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Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
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))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ROYCE MICRO-CAP TRUST, 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)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................
(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:
.......................................................
(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:
.......................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
ROYCE MICRO-CAP TRUST, INC.
To the Stockholders of
ROYCE MICRO-CAP TRUST, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of ROYCE
MICRO-CAP TRUST, INC. (the 'Fund') will be held at the offices of the Fund, 1414
Avenue of the Americas, New York, New York, on April 29, 1997 at 1:30 p.m.
(E.T.) for the following purposes:
1. To elect a board of five directors.
2. To approve a change in the Fund's fundamental investment policies
to permit the Fund to invest in the restricted shares of registered money
market funds.
3. To ratify the selection of Ernst & Young LLP as independent public
accountants of the Fund for the year ending December 31, 1997.
4. To transact such other business as may come before the meeting or
any adjournment thereof.
The Board of Directors has fixed the close of business on March 13, 1997 as
the record date for the determination of those stockholders entitled to vote at
the meeting, and only holders of record at the close of business on that day
will be entitled to vote.
The Fund's Annual Report to Stockholders for the year ended December 31,
1996 was previously mailed to stockholders, and copies of it are available upon
request, without charge, by writing to the Fund at 1414 Avenue of the Americas,
New York, New York 10019 or calling toll free at 1-800-221-4268.
IMPORTANT
To save the Fund the expense of additional proxy solicitation, if you do
not now expect to be present at the meeting, please insert your instructions on
the enclosed Proxy, date and sign it and return it in the enclosed envelope
(which requires no postage if mailed in the United States). The Proxy is
solicited on behalf of the Board of Directors, is revocable and will not affect
your right to vote in person in the event that you attend the meeting.
By order of the Board of Directors,
JOHN E. DENNEEN
Secretary
March 21, 1997
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ANNUAL MEETING OF STOCKHOLDERS
OF
ROYCE MICRO-CAP TRUST, INC.
1414 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
TUESDAY, APRIL 29, 1997
----------------------------------
PROXY STATEMENT
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Accompanying this Proxy Statement is a Notice of Annual Meeting of
Stockholders and a form of Proxy for the meeting solicited on behalf of the
directors of Royce Micro-Cap Trust, Inc. (the 'Fund').
The Proxy may be revoked at any time before it is exercised by written
instructions to the Fund or by filing a new Proxy with a later date, and any
stockholder attending the meeting may vote in person, whether or not he or she
has previously filed a Proxy. The shares represented by all properly executed
Proxies received in time for the meeting will be voted. Where a stockholder has
specified a choice on the Proxy with respect to Proposals 2 and 3 in the Notice
of Annual Meeting, his or her shares will be voted accordingly. If no directions
are given, the stockholder's shares will be voted in favor of these Proposal.
Unless authority to vote for all nominees or for an individual nominee pursuant
to Proposal 1 is specifically withheld, the Proxy will be voted for the election
of all of the persons nominated by the Board of Directors to become directors.
The cost of soliciting proxies will be borne by the Fund, which will reimburse
brokerage firms, custodians, nominees and fiduciaries for their expenses in
forwarding proxy material to the beneficial owners of the Fund's shares. Some
officers and employees of the Fund and/or Quest Advisory Corp. ('Quest'), the
Fund's investment adviser, may solicit Proxies personally and by telephone, if
deemed desirable. The Fund may engage the services of a professional solicitor,
such as Shareholder Communications Corporation, for help in securing shareholder
representation at the meeting.
On March 13, 1997, the record date for the meeting, there were 12,153,511
shares of Common Stock of the Fund outstanding. The stockholders entitled to
vote are those of record on that date. Each share is entitled to one vote on
each item of business at the meeting. Stockholders vote at the Annual Meeting by
casting ballots (in person or by proxy) which are tabulated by one or two
persons, appointed by the Board of Directors before the meeting, who serve as
Inspectors and Judges of Election at the meeting and who have executed an
Inspectors and Judges Oath. Neither abstentions nor broker non-votes are counted
in the tabulation of such votes.
The following persons were known to the Fund to be beneficial owners or
owners of record of 5% or more of its outstanding shares of Common Stock as of
the record date:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENTAGE
OF OWNER OF OWNERSHIP OF CLASS
- ------------------------------------------------- ------------------------------------ ----------
<S> <C> <C>
Charles M. Royce ................................ 682,646 shares -- Beneficial (sole 5.6%
1414 Avenue of the Americas voting and investment power)
New York, NY 10019
Depository Trust Company ........................ 11,592,776 shares -- Record 95.3%
Cede & Co.
