MORGAN GRENFELL SMALLCap FUND, INC.
885 Third Avenue
New York, New York 10022
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of MORGAN GRENFELL SMALLCap FUND, INC.:
The Annual Meeting of Shareholders of Morgan Grenfell SMALLCap Fund, Inc.
will be held on Friday, April 24, 1998 at 10:00 a.m. at 885 Third Avenue, 32nd
Floor, New York, New York for the following purposes:
(1) To elect as director of the Fund; Richard D. Wood
(2) To ratify the selection of KPMG Peat Marwick LLP as Independent Certified
Public Accountants of the Fund for the fiscal year ending December 31,
1998; and
(3) To transact such other business as may properly come before the Annual
Meeting and any adjournment or adjournments thereof.
YOUR DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR ALL PROPOSALS.
Shareholders of record at the close of business on February 26, 1998 will
be entitled to vote at the Annual Meeting or at any adjournment or adjournments
thereof.
It is important that you return your signed Proxy Card promptly, regardless
of the size of your holdings, so that a quorum may be assured thereby saving
your Fund the expense of additional proxy solicitation.
By order of the Board of Directors
James A. Capezzuto, Secretary
March 2, 1998
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Please complete, date and sign the Proxy Card for the shares held by you and
return the Proxy Card in the envelope provided so that your vote can be
recorded. No postage is required if the envelope is mailed in the United
States.
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MORGAN GRENFELL SMALLCap FUND, INC.
885 Third Avenue
New York, New York 10022
(212) 230-2600
<PAGE>
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PROXY STATEMENT
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This Proxy Statement is furnished in connection with the solicitation by
the board of directors of Morgan Grenfell SMALLCap Fund, Inc. (the "Fund") of
proxies to be voted at the Annual Meeting of Shareholders of the Fund to be held
on April 24, 1998 (the "Meeting"), and any adjournment or adjournments thereof,
for the purposes set forth in the accompanying Notice of Annual Meeting dated
March 1, 1998. This Proxy Statement is being first mailed to shareholders on or
about March 2, 1998.
The Fund's annual report for the year ended December 31, 1997 was mailed to
shareholders on February 27, 1998. Copies of the Fund's most recent annual
report are available without charge upon request made in writing to Morgan
Grenfell Capital Management, or by telephone to 1-800-550-6426.
As of March 2, 1998, there were 9,793,568 issued and outstanding shares of
common stock of the Fund. Shareholders will be entitled to one vote for each
share held. Only shareholders of record at the close of business on March 10,
1998 will be entitled to vote at the meeting. The Fund is not aware that on
March 2, 1998 any person owned beneficially or of record more than 5% of the
outstanding shares of the Fund.
Proposal 1
ELECTION OF DIRECTORS
Under the provisions of the Fund's articles and by-laws, the directors are
divided into three classes. It is intended that proxies not limited to the
contrary will be voted in favor of Mr. Richard Wood as director of the class
whose term is set to expire at the 2001 Annual Meeting of Shareholders (or
special meeting in lieu thereof). Mr. Wood presently serves as a director of the
Fund and has consented to being nominated herein and has indicated a willingness
to serve if elected. The by-laws of the Fund state that a person receiving a
plurality of the votes cast shall be elected as a director.
<PAGE>
The following table presents certain information regarding the directors
(including the nominee), indicating their principal occupations, which, unless
specified dates are shown, are of more than five years duration, although the
titles may not have been the same throughout. An asterisk beside a director's or
nominee's name indicates that he is an "interested person" as defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act")
through his position with the Fund's investment advisor, Morgan Grenfell Capital
Management Inc. (the "Advisor"), 885 Third Avenue, New York, New York, 10022.
The Fund's administrator is SEI Financial Management Corporation, 1 Freedom
Valley Drive, Oaks, Pennsylvania 19456-0100.
INFORMATION CONCERNING DIRECTORS
<TABLE>
<CAPTION>
First Shares of Percent
Name, Age and Position Became a Term Fund of
with the Fund Business Experience and Directorships Director Expiring Owned(1) Class(2)
- --------------------------- ---------------------------------------------------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Michael Bullock*, Director, Chairman and Chief Investment Officer, 1991 2000 -- --
Age 46, Chairman and Morgan Grenfell Investment Services, Ltd.;
Director Managing Director, Morgan Grenfell Asset
Management Ltd.; Director, Morgan
Grenfell Capital Management, Inc.
