ROYCE MICRO-CAP TRUST, INC. — Proxy Solicitation & Information Statement 2010

Aug 6, 2010

DEF 14A 1 e94248_def14a.htm

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 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)(4) and 0-11.
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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:
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or Registration Statement No.:
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	4) Date filed:

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ROYCE MICRO-CAP TRUST, INC.

745 Fifth Avenue New York, New York 10151

_______

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS ________

TO BE HELD ON SEPTEMBER 22, 2010

To the Stockholders of:

ROYCE MICRO-CAP TRUST, INC.

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the “Meeting”) of ROYCE MICRO-CAP TRUST, INC. (the “Fund”) will be held at the offices of the Fund, 745 Fifth Avenue, New York, New York 10151 on Wednesday, September 22, 2010, at 11:30 a.m. (Eastern time), for the following purposes:

1.	To elect five Directors to the Fund’s Board:
	(i)	three Directors
to be elected by the holders of the Fund’s Common Stock and its 6.00% Cumulative
Preferred Stock (the “Preferred Stock”), voting together as a single class,
and
	(ii)	two Directors
to be elected only by the holders of the Fund’s Preferred Stock voting as a
separate class; and
2.	To transact such other business as may properly come before the Meeting or any adjournment
thereof.

The Board of Directors of the Fund has set the close of business on July 14, 2010 as the record date for determining those stockholders entitled to vote at the Meeting or any adjournment thereof, and only holders of record at the close of business on that day will be entitled to vote.

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IMPORTANT

To save the Fund the expense of additional proxy solicitation, please mark 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), even if you expect to be present at the Meeting. You may also provide your vote via telephone or the Internet by following the instructions on the proxy card or Notice of Internet Availability of Proxy Materials, please take advantage of these prompt and efficient voting options. The accompanying 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

August 6, 2010

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON SEPTEMBER 22, 2010

THE NOTICE, PROXY STATEMENT AND PROXY CARD FOR THE FUND ARE AVAILABLE AT WWW.PROXYVOTE.COM

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PROXY STATEMENT

ROYCE MICRO-CAP TRUST, INC. 745 Fifth Avenue New York, New York 10151

ANNUAL MEETING OF STOCKHOLDERS September 22, 2010

INTRODUCTION

The enclosed Proxy is solicited on behalf of the Board of Directors for use at the Annual Meeting of Stockholders (the “Meeting”) of Royce Micro-Cap Trust, Inc. (the “Fund”), to be held at the offices of the Fund, 745 Fifth Avenue, New York, New York 10151, on Wednesday, September 22, 2010, at 11:30 a.m. (Eastern time) and at any adjournments thereof. The approximate mailing date of this Proxy Statement is August 6, 2010.

All properly executed Proxies received prior to the Meeting will be voted at the Meeting in accordance with the instructions marked thereon or otherwise as provided therein. Unless instructions to the contrary are marked, Proxies will be voted “FOR” the election of the Director nominees of the Fund.

You may revoke your Proxy at any time before it is exercised by sending written instructions to the Secretary of the Fund at the Fund’s address indicated above 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 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 Royce & Associates, LLC (“R&A”), the Fund’s investment adviser, may solicit proxies personally and by telephone, if deemed desirable. Stockholders vote at the 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 Voting at the Meeting and who have executed an Inspectors’ and Judges’ Oath.

The Board of Directors of the Fund has set the close of business on July 14, 2010 as the record date (the “Record Date”) for determining those stockholders entitled to vote at the Meeting or any adjournment thereof, and only holders of record at the close of business on that day will be entitled to vote. Stockholders on the Record Date will be entitled to one vote for each outstanding share of Common Stock and 6.00% Cumulative Preferred Stock

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(the “Preferred Stock” and, together with the Common Stock, “Stock” or “shares”) held (proportional voting rights for fractional shares held), with no shares having cumulative voting rights.

As of the Record Date, there were 27,333,911 shares of Common Stock and 2,400,000 shares of Preferred Stock of the Fund outstanding. 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 or Preferred Stock as of the Record Date:

	Class/Series	Amount and	Percent of
Name
and Address of Owner	of
Stock	Nature
of Ownership	Class/Series
Cede & Co.*	Common	27,103,595
shares—	99.16%
Depository
Trust Company		Record*
P.O. Box #20
Bowling Green
Station	6.00%	2,400,000
shares—	100%
New York,
NY 10028	Preferred	Record*

• Shares held by brokerage firms, banks and other financial intermediaries on behalf of beneficial owners are registered in the name of Cede & Co.

The Board of Directors knows of no business other than that stated in Proposal 1 of the Notice of Meeting that will be presented for consideration at the Meeting. If any other matter is properly presented at the Meeting or any adjournment thereof, it is the intention of the persons named on the enclosed proxy card to vote in accordance with their best judgment.

SUMMARY OF VOTING RIGHTS ON PROXY PROPOSALS

Proposal	Common Stockholders	Preferred Stockholders
Election of Directors	Common and
Preferred Stockholders, voting together as a single class, elect three Directors	Preferred
Stockholders, voting as a separate class, elect two additional Directors

PROPOSAL 1: ELECTION OF DIRECTORS

At the Meeting, five members of the Board of Directors of the Fund will be elected. The holders of both Common Stock and Preferred Stock, voting together as a single class, are entitled to elect six directors. These six directors are divided into three classes, each class having a term of three years. Generally, each year the term of office of one class will expire. However, this year, in addition to the scheduled election of Class II Directors, one Class III Director will be elected. This results from the reclassification of Richard M.

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Galkin from a Class II Director to a Class III Director at a meeting of the Board of Directors on June 10, 2010. Mr. Galkin has been nominated by the Board of Directors for a one-year term to expire at the Fund’s 2011 Annual Meeting of Stockholders or until his successor is duly elected and qualified. In addition, Mark R. Fetting and Arthur S. Mehlman have each been nominated by the Board of Directors for a three-year term to expire at the Fund’s 2013 Annual Meeting of Stockholders or until their successors are duly elected and qualified. The classes of Directors are indicated below:

CLASS III DIRECTOR TO SERVE UNTIL 2011 ANNUAL MEETING OF STOCKHOLDERS

Richard M. Galkin

CLASS II DIRECTORS TO SERVE UNTIL 2013 ANNUAL MEETING OF STOCKHOLDERS Mark R. Fetting Arthur S. Mehlman

CLASS I DIRECTORS SERVING UNTIL 2012 ANNUAL MEETING OF STOCKHOLDERS Charles M. Royce G. Peter O’Brien

CLASS III DIRECTOR SERVING UNTIL 2011 ANNUAL MEETING OF STOCKHOLDERS Stephen L. Isaacs

The holders of Preferred Stock, voting as a separate class, are entitled to elect two directors to serve until the next Annual Meeting of Stockholders and until their successors are duly elected and qualified or until their earlier resignation or removal. The Board of Directors has nominated the following two persons to continue as Directors of the Fund, to be elected by holders of the Preferred Stock: Patricia W. Chadwick and David L. Meister. It should be noted that William L. Koke retired from the Board in accordance with its retirement policy effective, December 31, 2009. Patricia W. Chadwick was unanimously elected on December 3, 2009 by the Fund’s full Board as a Director to take his place effective January 1, 2010.

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 service as a Director. However, if any of them become unwilling or unable to serve, the persons named in the accompanying Proxy will vote for the election of such other persons, if any, as the Board of Directors may nominate.

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Certain biographical and other information concerning the existing Directors and the nominees who are “interested persons” as defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”), of the Fund, including their designated classes, is set forth below.

