<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
The Mexico Fund, Inc.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
The Mexico Fund, Inc.
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] 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:*
(4) Proposed maximum aggregate value of transaction:
- --------
*Set forth the amount on which the filing is calculated and state how it was
determinaed
[_] 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:
Notes:
<PAGE>
THE MEXICO FUND, INC.
77 ARISTOTELES STREET, 3RD FLOOR
POLANCO
11560 MEXICO, D.F., MEXICO
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 27, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Meet-
ing") of The Mexico Fund, Inc. (the "Fund") will be held at the Omni Berkshire
Place Hotel at 21 East 52nd Street at Madison Avenue, New York, New York,
10021 on February 27, 1996 at 2:00 P.M. for the following purposes:
(1) To elect two Directors;
(2) To ratify the selection of Arthur Andersen LLP as independent public
accountants of the Fund for its fiscal year ending October 31, 1996;
(3) To transact such other business as may properly come before the Meet-
ing or any adjournment thereof.
The Board of Directors has fixed the close of business on December 28, 1995
as the record date for the determination of shareholders entitled to notice
of, and to vote at, the Meeting or any adjournment thereof, and only holders
of record of shares at the close of business on that date are entitled to no-
tice of, and to vote at, the Meeting and any adjournment thereof.
You are cordially invited to attend the Meeting. All shareholders are re-
quested to complete, date and sign the enclosed form of proxy and return it
promptly in the envelope provided for that purpose. The enclosed proxy is be-
ing solicited on behalf of the Board of Directors of the Fund.
By Order of the Board of Directors,
Samuel Garcia-Cuellar
Secretary
New York, New York
Dated: December 29, 1995
PLEASE RESPOND -- YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO AT-
TEND THE MEETING, PLEASE FILL IN, SIGN AND MAIL THE PROXY IN THE MANNER
PROVIDED. IT IS IMPORTANT THAT YOU RETURN YOUR PROXY AS SOON AS POSSIBLE
TO ASSURE THAT YOUR PROXY WILL BE VOTED AND TO AVOID ANY ADDITIONAL EX-
PENSE TO THE FUND OF FURTHER SOLICITATION.
<PAGE>
PROXY STATEMENT
THE MEXICO FUND, INC.
77 ARISTOTELES STREET, 3RD FLOOR
POLANCO
11560 MEXICO, D.F., MEXICO
----------------
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 27, 1996
----------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of The Mexico Fund, Inc. (the
"Fund"), a Maryland corporation, to be voted at the Annual Meeting of Share-
holders of the Fund (the "Meeting") to be held at the Omni Berkshire Place Ho-
tel, 21 East 52nd Street at Madison Avenue, New York, New York, 10021, on Feb-
ruary 27, 1996 at 2:00 P.M. and at any adjournment thereof. The approximate
mailing date of this Proxy Statement is December 29, 1995. The report for the
fiscal year ended October 31, 1995, including financial statements, accompa-
nies the mailing of this Proxy Statement. A representative of Arthur Andersen
LLP, who is expected to be present at the Meeting, will have an opportunity to
make a statement if he or she desires to do so as well as be available to an-
swer questions of shareholders.
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 thereon with
respect to Proposals 1, 2 and 3, a proxy will be voted FOR the proposals
stated in the accompanying Notice of Meeting. All proxies not voted, including
broker non-votes, will not be counted toward establishing a quorum. Sharehold-
ers should note that while votes to ABSTAIN will count toward establishing a
quorum, passage of any proposal being considered at the Meeting will occur
only if a sufficient number of votes are cast FOR the proposal. Accordingly,
votes to ABSTAIN and votes AGAINST will have the same effect in determining
whether the proposal is approved. Any shareholder giving a proxy has the right
to attend the Meeting to vote his shares in person (thereby revoking any prior
proxy) and also the right to revoke the proxy at any time by written notice
received by the Fund prior to its exercise.
In the event that a quorum is present at the Meeting but sufficient votes to
approve any of the proposals are not received, the proxy holders may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies. Any adjournment will require the affirmative vote of a majority of
those shares represented at the Meeting in person or by proxy. If a quorum is
present, the proxy holders will vote proxies which vote FOR any proposals, in
favor of such an adjournment and will vote those proxies required to be voted
AGAINST a proposal to be voted on at such adjournment, against adjournment. A
shareholder vote may be taken on one or more of the proposals in this Proxy
Statement prior to any adjournment if sufficient votes have been received for
approval.