James E. Minnick* President, Chief Executive Officer, 1997 2000 12,603 0.129%
Age 49, Morgan Grenfell Capital Management Inc.
Director Director, Morgan Grenfell Asset Management Ltd.
Robert E. Greeley Manager Corporate Investments, Hewlett 1987 1999 1,270 0.013%
Age 66, Director Packard (1979-1991); President Page Mill Asset
Management (1986 to present)
Joseph J. Incandela, Partner/Managing Director, Thomas H. Lee Co. 1990 1999 527 0.005%
Age 51, Director
Richard D. Wood, Consultant (October 1994 to present); 1987 2001 29,820 0.305%
Age 58, Director Chairman and President, Optical Radiation Corp.
Nominee (1969 to October 1994)
All directors and officers
as a group
</TABLE>
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(1) Shows all shares of Fund's common stock owned on February 26, 1998
beneficially, directly or indirectly. Such ownership includes voting and
investment control. This information, not being within the knowledge of the
Fund, has been furnished by each of the directors and officers.
(2) Shows percentage of shares owned on February 26, 1998.
1
<PAGE>
Information Concerning Committees and Meetings of Directors
The board of directors of the Fund met four times during the fiscal year
ended December 31, 1997 and each director attended at least 75% of the meetings
of the board and meetings of the committees of the board of directors on which
such director served.
The board of directors has an Executive Committee consisting of Messrs.
Bullock and Minnick which was constituted to conduct the current and ordinary
business of the Fund when the board is not in session and, to the same extent as
the board is so empowered, has the power to declare dividends from ordinary
income and distributions of realized capital gains upon any shares of capital
stock. Messrs. Bullock and Minnick also comprise the Valuation Committee which
was constituted to consider and act upon all questions relating to valuation of
the securities in the Fund's portfolio which may arise between meetings of the
directors. The Fund has an Audit Committee consisting of Messrs. Greeley and
Wood. An Audit Committee meeting was held on April 25, 1997 to make
recommendations to the board as to the firm of independent accountants to be
selected, to review the methods, scope and result of audits and audit fees
charged, and to review the Fund's internal accounting procedures and controls.
The directors have a Special Nominating Committee consisting of the directors
who are not "interested persons" (as defined by the Investment Company Act) of
the Fund or the Advisor (the "Disinterested Directors"). The Special Nominating
Committee is charged with the duty of making all nominations for disinterested
members of the board of directors to the directors. Shareholders'
recommendations as to nominees which are received by the Fund are referred to
the Special Nominating Committee for its consideration and action.
Compensation of Directors and Officers
The Fund pays no compensation to the Fund's officers. None of the Fund's
directors or officers has engaged in any financial transactions with the Fund or
the Advisor.
The following table sets forth all compensation paid to the Fund's
directors as of the Fund's most recent fiscal year:
<TABLE>
<CAPTION>
Aggregate Pension or Retirement Total Compensation from
Compensation Benefits Accrued as Part Fund and Other Funds
Name of Director from the Fund* of Fund's Expenses in Complex**
- --------------------- ---------------- -------------------------- ------------------------
<S> <C> <C> <C>
Michael Bullock $ 0 $0 $ 0
James E. Minnick $ 0 $0 $ 0
Robert E. Greeley $16,000 $0 $16,000
Joseph J. Incandela $16,000 $0 $16,000
Richard D. Wood $16,000 $0 $16,000
</TABLE>
* As of Fund's fiscal year end, December 31, 1997.
** None of the Directors receives any compensation from any other investment
company managed by or affiliated with the Advisor.
2
<PAGE>
Executive Officers
The following table sets forth information with respect to the executive
officers of the Fund who are not directors. Each officer is elected annually by
the board of directors of the Fund and serves until the officer's successor is
elected and qualified, or until the officer's death, resignation or removal by
the board.
<TABLE>
<CAPTION>
Shares of Percent
Positions Principal Occupation(s) During Fund of
Name and Address with Fund Past Five Years Owned(1) Class(2)
- ---------------------------- ---------------- ---------------------------------------------- ----------- -----------
<S> <C> <C> <C> <C>
Audrey M.T. Jones, Age 51 Executive Executive Vice President, Morgan Grenfell 4,652 0.048%
885 Third Avenue, Vice President Capital Management, Inc.
New York, NY 10022
David A. Baratta, Age 40 Executive Executive Vice President, Morgan Grenfell 1,000 0.010%
885 Third Avenue, Vice President Capital Management, Inc. (September 1994
New York, NY 10022 to present); Special Limited Partner at BEM
Management (Private Investment Partnership).