						Number of
			Length			Portfolios in	Other
Name, Address* and		Positions	of	Current		Fund	Public
Principal Occupations		With	Time	Term	Elected	Complex	Company
During
Past Five Years **	Age	the
Fund	Served	Expires	By	Overseen	Directorships
Charles M.
Royce***	70	Class I	1986	2012	Common	31	Director
of
President,
Co-Chief		Director			and		TICC
Investment
Officer and		and			Preferred		Capital
Member
of Board of		President†					Corp.
Managers
of Royce &
Associates,
LLC (“R&A”),
investment
adviser to the
Fund,
Royce Focus Trust,
Inc.
(“RFT”), Royce Value
Trust,
Inc. (“RVT”), The
Royce
Fund (“TRF”) and
Royce
Capital Fund
(“RCF”) (the Fund, RFT,
RVT,
TRF and RCF
collectively,
“The Royce
Funds”).
Mark R. Fetting***	55	Class II	2001	2010	Common	44	None
President
and Chief		Director			and	(Director/
Executive
Officer of Legg					Preferred	Trustee
of all
Mason,
Inc. Mr. Fetting’s						Royce Funds
prior
business experience						consisting
of
includes
having served as a						31 portfolios;
Member
of the Board of						Director/
Managers
of R&A; Senior						Trustee
of the
Executive
Vice President						Legg Mason
of
Legg Mason, Inc.;						Family of
Division
President and						Funds
Senior
Officer of Prudential						consisting
of
Financial
Group, Inc. and						13 portfolios)
related
companies; Partner,
Greenwich
Associates; and
Vice
President, T. Rowe
Price
Group, Inc.

| * | Mr. Royce’s address is c/o Royce & Associates, LLC, 745 Fifth Avenue, New York,
New York 10151. Mr. Fetting’s address is c/o Legg Mason, Inc., 100 International
Drive, Baltimore, Maryland 21202. |
| --- | --- |
| ** | Each of
the Directors or nominees is also a director/trustee of certain other investment
companies for which R&A acts as an investment adviser. |
| *** | “Interested
person,” as defined in the Investment Company Act, of the Fund. |
| † | Elected
by and serves at the pleasure of the Board of Directors. |

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Interested Persons

Messrs. Royce and Fetting are “interested persons” of the Fund within the meaning of Section 2(a)(19) of the Investment Company Act due to the positions they hold with R&A and its affiliate Legg Mason, respectively, and their stock ownership in Legg Mason. There are no family relationships between any of the Fund’s Directors and officers.

Certain biographical and other information concerning the existing Directors and nominees who are not “interested persons,” as defined in the Investment Company Act, of the Fund, including their designated classes, is set forth below.

| | | | | | | Number
of | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | Portfolios | Other |
| Name, Address* and | | Positions | Length | Current | | in Fund | Public |
| Principal Occupations | | With | of Time | Term | Elected | Complex | Company |
| During Past Five Years ** | Age | the
Fund | Served | Expires | By | Overseen | Directorships |
| Patricia W.
Chadwick | 61 | Director | 2010 | 2010 | Board of | 31 | Wisconsin |
| Consultant
and President | | | | | Directors | | Energy |
| of
Ravengate Partners LLC | | | | | | | Corp. and |
| (since
2000). | | | | | | | ING Mutual |
| | | | | | | | Funds |
| Richard M.
Galkin | 72 | Class III | 1986 | 2010 | Common | 31 | None |
| Private
investor. | | Director | | | and | | |
| Mr.
Galkin’s prior business | | | | | Preferred | | |
| experience
includes having | | | | | as a | | |
| served
as President of | | | | | Class II | | |
| Richard
M. Galkin | | | | | Director | | |
| Associates,
Inc., | | | | | | | |
| telecommunications | | | | | | | |
| consultants,
President of | | | | | | | |
| Manhattan
Cable Television | | | | | | | |
| (a
subsidiary of Time Inc.), | | | | | | | |
| President
of Haverhills Inc. | | | | | | | |
| (another
Time Inc. | | | | | | | |
| subsidiary),
President of | | | | | | | |
| Rhode
Island Cable | | | | | | | |
| Television
and Senior Vice | | | | | | | |
| President
of Satellite | | | | | | | |
| Television
Corp. (a | | | | | | | |
| subsidiary
of Comsat). | | | | | | | |

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| | | | | | | Number
of | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | Portfolios | Other |
| Name, Address and | | Positions | Length | Current | | in Fund | Public |
| Principal
Occupations | | With | of Time | Term | Elected | Complex | Company |
| During Past Five Years* | Age | the
Fund | Served | Expires | By | Overseen | Directorships |
| Stephen L.
Isaacs | 70 | Class III | 1986 | 2011 | Common | 31 | None |
| President
of The Center for | | Director | | | and | | |
| Health
and Social Policy | | | | | Preferred | | |
| (since
September 1996); | | | | | | | |
| Attorney
and President of | | | | | | | |
| Health
Policy Associates, | | | | | | | |
| Inc.,
consultants. | | | | | | | |
| Mr.
Isaacs’s prior business | | | | | | | |
| experience
includes | | | | | | | |
| having
served as Director | | | | | | | |
| of
Columbia University | | | | | | | |
| Development
Law and | | | | | | | |
| Policy
Program and | | | | | | | |
| Professor
at Columbia | | | | | | | |
| University
(until | | | | | | | |
| August
1996). | | | | | | | |
| Arthur S.
Mehlman | 68 | Class II | 2004 | 2010 | Common | 44 | Director
of |
| Director
of The League for | | Director | | | and | (Director/ | Municipal |
| People
with Disabilities, | | | | | Preferred | Trustee
of all | Mortgage |
| Inc.;
Director of University | | | | | | Royce Funds | & Equity, |
| of
Maryland Foundation | | | | | | consisting
of | LLC |
| (non-profits).
Formerly: | | | | | | 31 portfolios; | |
| Director
of University of | | | | | | Director/ | |
| Maryland
College Park | | | | | | Trustee
of | |
| Foundation
(non-profit) | | | | | | the Legg | |
| (from
1998 to 2005); | | | | | | Mason | |
| Partner,
KPMG LLP | | | | | | Family of | |
| (international
accounting | | | | | | Funds | |
| firm)
(from 1972 to 2002); | | | | | | consisting
of | |
| Director
of Maryland | | | | | | 13 portfolios) | |
| Business
Roundtable for | | | | | | | |
| Education
(from July 1984 | | | | | | | |
| to
June 2002). | | | | | | | |

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						Number of
						Portfolios	Other
Name, Address* and		Positions	Length	Current		in Fund	Public
Principal Occupations		With	of Time	Term	Elected	Complex	Company
During Past Five Years**	Age	the Fund	Served	Expires	By	Overseen	Directorships
David L. Meister	70	Director	1986	2010	Preferred	31	None
Consultant.
Chairman and					only
Chief
Executive Officer of
The
Tennis Channel (from
June
2000 to March 2005).
Mr.
Meister’s prior business
experience
includes having
served
as Chief Executive
Officer
of Seniorlife.com,
a
consultant to the
communications
industry,
President
of Financial News
Network,
Senior Vice
President
of HBO, President
of
Time-Life Films and
Head
of Broadcasting for
Major
League Baseball.
G. Peter O’Brien	64	Class I	2001	2012	Common	44	Director
of
Director,
Bridges School		Director			and	(Director/	TICC
(since
2006); Trustee					Preferred	Trustee
of all	Capital
Emeritus
of Colgate						Royce Funds	Corp.
University
(since 2005);						consisting
of
Board
Member of Hill						31 portfolios;
House,
Inc. (since 1999).						Director/
Formerly:
Trustee of						Trustee
of
Colgate
University (from						the Legg
1996
to 2005); President of						Mason
Hill
House, Inc. (from 2001						Family of
to
2005); and Managing						Funds
Director/Equity
Capital						consisting
of
Markets
Group of Merrill						13 portfolios)
Lynch
& Co. (from 1971
to
1999).

| * | Ms. Chadwick’s and Messrs. Galkin, Isaacs, Mehlman, Meister and O’Brien’s address
is c/o Royce & Associates, LLC, 745 Fifth Avenue, New York, New York 10151. |
| --- | --- |
| ** | Each of
the Directors or nominees is a director/trustee of certain other investment companies
for which R&A acts as an investment adviser. Ms. Chadwick and Messrs. Galkin,
Isaacs, Mehlman, Meister and O’Brien are each a member of the Fund’s Audit
Committee and its Nominating Committee. |

Additional information about each Director follows (supplementing the information provided in the table above) that describes some of the specific experiences, qualifications, attributes or skills that each Director possesses which the Board of Directors (the “Board”) believes has prepared them to be effective Directors.