P.O. Box 20 Bowling Green Station
New York, NY 10274
</TABLE>
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1. ELECTION OF DIRECTORS (PROPOSAL 1)
At the meeting, it is proposed to elect five directors, each director to
hold office until the next Annual Meeting of Stockholders and until his
successor shall have been elected and qualifies. The Fund's Board of Directors
has nominated the following five persons, each of whom has served as a director
since September 1993, to become directors of the Fund. Certain information
concerning them is set forth below. Each of these persons has agreed to serve if
elected, and the Fund's management has no reason to believe that any of them
will be unavailable for election as a director. However, if any of them become
unwilling or unable to serve, the persons named in the accompanying form of
Proxy will vote for the election of such other persons, if any, as the Board of
Directors may nominate.
<TABLE>
<CAPTION>
POSITIONS WITH
NAME AGE THE FUND
- ----------------------------------------------------------- --- -----------------------------
<S> <C> <C>
Charles M. Royce........................................... 57 Director, President
and Treasurer
Thomas R. Ebright.......................................... 52 Director
Richard M. Galkin.......................................... 58 Director
Stephen L. Isaacs.......................................... 57 Director
David L. Meister........................................... 57 Director
</TABLE>
A total of five meetings of the Board of Directors were held during the
year ended December 31, 1996, and each director attended 75% or more of the
meetings.
The Board of Directors has an Audit Committee, comprised of Richard M.
Galkin, Stephen L. Isaacs and David L. Meister, which is responsible for
recommending the selection and nomination of the independent auditors of the
Fund and for conducting post-audit reviews of the Fund's financial condition
with the auditors. The Audit Committee held two meetings during the year ended
December 31, 1996, and each member of the Audit Committee attended both of the
meetings. The Board of Directors does not have any other standing committees.
There are no family relationships between any of the Fund's directors and
officers.
As of the record date, the Fund's directors beneficially owned the
following shares of its Common Stock:
<TABLE>
<CAPTION>
PERCENTAGE
NAME OF DIRECTOR AMOUNT OF CLASS
- --------------------------------------------------------------------- -------------- ----------
<S> <C> <C>
Charles M. Royce..................................................... 682,646 shares 5.6%
Thomas R. Ebright.................................................... None N/A
Richard M. Galkin.................................................... None N/A
Stephen L. Isaacs.................................................... None N/A
David L. Meister..................................................... None N/A
</TABLE>
Mr. Royce has sole voting power and sole investment power as to the shares
beneficially owned by him. As of the record date, all directors and officers of
the Fund as a group (9 persons) beneficially owned 706,893 shares of the Fund's
Common Stock, constituting 5.8% of the class.
During the year ended December 31, 1996, W. Whitney George, a Vice
President of Quest and of the Fund, failed to file on a timely basis one report
required by Section 16(a) of the Securities Exchange Act of 1934.
2
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BUSINESS EXPERIENCE
Set forth below is certain information as to the principal business
experience of the Fund's directors during the past five years.
Charles M. Royce is the President, Secretary, Treasurer and sole director
and sole voting shareholder of Quest, the investment adviser to the Fund. He has
served as Quest's President and Treasurer for more than 24 years. Mr. Royce also
manages three private investment partnerships through Quest Management Company
('QMC'), a registered investment adviser, of which he is the managing general
partner.
Thomas R. Ebright has been a Vice President of Quest for more than 15
years. He has also been President, Treasurer, a director and principal
shareholder of Royce, Ebright & Associates, Inc., the investment adviser to a
series of The Royce Fund, since June 1994. He was a general partner of QMC and
its predecessor until June 1994. Mr. Ebright is also a director of Atlantic Pro
Sports, Inc. and of the Strasburg Rail Road Co. since March 1993 and was the
President and principal owner of Baltimore Professional Hockey, Inc. until May
1993.
Richard M. Galkin is a private investor and the President of Richard M.
Galkin Associates, Inc., telecommunications consultants.
