Securities and Exchange Commission
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
Amendment No. 7
Global Small Cap Fund, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
37935V103
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(CUSIP Number)
Ralph W. Bradshaw
c/o Deep Discount Advisors, Inc.
One West Pack Square, Suite 777
Asheville, NC 28801
(828) 255-4833
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 10, 1999
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(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
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CUSIP No.: 37935V103 13D Page 2
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. ID NO. OF ABOVE PERSON
Deep Discount Advisors, Inc.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER (a) [ ]
OF A GROUP (b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL [ ]
PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
One West Pack Square, Suite 777 Asheville, NC 28801
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NUMBER OF | | SOLE VOTING POWER
SHARES | 7 | 814563
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BENEFICIALLY | | SHARED VOTING POWER 0
OWNED | 8 |
============================================================================
BY EACH | | SOLE DISPOSITIVE POWER 814563
REPORTING | 9 |
============================================================================
PERSON | | SHARED DISPOSITIVE POWER 0
WITH | 10 |
============================================================================
11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 814563
=======================================================================
12 CHECK IF THE AGGREGATE AMOUNT IN ROW [ ]
(11) EXCLUDES CERTAIN SHARES
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13 PERCENT OF CLASS REPRESENTED BY
AMOUNT IN ROW (11) 21.4%
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14 TYPE OF REPORTING PERSON IA
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CUSIP No.: 37935V103 13D Page 3
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===============================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. ID NO. OF ABOVE PERSON
Ron Olin Investment Management Company
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2 CHECK THE APPROPRIATE BOX IF A MEMBER (a) [ ]
OF A GROUP (b) [ ]
========================================================================
3 SEC USE ONLY
======================================================================
4 SOURCE OF FUNDS OO
======================================================================
5 CHECK BOX IF DISCLOSURE OF LEGAL [ ]
PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e)
======================================================================
6 CITIZENSHIP OR PLACE OF ORGANIZATION
One West Pack Square, Suite 777 Asheville, NC 28801
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NUMBER OF | | SOLE VOTING POWER
SHARES | 7 | 546900
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BENEFICIALLY | | SHARED VOTING POWER 0
OWNED | 8 |
====================================================================
BY EACH | | SOLE DISPOSITIVE POWER 546900
REPORTING | 9 |
=====================================================================
PERSON | | SHARED DISPOSITIVE POWER 0
WITH | 10 |
======================================================================
11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 546900
=====================================================================
12 CHECK IF THE AGGREGATE AMOUNT IN ROW [ ]
(11) EXCLUDES CERTAIN SHARES
=========================================================================
13 PERCENT OF CLASS REPRESENTED BY
AMOUNT IN ROW (11) 14.4%
=======================================================================
14 TYPE OF REPORTING PERSON IA
=========================================================================
<PAGE>
This Amendment No. 7 supplements and updates information in Item 4 and Item 5
and adds Exhibit 2.
ITEM 4. PURPOSE OF TRANSACTION
On September 9, 1999 the issuer presented a proposal to deliver Net
Asset Value to its shareholders by March 2000 which was bundled with a
redemption fee. The reporting persons consider the press release to be
confusing and materially incomplete and have sent a letter to the
issuer requesting clarifications. That letter is included as Exhibit 2
to this filing.
The letter included two observations and six questions relative to the
issuers contemplated proposal.
The observations are:
1. The reporting persons are opposed to any redemption fees unless
unbundled and separately approved by the shareholders of the
issuer.
2. Many shareholders may prefer to keep the closed-end structure of
the issuer.
The questions requiring clarification are:
1. What vote is required for approval of shareholders?
2. Have any of the major shareholders been consulted concerning
whether or not they would favor the proposal?
3. Has a separate, independent determination been made as to the
appropriateness of the contemplated proposal?
4. What advance notice is required to solicit opposing proxies in the
Special Meeting required for shareholder approval?
5. If the proposal fails, when will the annual meeting be held?
6. Isn't this proposal really a transfer of assets rather than an
open-ending or reorganization, and, if so, why would it take so
long?
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) The Fund's semi annual report, dated March 23,1999,
states that, as of the close of business on January 31, 1999, there were
3,801,667 shares of Common Stock outstanding. The percentage set forth in
this Item 5(a) was derived using such number.
The Reporting Persons are the beneficial owners of 1,361,463
shares of Common Stock, which constitute approximately 35.8% of the outstanding
shares of Common Stock.
(b) Power to vote and to dispose of the securities resides
with the Reporting Persons.
(c) Since the last filing, the following shares
of Common Stock were traded on the open market:
Date Number of Shares Price Per Share
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8/6/99 2500 bought 15.5
8/12/99 1900 bought 15.2105
8/13/99 1300 bought 15.1875
8/17/99 1900 bought 15.2368
8/18/99 1500 bought 15.2625
8/20/99 1800 bought 15.1875
8/23/99 3700 bought 15.2854
8/24/99 2800 bought 15.25
8/25/99 14500 bought 15.3707
8/27/99 600 bought 15.3125
8/30/99 2000 bought 15.375
9/3/99 1800 bought 15.375
9/7/99 4500 bought 15.9028
9/9/99 5000 bought 15.8
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: September 10, 1999 Deep Discount Advisors, Inc.