The Board of Directors has fixed the close of business on December 28, 1995
as the record date for the determination of shareholders entitled to notice
of, and to vote at, the Meeting and at any adjournment
<PAGE>
thereof. Shareholders on the record date will be entitled to one vote for each
share held. As of October 31, 1995, the Fund had outstanding 49,715,907 shares
of common stock, par value $1.00 per share. To the knowledge of management of
the Fund, as of December 20, 1995, no party beneficially owned more than 5% of
the outstanding shares of common stock of the Fund.
PROPOSAL 1: ELECTION OF DIRECTORS
On July 22, 1987, the Board of Directors unanimously approved an amendment
to the Fund's By-Laws to provide that the Board of Directors will be divided
into three classes of Directors, as nearly equal in number as possible, each
of which, after a transition period, will serve for three years with one class
being elected each year. Each year the term of office of one class will ex-
pire. Messrs. Juan Gallardo T. and Agustin Santamarina V., whose terms expire
this year, have been nominated as Class III Directors for a three year term
expiring in 1999. The nominees have indicated an intention to serve if elected
and have consented to be named in this Proxy Statement.
The Board of Directors of the Fund knows of no reason why any of these nomi-
nees would be unable to serve, but in the event of any such unavailability,
the proxies received will be voted for such substituted nominees as the Board
of Directors may recommend. The Fund's Directors and executive officers bene-
ficially own less than 0.1% of the Fund's common stock. None of the Directors,
with the exception of Messrs. Philip Caldwell and Jose Luis Gomez Pimienta, is
an "interested person" of the Fund as defined in the Investment Company Act of
1940, as amended (the "1940 Act").
2
<PAGE>
The nominees for election as Class III Directors are as follows:
CLASS III (TERM EXPIRING IN 1999):
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY
PRINCIPAL OCCUPATION OWNED AND % OF
FOR PAST FIVE YEARS DIRECTOR TOTAL OUTSTANDING
NAME AND ADDRESS AND OTHER DIRECTORSHIPS AGE SINCE ON 10/31/95(1)
---------------- ----------------------- --- -------- ------------------
<S> <C> <C> <C> <C>
Juan Gallardo T.+ Chairman of the Board, Grupo 48 1985 --
Monte Caucaso 915 Embotelladoras Unidas S.A. de C.V.
Lomas de Chapultepec (bottling); Coordinator, Mexican
11000 Mexico, D.F., Business Council for the North
Mexico American Free Trade Agreement
(NAFTA); Vice Chairman, Grupo
Industrial Minera Mexico, S.A. de
C.V. (mining); Supervisory Director,
The First Mexico Income Fund N.V.;
Director, Alcatel-Indetel, S.A.
(telecommunications equipment);
Director, Clevite de Mexico, S.A. de
C.V. (auto parts); Chairman, Grupo
Azucarero Mexico (industrial group);
Director, Grupo Financiero Inverlat-
Comermex (financial group);
Director, Bursamex Casa de Bolsa
(brokerage house); Director, Bank of
Montreal (bank); Director, Mexicana
de Cobre (mining); Director,
Mexicana de Cananea (mining);
Director, Fondo Opcion, S.A. de C.V.
(venture capital); Director,
Nacional de Drogas (pharmaceutical
distribution company); Director,
Industrias Oxy, S.A.
(petrochemicals); Director,
Industria Mexicana de Equipo Marino
(marine and sports equipment);
Director, Industrial Torres Marmex
(manufacturing); Director,
Bombardier Concarrill
(manufacturing); Director, Medidores
Baily (manufacturing); previously,
Chairman of the Board, Babcock
Mexico; Director, Bufete Industrial,
S.A. de C.V. (construction);
Director, Home Mart de Mexico
(retail trade).
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY
PRINCIPAL OCCUPATION OWNED AND % OF
FOR PAST FIVE YEARS DIRECTOR TOTAL OUTSTANDING
NAME AND ADDRESS AND OTHER DIRECTORSHIPS AGE SINCE ON 10/31/95(1)
---------------- ----------------------- --- -------- ------------------
<S> <C> <C> <C> <C>
Agustin Santamarina V.+ Of Counsel, Santamarina y Steta (law 69 1981 --
Campos Eliseos 345, 2nd firm); Chairman of the Board,
Floor Alcatel-Indetel, S.A. de C.V.