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| • | Charles
M. Royce - In addition to his tenure as a Director/Trustee of The Royce Funds,
Mr. Royce serves as the President, Co-Chief Investment Officer and as a member of
the Board of Managers of R&A, having been President of R&A since 1972.
Mr. Royce has over 40 years of investment and business experience. |
| --- | --- |
| • | Mark
R. Fetting - In addition to his tenure as a Director/Trustee of The Royce Funds
and of the Legg Mason Family of Funds, Mr. Fetting serves as the Chairman, President
and Chief Executive Officer of Legg Mason, Inc. and has served as a member of the
Board of Managers of R&A. Mr. Fetting has over 30 years of investment and business
experience. |
| • | Richard
M . Galkin - In addition to his tenure as a Director/Trustee of The Royce
Funds, Mr. Galkin has served as the Chairman of the Board’s Audit Committee
for more than 15 years, acting as liaison between the Board and the Fund’s
independent registered public accountants and as co-Chairman of the Board’s
Nominating Committee. Mr. Galkin has over 40 years of business experience, including
extensive experience in the telecommunications industry. |
| • | Stephen
L . Isaacs - In addition to his tenure as a Director/Trustee of The Royce
Funds, Mr. Isaacs serves as Attorney and President of a private consulting firm.
Mr. Isaacs has over 40 years of business and academic experience, including extensive
experience related to public health and philanthropy. |
| • | Arthur
S . Mehlman - In addition to his tenure as a Director/Trustee of The Royce
Funds and of the Legg Mason Family of Funds, Mr. Mehlman is designated as an Audit
Committee Financial Expert. Mr. Mehlman has over 35 years of business experience,
including as Partner of an international accounting firm and a Director for various
private companies and non-profit entities. |
| • | David
L. Meister - In addition to his tenure as a Director/Trustee of The Royce Funds,
Mr. Meister has over 40 years of business experience, including extensive experience
as an executive officer in and consultant to the communications industry. |
| • | G. Peter
O’Brien - In addition to his tenure as a Director/Trustee of The Royce
Funds and of the Legg Mason Family of Funds, Mr. O’Brien serves as co-Chairman
of the Board’s Nominating Committee. Mr. O’Brien has over 35 |

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| | years of
business experience, including extensive experience in the financial sector. In
addition, Mr. O’Brien has served on the boards of public companies and non-profit
entities. |
| --- | --- |
| • | Patricia
W. Chadwick - In addition to her tenure as a Director/Trustee of The Royce Funds,
Ms. Chadwick is designated as an Audit Committee Financial Expert. Ms. Chadwick
has over 30 years of investment and business experience, including extensive experience
in the financial sector and as a consultant to business and non-profit entities.
In addition, Ms. Chadwick has served on the boards of a variety of public and private
companies and non-profit entities, including currently serving on the boards of
two public companies. |

The Board believes that each Director’s experience, qualifications, attributes and skills should be evaluated on an individual basis and in consideration of the perspective such Director brings to the entire Board, with no single Director, or particular factor, being indicative of Board effectiveness. However, the Board believes that Directors need to have the ability to critically review, evaluate, question and discuss information provided to them, and to interact effectively with Fund management, service providers and counsel, in order to exercise effective business judgment in the performance of their duties; the Board believes that their members satisfy this standard. Experience relevant to having this ability may be achieved through a Director’s educational background; business, professional training or practice, public service or academic positions; experience from service as a board member (including the Board of the Fund) or as an executive of investment funds, public companies or significant private or non-profit entities or other organizations; and/or other life experiences. The charter for the Board’s Nominating Committee contains certain other specific factors considered by the Nominating Committee in identifying and selecting Director candidates (as described below).

To assist them in evaluating matters under federal and state law, the Directors are counseled by their own independent legal counsel, who participates in Board meetings and interacts with R&A, and also may benefit from information provided by R&A’s internal counsel; both Board and R&A’s internal counsel have significant experience advising funds and fund board members. The Board and its committees have the ability to engage other experts as appropriate. The Board evaluates its performance on an annual basis.

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Board Composition and Leadership Structure

The Investment Company Act requires that at least 40% of a Fund’s Directors not be “interested persons” (as defined in the Investment Company Act) of the Fund and as such are not affiliated with the Fund’s investment adviser (“Independent Directors”). To rely on certain exemptive rules under the Investment Company Act, a majority of a Fund’s Directors must be Independent Directors, and for certain important matters, such as the approval of investment advisory agreements or transactions with affiliates, the Investment Company Act or the rules thereunder require the approval of a majority of the Independent Directors. Currently, 75% of the Fund’s Directors are Independent Directors. The Board does not have a chairman, but the President, Mr. Royce, an interested person of the Fund, acts as chairman at the Board meetings. The Independent Directors have not designated a lead Independent Director, but the Chairman of the Audit Committee, Mr. Galkin, generally acts as chairman of meetings or executive sessions of the Independent Directors and, when appropriate, represents the views of the Independent Directors to management. The Board has determined that its leadership structure is appropriate in light of the services that Royce and its affiliates provide to the Fund and potential conflicts of interest that could arise from these relationships.

Audit Committee Report

The Board of Directors has a standing Audit Committee (the “Audit Committee”), which consists of the Independent Directors who also are “independent” as defined in the listing standards of the New York Stock Exchange. The current members of the Audit Committee are Patricia W. Chadwick (since January 1, 2010), Richard M. Galkin, Stephen L. Isaacs, Arthur S. Mehlman, David L. Meister and G. Peter O’Brien. Mr. Galkin serves as Chairman of the Audit Committee and Ms. Chadwick and Mr. Mehlman have been designated as Audit Committee Financial Experts, as defined under Securities and Exchange Commission (“SEC”) regulations.

The principal purposes of the Audit Committee are to (i) assist Board oversight of the (a) integrity of the Fund’s financial statements; (b) independent accountants’ qualifications and independence; and (c) performance of the Fund’s independent accountants and (ii) prepare, or oversee the preparation of any audit committee report required by rules of the SEC to be included in the Fund’s proxy statement for its annual meeting of stockholders. The Board of Directors has adopted an Audit Committee Charter for the Fund which is attached hereto as Exhibit A.

The Audit Committee also has (i) received written disclosures and the letter required by Independence Standards Board Standard No. 1 from Tait, Weller & Baker (“TW&B”), independent auditors for the Fund, and (ii) discussed certain matters required to be discussed under the requirements of

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The Public Company Accounting Oversight Board with TW&B. The Audit Committee has considered whether the provision of non-audit services by the Fund’s independent auditors is compatible with maintaining their independence.

At its meeting held on February 9, 2010, the Audit Committee reviewed and discussed the audit of the Fund’s financial statements as of December 31, 2009 and for the fiscal year then ended with Fund management and TW&B. Had any material concerns arisen during the course of the audit and the preparation of the audited financial statements mailed to stockholders and included in the Fund’s 2009 Annual Report to Stockholders, the Audit Committee would have been notified by Fund management or TW&B. The Audit Committee received no such notifications. At the same meeting, the Audit Committee recommended to the Board of Directors that the Fund’s audited financial statements be included in the Fund’s 2009 Annual Report to Stockholders.