Stephen L. Isaacs is an attorney, President of The Center for Health and
Social Policy since September 1996 and President of Stephen L. Isaacs
Associates, consultants. He was a Director of the Columbia University
Development Law and Policy Program and a Professor at Columbia University until
August 1996.
David L. Meister is a consultant in the communications industry. He was an
executive officer of Digital Planet Inc. from April 1991 to December 1992.
Mr. Royce is also President and Treasurer of Royce Value Trust, Inc.
('RVT'), Royce Global Trust, Inc. ('RGT') and The Royce Fund ('TRF'), registered
management investment companies. Messrs. Royce, Ebright, Galkin, Isaacs and
Meister are also directors/trustees of RVT and TRF, and Messrs. Royce, Galkin,
Isaacs and Meister are also directors of RGT. Mr. Ebright is also a Vice
President of TRF and a Vice President and Treasurer, and Mr. Royce is also the
sole shareholder and director and Secretary, of Quest Distributors, Inc., the
distributor of TRF's shares.
Messrs. Royce and Ebright are 'interested persons' of the Fund within the
meaning of Section 2(a)(19) under the Investment Company Act of 1940.
In addition to Mr. Royce, three Vice Presidents of the Fund are also
officers of Quest.
REMUNERATION OF DIRECTORS AND OFFICERS
Set forth below is the compensation paid by the Fund and the three other
registered investment companies comprising The Royce Funds to each director for
the year ended December 31, 1996.
<TABLE>
<CAPTION>
AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM FROM THE FUND AND
DIRECTOR THE FUND OTHER ROYCE FUNDS
- ---------------------------------------------------------- ----------------- ------------------
<S> <C> <C>
Charles M. Royce.......................................... $ 0 $ 0
Thomas R. Ebright......................................... 0 0
Richard M. Galkin......................................... 7,500 64,000
Stephen L. Isaacs......................................... 7,500 64,000
David L. Meister.......................................... 7,500 64,000
</TABLE>
Each of the Fund's non-affiliated directors receives a base fee of $5,000
per year plus $500 for each meeting of the Board of Directors attended. No
director of the Fund received remuneration for services as a director for the
year ended December 31, 1996 in addition to or in lieu of this standard
arrangement.
3
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VOTE REQUIRED
A quorum consists of stockholders representing a majority of the
outstanding shares of the Fund's Common Stock entitled to vote who are present
in person or by proxy, and a plurality of all of the votes cast at a meeting at
which a quorum is present is sufficient to elect a director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES.
2. APPROVAL OF
CHANGE IN FUNDAMENTAL POLICIES TO PERMIT THE FUND TO INVEST IN
RESTRICTED SHARES OF REGISTERED MONEY MARKET FUNDS (PROPOSAL 2)
The Fund currently has the following fundamental investment policy, which
may not be changed without the affirmative vote of the holders of a majority of
the Fund's outstanding voting securities:
'The Fund may not invest in restricted securities.'
It is proposed to change this policy to read in its entirety as
follows:
'The Fund may not invest in restricted securities unless such
securities are redeemable shares issued by money market funds
registered under the Investment Company Act of 1940.'
REASONS FOR PROPOSED CHANGE
The Fund generally selects its portfolio securities with a view to
achieving its investment objective of long-term capital appreciation. Once
acquired by the Fund, such portfolio securities may occasionally be used to
generate income for the Fund by lending them to qualified institutional
investors. The Fund's current investment policies allow it to lend up to 25% of
its portfolio securities and other assets to such qualified institutional
investors for the purpose of realizing additional income. Such loans must be
fully collateralized by securities issued or guaranteed by the U.S. Government
or its agencies or instrumentalities or by cash. When the collateral is cash,
the Fund is responsible for investing such cash collateral.
The Fund has recently been offered the opportunity to invest such cash
collateral in a money market fund sponsored by its custodian bank. Although the
money market fund is registered under the Investment Company Act of 1940, its
shares are offered for sale only in private placement transactions to certain
institutional investors such as the Fund. Its shares are not registered under
the Securities Act of 1933 and, therefore, constitute restricted securities.
ALLOWING THE FUND TO INVEST IN THE SHARES OF SUCH A MONEY MARKET FUND WILL
ENABLE THE FUND TO REALIZE MORE INCOME FROM ITS SECURITIES LENDING TRANSACTIONS
THAN IT WOULD IF THE COLLATERAL CONSISTED OF U.S. GOVERNMENT SECURITIES.