Joan A. Binstock, Age 44 Treasurer Chief Operating Officer and Executive 601 0.006%
885 Third Avenue Vice President, MGCM (since
New York, NY 10022 June 1977); Principal National Director
of Investment Management Regulatory
Consulting, Ernst & Young (May
1995-June 1997); Vice President,
Director of Compliance, JP Morgan
Mutual Funds (August 1993-May 1995).
Tracie E. Richter, Age 30 Assistant Vice President, MGCM (since January 0 0%
885 Third Avenue Treasurer 1998); Vice President, Bankers Trust
New York, NY 10022 (February 1996 to December 1997);
Associate, Goldman Sachs Asset
Management (January 1993 to January 1996).
James A. Capezzuto, Age 34 Secretary Assistant Compliance and Legal Officer 100 0.001%
885 Third Avenue Morgan Grenfell Capital Management
New York, NY 10022 (June, 1996 to present); First Vice
President, Legal, Prudential Securities Inc.
</TABLE>
(1) Shows all shares of Fund's common stock owned on February 26, 1998
beneficially, directly or indirectly. Such ownership includes voting and
investment control. This information, not being within the knowledge of the
Fund, has been furnished by each of the directors and officers.
(2) Shows percentage of shares owned on February 26, 1998.
Proposal 2
RATIFICATION OF SELECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Pursuant to the Investment Company Act, at a meeting on February 18, 1998
called for such purpose, the board of directors of the Fund, including all of
the "Disinterested Directors," unanimously selected KPMG Peat
3
<PAGE>
Marwick LLP as independent certified public accountants for the Fund for the
fiscal year ending December 31, 1998. The Fund has been advised that KPMG Peat
Marwick LLP does not have any direct or material indirect financial interest in
the Fund, nor has it had any connection during the past three years with the
Fund in the capacity of promoter, underwriter, director, officer or employee.
Audit services performed by KPMG Peat Marwick LLP for the Fund during the
fiscal year ended December 31, 1997 consisted of the examination of the
financial statements of the Fund, consultation on financial, accounting and
reporting matters, review and consultation regarding various filings with the
Securities and Exchange Commission, including examination of answers to certain
items in the Fund's Annual Report filed with the Securities and Exchange
Commission.
Representatives of KPMG Peat Marwick LLP are not expected to be present at
the meeting, but have been given the opportunity to make a statement if they so
desire and will be available by telephone should any matter arise requiring
their presence.
Vote Required
The approval of Proposal 2 requires the affirmative vote of a majority of
the total number of votes entitled to be cast on the Proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS RATIFY
THE SELECTION OF KPMG PEAT MARWICK LLP AS INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS OF THE FUND.
OTHER BUSINESS
As of the date of this Proxy Statement, the board of directors is not aware
of any matters that are to be presented for action at the meeting other than
those described above. Should other business properly be brought before the
meeting, it is intended that the accompanying proxy will be voted thereon in
accordance with the judgment of the persons named as proxies.
Proposals of shareholders which are intended to be presented at the next
Annual Shareholders' meeting must be received in writing by the Fund at 885
Third Avenue, New York, New York 10022 no later than November 1, 1998.
PROXIES AND VOTING AT THE MEETING
Shareholders who execute proxies may revoke them at any time before they
are voted by written notice to the secretary of the Fund or by casting a vote in
person at the meeting. All valid proxies received prior to the meeting, or any
adjournment or adjournments thereof, will be voted at the meeting. Matters on
which a choice has been provided will be voted as indicated on the proxy, and,
if no instruction is given, the persons named as proxies will vote the shares
represented thereby for the election as director of each nominee named in
Proposal 1, for the ratification of KPMG Peat Marwick LLP as the Fund's
independent certified public accountants as set forth in Proposal 2 of the
Notice of Annual Meeting of Shareholders and will use their best judgment in
connection with the transaction of such other business as may properly come
before the meeting or any adjournment or adjournments thereof.