Nominating Committee

The Board of Directors has a Nominating Committee composed of the six Independent Directors, namely Ms. Chadwick (since January 1, 2010) and Messrs. Galkin, Isaacs, Mehlman, Meister and O’Brien. Messrs. Galkin and O’Brien serve as co-Chairmen of the Nominating Committee. The Board of Directors has adopted a Nominating Committee Charter which is attached hereto as Exhibit B. During the year ended December 31, 2009, the Nominating Committee met one time. In addition, members of the Nominating Committee discussed proposed nominees during two executive sessions of the Fund’s Independent Directors during the year. Finally, individual members of the Nominating Committee met separately on a number of occasions to interview Board nominees during 2009. On September 24, 2009, the Nominating Committee unanimously voted to recommend Patricia W. Chadwick for election to the Fund’s full Board of Directors. Ms. Chadwick was unanimously elected on December 3, 2009 as a Director by the Fund’s full Board of Directors, effective January 1, 2010.

The Nominating Committee is responsible for identifying and recommending to the Board of Directors individuals believed to be qualified to become Board members in the event that a position is vacated or created. The Nominating Committee will consider Director candidates recommended by stockholders. In considering potential nominees, the Nominating Committee will take into consideration (i) the contribution which the person can make to the Board, with consideration given to the person’s business and professional experience, education and such other factors as the Committee may consider relevant, including but not limited to whether a potential nominee’s personal and professional qualities and attributes would provide a beneficial diversity of skills, experience and/or perspective to the Board; (ii) the character and integrity of the person; (iii) whether or not the person is an “interested person” as defined in the Investment Company Act and whether the person is otherwise qualified under applicable laws and regulations to

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serve as a Director or Independent Director of the Fund; (iv) whether or not the person has any relationships that might impair his or her independence, such as any business, financial or family relationships with Fund management, the investment adviser of the Fund, Fund service providers or their affiliates; (v) whether or not the person is financially literate pursuant to the New York Stock Exchange’s audit committee membership standards; (vi) whether or not the person serves on boards of, or is otherwise affiliated with, competing financial service organizations or their related investment company complexes; (vii) whether or not the person is willing to serve as, and willing and able to commit the time necessary for the performance of the duties of, a Director of the Fund; and (viii) whether or not the selection and nomination of the person would be in the best interest of the Fund in light of the requirements of the Fund’s retirement policies. While the Nominating Committee does not have a formal policy regarding diversity, as noted above, it may consider the diversity of skills, experience and/or perspective a potential nominee will bring to the Board as part of its evaluation of the contribution such potential nominee will make to the Board. Such factors will be considered in light of the other factors described above and in the context of the Board’s existing membership at the time such potential candidate is considered.

To have a candidate considered by the Nominating Committee, a stockholder must submit the recommendation in writing and must include biographical information and set forth the qualifications of the proposed nominee. The stockholder recommendation and information described above must be sent to the Fund’s Secretary, John E. Denneen, c/o Royce Micro-Cap Trust, Inc., 745 Fifth Avenue, New York, New York 10151.

Although the Board of Directors does not have a standing compensation committee, the Independent Directors review their compensation annually.

Board’s Oversight Role in Management

The Board’s role in management of the Fund is oversight. As is the case with virtually all investment companies (as distinguished from operating companies), service providers to the Fund, primarily R&A and its affiliates, have responsibility for the day-to-day management of the Fund, which includes responsibility for risk management (including management of investment performance and investment risk, valuation risk, issuer and counterparty credit risk, compliance risk and operational risk). As part of its oversight, the Board, acting at its scheduled meetings, or the Chairman of the Audit Committee, acting between Board meetings, regularly interacts with and receives reports from senior personnel of service providers, including the Fund’s and R&A’s Chief Compliance Officer and portfolio management personnel. The Board’s Audit Committee (which consists of the six Independent Directors) meets during its scheduled meetings, and between meetings the Chairman of the Audit Committee maintains contact with the Fund’s independent registered public accounting firm and the Fund’s Vice President and Treasurer. The Board also receives periodic presentations from

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senior personnel of R&A or its affiliates regarding risk management generally, as well as periodic presentations regarding specific operational, compliance or investment areas such as business continuity, anti-money laundering, personal trading, valuation, investment research and securities lending. The Board also receives reports from counsel to R&A and the Board’s own independent legal counsel regarding regulatory, compliance and governance matters. The Board’s oversight role does not make the Board a guarantor of the Fund’s investments or activities.

Committee and Board of Directors Meetings

During the year ended December 31, 2009, the Board of Directors held six meetings, the Audit Committee held two meetings and the Nominating Committee held one meeting. Each Director then in office attended 75% or more of the aggregate of the total number of meetings of the Board of Directors, the total number of meetings of the Audit Committee and the total number of meetings of the Nominating Committee held during that year.

Compensation of Directors and Affiliated Persons

Each Independent Director receives a base fee of $6,000 per year plus $500 for each meeting of the Board of Directors attended. No Director received remuneration for services as a Director for the year ended December 31, 2009 in addition to or in lieu of this standard arrangement.

Set forth below is the aggregate compensation paid by the Fund and the total compensation paid by The Royce Funds to each Independent Director of the Fund for the year ended December 31, 2009.

| | | Pension
or — Retirement | | Total | Total — Compensation |
| --- | --- | --- | --- | --- | --- |
| | | Benefits | Estimated | Compensation | From
the |
| | | Accrued | Annual | From
The | Fund
and |
| | Aggregate | as Part | Benefits | Royce
Funds | Fund
Complex |
| | Compensation | of Fund | upon | Paid
to | Paid
to |
| Name | From
the Fund | Expenses | Retirement | Directors | Directors 1 |
| Patricia W.
Chadwick, | | | | | |
| Director 2 | None | None | None | $13,308 | $13,308 |
| Richard M.
Galkin, | | | | | |
| Director | $7,800 | None | None | 137,800 | 137,800 |
| Stephen L.
Isaacs, | | | | | |
| Director | 7,800 | None | None | 137,800 | 137,800 |
| Arthur S.
Mehlman | | | | | |
| Director | 7,800 | None | None | 137,800 | 261,550 |
| David L. Meister, | | | | | |
| Director | 7,800 | None | None | 137,800 | 137,800 |
| G. Peter O’Brien, | | | | | |
| Director | 7,800 | None | None | 137,800 | 303,147 |

| 1 | Represents
aggregate compensation paid to each Director during the calendar year ended December
31, 2009 from the Fund Complex. The Fund Complex includes the 31 portfolios of The
Royce Funds and the 13 portfolios of the Legg Mason Family of Funds. |
| --- | --- |
| 2 | Ms. Chadwick
was elected as a Director effective January 1, 2010. |

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Officers of the Fund

Officers of the Fund are elected each year by the Fund’s Board of Directors. The following sets forth information concerning the Fund’s officers:

Name, Address* and Principal — Occupations During Past Five Years	Age	Office **	Officer of — Fund Since
Charles M. Royce	70	President	1986
President,
Co-Chief Investment
Officer
and Member of Board of
Managers
of R&A.
John D. Diederich	59	Vice	1997
Chief
Operating Officer, Managing		President
Director
and Member of the Board of		and
Managers
of R&A; Chief Financial		Treasurer
Officer
of R&A; Director of
Administration
of The Royce Funds;
and
President of Royce Fund
Services,
Inc. (“RFS”), having been
employed
by R&A since April 1993.
Jack E. Fockler,
Jr.	51	Vice	1995
Managing
Director and Vice		President
President
of R&A; Vice President of
RFS,
having been employed by R&A
since
October 1989.
W. Whitney
George	52	Vice	1995
Managing
Director, Vice President		President
and
Co-Chief Investment Officer of
R&A, having been employed by
R&A since October 1991.
Daniel A.
O’Byrne	48	Vice	1994
Principal
and Vice President of R&A,		President
having
been employed by R&A since
October
1986.
John E. Denneen	43	Secretary
and	1996 to
2001
General
Counsel, Principal, Chief		Chief Legal	and
Legal
and Compliance Officer and		Officer	since 2002
Secretary
of R&A; Secretary and
Chief
Legal Officer of The Royce
Funds.
Lisa Curcio	50	Chief	2004
Chief
Compliance Officer of The		Compliance
Royce
Funds (since October 2004);		Officer
and
Compliance Officer of R&A
(since
June 2004).