By: /s/ Ralph W. Bradshaw
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Name: Ralph W. Bradshaw
Title: Secretary
EXHIBIT 2
DEEP DISCOUNT ADVISORS, INC.
One West Pack Square, Suite 777, Asheville, NC 28801
(828) 255-4832 Fax: (828) 255-4834
Dianne E. O'Donnell, Secretary Ph: 212-713-2712 Fax: 212-713-1374
The Board of Directors, The Global Small Cap Fund, Inc.
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas, 18th Floor
New York, NY 10019
(via both fax and Regular Mail) September 10, 1999
Dear Ms. O'Donnell and Board Members:
As you know, we represent a major shareholder stake (approximately 35%)
in the Global Small Cap Fund Inc. We reviewed with interest and some
considerable concern your press release of September 9, 1999. The
release appears to us to be confusing and materially incomplete on a
number of important points. In this letter, we would like to make a
few observations and request prompt answers to a number of important
questions relative to the contemplated proposal described in the press
release.
OBSERVATION 1: We are opposed to any redemption fees unless unbundled
and separately approved by the shareholders.
Unfortunately, it has become the practice of late to bundle redemption
fees of questionable appropriateness with various attempts to deliver
Net Asset Value (NAV) to shareholders. While it would be a simple
matter to allow shareholders to determine separately whether or not
they approve of such a penalty to redemption, the bundling requires
them to accept it or lose entirely their chance to receive something
close to NAV for their shares. Many shareholders are reacting to this
coercion by opposing the entire bundled proposal as their only
alternative.
OBSERVATION 2: Many shareholders may prefer to keep the closed-end
structure.
There are many shareholders who prefer a closed-end structure, albeit
in an environment in which the discount is responsively dealt with by
the Board and the Adviser. There are also other ways to deliver NAV to
shareholders if a majority of them desire such an option.
QUESTION 1: What vote is required for approval of shareholders in the
Special Meeting?
Many shareholders may oppose this proposal, particularly if bundled
with a mandatory redemption fee. It is material information for the
marketplace to know what vote of the shareholders is required for
approval. Is it a majority of those voting, a majority of shares
outstanding, or a super-majority of shares outstanding?
QUESTION 2: Have any of the major shareholders been consulted
concerning whether or not they would favor a proposal such as that
contemplated by the Fund?
If enough major shareholders oppose this particular proposal, it may
well fail to receive whatever the required vote may be. In such a
case, considerable time and expense may have been wasted by the Fund to
pursue an action which does not receive approval. Then a further,
separate annual meeting will be required. The directors own no shares
whatsoever of the Fund. Have they consulted any of the real shareholders before
making this decision?
QUESTION 3: Has a separate, independent determination been made as to
the appropriateness of the contemplated proposal.
The Fund has 9 directors. Three are directly associated with the
Adviser. The other six "independent" directors own no shares in the
Fund, and receive compensation from the Fund and the Fund complex in
amounts that ranged from $87,085 to $117,853 in 1997. This proposal
will transfer the Fund's assets to another fund associated with the
same adviser and the redemption fee may have the effect of discouraging
or postponing redemptions that would otherwise occur. Such redemptions
would have the effect of reducing the compensation paid to the adviser.
This all gives the appearance of a possible conflict of interest and suggests
that an independent determination of its appropriateness may
be advisable.
QUESTION 4: What advance notice is required to solicit opposing
proxies in the Special Meeting?
The Fund has recently imposed severe advance notice requirements for
stockholders to bring issues before shareholders in annual meetings.
If a shareholder is opposed to part or all of this contemplated
proposal, what are the specific advance notice requirements in order
to present an opposing proxy to shareholders regarding this special
meeting?
QUESTION 5: If this proposal fails to receive shareholder approval,
when will the annual meeting be held?
The Fund is required to hold annual meetings at which shareholders can
vote on whether or not to continue their current Directors in office as
well as other matters. This special meeting is apparently scheduled
for December, 13 months after the last annual meeting. When is the
annual meeting to be held if the special meeting is unsuccessful?
Wouldn't it save shareholder money to hold both meetings simultaneously
as has been done by most other closed-end funds in similar situations?
QUESTION 6: Isn't this really a transfer of assets, rather than an
"open-ending" or "reorganization"? If so, why does it take so long to
happen?
While the terms "open-ending" and "reorganization" are used liberally
in the press release, the Global Small Cap Fund actually ends up being
dissolved. This appears to actually be an exchange of assets of the
Fund for Class A shares of the open-end Global Equity Fund. Such
proposals are much simpler to structure and implement than open-endings
or reorganizations. Why wait until December for the contemplated
special meeting and March 2000 for the implementation. Why couldn't
this entire proposal be presented for approval and implemented much,
much faster? Meanwhile, the shareholders who may want to cash out and
receive full Net Asset Value are paying fees and expenses. What is the
justification for the timeframe contemplated?
We would appreciate a prompt answer to the above questions and would
respectfully suggest that other shareholders of the Fund would also be
very interested in your response. We thank you in advance for your
kind attention to our request.
Very truly yours,
Ronald G. Olin, Chairman
Deep Discount Advisors