Colonia Chapultepec (telecommunications equipment);
Polanco 11560 Mexico, Chairman of the Board, Apasco, S.A.
D.F., Mexico de C.V. (cement and other
construction materials); Chairman of
the Board, John Deere, S.A. de C.V.
(agricultural equipment); Chairman
of the Board, Cummins, S.A. de C.V.
(diesel engines); Vice Chairman of
the Board, Kimberly-Clark de Mexico,
S.A. de C.V. (consumer products);
Director, Deere & Company
(agricultural, industrial and lawn
and garden equipment); Director,
Grupo Carso, S.A. de C.V.
(diversified holding company);
Director, Grupo Industrial Minera
Mexico, S.A. de C.V. (mining);
Director, Grupo Modelo, S.A. de C.V.
(breweries and beer distribution);
Director, Grupo Condumex, S.A. de
C.V. (electronic cables, auto parts
and cables); Director, Corporacion
Industrial Sanluis, S.A. de C.V.
(mining and auto parts); Director,
Industrias Nacobre, S.A. de C.V.
(copper products); previously,
Director, Grupo Financiero
Invermexico, S.A. de C.V. (banking
and stock brokerage).
</TABLE>
4
<PAGE>
CONTINUING DIRECTORS
The balance of the current Directors consists of two Class I and three Class
II Directors, none of whom is a nominee for election at the Meeting and all of
whom will continue in office after the Meeting for the terms shown below. The
Directors are as follows:
CLASS I (TERM EXPIRING IN 1997):
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY
PRINCIPAL OCCUPATION OWNED AND % OF
FOR PAST FIVE YEARS DIRECTOR TOTAL OUTSTANDING
NAME AND ADDRESS AND OTHER DIRECTORSHIPS AGE SINCE ON 10/31/95(1)
---------------- ------------------------------------ --- -------- ------------------
<S> <C> <C> <C> <C>
Philip Caldwell* Director and Senior Managing 75 1991 --
World Financial Center Director, Lehman Brothers Inc.
200 Vesey Street, 19th (investment banking); Director,
Floor Digital Equipment Corp. (computers);
New York, NY 19285-1900 Director, Zurich Reinsurance Centre
Holdings, Inc. (reinsurance);
Director, Zurich Holding Company of
America, Inc. (insurance); Director,
American Guaranty & Liability
Insurance Co. (insurance); Director,
Russell Reynolds Associates, Inc.
(executive recruitment); Director,
Castech Aluminum Group, Inc.
(aluminum manufacturing); Director,
WCD Investors Inc. (manufacturers of
scientific test instruments);
previously, Chairman, Chief
Executive Officer, succeeding Henry
Ford II, and Director, Ford Motor
Company (automobiles); Director,
Federated Department Stores, Inc.
(department stores); Director,
Kellogg Company (food products);
Director, Shearson Lehman Brothers
Holdings, Inc. (investment banking);
Director, Specialty Coatings
International, Inc. (packaging
materials).
Ernesto Fernandez Chairman of the Board and of the 73 1981 --
Hurtado+ Campos Eliseos Executive Committee, Tubos de Acero
400, 7th Floor 11560 de Mexico, S.A. (steel pipes).
Mexico, D.F., Mexico
</TABLE>
5
<PAGE>
CLASS II (TERM EXPIRING IN 1998):
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY
PRINCIPAL OCCUPATION OWNED AND % OF
FOR PAST FIVE YEARS DIRECTOR TOTAL OUTSTANDING
NAME AND ADDRESS AND OTHER DIRECTORSHIPS AGE SINCE ON 10/31/95(1)
---------------- ------------------------------------ --- -------- ------------------
<S> <C> <C> <C> <C>
Claudio X. Gonzalez+ Chairman of the Board and Chief 61 1981 --
Lagrange 103 Executive Officer, Kimberly-Clark de
11560 Mexico, D.F., Mexico, S.A. de C.V. (consumer
Mexico products); Director, Grupo
Financiero Banamex Accival, S.A. de
C.V. (banking); Director, Grupo
Carso (holding company); Director,
Grupo Industrial Alfa, S.A.
(industrial development companies);
Director, Grupo Industrial Minera
Mexico, S.A. de C.V. (mining);
Director, Kimberly-Clark (U.S.A.);
Director, Kellogg Company (U.S.A.)
