SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
THE MEXICO EQUITY AND INCOME FUND, INC.
(Name of Registrant as Specified in Its Charter)
THE MEXICO EQUITY AND INCOME 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), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
/ / $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:
- ------------------------------------------------------------
<PAGE>
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- ----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ----------------------------------------------------------
(5) Total fee paid:
- ----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- ----------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- ----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- ----------------------------------------------------------
(3) Filing Party:
- ----------------------------------------------------------
(4) Date Filed:
- ----------------------------------------------------------
<PAGE>
The Mexico Equity and Income Fund, Inc.
World Financial Center
200 Liberty Street
New York, New York 10281
(212) 667-5000
September 30, 1997
Dear Stockholder,
The Annual Meeting of Stockholders of The Mexico Equity and Income Fund,
Inc. (the "Fund") will be held at 11:00 A.M. on Friday, November 7, 1997, at the
offices of Oppenheimer & Co., Inc., 200 Liberty Street, 39th Floor, New York,
New York 10281. A Notice and Proxy Statement regarding the meeting, proxy card
for your vote at the meeting, and postage prepaid envelope in which to return
your proxy are enclosed.
At the Annual Meeting, the stockholders will (i) elect one Class I director
of the Fund, (ii) ratify or reject the selection of Price Waterhouse LLP as
independent public accountants of the Fund, and (iii) transact such other
business as may properly be brought before the meeting. In addition, the
stockholders present will hear an investment report on the Fund and will have an
opportunity to discuss matters of interest to them.
The Board recommends that the stockholders vote in favor of each of
proposals (i) and (ii) above.
Respectfully,
/s/ Alan H. Rappaport
Alan H. Rappaport
Chairman of the Board
STOCKHOLDERS ARE URGED TO SIGN AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED
ENVELOPE TO INSURE A QUORUM AT THE MEETING.
<PAGE>
THE MEXICO EQUITY AND INCOME FUND, INC.
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
To Be Held on November 7, 1997
To the Stockholders of
The Mexico Equity and Income Fund, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of The
Mexico Equity and Income Fund, Inc. (the "Fund") will be held at the offices of
Oppenheimer & Co., Inc., 200 Liberty Street, 39th Floor, New York, New York
10281, on Friday, November 7, 1997 at 11:00 A.M., New York time, for the
following purposes:
1. To elect one Class I director to serve for a term expiring on the date
on which the annual meeting of stockholders is held in 2000.
2. To ratify or reject the selection of Price Waterhouse LLP as
independent public accountants of the Fund for its fiscal year ending
July 31, 1998.
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on September 12,
1997 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting or any adjournments thereof.
You are cordially invited to attend the meeting. Stockholders who do not
expect to attend the meeting in person are requested to complete, date and sign
the enclosed form of proxy and return it promptly in the envelope provided for
that purpose. You may nevertheless vote in person at the meeting if you choose
to attend. The enclosed proxy is being solicited by the Board of Directors of
the Fund.
By order of the Board of Directors,
Robert A. Blum
President and Secretary
September 30, 1997
2
<PAGE>
THE MEXICO EQUITY AND INCOME FUND, INC.
World Financial Center
200 Liberty Street
New York, New York 10281
---------------
PROXY STATEMENT
---------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of THE MEXICO EQUITY AND INCOME FUND, INC.
(the "Fund"), for use at the Annual Meeting of Stockholders, to be held at the
offices of Oppenheimer & Co., Inc., 200 Liberty Street, 39th Floor, New York,
New York 10281, on Friday, November 7, 1997 at 11:00 A.M., New York time, and at
any adjournments thereof.
This Proxy Statement and the form of proxy are being mailed to stockholders
on or about September 30, 1997. Any stockholder giving a proxy has the power to
revoke it by mail (addressed to The Mexico Equity and Income Fund, Inc., World
Financial Center, 200 Liberty Street, New York, New York 10281) or in person at
the meeting, by executing a superseding proxy or by submitting a notice of
revocation to the Fund. All properly executed proxies received in time for the
meeting will be voted as specified in the proxy or, if no specification is made,
for each proposal referred to in this Proxy Statement. Abstentions and broker
non-votes are each included in the determination of the number of shares present
and voting at the meeting.
The Fund will furnish without charge, a copy of its annual report for its
fiscal year ended July 31, 1997 to any stockholder requesting such report.
Requests for a copy of the Fund's annual report should be made by writing to The
Mexico Equity and Income Fund, Inc., c/o Oppenheimer & Co., Inc., 200 Liberty
Street, New York, New York 10281 or by calling (800) 421-4777 or (212) 667-7000.
The Board of Directors has fixed the close of business on September 12, 1997 as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting and at any adjournments thereof. Stockholders on the
record date will be entitled to one vote for each share held, with no shares
having cumulative voting rights. As of the record date, the Fund had outstanding
11,825,273 shares of common stock. To the knowledge of the Fund's management, no
person owns beneficially more than 5% of the Fund's outstanding shares except
for the persons set forth in the following table.
3
<PAGE>
Shares Percent of
Beneficially Shares
5% Stockholders Owned (1) Outstanding (2)
- --------------- --------- ---------------
City of London Investment Group PLC 2,067,058(3) 17.48%
10 Eastcheap
London EC3M 1AJ
England
President and Fellows of Harvard College 745,390(4) 6.3%
c/o Harvard Management Company, Inc.
