Edgar Filing: CENTRAL SECURITIES CORP

CENTRAL SECURITIES CORPORATION

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

March 9, 2005

NOTICE is hereby given that the Annual Meeting of Stockholders of Central
Securities Corporation will be held at The University Club, One West 54th
Street, 9th Floor, New York, New York on Wednesday, March 9, 2005 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 21, 2005
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

MARLENE A. KRUMHOLZ
Secretary

New York, New York
February 2, 2005

A proxy is enclosed with this Notice and Proxy Statement. Please complete,
SIGN and promptly return your proxy in the enclosed envelope. This will assure a
quorum and save further solicitation costs.

PROXY STATEMENT

February 2, 2005

CENTRAL SECURITIES CORPORATION
630 FIFTH AVENUE
NEW YORK, NEW YORK 10111
(Tel. No. 212-698-2020)

This Proxy Statement and the enclosed proxy card are first being mailed to
stockholders on or about February 2, 2005 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 9, 2005, 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 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 21, 2005. On that date, the Corporation had
outstanding 20,023,209 shares of Common Stock.

The holders of the Corporation's Common Stock 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, 2004
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 the Common 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
or Name and Address Nature of Beneficial Percent
of Beneficial Owner Ownership(1) of Class(2)
---------------------- -------------------- -----------
Donald G. Calder* ...................... 60,740(3)

Jay R. Inglis* ......................... 1,718

Christian A. Johnson
Endeavor Foundation(4) ............... 6,637,318 33.1
1060 Park Avenue
New York, New York 10128

Dudley D. Johnson* ..................... 45,848(5)

Wilmot H. Kidd* ........................ 2,361,778(6)(8) 11.8
630 Fifth Avenue
New York, New York 10111

Mrs. Wilmot H. Kidd .................... 2,361,778(6)(8) 11.8
1060 Park Avenue
New York, New York 10128

C. Carter Walker, Jr.* ................. 481,674(7)(8) 2.4

All directors and officers
as a group ........................... 2,558,637(8) 12.8

----------
* 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 20,023,209 shares of Common Stock
outstanding on December 31, 2004, Messrs. Calder, Inglis and Johnson each owned
less than 1% of the outstanding Common Stock.

(3) Includes 8,034 shares of Common Stock owned by Mr. Calder's wife and
8,628 shares of Common Stock owned by the Donald Grant and Ann Martin Calder
Foundation (the "Calder Foundation"). Mr. Calder is the President and Treasurer
of the Calder Foundation. He disclaims beneficial ownership of all such shares.

(4) Mrs. W. H. Kidd, whose husband is the President of the Corporation, is
President and Trustee of the Christian A. Johnson Endeavor Foundation.

(5) Includes 19,802 shares of Common Stock held in the Young & Franklin
Inc. Retirement Income Trust of which Mr. Johnson is Trustee and 1,285 shares of
Common Stock held by the Disosway Foundation. Mr. Johnson is the Trustee of the
Disosway Foundation. He disclaims beneficial ownership of all such shares.

(Footnotes continued on following page)

(Footnotes continued from previous page)

(6) An aggregate of 2,361,318 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 371,379 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; 886,871
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 1,077,603 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 25,925 shares of Common Stock held in trust for the
benefit of the children of Mr. C. Carter Walker, Jr. as to which Mr. Kidd had
shared investment power and shared voting power and as to which Mr. and Mrs.
Kidd disclaim beneficial ownership.

(7) Includes 39,753 shares of Common Stock owned by Mr. Walker's wife as
to which Mr. Walker had shared investment power and shared voting power and
393,121 shares of Common Stock held in trust 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.

(8) An aggregate of 393,121 shares of Common Stock were included in the
shares beneficially owned by each of Mr. Kidd, Mrs. Kidd, and Mr. Walker.

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.

