
Calder, Inglis, Johnson and Walker, but it does not have a Compensation
Committee or a Nominating Committee. All directors attended at least 75% of the
aggregate of all meetings of the Board of Directors and the committee on which
they served.
The Audit Committee recommends to the Board of Directors the firm of
independent auditors who are to be engaged to audit the books of account and
other corporate records of the Corporation, reviews with the independent
auditors the scope of their examination with particular emphasis on the areas
to which either the Audit Committee or the independent auditors believe special
attention should be directed, reviews the recommendations of the independent
auditors regarding internal controls and other matters, and reports from time
to time to the Board of Directors with respect to the internal control and
accounting practices of the Corporation. The Audit Committee also reviews and
considers the nature and scope of audit and non-audit fees of the independent
auditors. The Audit Committee met three times in 1998.
EXECUTIVE OFFICERS OF THE CORPORATION
The executive officers of the Corporation are Mr. Wilmot H. Kidd,
President, Mr. Charles N. Edgerton, Vice President and Treasurer, and Ms. Karen
E. Riley, Secretary. Information concerning Mr. Kidd is given above under
"Election of Directors." Mr. Edgerton, 54, was elected Vice President in 1989
and has been Treasurer since 1985. Ms. Riley, 48, has been Secretary since
1986. Executive officers serve as such until the election of their successors.
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COMPENSATION
The table below sets forth for all directors and for each of the three
highest-paid executive officers the aggregate compensation received from the
Corporation for 1998 for services in all capacities:
PENSION OR
RETIREMENT
BENEFITS ACCRUED
NAME OF PERSON, AGGREGATE AS PART OF
POSITION COMPENSATION EXPENSES(1)
- ---------------------------------------- ---------------- -----------------
Donald G. Calder
Director ............................. $ 18,400
Jay R. Inglis
Director ............................. 18,400
Dudley D. Johnson
Director ............................. 17,900
C. Carter Walker, Jr.
Director ............................. 18,400
Wilmot H. Kidd
President and Director(2) ............ 753,000 $24,000
Charles N. Edgerton
Vice President and Treasurer ......... 200,346(3) 24,000
Karen E. Riley
Secretary ............................ 130,558(3) 19,584
- -----------
(1) Represents contributions to the Corporation's Profit Sharing Plan.
(2) All remuneration received by Mr. Kidd was in his capacity as President
of the Corporation.
(3) Includes compensation of $85,000 and $54,000 accrued in 1998 for Mr.
Edgerton and Ms. Riley, respectively, deferred until January, 1999.
Each director who is not an officer is paid an annual retainer of $10,000,
a fee of $1,000 for each Board of Directors meeting attended in person, and
$500 for participating in a Board of Directors meeting by telephone. Each
member of the Audit Committee is paid $500 for each Audit Committee meeting
attended. Directors are reimbursed for their out-of-pocket expenses incurred in
attending meetings.
PROFIT SHARING PLAN
Generally, all salaried employees of the Corporation are eligible to
participate in the Profit Sharing Plan. The Plan provides for contributions by
the Corporation from its profits of up to 15% of an employee's compensation.
The vested contributions credited to an employee's account are payable at
normal (age 65), early, or disability retirement, death or other termination of
employment and may be paid in various forms, including a lump sum cash payment
or a monthly annuity. The officers referred to above are fully vested in all
contributions to the Plan.
Employees may withdraw the amounts of any voluntary contributions made
prior to 1991 and may, under certain conditions, withdraw or borrow against
vested Corporation contributions. Under the Plan,
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each employee is permitted to invest the assets in his account in the capital
stock of one or more regulated investment companies from a selection provided
from time to time by the Plan Administrator. Such regulated investment
companies include, among others, U.S. Treasury funds; short-term, global
government and international bond funds; and general and specialized stock
funds.
BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS
During the year ended December 31, 1998, the Corporation paid $162,305 in
brokerage commissions on portfolio transactions to various brokerage firms. All
of the commissions paid in 1998 were paid to brokers providing investment
research and services. No commissions were paid to any affiliated broker.