| * | The address
of each officer is c/o Royce & Associates, LLC, 745 Fifth Avenue, New York,
New York 10151. |
| --- | --- |
| ** | Elected
by and serves at the pleasure of the Board of Directors. |

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Stockholder Communications

Stockholders may send written communications to the Fund’s Board of Directors or to an individual Director by mailing such correspondence to the Secretary of the Fund (addressed to 745 Fifth Avenue, New York, New York 10151). Such communications must be signed by the stockholder and identify the class and number of shares held by the stockholder. Properly submitted stockholder communications will, as appropriate, be forwarded to the entire Board or to the individual Director. Any stockholder proposal submitted pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), must continue to meet all the requirements of Rule 14a-8. See “Additional Information – Stockholder Proposals” herein.

Director Attendance at Stockholder Meetings

The Fund has no formal policy regarding Director attendance at stockholder meetings. None of the Fund’s Independent Directors attended the 2009 Annual Meeting of Stockholders.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires the officers and Directors of the Fund and persons who own more than ten percent of a registered class of the Fund’s equity securities, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC and the New York Stock Exchange. Officers, Directors and greater than ten percent stockholders are required by SEC regulations to furnish the Fund with copies of all Forms 3, 4 and 5 they file.

Based solely on the Fund’s review of the copies of such forms and amendments thereto, furnished to it during or with respect to its most recent fiscal year, and written representations from certain reporting persons that they were not required to file Form 5 with respect to the most recent fiscal year, the Fund believes that all of its officers, Directors, greater than ten percent beneficial owners and other persons subject to Section 16 of the Exchange Act due to the requirements of Section 30(h) of the Investment Company Act (i.e., any investment adviser or affiliated person of the Fund’s investment adviser), have complied with all filing requirements applicable to them with respect to transactions in the Fund’s shares during the Fund’s most recent fiscal year.

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Stock Ownership

Information relating to each Director’s ownership as of July 14, 2010 in the Fund and in all registered Royce Funds overseen or to be overseen by each Director is set forth below:

		Aggregate Dollar Range of
		Securities in all Royce Funds
	Aggregate Dollar Range of	overseen by each Director
Name	Equity in the Fund	in the Royce Family of Funds
Interested Director:
Charles M. Royce	Over $100,000	Over $100,000
Mark
R. Fetting	$10,001-$50,000	Over $100,000
Non-Interested
Directors:
Patricia
W. Chadwick	None	Over $100,000
Richard M. Galkin	$10,001-$50,000	Over $100,000
Stephen
L. Isaacs	$1-$10,000	Over $100,000
Arthur
S. Mehlman	$10,001-$50,000	Over $100,000
David
L. Meister	None	Over $100,000
G.
Peter O’Brien	$10,001-$50,000	Over $100,000

Information regarding ownership of the Fund’s shares by the Fund’s Directors and officers as of the Record Date is set forth below:

| Name and Address* | Amount of Beneficial — Ownership
of | Percent of Shares |
| --- | --- | --- |
| of Owner | Shares of Common Stock | Outstanding |
| Interested Directors: | | |
| Charles M. Royce | 1,292,850 | 4.73% |
| Mark
R. Fetting | 3,020 | 0.01% |
| Non-Interested
Directors: | | |
| Patricia
W. Chadwick | None | None |
| Richard
M. Galkin | 1,457 | 0.01% |
| Stephen
L. Isaacs | 333 | 0.00% |
| Arthur
S. Mehlman | 1,819 | 0.01% |
| David
L. Meister | None | None |
| G.
Peter O’Brien | 1,940 | 0.01% |
| Interested
Officers: | | |
| John
D. Diederich | 1,627 | 0.01% |
| Jack
E. Fockler, Jr. | None | None |
| W.
Whitney George | 1,687 | 0.01% |
| Daniel
A. O’Byrne | 5,724 | 0.02% |
| John
E. Denneen | 2,983 | 0.01% |
| Lisa
Curcio | None | None |

• The address of each Director and officer is c/o Royce & Associates, LLC, 745 Fifth Avenue, New York, New York 10151.

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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 (14 persons) beneficially owned 1,313,440 shares of the Fund’s Common Stock, constituting approximately 4.81% of the outstanding shares, and no shares of its Preferred Stock.

As of July 14, 2010, no Independent Director or any of his immediate family members directly or indirectly owned any securities issued by Legg Mason or any of its affiliates (other than registered investment companies).

Vote Required

A quorum consists of stockholders representing a majority of the outstanding shares of the Fund’s Common Stock and/or Preferred Stock, as the case may be, 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 that all stockholders vote FOR all Director nominees.

FEES PAID TO INDEPENDENT AUDITORS

Audit Fees

The aggregate fees paid to TW&B in connection with the annual audit of the Fund’s financial statements and for services normally provided by TW&B in connection with the statutory and regulatory filings of the Fund for the fiscal years ended December 31, 2008 and December 31, 2009 were $29,500 and $29,000, respectively, including out of pocket expenses.

Audit Related Fees

The aggregate fees paid to TW&B in connection with assurance and related services related to the annual audit of the Fund and for review of the Fund’s financial statements, other than the Audit Fees described above, for each of the fiscal years ended December 31, 2008 and December 31, 2009 was $1,500. The audit-related services rendered by TW&B to the Fund consisted of the preparation of reports to a rating agency for the Preferred Stock.

Tax Fees

The aggregate fees paid for tax-related services, including preparation of tax returns, tax compliance and tax advice, rendered by TW&B to the Fund for the fiscal years ended December 31, 2008 and December 31, 2009 were $6,500 and $6,750, respectively.

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All Other Fees

There were no other fees billed for non-audit services rendered by TW&B to the Fund for the fiscal years ended December 31, 2008 and December 31, 2009. The aggregate non-audit fees billed by TW&B for services rendered to R&A and any entity controlling, controlled by, or under common control with R&A that provides ongoing services to the Fund for the fiscal years ended December 31, 2008 and December 31, 2009 were $8,000 and $8,250, respectively. The Audit Committee has determined that the provision of non-audit services is compatible with maintaining the independence of TW&B.

The Audit Committee has determined that the preparation of the rating agency reports is compatible with maintaining TW&B’s independence. TW&B did not provide any other professional services to the Fund or R&A for the year ended December 31, 2009. No representatives of TW&B will be present at the Meeting.

Audit Committee’s Pre-Approval Policies and Procedures

The Audit Committee of the Fund has adopted policies and procedures with regard to the pre-approval of audit and non-audit services. On an annual basis, at the Fund’s December Audit Committee meeting, the independent auditors of the Fund will submit a schedule of proposed audit, audit-related, tax and other non-audit services to be rendered to the Fund and/or R&A and its affiliates for the following year that require pre-approval by the Audit Committee. Such schedule will include the maximum fees that can be paid for such services without further Audit Committee approval. Any subsequent revision to pre-approved services or fees will be considered at the next regularly scheduled Audit Committee meeting. Services not presented for pre-approval at the December Audit Committee meeting will be submitted to the Chief Financial Officer of the Fund for a determination that the proposed services fit within the independence guidelines and then considered for pre-approval at the next regularly scheduled Audit Committee meeting. A proposal to commence an engagement involving audit, audit-related or tax services prior to the next regularly scheduled Audit Committee meeting shall be made in writing by the Chief Financial Officer to all Audit Committee members and include a summary of the engagement, estimated maximum cost, the category of services and the rationale for engaging the Fund’s independent auditor. Such proposed engagement can be pre-approved by any Audit Committee member who is an Independent Director. Pre-approval by the Chairman of the Audit Committee is required for a proposed engagement involving non-audit services other than audit-related or tax.

