Securities and Exchange Commission
Washington, D.C. 20549
-------------------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Amendment No. 10
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)
November 26, 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. [ ]
<PAGE>
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
===========================================================================
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 | 932363
============================================================================
BENEFICIALLY | | SHARED VOTING POWER 0
OWNED | 8 |
============================================================================
BY EACH | | SOLE DISPOSITIVE POWER 932363
REPORTING | 9 |
============================================================================
PERSON | | SHARED DISPOSITIVE POWER 0
WITH | 10 |
============================================================================
11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 932363
=======================================================================
12 CHECK IF THE AGGREGATE AMOUNT IN ROW [ ]
(11) EXCLUDES CERTAIN SHARES
=======================================================================
13 PERCENT OF CLASS REPRESENTED BY
AMOUNT IN ROW (11) 24.6%
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14 TYPE OF REPORTING PERSON IA
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<PAGE>
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
===============================================================================
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 | 609600
=====================================================================
BENEFICIALLY | | SHARED VOTING POWER 0
OWNED | 8 |
====================================================================
BY EACH | | SOLE DISPOSITIVE POWER 609600
REPORTING | 9 |
=====================================================================
PERSON | | SHARED DISPOSITIVE POWER 0
WITH | 10 |
======================================================================
11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 609600
=====================================================================
12 CHECK IF THE AGGREGATE AMOUNT IN ROW [ ]
(11) EXCLUDES CERTAIN SHARES
=========================================================================
13 PERCENT OF CLASS REPRESENTED BY
AMOUNT IN ROW (11) 16.0%
=======================================================================
14 TYPE OF REPORTING PERSON IA
=========================================================================
<PAGE>
This Amendment No. 10 supplements and updates information in Item 4 and Item 5
and adds Exhibit 4.
ITEM 4. PURPOSE OF TRANSACTION
The reporting persons have sent the SEC and the issuer a letter protesting
certain actions taken by the issuer in response to the reporting person's
intent to submit proposals to shareholders at the Special Meeting of
Shareholders announced for December 1999. The letter is attached as
Exhibit 4.
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 1,541,963
shares of Common Stock, which constitute approximately 40.6% 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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11/26/99 600 bought 18.875
<PAGE>
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: November 29, 1999 Deep Discount Advisors, Inc.
By: /s/ Ralph W. Bradshaw
----------------------------
Name: Ralph W. Bradshaw
Title: Secretary
EXHIBIT 4
Deep Discount Advisors, Inc.
One West Pack Square, Suite 777 - Asheville, N.C. 28801
Phone: 828-255-4830 Fax: 828-255-4834
William A. Clark 828-255-4835
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November 26, 1999 VIA FEDERAL EXPRESS AND TELEFAX
202-942-9627
Mr. Paul Roye, Director
Division of Investment Management
Securities and Exchange Commission
Mail Stop 5-6
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Formal Protest to the Securities and Exchange Commission
Global Small Cap Fund, Inc., Special Meeting on December 30, 1999
Opposing Proxy from Deep Discount Advisors, Inc.
Dear Mr. Roye:
Please consider this letter a formal protest of certain actions taken by the
Board of Directors of The Global Small Cap Fund, Inc. (the "Fund") as they
relate to a contested Special Meeting of Shareholders scheduled for December 30,
1999. Deep Discount Advisors, Inc. and Ron Olin Investment Management Company
(the "Soliciting Shareholder") have provided advance notice of their intention
to run an opposing proxy for this meeting and to introduce resolutions
specifically authorized by the By-Laws of the Fund.
The Fund's By-Laws clearly give shareholders the right to remove and replace
directors at any duly called meeting. By ruling out of order a properly
presented proposal to remove themselves, the directors may be allowing other
interests to take precedence over their fiduciary responsibilities to the
shareholders of the Fund.
A summary of the facts and the position of the Soliciting Shareholder follows
below.