If this policy change is approved by stockholders, the Fund could, in
certain circumstances, have up to 20% of its assets at risk in a money market
fund in which the cash collateral has been invested.
VOTE REQUIRED
The vote required for approval of Proposal 2 is a majority of the Fund's
outstanding voting securities, which is the lesser of (i) 67% of the shares of
Common Stock of the Fund present or represented at the
4
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meeting (assuming that more than 50% of the shares are present or represented)
or (ii) more than 50% of the outstanding shares of Common Stock of the Fund.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.
3. RATIFICATION OF
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS (PROPOSAL 3)
At the meeting, the stockholders will be asked to ratify the selection by
the Board of Directors, including a majority of the directors who are not
'interested persons' (as such term is defined in the Investment Company Act of
1940), of Ernst & Young LLP, independent auditors, to serve as the Fund's
auditors for the year ending December 31, 1997.
Ernst & Young LLP has informed the Fund that neither Ernst & Young LLP nor
any of its partners has any direct or indirect financial interest in the Fund
except as auditors and independent public accountants. Ernst & Young LLP served
as the Fund's independent public accountants for the year ended December 31,
1996. Representatives of Ernst & Young LLP are not expected to be present at the
meeting, but have been given an opportunity to make a statement if they so
desire, and will be available should any matter arise requiring their
participation.
VOTE REQUIRED
Ratification of the selection of Ernst & Young LLP as the independent
public accountants of the Fund requires the affirmative vote of a majority of
the outstanding shares of Common Stock of the Fund present or represented at the
meeting (assuming that more than 50% of the shares are present or represented).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3.
4. OTHER BUSINESS
Management knows of no business to be brought before the meeting other than
Proposals 1, 2 and 3 in the Notice of the Annual Meeting. If other matters do
come before the meeting, it is intended that the shares represented by Proxies
will be voted in accordance with the judgment of the person or persons
exercising at the meeting the authority conferred by the Proxies.
ADDITIONAL INFORMATION
Quest Advisory Corp., the Fund's investment adviser, is located at 1414
Avenue of the Americas, New York, New York 10019.
Mitchell Hutchins Asset Management Inc., located at 1285 Avenue of the
Americas, New York, New York 10019, serves as the Fund's Administrator.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Fund's 1998
Annual Meeting of Stockholders must be received by the Fund by November 21,
1997, for inclusion in the Fund's Proxy Statement and form of Proxy relating to
that meeting.
PLEASE FILL IN, DATE AND SIGN THE PROXY AND RETURN IT IN THE ACCOMPANYING
POSTAGE-PAID ENVELOPE
5
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APPENDIX 1
PROXY CARD
PROXY ROYCE MICRO-CAP TRUST, INC. PROXY
1414 Avenue of the Americas
New York, NY 10019
This Proxy Is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Charles M. Royce and John E. Denneen, or
either of them, acting in absence of the other, as Proxies, each with the
power to appoint his substitute, and hereby authorizes them to represent
and to vote, as designated on the reverse, all shares of the Fund held of
record by the undersigned on March 13, 1997, at the Annual Meeting of
Stockholders to be held on April 29, 1997, or at any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed by
the undersigned stockholder. If no direction is made, this Proxy will be
voted FOR Proposals 1, 2 and 3.
PLEASE VOTE, DATE, AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name(s) appear(s) on reverse. When shares are
held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give 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.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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PLEASE MARK VOTES
X AS IN THIS EXAMPLE
ROYCE MICRO-CAP TRUST, INC.
Please be sure to sign and date this Proxy. Date
Stockholder sign here Co-owner sign here
1. ELECTION OF DIRECTORS
(Page 2) With- For All
For hold Except
Charles M. Royce, Thomas R. Ebright,
Richard M. Galkin, Stephen L. Isaacs,
and David L. Meister
If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the nominee's
name. Your shares will be voted for the remaining nominees.
For Against Abstain
2. PROPOSAL TO APPROVE A CHANGE IN THE
FUND'S FUNDAMENTAL INVESTMENT POLICIES.
(Page 4)
3. PROPOSAL TO RATIFY THE SELECTION OF
ERNST & YOUNG LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS.
(Page 5)
4. THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
Mark box at right if an address change or comment has been noted
on the reverse side of this card.
RECORD DATE SHARES:
