In a bowl, combine sugar, flour and nutmeg. Add peaches: stir to coat. Pour into a greased 11-in.x7-in.x2-in. baking pan. For topping, combine sugar, flour, baking powder and salt: cut in the butter until the mixture resembles fine crumbs. Stir in egg. Spoon over peaches. Bake at 375* for 35-40 minutes or until filling is bubbly and topping is golden. Serve hot or cold with ice cream if desired.