(food products); Director, General
Electric Co. (U.S.A.); Supervisory
Director, The First Mexico Income
Fund N.V.; Director, Seguros de
Mexico, S.A. (insurance); Director,
Telefonos de Mexico; Director, IBM
Latinoamerica; International
Advisory Board, Chemical Corp.
Jose Luis Gomez President, The Mexico Fund, Inc.; 56 1989 --
Pimienta* President and Supervisory Director,
Aristoteles 77, 3rd The First Mexico Income Fund N.V.;
Floor Chairman of the Board and Director
Col. Polanco General, Impulsora del Fondo Mexico,
11560 Mexico, D.F., S.A. de C.V. (investment adviser).
Mexico
Robert L. Knauss+ Chairman and Chief Executive 64 1985 1,333
1990 Post Oak Blvd. Officer, Baltic International USA,
Suite 1630 Inc. (aviation investments);
Houston, TX 77056 Director, Equus II, Inc. (financial
investment); Director, Air Baltic
Corporation (international airline);
Director, Allwaste Inc.
(environmental services);
previously, Dean and Distinguished
University Professor, University of
Houston Law School.
</TABLE>
- ---------------------
(1) The information as to beneficial ownership is based on statements fur-
nished to the Fund by the Directors and nominees. All shares listed in
this table are owned with sole voting and investment power, and in the ag-
gregate represent less than 1/4 of 1% of the total shares outstanding of
common stock as of October 31, 1995.
+ Audit Committee and Contract Review Committee Member.
* Directors who are "interested persons" (as defined in the 1940 Act ("inter-
ested directors")). Messrs. Caldwell and Gomez Pimienta are deemed to be
interested directors by reason of their respective affiliations with Lehman
Brothers, Inc., 3 World Financial Center, New York, New York 10285, a reg-
istered broker-dealer, which served as Dealer Manager in connection with
the Fund's rights offering which was completed on October 31, 1995, and
with the Fund's investment adviser, Impulsora del Fondo Mexico, S.A. de
C.V. (the "Adviser").
6
<PAGE>
The Fund has a standing Audit Committee and Contract Review Committee. The
Audit Committee reviews both the audit and non-audit work of the Fund's inde-
pendent public accountants, submits a recommendation to the Board of Directors
as to the selection of independent public accountants, and reviews compliance
of the Fund with regulations of the Securities and Exchange Commission and the
Internal Revenue Service, and other related matters. The Contract Review Com-
mittee reviews the terms of the Fund's investment advisory agreement, includ-
ing the rate of compensation, and submits a recommendation to the Board of Di-
rectors as to the approval and/or renewal of the Fund's investment advisory
agreement. During the Fund's fiscal year ended October 31, 1995, the Board
held four regular meetings and two Special Board meetings, one of which was in
the capacity of the Audit Committee, and the Contract Review Committee held
one meeting. Except for Mr. Ernesto Fernandez Hurtado, each Director then in
office attended at least 75% of the total number of meetings of the Board as
well as the meetings of the Audit and Contract Review Committees. In connec-
tion with the Fund's 1995 transferable rights offering to shareholders, the
Board established a Rights Offering Committee, which held four meetings and
whose members included Messrs. Juan Gallardo T., Ernesto Fernandez Hurtado,
Claudio X. Gonzales, Robert L. Knauss and Agustin Santamarina V.
During the fiscal year ended October 31, 1995, the Fund paid each Director,
with the exception of Mr. Gomez Pimienta, an annual retainer of $6,750 and
$2,000 per meeting attended. The Fund also paid a $1,500 per diem fee to each
non-Mexican Director for travel required to attend a Board meeting and reim-
bursed all Directors, with the exception of Mr. Gomez Pimienta, for out-of-
pocket expenses relating to attendance at meetings. The aggregate amount of
fees paid and expenses reimbursed to the Directors for the twelve-month period
ended October 31, 1995 was $171,905. The Fund paid fees and expenses to its
Directors as described above except that in the event that a Board meeting
took place on the same date as a meeting of the board of directors of any
other investment company advised by the Fund's investment adviser, the $1,500
per diem fee of any non-Mexican Director of the Fund who was also a director
of any such other investment company was shared equally between the Fund and
such other investment company. As a result of changes in fees to be paid to
Directors which were approved by the Board in 1995, the annual retainer to be
paid to each Director, with the exception of Mr. Gomez Pimienta, in fiscal
year 1996 is expected to be $12,000.