1. On May 25, 1999, the Soliciting Shareholder sent advance notice of its
intention to run an opposing slate of Directors at the next Annual Meeting of
shareholders. This notice was in compliance with the requirements of the Fund's
By-Laws.
2. Subsequently, the Fund decided not to call a regularly scheduled annual
meeting, but instead to call a Special Meeting of shareholders to vote on a
proposal to merge the Fund into an open-end fund (The PaineWebber Global Equity
Fund) managed by the Fund's investment adviser.
3. On September 15, 1999, the Soliciting Shareholder sent advance notice to
the Fund of its intention to run an opposing proxy for the Special Meeting and
to submit for consideration two (2) resolutions for consideration by the
shareholders, (i) a resolution to remove all members of the incumbent Board of
the Fund, and (ii) a resolution to elect an alternate slate of Directors to fill
the unexpired terms of the incumbent Directors.
4. On October 8, 1999, in response to a press release by the Fund regarding
issues relevant to the merger proposal, the Soliciting Shareholder sent a letter
to the Fund re-affirming all of the details of its previous advance notice
regarding the opposing proxy and the resolutions cited in the letter of
September 15, 1999.
5. On November 9, 1999, in response to having seen the Fund's annual report
which made reference to a new Director, the Soliciting Shareholder sent a letter
as an addendum to its original advance notice letters of May 25 and September
15, advising the Fund of its intention to add an additional Director nominee to
its slate of opposing Directors for the Special Meeting of shareholders. This
option was specifically reserved in the original advance notice letter of May
25.
6. In a letter from the Fund dated November 22, 1999, the Fund advised the
Soliciting Shareholder that the resolutions submitted by the Soliciting
Shareholder "are not in order and will not be considered at a special meeting."
The reasons cited in the letter are as follows: (i) "Under Maryland corporate
law, a 'duly called' special meeting is limited to the purposes disclosed in the
notice of the meeting; no other proposals may be properly considered." and (ii)
"Global Small Cap's By-Laws state that only proposals that 'the Board of
Directors decides should be voted on by stockholders' may be considered at a
meeting. Therefore, the board has the discretion to decide which proposals
submitted by shareholders will be considered at a special meeting."
RESPONSE AND POSITION OF THE SOLICITING SHAREHOLDER
7. Our right to submit the resolutions in question is founded on Article III,
section 5 of the Fund's By-Laws. Section 5 is quoted in its entirety as
follows:
"Section 5. Removal. At any stockholders' meeting duly called, provided a
quorum is present, the stockholders may remove any director from office
(either with or without cause) and may elect a successor or successors to
fill any resulting vacancies for the unexpired terms of the removed
director or directors. A majority of all votes represented at a meeting is
sufficient to remove a Director for cause."
Please note that this language is explicit and unambiguous. There is no
language that makes this right of the shareholders subject to Board approval.
It is not subject to "interpretation." The meaning is clear, i.e. at any duly
called meeting the stockholders may remove and replace directors of the fund.
The Fund's By-Laws make this prerogative a fundamental right of the
shareholders, not a right that may be arbitrarily removed or disavowed by the
Board of Directors in order to suit their own purposes.
8. It is no defense to attempt hiding behind an interpretation of Maryland
corporate law, and the argument in Mr. Storms's letter of November 22 is
circular. If Maryland law requires that all proposals for a special meeting be
disclosed in a notice, this is easily accomplished by publishing such a notice.
The Board has had ample advance notice of the intention of the Soliciting
Shareholder. The "notice" of the agenda of the Special Meeting can be modified
at any time, and the final proxy materials of the Fund constitute the final and
official notice of the agenda. Even final proxy materials can be modified if so
required by the SEC.
By providing advance notice to the fund we have complied with the requirements
of the Fund's By-Laws, and the Fund is obliged to include these resolutions in
their proxy materials, or at least to disclose that these resolutions may be
brought before shareholders at the meeting. The appeal to Maryland law is
completely without merit, and in this context it simply means, "We, the Board,
do not choose to disclose these items in the notice of the special meeting."
