(File Nos. 33-64808 and 811-7814)
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))
[ ] Definitive Proxy Statement
[X] Definitive Additional
Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or
ss.240.14a-12
GLOBAL SMALL CAP FUND INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the 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:
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2) Aggregate number of securities to which transaction applies:
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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:
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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:
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4) Date Filed:
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GLOBAL SMALL CAP FUND INC.
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019-6114
December 29, 1999
To the Stockholders:
It has come to our attention that two stockholders of Global Small Cap
Fund Inc. (the "Fund"), Deep Discount Advisors, Inc. and Ron Olin Investment
Management Company (the "Soliciting Stockholders"), have together launched a
proxy solicitation in opposition to the Board's solicitation. We urge you to
vote "FOR" management's proposal to reorganize into PaineWebber Global Equity
Fund ("Global Equity") as the Board has recommended and to return the WHITE
proxy card.
The only proposal that will be considered at the Meeting is the
Reorganization proposal made by the Board, and only votes regarding this
proposal will be effective. The Soliciting Stockholders apparently have no
recommendation as to how you should vote on the proposed Reorganization. They
state that they are even uncertain as to how they will vote their own shares on
the proposal. Moreover, the Soliciting Stockholders generally mischaracterize
the Reorganization proposal. For example, they erroneously state that the Fund
and Global Equity have the same investment adviser and sub-adviser. As the
Fund's proxy materials clearly state, while the Fund is sub-advised by GE
Investment Management Corporation ("GEIM"), Global Equity is sub-advised by
Invista Capital Management LLC, which is not related to GEIM or to Mitchell
Hutchins. The uncertainty and lack of accuracy revealed in their proxy materials
illustrate the level of the Soliciting Stockholders' professed concern for the
interests of other Fund stockholders. WE URGE YOU TO VOTE "FOR" THE RECOMMENDED
REORGANIZATION PROPOSAL.
These Soliciting Stockholders criticize the Fund's performance and
describe themselves as "fellow stockholders who believe in good corporate
governance and in maximizing stockholder value." To bolster this claim, they
cite their management of another closed-end global equity fund, Clemente
Strategic Value Fund, Inc. ("Clemente"). On September 29, 1998, representatives
of the Soliciting Stockholders took control of Clemente's board. However, a
simple comparison of the Fund's performance and discount as compared to
Clemente's over the same period illustrates that the Soliciting Stockholders
have not achieved for Clemente what the Board and the Fund's advisers have done
for the Fund:
FOR THE PERIOD SEPTEMBER GLOBAL SMALL CAP CLEMENTE
30, 1998 THROUGH
NOVEMBER 30, 1999
AVERAGE ANNUAL RETURN 48.58% 40.99%
(based on NAV)
AVERAGE ANNUAL RETURN 56.04% 36.88%
(based on market price)
CHANGE IN DISCOUNT TO Discount REDUCED Discount INCREASED
NAV (beginning of period by 4.7% by 3.2%
to end of period) (From 20.1% (From 7.5% to
to 15.4%) 10.7%)
<PAGE>
Thus, while they declare that the Fund's performance has been "simply
terrible," the Soliciting Stockholders would have an investment worth almost 20%
more if they had simply invested their money in the Fund, instead of in
Clemente. In other words, the Fund's average annual return during this period
was about 50% higher than Clemente's. This is so despite the Soliciting
Stockholders' control of Clemente's management during this period.
Nonetheless, the Soliciting Stockholders criticize the Fund's management
and its Board of Directors for apparent indifference to performance. Nothing
could be further from the truth. As the Fund has indicated, the Board has
determined that early performance of the Fund was unsatisfactory, and in late
March 1995 the Board engaged a new, highly regarded sub-adviser. Moreover, in
September 1999, the Fund's Board determined to offer an opportunity for
stockholders, as more fully described in the Fund's Proxy Statement/Prospectus,
to receive shares of another diversified global stock fund, which is an open-end
mutual fund whose shares may be redeemed at net asset value without being
subject to any market discount.
Even more strangely, the main purpose of the Soliciting Stockholders'
proxy solicitation apparently is to seek your vote on proposals that are not
eligible for consideration at the special meeting--the removal of your Board of
Directors and their replacement with the Soliciting Stockholders' own slate of
nominees. As a matter of Maryland law, which governs the Fund because it is
incorporated in Maryland, those proposals are ineligible for consideration at
this special meeting, which was called solely to vote on the proposed
Reorganization of the Fund into Global Equity. THEREFORE, IF INTRODUCED, THE
SOLICITING STOCKHOLDERS' PROPOSALS WILL BE RULED OUT OF ORDER AT THE MEETING.
ANY VOTES REGARDING THEIR PROPOSALS WILL NOT BE RECOGNIZED AS VALID AT THE
MEETING AND WILL HAVE NO EFFECT ON THE FUND.
Despite their focus on proposals that will not be considered at this
meeting, the inaccuracies in their proxy statement, and their misleading and
misplaced criticism of the Fund and its Board, the Soliciting Stockholders would
like you to give them your proxy. They also state that if you send in their
proxy card signed but not specifically voting on the Reorganization, they will
"abstain" your shares on the Reorganization proposal. HOWEVER, AN ABSTENTION
WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE REORGANIZATION.
WE ENCOURAGE YOU TO VOTE "FOR" THE REORGANIZATION PROPOSAL ON THE WHITE
PROXY CARD AND IGNORE THE SOLICITING STOCKHOLDERS' PROXY CARD ENTIRELY.
The Board is confident that the Reorganization will benefit both the Fund
and its stockholders. Please sign, date, and return the WHITE proxy card that
you have received in the enclosed postage-paid return envelope, or, if you
prefer, you may authorize and instruct your proxies by phone by calling
1-800-949-8596 or by fax by faxing your signed and dated proxy card to
1-800-733-1885. PLEASE NOTE THAT ANY ABSTENTION OR BROKER NON-VOTE WILL HAVE THE
SAME EFFECT AS A VOTE AGAINST THE REORGANIZATION.
Sincerely,
/s/ Brian M. Storms
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Brian M. Storms
Director and Senior Vice President
Global Small Cap Fund Inc.