The following table sets forth the aggregate compensation paid by the Fund
to each non-interested Director during the fiscal year ended October 31, 1995,
as well as the total compensation paid by the Fund to each Director.
<TABLE>
<CAPTION>
PENSION OR RETIREMENT TOTAL COMPENSATION
AGGREGATE BENEFITS ACCRUED FROM FUND
COMPENSATION AS PART OF COMPLEX PAID
NAME OF DIRECTOR FROM FUND FUND EXPENSES TO DIRECTORS
---------------- ------------ --------------------- ------------------
<S> <C> <C> <C>
Juan Gallardo T. $28,750 None $28,750
Philip Caldwell 20,750 None 20,750
Ernesto Fernandez Hurtado 16,750 None 16,750
Claudio X. Gonzalez 28,750 None 28,750
Robert L. Knauss 28,750 None 28,750
Agustin Santamarina V. 24,750 None 24,750
</TABLE>
The executive officers of the Fund and their principal occupations for the
past five years are: Jose Luis Gomez Pimienta (age 56), President, who also
serves as Chairman of the Board and Director General of the Adviser; Samuel
Garcia-Cuellar (age 53), Secretary, who is a partner of Creel, Garcia-Cuellar
y Muggenburg, S.C., Mexican counsel to the Fund and to the Adviser and also
Secretary of the Adviser; and Carlos Woodworth Ortiz (age 52), who is Trea-
surer of the Fund and a Deputy Director of the Adviser. Allan S. Mostoff (age
63) and Sander M. Bieber (age 45), partners of Dechert Price & Rhoads, U.S.
counsel to the Fund, are Assistant Secretaries of the Fund.
7
<PAGE>
The Board of Directors recommends that shareholders vote FOR the election of
the two nominees to the Fund's Board of Directors.
PROPOSAL 2: SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors upon recommendation of the Audit Committee, has se-
lected Arthur Andersen LLP as independent public accountants to examine the
financial statements of the Fund for the fiscal year ending October 31, 1996.
Audit services performed by Arthur Andersen LLP during the most recent fiscal
year included examination of the financial statements of the Fund, review of
filings with the Securities and Exchange Commission and preparation of tax re-
turns. The Fund knows of no direct or indirect interest of such firm in the
Fund.
A representative of Arthur Andersen LLP will be present at the Meeting and
will have the opportunity to respond to questions from shareholders.
The Board of Directors recommends that shareholders vote FOR the ratifica-
tion of the selection of Arthur Andersen LLP as independent public accoun-
tants.
PROPOSAL 3: OTHER MATTERS
No business other than as set forth herein is expected to come before the
Meeting, but should any other matter requiring a vote of shareholders arise,
including any question as to an adjournment of the Meeting, the persons named
in the enclosed proxy will vote thereon according to their best judgment in
the interests of the Fund.
ADDITIONAL INFORMATION
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
THE ADVISER. Impulsora del Fondo Mexico, S.A. de C.V. (the "Adviser"), 77
Aristoteles Street, 3rd Floor, Polanco, 11560 Mexico D.F., Mexico, has served
as the investment adviser of the Fund from the time the Fund was established
in 1981. Pursuant to the Investment Advisory and Management Agreement between
the Fund and the Adviser, the Adviser receives an advisory fee rate of 0.85%
of the Fund's average daily net assets up to $200 million, 0.70% of such as-
sets between $200 million and $400 million, and 0.60% of such assets in excess
of $400 million. For the fiscal year ended October 31, 1995, total advisory
fees paid by the Fund to the Adviser aggregated $4,845,926 based on average
net assets for the fiscal year of approximately $678,166,861. The Adviser is a
Mexican corporation which was incorporated in 1980 in order to serve as in-
vestment adviser to the Fund. The Adviser also serves as investment adviser to
The First Mexico Income Fund N.V., a Netherlands Antilles fund investing pri-
marily in Mexican debt securities, and may in the future serve other clients
including investment companies with investment objectives and policies similar
to those of the Fund, as well as engage in other businesses. The By-Laws of
the Adviser provide for the issuance of two series of capital stock. Series A
shares must represent at least 51% of the equity and of the voting rights in
the Adviser's stock and can be subscribed for only by Mexican brokers and
banks and executive officers of the Adviser. Series B shares must represent
49% or less of the equity and of the voting rights in the Adviser's stock and
may be held by non-Mexican banks, brokerage firms and financial institutions
as well as executive officers of the Adviser.