PORTFOLIO TURNOVER
The ratio of the lesser of the value of purchases or sales of portfolio
securities to the monthly average of the value of portfolio securities (in all
cases, exclusive of United States government securities, short-term securities,
and certificates of deposit) for the years 1996 through 1998 was as follows:
1996 1997 1998
- ------- ------ -----
10% 11% 6%
PROPOSAL 2. RATIFICATION OF INDEPENDENT AUDITORS
Stockholders are invited to ratify the selection of KPMG LLP as
independent auditors of the Corporation for the year 1999. KPMG LLP has no
direct or material indirect financial interest in the Corporation other than
its employment in such capacity.
At a meeting held January 22, 1999, a majority of the directors who were
not "interested persons" (as defined under the Investment Company Act of 1940)
selected KPMG LLP to act as auditors for the Corporation during 1999. A
representative of KPMG LLP is not expected to be present at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS SELECTION.
OTHER MATTERS
The Board of Directors knows of no other matters which may properly be,
and are likely to be, brought before the Meeting. However, if any proper
matters are brought before the Meeting, the persons named in the enclosed form
of proxy will have discretionary authority to vote thereon according to their
best judgment.
2000 STOCKHOLDER PROPOSALS
Any stockholder proposals for inclusion in the Corporation's proxy
statement for the 2000 Annual Meeting of Stockholders pursuant to Rule 14a-8 of
the Securities and Exchange Act of 1934 ("14a-8 proposals") must be received by
the Corporation at its office at New York, New York prior to October 6, 1999.
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Pursuant to Rule 14a-4 of the Securities and Exchange Act of 1934, the
Corporation has discretionary voting authority with respect to any non-Rule
14a-8 proposals for the 2000 Annual Meeting of Stockholders that are not
received by the Corporation prior to December 20, 1999.
MISCELLANEOUS
The Corporation will pay all costs of soliciting proxies in the
accompanying form. Solicitation will be made by mail, and officers and regular
employees of the Corporation may also solicit proxies by telephone or personal
interview. The Corporation will request brokers, banks and nominees who hold
stock in their names to furnish this proxy material to the beneficial owners
thereof and to solicit proxies from them, and will reimburse such brokers,
banks and nominees for their out-of-pocket and reasonable clerical expenses in
connection therewith.
A copy of the Annual Report including financial statements for the year
ended December 31, 1998 is enclosed.
Please date, sign and return the enclosed proxy at your earliest
convenience. No postage is required for mailing in the United States.
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PROXY
CENTRAL SECURITIES CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING MARCH 10, 1999
The undersigned hereby appoints MICHAEL J. BARBERA, WILMOT H. KIDD and KAREN E.
RILEY, and each of them, as attorneys with power of substitution, to represent
the undersigned at the annual meeting of stockholders of Central Securities
Corporation to be held at the office of the Corporation, 1209 Orange Street,
Wilmington, Delaware on March 10, 1999, at 11:00 o'clock A.M., and at any
adjournment thereof, on all matters which may properly come before the meeting.
Election of Directors:
Nominees to be elected by Preference Stock:
Donald G. Calder and Jay R. Inglis
Nominees to be elected by Common Stock:
Dudley D. Johnson, Wilmot H. Kidd
and C. Carter Walker, Jr.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
(CONTINUED ON REVERSE SIDE)
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
FOR election of directors and FOR Proposal 2.
FOR WITHHELD
1. ELECTION OF DIRECTORS (SEE REVERSE) [ ] [ ]
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. APPROVAL OF KPMG LLP as independent [ ] [ ] [ ]
auditors for 1999.
3. In their discretion, upon such other matters as may properly come before
the meeting or any adjournments thereof.
This Proxy Must Be Signed Exactly as Name Appears Hereon
Joint owners should each sign. Executors, administrators, trustees, etc., should
give full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer.
- -------------------------------------------
1999
- -------------------------------------------
SIGNATURE(S) DATE