ADDITIONAL INFORMATION

Adjournment of Meeting; Other Matters

In the event that sufficient votes in favor of Proposal 1 in the Notice of Annual Meeting of Stockholders are not received by the time scheduled for

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the Meeting, the persons named as proxies may propose one or more adjournments of the Meeting to permit further solicitation of proxies for such Proposal. 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 in favor of such adjournment those proxies which they are entitled to vote in favor of the Proposal. They will vote against any such adjournment those proxies required to be voted against the Proposal.

While the Meeting has been called to transact any business that may properly come before it, the Directors know of no business other than the matter stated in the Notice of Annual Meeting of Stockholders. However, if any additional matter properly comes before the Meeting and on all matters incidental to the conduct of the Meeting, it is the intention of the persons named in the enclosed Proxy to vote the Proxy in accordance with their judgment on such matters.

The Fund expects that broker-dealer firms holding shares of the Fund in “street name” for the benefit of their customers and clients will request the instructions of such customers and clients on how to vote their shares on the Proposal before the Meeting. The Fund understands that, under the rules of the New York Stock Exchange, such broker-dealers may, without instructions from such customers and clients, grant authority to the proxies designated by the Fund to vote on the election of Directors if no instructions have been received prior to the date specified in the broker-dealer firm’s request for voting instructions. Certain broker-dealer firms may exercise discretion over shares held in their name for which no instructions are received by voting such shares in the same proportion as they have voted shares for which they have received instructions.

The shares as to which the Proxies so designated are granted authority by broker-dealer firms to vote on the matters to be considered at the Meeting, the shares as to which broker-dealer firms have declined to vote (“broker non-votes”) and the shares as to which Proxies are returned by record stockholders but which are marked “abstain” on any matter will be included in the Fund’s tabulation of the total number of votes present for purposes of determining whether the necessary quorum of stockholders exists. However, abstentions and broker non-votes will not be counted as votes cast. Therefore, abstentions and broker non-votes will not have an effect on the election of Directors.

Address of Investment Adviser

R&A’s principal office is located at 745 Fifth Avenue, New York, New York 10151.

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Annual Report Delivery

The Fund’s Annual Report to Stockholders for the year ended December 31, 2009 was previously mailed to its stockholders and the Semiannual Report to Stockholders for the six months ended June 30, 2010 will be mailed to stockholders in late August 2010. Copies of the Annual Report are available, and copies of the Semiannual Report will be available in late August, upon request, without charge, by writing to the Fund at 745 Fifth Avenue, New York, New York 10151 or calling toll free at 1-800-221-4268. All publicly released material information is always disclosed by the Fund on its website at www.roycefunds.com.

Stockholder Proposals

Proposals of stockholders intended to be presented at the Fund’s 2011 Annual Meeting of Stockholders must be received by the Fund by April 8, 2011 for inclusion in the Fund’s Proxy Statement and form of Proxy for that meeting. The Fund’s By-laws generally require advance notice be given to the Fund in the event a stockholder desires to nominate a person for election to the Board of Directors or to transact any other business from the floor at an annual meeting of stockholders. Notice of any such nomination or other business intended to be presented at the Fund’s 2011 Annual Meeting of Stockholders must be in writing and received at the Fund’s principal executive office between April 8, 2011 and May 8, 2011. Written proposals should be sent to the Secretary of the Fund, 745 Fifth Avenue, New York, New York 10151.

Proxy Delivery

If you and another stockholder share the same address, the Fund may only send one proxy statement unless you or the other stockholder(s) request otherwise. Call or write the Fund if you wish to receive a separate copy of the proxy statement and the Fund will promptly mail a copy to you. You may also call or write to the Fund if you wish to receive a separate proxy in the future, or if you receive multiple copies now, and wish to receive a single copy in the future. For such requests, please call 1-800-221-4268, or write the Fund at 745 Fifth Avenue, New York, New York 10151.

PLEASE FILL IN, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE.

By order of the Board of Directors,
John E. Denneen
Secretary

Dated: August 6, 2010

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E XHIBIT A

C HARTER OF THE A UDIT C OMMITTEE OF THE B OARD OF D IRECTORS /T RUSTEES F OR THE ROYCE F UNDS L ISTED I N A PPENDIX A H ERETO

I. Composition of the Audit Committee

The Audit Committee shall be composed of at least three Directors/Trustees, each of whom:

| (a) | shall not
be an “interested person” of the Fund, as defined in Section 2(a)(19)
of the Investment Company Act of 1940, as amended (the “1940 Act”); |
| --- | --- |
| (b) | shall not
accept directly or indirectly any consulting, advisory, or other compensatory fee
from the Fund (other than fees for serving on the Board of Directors/Trustees or
any committee thereof); and |
| (c) | shall be
financially literate at the time of his or her appointment to the Audit Committee,
as such qualification is interpreted by the Board of Directors/Trustees in its business
judgment, or shall become financially literate within a reasonable period of time
after his or her appointment to the Audit Committee. |

In the event Fund shares are or become listed on a national securities exchange or are or become quoted on a national market quotation system, the additional qualification requirements set forth below also shall apply:

| (d) | each Director/Trustee
who is a member of the Audit Committee shall satisfy the applicable independence
requirements for any such national securities exchange or national market quotation
system; and |
| --- | --- |
| (e) | at least
one Director/Trustee who is a member of the Audit Committee shall have accounting
or related financial management expertise as the Board of Directors/Trustees interprets
such qualification in its business judgment. |

The Board of Directors/Trustees shall determine annually: (i) whether at least one of the members of the Audit Committee is an “audit committee financial expert,” as defined in rules of the Securities and

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Exchange Commission and (ii) whether simultaneous service on more than three public company audit committees by a member of the Audit Committee would not impair the ability of such member to serve on the Audit Committee.

II.	Purposes of the Audit Committee
	The Audit
Committee shall be responsible for:
	(1)	assisting Board oversight of the
		(a)	integrity
of the Fund’s financial statements;
		(b)	independent
accountants’ qualifications and
			independence;
and
		(c)	performance
of the Fund’s independent accountants; and
	(2)	preparation, or overseeing the preparation of, any audit committee report required
by rules of the Securities and Exchange Commission to be included in the Fund’s
proxy statement for its annual meeting of stockholders.
III.	Responsibilities and Duties of the Audit Committee

The Fund’s independent accountants shall report directly to the Audit Committee.