4
<PAGE>
In the event that at the time any session of the meeting is called to order
a quorum is not present in person or by proxy, the persons named as proxies may
vote those proxies which have been received to adjourn the meeting to a later
date. In the event that a quorum is present, but sufficient votes in favor of
either of Proposals 1 and 2 have not been received, the persons named as proxies
may propose one or more adjournments of the meeting to permit further
solicitation of proxies with respect to those proposals. Any such adjournment
will require the affirmative vote of a majority of the shares present in person
or by proxy at the session of the meeting to be adjourned. The persons named as
proxies will vote those proxies which they are entitled to vote for Proposals 1
and 2 in favor of such an adjournment, and will vote those proxies entitled to
be voted against Proposal 1 and 2 against any such adjournment. A shareholder
vote may be taken on one or more of the proposals in this Proxy Statement prior
to such adjournment if sufficient votes for its approval have been received and
it is otherwise appropriate.
Shares of the Fund represented in person or by proxy (including shares
which abstain or do not vote with respect to one or more of the proposals
presented for shareholder approval) will be counted for purposes of determining
whether a quorum is present at the meeting. Abstentions will be treated as
shares that are present and entitled to vote with respect to either proposal,
but will not be counted as a vote in favor of such proposal. Accordingly, an
abstention from voting on a proposal has no effect in determining whether the
nominees in Proposal 1 have been elected, but has the same effect as a vote
against Proposal 2. If a broker or nominee holding shares in "street name"
indicates on the proxy that it does not have discretionary authority to vote as
to a particular proposal, those shares will not be considered as present and
entitled to vote with respect to such proposal and are not considered to be
votes cast. Accordingly, broker non-votes have no effect on the voting in
determining whether the nominees in Proposal 1 have been elected and, because
shares represented by broker non-votes are considered outstanding shares, have
the same effect as a vote against Proposal 2.
GENERAL
The Fund will pay the cost of preparing, assembling and mailing the
material in connection with solicitation of proxies, and will reimburse brokers,
nominees and similar record holders for their reasonable expenses incurred in
connection with forwarding proxy material to beneficial holders. In addition to
the solicitation by use of the mails, certain officers and employees of the
Fund, who will receive no compensation for their services other than their
regular salaries, may solicit the return of proxies personally or by telephone
or telegraph.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
MORGAN GRENFELL SMALLCap
FUND, INC.
5
<PAGE>
Morgan Grenfell SMALLCap Fund, Inc.
885 Third Avenue - 32nd Floor
New York, New York 10022
ANNUAL MEETING OF SHAREHOLDERS APRIL 24, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Audrey M.T. Jones and David A. Baratta,
and each of them, the proxies of the undersigned with power of substitution to
each of them, to vote all shares of Morgan Grenfell SMALLCap Fund, Inc. (the
"Fund") which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Fund to be held at the offices of the Fund located at 885
Third Avenue, 32nd Floor, New York, New York 10022 on Friday, April 24, 1998 at
10:00 a.m. (eastern time) and any adjournment or adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSAL 2 AND FOR THE NOMINEE IN PROPOSAL 1.
MORGAN GRENFELL SMALLCAP FUND, INC.
P.O. BOX 11377
NEW YORK, N.Y. 10203-0377
(Continued, and to be dated and signed on the other side.)
<PAGE>
1. To elect one (1) Director to the Fund's Board of Directors to serve until
the Fund's Annual Meeting in 2001.
The nominee is Richard D. Wood.
FOR the nominee VOTE WITHHELD for the *EXCEPTIONS (as noted
named above. |X| nominee named above. |X| to the contrary below) |X|
*Exceptions___________________________________________________________________
2. To ratify the selection of KPMG Peat Marwick LLP as Independent Certified
Public Accountants for the fiscal year ending December 31, 1998.
FOR |X| AGAINST |X| ABSTAIN |X|
Address Change and/or
Comments Mark Here |X|
Please sign exactly as your name
or names appear in the box on the
left. When signing as attorney,
executor, administrator, trustee
or guardian, please give your
full title as such. If a
corporation, please sign in full
corporate name by president or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
Dated:______________________1998
| ________________________________
|
| ________________________________
----- (Signature(s) of Shareholder(s))
Votes MUST be
indicated (x) in
Black or Blue
Sign, Date and Return this Proxy in the Enclosed Envelope. ink. |X|