VALUE OF BENEFICIAL SHARE OWNERSHIP BY DIRECTORS

The dollar range of the value of equity securities of the Corporation
beneficially owned by each director as of December 31, 2004 is as follows:

Dollar Range of
Independent Directors Share Ownership
--------------------- ---------------
Donald G. Calder Over $100,000
Jay R. Inglis $10,001 - $50,000
Dudley D. Johnson Over $100,000
C. Carter Walker, Jr. Over $100,000

Interested Director
-------------------
Wilmot H. Kidd Over $100,000

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 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
such reports were required, all Section 16(a) filing requirements applicable to
its officers, directors and greater than ten percent beneficial owners were
complied with except that C. Carter Walker, Jr., a director of the Corporation,
filed late with the SEC two Form 4's for fiscal 2004 relating to two sales of
Common Stock.

VOTING PROCEDURES

The election of directors requires the affirmative vote of a plurality of
the shares of Common Stock present in person or represented by proxy at the
Meeting and entitled to so vote. Shares of 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 will not be voted with respect to the
nominee or nominees so indicated. The ratification of the selection of
independent auditors of the Corporation requires the affirmative vote of a
majority of the shares of Common Stock present in person or represented by proxy
at the Meeting and entitled to so vote. Shares of Common Stock represented by
proxies which are marked "abstain" with respect to this matter 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
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.

Duly authorized proxies for Common Stock will be voted for the election of
Mr. Donald G. Calder, Mr. Jay R. Inglis, 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
------- --- --------------------- ------------

Independent Directors:

Donald G. Calder ........ 67 President, G. L. Ohrstrom & Co., Inc. (private 1982
investment firm); Director of Brown-Forman
Corporation, Carlisle Companies Incorporated
and Roper Industries, Inc. (manufacturing
companies)

Jay R. Inglis ........... 70 Executive Vice President, National Marine Underwriters 1973
(insurance management company) since 2001;
Executive Vice President, Holt Corporation
(insurance holding company) prior thereto

Dudley D. Johnson ....... 65 President, Young & Franklin Inc. (private 1984
manufacturing company)

C. Carter Walker, Jr. ... 70 Private Investor 1974

Interested Director:
Wilmot H. Kidd .......... 63 Investment and research - President, Central Securities 1972
Corporation

The address of each nominee is c/o Central Securities Corporation, 630
Fifth Avenue, New York, New York, 10111.

The Board of Directors held ten regular meetings in 2004. All directors
attended at least 75% of the meetings of the Board of Directors and meetings of
the committees on which they served. The Board of Directors maintains an Audit
Committee and a Nominating Committee. Both the Audit Committee and the
Nominating Committee consist of Messrs. Calder, Inglis, Johnson and Walker, each
of whom are independent as defined in Section 121(A) of the American Stock
Exchange's listing standards and none of whom are "interested persons" as
defined under the Investment Company Act of 1940. The Board of Directors does
not have a Compensation Committee.

The Nominating Committee met once during 2004. This committee is
responsible for the review and recommendation of candidates for the Board of
Directors. The committee operates subject to a charter which may be viewed on
the Corporation's website at www.centralsecurities.com. The Nominating Committee
will consider director nominee recommendations by stockholders provided the
names of such nominees, accompanied by relevant biographical information, are
submitted in writing to the Secretary of the Corporation. Any such
recommendation must be accompanied by a written statement from the individual of
his or her consent to be named as a candidate and, if nominated and elected, to
serve as a director.

In making its recommendations, the Nominating Committee identifies
candidates who meet the current needs of the Board. The Nominating Committee
does not have any specific minimum qualifications that must be met by a nominee.
The Nominating Committee considers, among other things, an individual's
judgment, background and experience including business experience, industry
experience, and financial background. The Nominating Committee also considers
whether the individual meets the independence

requirements of the American Stock Exchange and whether the individual would be
considered an "interested person" under the Investment Company Act of 1940. With
respect to nomination of continuing directors, the individual's past service to
the Board is also considered. In addition, the Nominating Committee is guided by
the following criteria: each Director should have integrity and the ability to
work constructively with others; each Director should have sufficient time
available to devote to the affairs of the Corporation in order to carry out the
responsibilities of a Director; and each director should be free of any conflict
which would interfere with the proper performance of the responsibilities of a
Director. There are no differences in the manner in which the Nominating
Committee evaluates nominees for directors if the nominee is recommended by a
stockholder.