There is no conflict with Maryland law in bringing business before the
stockholders that is explicitly authorized by the Fund's By-Laws.
9. The argument that the Board of Directors has the exclusive right to decide
what the shareholders may consider is more serious and contains the implication
of a blatant conflict of interest on the part of the Board. The section of the
By-Laws quoted in Mr. Storms's letter of November 22 is taken out of context.
On November 12, 1998, the Fund modified its By-Laws with respect to Article II,
Section 9, the nomination of directors, and Section 10, stockholder proposals.
The language in question is from the modified Section 10, located within the
context of a clause in a sentence that outlines the notice requirements for
stockholder proposals. It contains the oblique implication that the Board of
Directors, in its sole discretion, may decide what the shareholders may vote on.
The beginning of the long sentence is as follows:
"...The introduction of any stockholder proposal that the Board of
Directors decides should be voted on by the stockholders of the
Corporation, shall be made by notice in writing..." etc.
There is no other place in the Fund's By-Laws that explicitly gives the Board of
Directors the exclusive right to decide in its sole discretion what may be voted
on by the stockholders.
By contrast, the Fund's By-Laws explicitly give the shareholders the right to
remove and replace directors at any duly called meeting of the stockholders.
If the Board is claiming that it can arbitrarily refuse to acknowledge a
specific provision of the Fund's By-Laws because it threatens to remove them
from office, it constitutes a very clear abuse of power and shareholder trust.
The conflict of interest in this situation is obvious and should not be
permitted to continue.
The Board of Directors of the Fund does not have the authority to disregard or
to fail to uphold a specific provision of the Fund's By-Laws. Article III,
Section 1, of the Fund's By-Laws specifies the powers of the Board of Directors;
this section is quoted in its entirety as follows:
"Section 1. Powers. Except as otherwise provided by operation of law, by
the Articles of Incorporation, or by these Bylaws, the business and affairs
of the Corporation shall be managed under the direction of and all the
powers of the Corporation shall be exercised by or under the authority of
its Board of Directors."
Once again, this language is explicit and unambiguous. The powers of the Board
of Directors are clearly constrained by the provisions of the Fund's By-Laws,
one of which explicitly permits the removal and replacement of Directors by the
shareholders at any duly called meeting.
10. Please note that there can be no suggestion that we, the Soliciting
Shareholder, have failed in some way to provide correct notice to the Fund. All
of our advance notice letters were delivered within the respective time limits
required by the Fund's By-Laws. Moreover, each of these letters specifically
said that if any other information was required by the Fund in order to comply
fully with their advance notice requirements that the Fund should notify us
accordingly and the information would be provided. For the record, the Fund
made no communication or response to us with regard to these letters of advance
notice, except in their letter of November 22, 1999.
We intend to file an opposing proxy as soon as we have seen the preliminary or
final proxy materials of the Fund. In addition to the proposal to merge the
Fund into an open-end fund, our proxy materials will contain the two resolutions
cited in our advance notice letter of September 15, 1999. We believe that the
Fund is obliged to advise its shareholders that it has received notice that
these resolutions may be brought before the shareholders at the Special Meeting
on December 30, 1999. We believe that the Fund is required by law and by the
provisions of the By-Laws of the Fund to acknowledge these resolutions and to
permit them to be voted on by the shareholders of the Fund.
It is possible that the Fund may attempt to send definitive proxy materials to
shareholders without allowing time for review and comment by the SEC. Due to
its time-critical nature, we would ask the SEC to study the situation and to
make the parties aware of their observations as soon as practical.
Thank you for your prompt attention to this matter and please advise us if you
need any other information for your review.
Sincerely,
William A. Clark
828-255-4835 phone
cy: Brian M. Storms, Director, Global Small Cap fund, Inc.
