<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
MORGAN GRENFELL SMALL CAP FUND, INC.
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(Name of Registrant as Specified In Its Charter)
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(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)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
Common
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(2) Aggregate number of securities to which transaction applies:
9,802,054
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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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
March 4, 1999
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<PAGE>
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 Wednesday, April 28, 1999 at 9:30 a.m. at 885 Third Avenue, 32nd
Floor, New York, New York for the following purposes:
(1) To elect as directors of the Fund; Patrick W.W. Disney, Robert E.
Greeley and Joseph J. Incandela
(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, 1999; 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 March 2, 1999 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 9, 1999
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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.
- --------------------------------------------------------------------------------
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 28, 1999 (the "Meeting"), and any adjournment or adjournments thereof,
for the purposes set forth in the accompanying Notice of Annual Meeting dated
March 9, 1999. This Proxy Statement is being first mailed to shareholders on or
about March 20, 1999.
The Fund's annual report for the year ended December 31, 1998 was mailed to
shareholders on February 26, 1999. Copies of the Fund's most recent annual
report are available without charge upon request made in writing to Morgan
Grenfell, or by telephone to 1-800-550-6426.
As of March 2, 1999 there were 9,802,054 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 2,
1999 will be entitled to vote at the meeting. The Fund is not aware that any
person owned beneficially or of record more than 5% of the outstanding shares of
the Fund on March 2, 1999.
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 Messrs. Robert E. Greeley and Joseph H.
Incandela as directors of the class whose term is set to expire at the 2002
Annual Meeting of Shareholders and Mr. Patrick W.W. Disney as director of the
class whose term is set to expire at the 2000 Annual Meeting (or special meeting
in lieu thereof). Messrs. Disney, Greeley and Incandela presently serve as
directors of the Fund and have consented to being nominated herein and have
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 director.
<PAGE>
The following table presents certain information regarding the directors
(including the nominees), 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 Inc.
(the "Advisor"), 885 Third Avenue, New York, New York, 10022. The Fund's
administrator is also Morgan Grenfell Inc.
INFORMATION CONCERNING DIRECTORS
<TABLE>
<CAPTION>
FIRST SHARES OF
NAME, AGE AND POSITION BECAME A TERM FUND PERCENT OF
WITH THE FUND BUSINESS EXPERIENCE AND DIRECTORSHIPS DIRECTOR EXPIRING OWNED(1) CLASS(2)
- ------------------------ -------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Patrick W.W. Disney(3)*, Director and Chief Executive Officer, 1998 2000 0 0%
Age 42, Director Morgan Grenfell Investment Services, Ltd.;
Nominee Director, Morgan Grenfell Asset Management
Ltd.
James E. Minnick* President, Chief Executive Officer, 1997 2000 15,614 .159%
Age 50, President, Morgan Grenfell Inc.
Chairman and Director Director, Morgan Grenfell Asset Management
Ltd.
Robert E. Greeley Manager Corporate Investments, Hewlett 1987 1999 1,270 .013%
Age 67, Director Packard (1979-1991); President Page Mill
Nominee Asset Management (1986 to present)
Joseph J. Incandela, Partner/Managing Director, Thomas H. Lee 1990 1999 527 .005%
Age 52, Director Co.; Private Investor (January 1999 to
Nominee present)
Richard D. Wood, Consultant (October 1994 to present); 1987 2001 29,820 .304%
Age 59, Director Chairman and President, Optical Radiation
Corp.
(1969 to October 1994)
</TABLE>
All directors and officers
as a group
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(1) Shows all shares of Fund's common stock owned on March 2, 1999
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 March 2, 1999.
(3) Mr. Disney was appointed to fill the vacancy created by Mr. Bullock's
retirement. Upon his election at this meeting, he will replace Mr. Bullock as a
director whose term was set to expire at the Year 2000 annual meeting.
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, 1998 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.
Disney 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. Disney 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 28, 1998 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
Patrick W.W. Disney $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, 1998.
** 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
POSITIONS PRINCIPAL OCCUPATION(S) DURING FUND PERCENT OF
NAME AND ADDRESS WITH FUND PAST FIVE YEARS OWNED(1) CLASS(2)
- ------------------------------------ ---------------- ------------------------------------ ----------- -----------
<S> <C> <C> <C> <C>
Audrey M.T. Jones, Age 52 Executive Vice Executive Vice President, Morgan 4,760 .049%
885 Third Avenue, President Grenfell Inc.
New York, NY 10022
David A. Baratta, Age 41 Executive Vice Executive Vice President, Morgan 1,236 .013%
885 Third Avenue President Grenfell Inc. (September 1994 to
New York, NY 10022 present); Special Limited Partner at
BEM Management (Private Investment
Partnership).
Joan A. Binstock, Age 45 Treasurer Chief Operating Officer and 615 .006%
885 Third Avenue Executive Vice President, Morgan
New York, NY 10022 Grenfell Inc. (since June 1997):
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 31 Assistant Vice President, MG Inc. (since 0 0%
885 Third Avenue Treasurer January 1998); Vice President,
New York, NY 10022 Bankers Trust (February 1996 to
December 1997); Associate, Goldman
Sachs Asset Management (January 1993
to January 1996).
James A. Capezzuto, Age 35 Secretary Vice President, Legal Officer Morgan 102 .001%
885 Third Avenue Grenfell Inc. (June, 1996 to
New York, NY 10022 present); First Vice President,
Regional Counsel, Prudential
Securities Inc.
</TABLE>
(1) Shows all shares of Funds common stock owned on March 2, 1999
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 March 2, 1999.
3
<PAGE>
PROPOSAL 2
RATIFICATION OF SELECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Pursuant to the Investment Company Act, at a meeting on February 17, 1999
called for such purpose, the board of directors of the Fund, including all of
the "Disinterested Directors," unanimously selected KPMG Peat Marwick LLP as
independent certified public accountants for the Fund for the fiscal year ending
December 31, 1999. 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, 1998 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 5, 1999.
PROXIES AND VOTING AT THE MEETING
Shareholders who executed 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
4
<PAGE>
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.
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 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
