<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 [_] 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 (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, 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.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
THE MEXICO FUND, INC.
77 ARISTOTELES STREET, 3RD FLOOR
POLANCO
11560 MEXICO, D.F., MEXICO
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 28, 1997
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 RIHGA Royal
Hotel, 151 W. 54th Street, New York, New York, 10019 on February 28, 1997 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, 1997;
(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 30, 1996
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 30, 1996
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 28, 1997
----------------
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 RIHGA Royal Hotel, 151
W. 54th Street, New York, New York, 10019 on February 28, 1997 at 2:00 P.M.
and at any adjournment thereof. The approximate mailing date of this Proxy
Statement is December 30, 1996. The report for the fiscal year ended October
31, 1996, including financial statements, accompanies 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 answer questions of share-
holders.
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 30, 1996
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, 1996, 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 17, 1996, 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. Philip Caldwell's and Ernesto Fernandez Hurtado's terms expire
this year. Mr. Fernandez Hurtado has resigned from the Board of Directors ef-
fective December 31, 1996. Messrs. Philip Caldwell and Jaime Serra-Puche have
been nominated as Class I Directors for a three year term expiring in 2000.
The nominees have indicated an intention to serve if elected and have con-
sented 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 I Directors are as follows:
CLASS I (TERM EXPIRING IN 2000):
<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 10/31/96(1)
---------------- ----------------------- --- -------- ------------------
<S> <C> <C> <C> <C>
Philip Caldwell*++ Director and Senior Managing 76 1991 --
World Financial Center Director, Lehman Brothers Inc.
200 Vesey Street, 19th (investment banking); Director,
Floor Zurich Reinsurance Centre Holdings,
New York, NY 19285-1900 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, Waters
Corporation (manufacturers of
scientific test instruments);
Chairman of the Board, Mettler-
Toledo Holdings Inc. (manufacturer
of scales and other weighing
instruments); previously, Chairman
of the Board, Chief Executive
Officer, succeeding Henry Ford II,
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); Director,
Castech Aluminum Group, Inc.
(aluminum manufacturing).
</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 10/31/96(1)
---------------- ----------------------- --- -------- ------------------
<S> <C> <C> <C> <C>
Jaime Serra-Puche Senior Partner, Serra and Associates 45 -- --
Edificio Plaza Reforma International (law and economics
600-103 consulting firm); Weinberg Visiting
Sante Fe Professor, Princeton University;
01210 Mexico, D.F., Trustee, Yale University;
Mexico previously, Secretary of Finance
(Mexico); Secretary of Trade and
Industry (Mexico); Chairman of the
Board, Industrial Property
Institute; Chairman of the Board,
Mexican Investment Board; Board
Member, Central Bank of Mexico;
Board Member, Comision Nacional de
Valores (the Mexican National
Securities Commission); Chairman,
National Commission on Foreign
Investment (Mexico); Chairman,
Commission for the Modernization of
the Medium and Small Industry
(Mexico); Chairman, Commission for
Export Promotion (Mexico); Member,
Commission for the Evaluation of the
Pact for Stability, Competitiveness
and Labor (Mexico); Member,
Intersecretarial Commission for
Public Expenditure and Revenue
(Mexico); Minister in charge of
negotiations for Mexico, North
American Free Trade Agreement and
the trade agreements entered into by
Mexico with Chile, Bolivia,
Venezuela, Colombia and Costa Rica;
Distinguished Visiting Associate,
Carnegie Endowment for International
Peace.
</TABLE>
4
<PAGE>
CONTINUING DIRECTORS
The balance of the current Directors consists of three Class II and two
Class III 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 be-
low. The Directors are as follows:
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 10/31/96(1)
---------------- ------------------------------------ --- -------- -----------------
<S> <C> <C> <C> <C>
Claudio X. Gonzalez++ Chairman of the Board and Chief 62 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, Banco
Nacional de Mexico, S.A. (bank);
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.); Director, Planet Hollywood
Int. (theme entertainment);
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.; 57 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 of the Board and Chief 65 1985 1,333
University of Houston Executive Officer, Baltic
Law Center International USA, Inc. (aviation
Houston, TX 77204 investments); Director, Equus Ltd.
II (financial investment); Director,
Allwaste Inc. (environmental
services); previously, Dean and
Distinguished University Professor,
University of Houston Law School.
</TABLE>
5
<PAGE>
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 10/31/96(1)
---------------- ------------------------------------ --- -------- -----------------
<S> <C> <C> <C> <C>
Juan Gallardo T.++ Chairman of the Board and Chief 49 1985 --
Monte Caucaso 915 Executive Officer, Grupo
4th Floor Embotelladoras Unidas S.A. de C.V.
Lomas de Chapultepec (bottling); Chairman of the Board
11000 Mexico, D.F., and Chief Executive Officer, Grupo
Mexico Azucarero Mexico, S.A. de C.V.
(industrial group); Coordinator,
Mexican Business Council for the
North American Free Trade Agreement
(NAFTA); Vice Chairman of the Board,
Grupo Industrial Minera Mexico, S.A.
de C.V. (mining); Chairman of the
Board of Supervisory Directors, 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); Member of the
International Advisory Council, Bank
of Montreal (bank); Director,
Nacional de Drogas (pharmaceutical
distribution company); Director,
Bombardier Concarrill
(manufacturing); Director, Bufete
Industrial, S.A. de C.V.