Pursuant to an Administrative Services Agreement, effective April 1, 1994,
the Adviser also provides certain administrative services to the Fund which
were previously performed by the Fund's Trustee (described below), including
the determination and publication of the net asset value of the Fund, the
maintenance of the Fund's books and records in accordance with applicable
United States and Mexican law and the provision of assistance to the Fund's
auditors in the preparation and filing of tax reports and returns. The initial
term of this agreement runs until August 31, 1996.
8
<PAGE>
THE TRUST AGREEMENT AND THE TRUSTEE. At its June 7, 1995 meeting, the Board
of Directors approved the appointment of Bancomer, S.A. ("Bancomer"), as the
new Trustee, for the Mexican Trust through which the Fund invests. The Fund
also obtained the approval of the Comision Nacional de Bancaria y Valores
("CNBV") and the Mexican Foreign Investment Commission to permit Bancomer to
become Trustee. Bancomer is one of the largest banking institutions in Mexico
and maintains a large fiduciary department in Mexico. Its operations are su-
pervised and regulated by the Ministry of Finance and Public Credit of Mexico.
The Trustee clears all securities transactions, verifies that purchases and
sales of securities by the Trust on behalf of the Fund are made in accordance
with appropriate instructions, deposits cash balances in the Fund's investment
account on a daily basis and delivers to the Fund a statement of all trades on
a daily basis.
Under this new arrangement, effective October 5, 1995, Bancomer receives
NPs. 600,000 (approximately $84,000 as computed on October 31, 1995) per year
for three years, subject to a monthly increase linked to the Mexican Consumer
Price Index on a monthly cumulative basis. This fee arrangement will result in
significantly lower Trustee fees to the Fund. In this regard, the Fund entered
into a definitive arrangement on October 5, 1995 with Bancomer and Nacional
Financiera, S.N.C. ("Nafin"), the previous Trustee, which provided for the
succession of Bancomer as Trustee. Under the previous Trust Agreement, the
Fund paid the Trustee for administration of the Trust, including portfolio ac-
counting and valuation, a fee, paid quarterly, on the basis of the Fund's av-
erage daily net asset value (as translated into dollars) at the annual rate of
0.12% (formerly 0.25%) of the first $75 million of average daily net assets
and 0.10% (formerly 0.20%) of the excess over $75 million. The fee was renego-
tiated effective December 1, 1990 by the Fund. For the fiscal years ended Oc-
tober 31, 1992, 1993 and 1994 the Fund paid Nafin fees as Trustee in the
amount of $633,746, $749,880 and $809,097, respectively. Pursuant to an
amended agreement with Nafin, effective May 1, 1994, the Fund paid Nafin a
fixed annual fee of $350,000.
The Trust was originally created within the Fiduciary Department of Nafin
pursuant to a Trust Agreement dated May 28, 1981, with Nafin acting as Trust-
ee. The CNBV and the Mexican Foreign Investment Commission approved designa-
tion of the Fund as sole beneficiary of the Trust. The Trust Agreement pro-
vides that the Fund's assets in the Trust are to be held, invested and rein-
vested for the benefit of the Fund in accordance with the rules of the CNBV.
Any change in Trustees is also subject to the approval of the CNBV and the
Mexican Foreign Investment Commission. The CNBV and the Mexican Foreign In-
vestment Commission also must approve any assignment of rights by the Fund and
any other amendment to the Trust Agreement.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Fund's of-
ficers and Directors, and persons who own more than ten percent of a regis-
tered class of the Fund's securities, to file reports of ownership and changes
in ownership with the Securities and Exchange Commission and the New York
Stock Exchange. Officers, Directors and greater than ten percent shareholders
are also required by such regulations to furnish the Fund with copies of all
Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, the
Fund believes that during fiscal year 1995, its officers and Directors com-
plied with all applicable filing requirements under the Securities Exchange
Act of 1934. The Fund is not aware of any shareholder owning more than ten
percent of the Fund's shares.
COUNSELORS
In December, 1993, five Directors of the Fund announced their resignation
from the Board. In each case, the Directors resigned because of their other
affiliations and business activities. These Directors are Messrs. David
Gemmill, Antonio Madero, Joaquin Munoz Izqurero, Bernardo Quintana and Dr.
