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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] 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 Regi
strant)
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:
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:
<PAGE>
PRELIMINARY PROXY MATERIAL
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
_________, 1997
<PAGE>
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
_____________________________
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.
<PAGE>
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:
Amount and Nature Percentage
Name and Address of Owner of Ownership of Class
Charles M. Royce ____ shares-Beneficial __%
1414 Avenue of the Americas (sole voting and investment
New York, NY 10019 power)
Depository Trust Company ____ shares-Record __%
Cede & Co.
P.O. Box 20 Bowling Green Station
New York, NY 10274
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.
Positions With
Name Age The Fund
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
A total of five meetings of the Board of Directors were held
<PAGE>
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:
Name of Director Amount Percentage of Class
Charles M. Royce ............ ____ shares __%
Thomas R. Ebright ............ None N/A
Richard M. Galkin ............ None N/A
Stephen L. Isaacs ............ None N/A
David L. Meister ............ None N/A
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 ________ shares of the Fund's Common Stock,
constituting __% of the class.
During the year ended December 31, 1996, W. Whitney George,
a Vice President of Quest and of the Fund, and failed to file on
a timely basis one report required by Section 16(a) of the
Securities Exchange Act of 1934.
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.
<PAGE>
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.
Aggregate Total Compensation
Compensation From From the Fund and
Director the Fund Other Royce Funds
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
<PAGE>
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.
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's current investment policies allow it to lend up
to 25% of its portfolio securities and other assets to 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.
<PAGE>
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.
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 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
<PAGE>
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 ________, 1998, 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
<PAGE>
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?
<PAGE>
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:
<PAGE>
Royce Micro-Cap Trust, Inc.
1414 Avenue of the Americas
New York, NY 10019
(212) 355-7311
March 3, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Royce Micro-Cap Trust, Inc.
File No. 811-8030
CIK No. 000912147
Ladies and Gentlemen:
Enclosed herewith for filing pursuant to Rule 14a-6 under
the Securities Exchange Act of 1934, as amended, are the Notice
of Meeting and Preliminary Proxy Statement (including exhibit)
and form of proxy, to be sent to stockholders of Royce Micro-Cap
Trust, Inc. (the "Fund") in connection with the Fund's Annual
Meeting scheduled to be held on April 23, 1997.
The Proxy Statement covers the election of directors and the
appointment of auditors. It also seeks stockholder approval of a
change in the Fund's stated investment policy concerning
restricted securities.
The Fund expects to mail its definitive proxy materials to
stockholders promptly after the March 13, 1997 record date for
the Meeting.
If you have any questions or comments with respect to the
enclosed materials, please contact John E. Denneen at (212) 508-
4578.
Sincerely,
S/JOHN E. DENNEEN
John E. Denneen
Secretary