The Audit Committee assists the Board of Directors by overseeing the
accounting and financial reporting process of the Corporation and the audits of
its financial statements. It operates subject to a charter which has been
reviewed by the Audit Committee and approved and adopted by the Board of
Directors. The Audit Committee met four times during 2004.

Stockholders may send written communications to any member of the Board of
Directors c/o Corporate Secretary, Central Securities Corporation, 630 Fifth
Avenue, New York, New York, 10111. All communications will be compiled by the
Corporate Secretary and submitted to the director.

Each of the Corporation's directors is encouraged to attend the annual
meeting of stockholders in person. All of the Corporation's directors attended
the Corporation's 2004 Annual Meeting.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee has reviewed the audited financial statements of the
Corporation for the year ended December 31, 2004, and has met with management
and KPMG LLP, the Corporation's independent auditors, to discuss the audited
financial statements.

The Audit Committee received from KPMG LLP written disclosures regarding
their independence and the letter required by Independence Standards Board
Standard No. 1, and has discussed with KPMG LLP their independence. In
connection with its review, the Audit Committee has also discussed with KPMG LLP
the matters required to be discussed by Statement of Auditing Standards No. 61.

Based on its review and discussions with management and KPMG LLP, the
Audit Committee recommended to the Board of Directors that the audited financial
statements be included in the Corporation's Annual Report to Stockholders for
the year ended December 31, 2004.

Members of the Audit Committee:
Donald G. Calder
Jay R. Inglis
Dudley D. Johnson
C. Carter Walker, Jr.

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.
Marlene A. Krumholz, Secretary. Information concerning Mr. Kidd is given above
under "Election of Directors." Mr. Edgerton, 60, was elected Vice President in
1989 and has

been Treasurer since 1985. Ms. Krumholz, 41, joined the Corporation in November
2000 and was elected Secretary effective January 1, 2001. Ms. Krumholz was
Senior Manager, PricewaterhouseCoopers LLP (public accounting) prior thereto.
Executive officers serve as such until the election of their successors.

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 2004 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 ................................. $ 26,000
Jay R. Inglis
Director ................................. 27,000
Dudley D. Johnson
Director ................................. 26,000
C. Carter Walker, Jr.
Director ................................. 26,500
Wilmot H. Kidd
President and Director(2) ................ 850,000 $30,750
Charles N. Edgerton
Vice President and Treasurer ............. 272,000(3) 30,750
Marlene A. Krumholz
Secretary ................................ 194,000(3) 29,100
----------
(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 $45,000 and $40,000 accrued in 2004 for Mr.
Edgerton and Ms. Krumholz, respectively, deferred until January 2005.

Effective January 1, 2005, each director who is not an officer is paid an
annual retainer of $12,000, a fee of $1,000 for each Board of Directors meeting
attended in person, and $750 for participating in a Board of Directors meeting
by telephone. Each member of the Audit Committee and the Nominating Committee is
paid $1,000 for each Committee meeting attended. Directors are reimbursed for
their out-of-pocket expenses incurred in attending meetings.

Profit Sharing Plan

For the year ended 2004, the Corporation contributed 15% of employee
compensation to the Profit Sharing Plan, subject to Internal Revenue Code
limitations. Generally, all salaried employees of the Corporation are eligible
to participate in the Plan. The Plan provides for contributions by the
Corporation from its profits of up to 25% 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, 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, government and international bond funds; and general
and specialized stock funds.

AUDIT FEES

During the last two fiscal years, the Corporation engaged KPMG LLP for its
services as follows:

2004 2003
------- -------
Audit fees .............................. $34,000(1) $33,050(1)
Audit-related fees ...................... 0 0
Tax fees ................................ 14,250(2) 13,500(2)
All other fees .......................... 0 0
------- -------
Total ................................... $48,250 $46,550
======= =======
----------
(1) Includes fees for review of the semi-annual report to stockholders
and audit of the annual report to stockholders.