(construction); Vice Chairman of the
Board, Home Mart de Mexico (retail
trade); Member of the International
Advisory Council, Lafarge Coppe.
Agustin Santamarina V.++ Of Counsel, Santamarina y Steta (law 70 1981 --
Campos Eliseos 345, 3rd firm); Chairman of the Board,
Floor 11560 Mexico, Alcatel-Indetel, S.A. de C.V.
D.F., Mexico (telecommunications equipment);
Chairman of the Board, Apasco S.A.
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>
6
<PAGE>
- ---------------------
(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, 1996.
++ Audit Committee and Contract Review Committee Member.
* Directors who are "interested persons" (as defined in the 1940 Act ("inter-
ested directors")). Messrs. Philip 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 registered broker-dealer, and with the Fund's investment adviser,
Impulsora del Fondo Mexico, S.A. de C.V. (the "Adviser").
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 recommendations 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, 1996, the Board
held four regular meetings and four special meetings, one of which was in the
capacity of the Audit Committee. Except for Mr. Agustin Santamarina V., each
Director then in office attended at least 75% of the total number of regular
meetings of the Board and applicable special meetings of the Board.
During the fiscal year ended October 31, 1996, the Fund paid each Director,
with the exception of Mr. Gomez Pimienta, an annual retainer of $12,000 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, 1996 was $162,892. The Fund will pay fees and expenses to
its Directors as described above except that in the event of a Board meeting
taking 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 is also a director of
any such other investment company shall be shared equally between the Fund and
such other investment company.
The following table sets forth the aggregate compensation (not including per
diem fees and expense reimbursement) paid by the Fund to each Director (other
than Mr. Gomez Pimienta) during the fiscal year ended October 31, 1996, 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. 28,000 None 28,000
Philip Caldwell 24,000 None 24,000
Ernesto Fernandez Hurtado 28,000 None 28,000
Claudio X. Gonzalez 28,000 None 28,000
Robert L. Knauss 28,000 None 28,000
Agustin Santamarina V. 18,000 None 18,000
</TABLE>
7
<PAGE>
The executive officers of the Fund and their principal occupations for the
past five years are: Jose Luis Gomez Pimienta (age 57), President, who also
serves as Chairman of the Board and Director General of the Adviser; Samuel
Garcia-Cuellar (age 54), 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 53), who is Trea-
surer of the Fund and a Deputy Director of the Adviser. Allan S. Mostoff (age
64) and Sander M. Bieber (age 46), partners of Dechert Price & Rhoads, U.S.
counsel to the Fund, are Assistant Secretaries of the Fund.
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, 1997.
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, 1996, total advisory
fees paid by the Fund to the Adviser aggregated $5,831,370 based on average
net assets for the fiscal year of approximately $852,559,507. The Adviser is a
Mexican corporation incorporated in 1980 in order to serve as investment ad-
viser to the Fund.
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
8
<PAGE>
the provision of assistance to the Fund's auditors in the preparation and fil-
ing of tax reports and returns. This agreement is currently in effect through
August 31, 1997.
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 Ps.
600,000 (approximately $75,019 as computed based on the peso/dollar exchange
rate on October 31, 1996) per year for three years, subject to a monthly in-
crease linked to the Mexican Consumer Price Index on a monthly cumulative ba-
sis. 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 adminis-
tration of the Trust, including portfolio accounting and valuation, a fee,
paid quarterly, on the basis of the Fund's average 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 renegotiated effective December 1,
1990 by the Fund. For the fiscal years ended October 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 in the fiscal
year ended October 31, 1995.
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 1996, 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.
9
<PAGE>
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 Izquierdo, Bernardo Quintana and Dr.
Martin 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. Be-
cause of each individual's extensive experience with, and knowledge of, the
Mexican business community, each of these individuals continues to serve the
Fund as a counselor to the Fund. Each counselor provides advice, furnishes in-
formation 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 re-
imbursed for reasonable 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, 1996 and
notes to such financial statements, is hereby incorporated by reference.
SHAREHOLDER PROPOSALS
If a shareholder intends to present a proposal at the 1998 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, 1997.
----------------
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 30, 1996
10
<PAGE>
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
Shareholders of the Fund, to be held at The RIHGA Royal Hotel, 151 West 54th
Street, New York, New York 10019, on February 28, 1997 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 31, 1996.
(CONTINUED ON REVERSE SIDE)
<PAGE>
Please mark your
A [X] votes as in this
example
1. Election of the nominees listed at right to FOR WITHHELD
serve as members of the Fund's Board of
Directors, as Class I Directors, for a [ ] [ ]
term expiring in 2000 and until their
successors are elected and qualified:
For, except as marked to the contrary below:
- --------------------------------------------
Nominees: Philip Caldwell
Jaime Serra-Puche
2. Ratification of the selection of Arthur FOR AGAINST ABSTAIN
Andersen LLP as independent public
accountants of the Fund for the fiscal [ ] [ ] [ ]
year ending October 31, 1997.
3. In their discretion of the above named
proxies, such other business as may
properly come before the Meeting or any
adjournment thereof.
SIGNATURE(S) __________________________________ DATED _______________________
NOTE: 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.