As may be necessary or appropriate to carry out its purposes, or to comply with applicable law or the requirements of any securities exchange or market quotation system on which Fund shares are or may become listed or quoted, the Audit Committee shall have the following responsibilities and duties:

| (a) | the appointment,
compensation, retention and oversight of the work of the Fund’s independent
accountants, including the resolution of disagreements between management and the
independent accountants regarding financial reporting; |
| --- | --- |
| (b) | to (i)
select an accounting firm to (1) serve as the Fund’s independent accountants,
(2) audit the Fund’s financial statements on an annual basis, and (3) provide
an opinion on an annual basis with respect to the Fund’s financial statements,
and (ii) recommend that the members of the Board of Directors/Trustees who are not
“interested persons” of the Fund, as defined in Section 2(a)(19) of the
1940 Act, ratify such selection; |

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| (c) | to pre-approve
(i) all audit and permissible non-audit services to be provided to the Fund by the
Fund’s independent accountants and (ii) all permissible non-audit services
to be provided by the Fund’s independent accountants to the Fund’s Investment
Adviser or any entity controlling, controlled by, or under common control with the
Investment Adviser (“Adviser Affiliate”) that provides ongoing services
to the Fund, if the engagement by the Adviser Affiliate relates directly to the
operations and financial reporting of the Fund; |
| --- | --- |
| (d) | if determined
to be advisable, to develop policies and procedures for pre-approval of the engagement
of the Fund’s independent accountants to provide any of the audit or non-audit
services described in Section III(c) above; |
| (e) | to consider
whether each non-audit service provided by the Fund’s independent accountants
to the Fund and to the Fund’s Investment Adviser or any Adviser Affiliate that
provides ongoing services to the Fund is compatible with maintaining the independence
of such independent accountants; |
| (f) | to ensure
that the Fund’s independent accountants submit on a periodic basis to the Audit
Committee a formal written statement delineating all relationships between such
independent accountants and the Fund, consistent with Independence Standards Board
Standard No. 1, and to actively engage in a dialogue with, and receive and consider
specific representations from, the Fund’s independent accountants with respect
to any disclosed relationships or services that may affect the objectivity and independence
of such independent accountants; |
| (g) | to review
the arrangements for annual and special audits and the scope of such audits with
the Fund’s independent accountants; |
| (h) | to meet
to review and discuss the Fund’s audited financial statements and, to the extent
required by applicable law or regulations, the Fund’s semi-annual financial
statements with Fund management and the Fund’s independent accountants, including
the Fund’s disclosure of management’s discussion of Fund performance; |

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| (i) | to review
with the Fund’s independent accountants any audit problems or difficulties
the accountants may have encountered during or relating to the conduct of the audit,
including any matters required to be discussed pursuant to rules of The Public Company
Accounting Oversight Board and other relevant regulatory and professional organizations,
and management’s response; |
| --- | --- |
| (j) | to establish
and administer policies and procedures relating to the hiring by the Fund, its Investment
Adviser, or any administrator that is an Adviser Affiliate of employees or former
employees of the Fund’s independent accountants; |
| (k) | to consider
information and comments from the Fund’s independent accountants with respect
to the Fund’s accounting and financial reporting policies, procedures and internal
control over financial reporting (including the Fund’s critical accounting
policies and practices) and management’s responses to any such comments; |
| (l) | to request,
receive and/or review from the Fund’s independent accountants such other materials
as may be deemed necessary or advisable in the discretion of the Committee in the
exercise of its duties under this Charter; such materials may (but are not required
to) include, without limitation, any other material written communications relating
to the Fund’s financial statements, or internal or disclosure controls, between
the independent accountants and the Fund, the Investment Adviser, the Fund’s
sub-adviser(s), if any, or other Fund service providers, such as any management
letter or schedule of unadjusted differences; |
| (m) | at least
annually, to obtain and review a report by the Fund’s independent accountants
describing: (i) such independent accountants’ internal quality-control procedures;
(ii) any material issues raised by the most recent internal quality-control review,
or peer review, of such independent accountants, or by any inquiry or investigation
by governmental or professional authorities, within the preceding five years, respecting
one or more independent audits carried out by such firm, and any steps taken to
deal with any such issues; and (iii) all relationships between the |

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| | Fund’s
independent accountants and the Fund, the Investment Adviser, Adviser Affiliates
and members of management of such entities (to assess the independence of the Fund’s independent accountants); |
| --- | --- |
| (n) | to establish
procedures for: (i) the receipt, retention, and treatment of complaints received
by the Fund regarding accounting, internal accounting controls, or auditing matters;
and (ii) the confidential, anonymous submission of concerns by employees of the
Fund’s Investment Adviser, manager, administrator, principal underwriter, or
any other provider of accounting related services for the Fund regarding questionable
accounting or auditing matters; |
| (o) | to address
reports received from attorneys in accordance with procedures adopted by the Fund’s Investment Adviser relating to the possible violation of federal or state
law or fiduciary duty; |
| (p) | to discuss
with Fund management and the Fund’s independent accountants policies with respect
to risk assessment and risk management; and |
| (q) | to perform
such other functions and to have such other powers consistent with this Charter,
the Fund’s Articles of Incorporation or Declaration of Trust, as amended and
supplemented, the Fund’s By-laws, as amended, and applicable law, as the Audit
Committee or the Board deems necessary or appropriate. |

The Audit Committee may delegate any portion of its authority, including the authority to grant preapprovals of audit related services and permitted non-audit services, to a subcommittee of one or more members of the Audit Committee pursuant to preapproval policies and procedures established by the Audit Committee; provided, however, that the Audit Committee may not delegate preapproval of the audit required by the Securities Exchange Act of 1934. Any decision of such subcommittee of the Audit Committee to grant preapprovals shall be presented to the full Audit Committee at its next regularly scheduled meeting.

The function of the Audit Committee is oversight; it is the responsibility of Fund management to maintain appropriate systems for accounting and internal control over financial reporting, and the responsibility of the Fund’s independent accountants to plan and carry out a proper audit.

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Specifically, Fund management is responsible for: (1) the preparation, presentation and integrity of the Fund’s financial statements; (2) the maintenance of appropriate accounting and financial reporting principles and policies; and (3) the maintenance of internal control over financial reporting and other procedures designed to assure compliance with accounting standards and related laws and regulations. The Fund’s independent accountants are responsible for planning and carrying out an audit consistent with applicable legal and professional standards and the terms of their engagement letter. Nothing in this Charter shall be construed to reduce the responsibilities or liabilities of the Fund’s service providers, including the Fund’s independent accountants.

Although the Audit Committee is expected to review appropriately the matters that come before it, such review of a Fund’s financial statements by the Audit Committee is not an audit, nor does the Committee’s review substitute for the responsibilities of the Fund’s management for preparing, or the Fund’s independent accountants for auditing, the financial statements. Members of the Audit Committee are not employees of the Fund and, in serving on the Audit Committee, are not, and do not hold themselves out to be, acting as accountants or auditors. As such, it is not the duty or responsibility of the Audit Committee or its members to conduct “field work” or other types of auditing or accounting reviews or procedures.

In discharging their duties, the members of the Audit Committee are entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by: (1) one or more officers of the Fund whom the Board reasonably believes to be reliable and competent in the matters presented; (2) legal counsel, public accountants, or other persons as to matters the Board reasonably believes are within the person’s professional or expert competence; or (3) a committee of the Board.

IV. Meetings

The Audit Committee shall meet on a regular basis but no less frequently than annually. The Audit Committee periodically shall meet separately with the Fund’s independent accountants, Fund management, and representatives of Fund management responsible for the financial and accounting operations of the Fund. The Audit Committee may hold special meetings at such times as the Audit Committee believes necessary or appropriate. Members of the Audit Committee may participate in a meeting of the Audit Committee by means of conference call or similar communications equipment by means of which all persons participating in such meeting can hear each other.

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V. Assistance from Fund Management; Authority to Engage Advisers; Funding

The appropriate officers of the Fund shall provide or arrange to provide such information, data and services as the Audit Committee may request. The Audit Committee shall have the power and authority to take all action it believes necessary or appropriate to discharge its responsibilities, including the power and authority to retain independent counsel and other advisers. The Fund shall provide for appropriate funding, as determined by the Audit Committee as a committee of the Board, for payment of: (i) compensation to the Fund’s independent accountants or any other accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services for the Fund, (ii) compensation to any advisers employed by the Audit Committee under this Section V, and (iii) ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its responsibilities.

VI. Reporting

The Chairman of the Audit Committee shall report to the Board on the results of its deliberations and make such recommendations as deemed necessary or appropriate.

VII. Amendments

This Charter may be amended or modified from time to time by vote of the Board.