Martin
9
<PAGE>
Murtfeld. In order to retain their counsel for the benefit of the Fund, the
Board amended the Fund's By-Laws to allow for counselors to the Fund. Because
of each individual's extensive experience with, and knowledge of, the Mexican
business community, each of these individuals continue to serve the Fund as a
counselor to the Fund. Each counselor provides advice, furnishes information
about the securities and currency markets, political developments, economic
factors and trends, and business trends and developments. A counselor normally
attends Board meetings but does not vote at meetings of the Board of Directors
or manage the business and affairs of the Fund, nor does a counselor have the
power to determine that any security will be purchased or sold by the Fund.
Each counselor is paid as compensation for services rendered a fee of $4,000
for each regularly scheduled Board and Committee meeting attended, $2,000 for
attendance at special meetings of the Board or a Committee, a $1,500 per diem
fee for travel required to attend a Board meeting, and is reimbursed for rea-
sonable expenses incurred in attending meetings or otherwise.
EXPENSES
The expense of preparation, printing and mailing of the enclosed form of
proxy and accompanying Notice and Proxy Statement will be borne by the Fund.
The Fund will reimburse banks, brokers and others for their reasonable ex-
penses in forwarding proxy solicitation material to the beneficial owners of
the shares of the Fund. In order to obtain the necessary quorum at the Meet-
ing, supplementary solicitation may be made by mail, telephone, telegraph or
personal interview by officers or agents of the Fund. It is not anticipated
that the cost of such supplementary solicitation will be material.
VOTE REQUIRED
The presence in person or by proxy of the holders of a majority of the out-
standing shares of the Fund is required to constitute a quorum at the Meeting.
Election of Directors (Proposal 1), ratification of the selection of indepen-
dent public accountants (Proposal 2), and approval to transact such other
business as may properly come before the Meeting (Proposal 3), will require
the approval of the majority of votes validly cast at the Meeting.
The Fund's annual report which accompanies this Proxy Statement, including
the Fund's financial statements for the fiscal year ended October 31, 1995 and
notes to such financial statements, is hereby incorporated by reference.
SHAREHOLDER PROPOSALS
If a shareholder intends to present a proposal at the 1997 Annual Meeting of
Shareholders of the Fund and desires to have the proposal included in the
Fund's Proxy Statement and form of proxy for that meeting, the shareholder
must deliver the proposal to the offices of the Fund by September 1, 1996.
----------------
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO
HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
By Order of the Board of Directors,
Samuel Garcia-Cuellar
Secretary
Dated: December 29, 1995
10
<PAGE>
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THE MEXICO FUND, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of The Mexico Fund, Inc., a Maryland corporation
(the "Fund"), hereby appoints Jose Luis Gomez Pimienta and Sander M. Bieber
and each of them proxies of the undersigned, with full power of substitution,
to vote and act in the name and stead of the undersigned at the Annual Meeting
of the Shareholders of the Fund, to be held at the Omni Berkshire Place Hotel
at 21 East 52nd Street at Madison Avenue, New York, New York, 10021, on
February 27, 1996 at 2:00 P.M., New York City time, and at any and all
adjournments thereof, according to the number of votes the undersigned would
be entitled to cast if personally present.
The shares represented by this proxy will be voted in accordance with
instructions given by the shareholder, BUT IF NO INSTRUCTIONS ARE GIVEN, THIS
PROXY WILL BE VOTED IN FAVOR OF PROPOSALS 1 THROUGH 3 AS SET FORTH IN THIS
PROXY.
The undersigned hereby revokes any and all proxies with respect to such
shares heretofore given by the undersigned. The undersigned acknowledges
receipt of the Proxy Statement dated December 29, 1995.
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<PAGE>
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[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD
Election of [_] [_]
Directors
For, except as marked to the contrary below:
1. Election of the nominees listed below to serve as members of the Fund's
Board of Directors, as Class III Directors, for a term expiring in 1999 and
until their successors are elected and qualified:
Juan Gallardo T.
Agustin Santamarina V.
FOR AGAINST ABSTAIN
[_] [_] [_]
2. Ratification of the selection of Arthur Andersen LLP as independent public
accountants of the Fund for the fiscal year ending October 31, 1996.
3. In the discretion of the above named proxies, such other business as may
properly come before the Meeting or any adjournment thereof.
SIGNATURE(S) __________________________ DATE _________________________________
Please sign, date and return promptly. Signature(s) should be exactly as name or
names appear on proxy. If shares are held jointly, each holder should sign. If
signing as attorney, executor, administrator, trustee or guardian, please give
full name.
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