(2) Includes fees for services performed with respect to tax compliance
and tax planning.

Pursuant to its charter, the Audit Committee is responsible for
recommending the selection, approving compensation and overseeing the
independence, qualifications and performance of the independent accountants. The
Audit Committee's policy is to pre-approve all audit and permissible non-audit
services provided by the independent accountants. In assessing requests for
services by the independent accountants, the Audit Committee considers whether
such services are consistent with the auditor's independence; whether the
independent accountants are likely to provide the most effective and efficient
service based upon their familiarity with the Corporation; and whether the
service could enhance the Corporation's ability to manage or control risk or
improve audit quality. The Audit Committee may delegate pre-approval authority
to one or more of its members. Any pre-approvals by a member under this
delegation are to be reported to the Audit Committee at its next scheduled
meeting.

All of the audit and tax services provided by KPMG LLP in fiscal year 2004
(described in the footnotes to the table above) and related fees were approved
in advance by the Audit Committee.

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 2005. 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 26, 2005, 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 2005. A
representative of KPMG LLP is not expected to be present at the Corporation's
Annual Meeting of Stockholders.

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.

2006 STOCKHOLDER PROPOSALS

Any stockholder proposals for inclusion in the Corporation's proxy
statement for the 2006 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 10, 2005.

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 2006 Annual Meeting of Stockholders that are not
received by the Corporation prior to December 22, 2005.

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, 2004 is enclosed.

Please date, sign and return the enclosed proxy at your earliest
convenience. No postage is required for mailing in the United States.

PROXY

CENTRAL SECURITIES CORPORATION

Proxy Solicited on Behalf of the Board of Directors of
the Company for Annual Meeting March 9, 2005

The undersigned hereby appoints WILMOT H. KIDD and MARLENE A. KRUMHOLZ, 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 University Club, One West 54th Street, 9th Floor, New York, New York
on March 9, 2005 at 11:00 o'clock A.M., and at any adjournment thereof, on all
matters which may properly come before the meeting.

--------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN THIS PROXY ON THE OTHER SIDE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
--------------------------------------------------------------------------------

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

____________________________________ ____________________________________

PROXY

CENTRAL SECURITIES CORPORATION

Proxy Solicited on Behalf of the Board of Directors of
the Company for Annual Meeting March 9, 2005

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

____________________________________ ____________________________________

[X] Please mark | 1224
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.

1.Election of Directors.

Nominees: (01) Donald G. Calder, (02) Jay R. Inglis, (03) Dudley D. Johnson,
(04) Wilmot H. Kidd and (05) C. Carter Walker, Jr.

FOR WITHHELD
[ ] [ ]

[ ] ______________________________________
For all nominees except as noted above

2. Approval of KPMG LLP as independent FOR AGAINST ABSTAIN
auditors for 2005. [ ] [ ] [ ]

3. In their discretion, upon such other matters as may properly come before the
meeting or any adjournments thereof.

Mark box at right if you plan to attend the Annual Meeting. [ ]

Mark box at right if an address change or comment [ ]
has been noted on the reverse side of this card.

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.

Signature: ______________ Date: ______ Signature: ______________ Date: ______

[X] Please mark | 1224
votes as in |___
this example.

1.Election of Directors.

Nominees: (01) Donald G. Calder, (02) Jay R. Inglis, (03) Dudley D. Johnson,
(04) Wilmot H. Kidd and (05) C. Carter Walker, Jr.

FOR WITHHELD
[ ] [ ]

[ ] ______________________________________
For all nominees except as noted above

2. Approval of KPMG LLP as independent FOR AGAINST ABSTAIN
auditors for 2005. [ ] [ ] [ ]

3. In their discretion, upon such other matters as may properly come before the
meeting or any adjournments thereof.

Mark box at right if you plan to attend the Annual Meeting. [ ]

Mark box at right if an address change or comment [ ]
has been noted on the reverse side of this card.

Signature: ______________ Date: ______ Signature: ______________ Date: ______