Dated: April 11, 2000, as revised through July 14, 2010

Appendix A

Royce Capital Fund Royce Focus Trust, Inc. Royce Micro-Cap Trust, Inc. Royce Value Trust, Inc. The Royce Fund

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E XHIBIT B

C HARTER OF THE N OMINATING C OMMITTEE OF THE B OARD OF D IRECTORS /T RUSTEES FOR T HE R OYCE F UNDS L ISTED IN A PPENDIX A H ERETO

O RGANIZATION

The Nominating Committee (the “Committee”) of the Board of Directors/Trustees for the registered investment companies (each, a “Fund”) listed on Exhibit A attached hereto shall be composed solely of Directors/Trustees who are not “interested persons” of the Fund as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”), and who are “independent” as defined in the applicable listing standards of the national securities exchange or national market quotation system (each, an “Exchange”) on which a Fund is listed or quoted (the “Independent Directors”). The Board of Directors/Trustees of the Fund (the “Board”) shall appoint the members of the Committee (which may or may not be all of the Independent Directors) and shall designate the Chairman of the Committee. The Committee shall have authority to retain its own counsel and other advisers the Committee deems appropriate and shall have the sole authority to approve the compensation and other terms of their retention.

R ESPONSIBILITIES

The Committee shall identify individuals qualified to serve as Independent Directors of the Fund and shall recommend its nominees for consideration by the full Board.

I DENTIFICATION AND E VALUATION OF P OTENTIAL N OMINEES

In identifying and evaluating a person as a potential nominee to serve as an Independent Director of the Fund, the Committee should consider among other factors it may deem relevant:

| • | the contribution
which the person can make to the Board, with consideration being given to the person’s business and professional experience, education and such other factors as
the Committee may consider relevant, including but not limited to whether a potential
nominee’s personal and professional qualities and attributes would provide
a beneficial diversity of skills, experience and/or perspective to the Board; |
| --- | --- |
| • | the character
and integrity of the person; |

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| • | whether
or not the person is an “interested person” as defined in the 1940 Act
and whether the person is otherwise qualified under applicable laws and regulations
to serve as a Director or Independent Director of the Fund; |
| --- | --- |
| • | whether
or not the person has any relationships that might impair his independence, such
as any business, financial or family relationships with Fund management, the investment
adviser of the Fund, Fund service providers or their affiliates; |
| • | whether
or not the person is financially literate pursuant to the applicable Exchange’s
audit committee membership standards; |
| • | whether
or not the person serves on boards of, or is otherwise affiliated with, competing
financial service organizations or their related investment company complexes; |
| • | whether
or not the person is willing to serve as, and willing and able to commit the time
necessary for the performance of the duties of a Director of the Fund; |
| • | whether
or not the selection and nomination of the person would be in the best interest
of the Fund in light of the requirements of the Fund’s retirement policies. |

While the Committee is solely responsible for the selection and nomination of the Fund’s Independent Directors, the Committee shall review and consider nominations for the office of Director made by management and by Fund stockholders as it deems appropriate. Stockholders who wish to recommend a nominee should send nominations to the Secretary of the Fund which include biographical information and set forth the qualifications of the proposed nominee.

Q UORUM

A majority of the members of the Committee shall constitute a quorum for the transaction of business, and the act of a majority of the members of the Committee present at any meeting at which there is quorum shall be the act of the Committee.

N OMINATION OF D IRECTORS

After a determination by the Committee that a person should be selected and nominated as an Independent Director of the Fund, the Committee shall

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resent its recommendation to the full Board for its consideration and, if necessary, to the Independent Directors.

M EETINGS

The Committee may meet either on its own or in conjunction with meetings of the Board. Meetings of the Committee may be held in person, by video conference or by conference telephone. The Committee may take action by unanimous written consent in lieu of a meeting.

Adopted: February 10, 2004 Revised through April 8, 2010

A PPENDIX A Royce Capital Fund Royce Focus Trust, Inc. Royce Micro-Cap Trust, Inc. Royce Value Trust, Inc. The Royce Fund

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PROXY TABULATOR
P.O. BOX 9112	To vote
by Internet
FARMINGDALE, NY 11735
	1) Read the
Proxy Statement and have the proxy card below at hand.
	2) Go to website www.proxyvote.com
	3) Follow
the instructions provided on the website.
	To vote
by Telephone
	1) Read the
Proxy Statement and have the proxy card below at hand.
	2) Call 1-800-690-6903
	3) Follow
the instructions.
	To vote
by Mail
	1) Read the
Proxy Statement.
	2) Check the
appropriate boxes on the proxy card below.
	3) Sign and
date the proxy card.
	4) Return
the proxy card in the envelope provided.
	If you vote by Telephone or Internet ,
	you do not need to mail your proxy .

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M25979-P99729	KEEP THIS
PORTION FOR YOUR RECORDS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.	DETACH AND
RETURN THIS PORTION ONLY

	Vote On Directors		For — All	Withhold — All	For All — Except
	1.	Election of
Directors
		Nominees:
	01)	Richard
M. Galkin	0	0	0
	02)	Mark R.
Fetting
	03)	Arthur
S. Mehlman
2.	To transact such other business as may properly come before the meeting
The shares of stock represented by this Proxy will be voted in accordance with
the specifications made above.
If no specifications are made, such shares will be voted FOR the election of all
the nominees for Director.
Please Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.
Note: Please be sure to sign and date this proxy

Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

page

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Proxy Statement is available at www.proxyvote.com.

M25980-P99729

| COMMON PROXY |
| --- |
| ROYCE MICRO-CAP TRUST, INC. |
| COMMON
STOCK |
| 745 FIFTH
AVENUE |
| NEW YORK,
NEW YORK 10151 |
| 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 stock of the Fund held of record by the undersigned
on July 14, 2010 at the Annual Meeting of Stockholders of Royce Micro-Cap Trust, Inc.
to be held on September 22, 2010, and at any adjournment thereof. |
| PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. |
| Please sign exactly as your name(s) appear(s) on other side. 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. |

page

PROXY TABULATOR
P.O. BOX 9112	To vote
by Internet
FARMINGDALE, NY 11735
	1) Read the
Proxy Statement and have the proxy card below at hand.
	2) Go to website www.proxyvote.com
	3) Follow
the instructions provided on the website.
	To vote
by Telephone
	1) Read the
Proxy Statement and have the proxy card below at hand.
	2) Call 1-800-690-6903
	3) Follow
the instructions.
	To vote
by Mail
	1) Read the
Proxy Statement.
	2) Check the
appropriate boxes on the proxy card below.
	3) Sign and
date the proxy card.
	4) Return
the proxy card in the envelope provided.
	If you vote by Telephone or Internet ,
	you do not need to mail your proxy .

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M25981-P99729	KEEP THIS
PORTION FOR YOUR RECORDS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.	DETACH AND
RETURN THIS PORTION ONLY

	Vote On Directors		For — All	Withhold — All	For All — Except
	1.	Election of
Directors
		Nominees:
		01) Richard
M. Galkin 04) Patricia W. Chadwick	0	0	0
		02) Mark R.
Fetting 05) David L. Meister
		03) Arthur
S. Mehlman
2.	To transact such other business as may properly come before the meeting
The shares of stock represented by this Proxy will be voted in accordance with
the specifications made above.
If no specifications are made, such shares will be voted FOR the election of all
the nominees for Director.
Please Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.
Note: Please be sure to sign and date this proxy

Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

page

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Proxy Statement is available at www.proxyvote.com.

M25982-P99729

| PREFERRED PROXY |
| --- |
| ROYCE MICRO-CAP TRUST, INC. |
| 6.00% CUMULATIVE PREFERRED STOCK |
| 745 FIFTH AVENUE NEW YORK, NEW YORK 10151 |
| 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
stock of the Fund held of record by the undersigned on July 14, 2010
at the Annual Meeting of Stockholders of Royce Micro-Cap Trust, Inc. to
be held on September 22, 2010, and at any adjournment thereof. |
| PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. |
| Please sign exactly as your name(s) appear(s) on other side. 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. |