600 Atlantic Avenue
Boston, MA 02210
- ----------
(1) Beneficial share ownership is determined pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934. Accordingly, a beneficial owner of a
security includes any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise has or
shares the power to vote such security of the power to dispose of such
security.
(2) Percentages are calculated on the basis of 11,825,273 shares of stock
outstanding as of the record date.
(3) The above information is based on a written representation dated September
1, 1997, which indicates that The City of London Investment Group PLC and
its affiliates have voting and dispositive power with respect to all
2,067,058 shares.
(4) The above information is based on copies of a statement on Schedule 13G
filed with the U.S. Securities and Exchange Commission on February 14,
1997, which indicates that the President and Fellows of Harvard College has
sole voting and dispositive power with respect to all 745,390 shares.
Management of the Fund knows of no business other than that mentioned in
Items 1 and 2 of the Notice of the Annual Meeting which will be presented for
consideration at the meeting. If any other matter is properly presented, it is
the intention of the persons named in the enclosed proxy to vote in accordance
with their best judgment.
The Board recommends that the stockholders vote in favor of each of the
matters mentioned in Items 1 and 2 of the Notice of the Annual Meeting.
(1) ELECTION OF DIRECTORS
Persons named in the accompanying form of proxy intend in the absence of
contrary instructions to vote all proxies for the election of the nominee listed
below as a director of the Fund,
Class I
-------
Alan H. Rappaport
to serve for a term expiring on the date of the Annual Meeting of Stockholders
held in 2000, or until his successor is elected and qualified. If such nominee
should be unable to serve, an event not now anticipated, the proxies will be
voted for such person, if any, as shall be designated by the
4
<PAGE>
Board of Directors to replace such nominee. The election of a director will
require the affirmative vote of a plurality of the votes cast at the meeting.
For this purpose, abstentions and broker non-votes will not be counted as votes
cast at the meeting.
Information Concerning Nominee, Members of the Board of Directors and Officers
of the Fund
The following table sets forth information concerning the nominee as a director
of the Fund, each of the Fund's current directors and each of the Fund's
officers. The nominee is now a director of the Fund.
<TABLE>
<CAPTION>
Principal Occupation or Shares
Employment During Beneficially
Name and Address Past Five Years and Owned Percent
of Nominee or Directorships in September 12, of
Director (Age) Publicly Held Companies Position with the Fund 1997(1) Class
- ---------------- ----------------------- ----------------------- ------------- -------
<S> <C> <C> <C> <C>
*Alan H. Rappaport (44) Executive Vice President Director and Chairman of 2,821 (2)
World Financial Center (since 1994) and Managing the Board since 1995
200 Liberty Street Director (since 1986),
New York, New York Oppenheimer & Co., Inc.;
10281 President and Director,
Advantage Advisers, Inc.
(since 1993); Executive
Vice President, Advantage
Advisers, Inc.
(1990-1993); Chairman of
the Board and Director,
The Asia Tigers Fund,
Inc., The India Fund,
Inc., The Czech Republic
Fund, Inc., The Emerging
Markets Income Fund II
Inc. and The Emerging
Markets Floating Rate
Fund Inc.; President and
Director, Global Partners
Income Fund, Inc., and
The Emerging Markets
Income Fund, Inc.;
Member, New York Stock
Exchange Advisory
Committee on
International Capital
Markets.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation or Shares
Employment During Beneficially
Name and Address Past Five Years and Owned Percent
of Nominee or Directorships in September 12, of
Director (Age) Publicly Held Companies Position with the Fund 1997(1) Class
- ---------------- ----------------------- ----------------------- ------------- -------
<S> <C> <C> <C> <C>
Carroll W. Brewster (61) Executive Director, Hole Director None --
126 Lounsbury Road in the Wall Gang Fund, since 1991
Ridgefield, Connecticut Inc. (not-for-profit
06877 charitable organization)
(since July 1991);
President, Hobart &
William Smith Colleges
(1982-1991).
Sol Gittleman (63) Senior Vice President and Director None --
Ballou Hall Provost, Tufts since 1990
Tufts University University; General
Medford, Massachusetts Partner, Augusta
02155 Partners, L.P.
Dr. Luis Rubio (42) President, Centro de Director 1,000 --
Jaime Balme No. 11 Investigacion para el since 1990
Edificio D, Piso 2 Desarrollo A.C. (Center
Polanco Los Morales of Research for
11510 Mexico Development); Director,
Banco Nacional de Mexico
S.A. (since 1991);
Director of The Czech
Republic Fund, Inc.;
General Partner, Augusta
Partners, L.P.
*Frederick M. Bohen (60) Director, Oppenheimer & Director 1,333 (2)
1230 York Avenue Co., Inc. (since 1993); since 1990
New York, NY Executive Vice President,
10028 Rockefeller University
(since 1990); Senior Vice
President, Brown
University (1985-1990);
Director, Apache
Corporation (energy
exploration, development,
production and marketing)
(since 1981); Director,
Student Loan Marketing
Association (since 1984).
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation or Shares
Employment During Beneficially
Name and Address Past Five Years and Owned Percent
of Nominee or Directorships in September 12, of
Director (Age) Publicly Held Companies Position with the Fund 1997(1) Class
- ---------------- ----------------------- ----------------------- ------------- -------
<S> <C> <C> <C> <C>
Robert A. Blum (37) Managing Director, President since 1997, None --
World Financial Center Oppenheimer & Co., Inc. Secretary since 1995
200 Liberty Street (1994-Present); Senior
New York, New York Vice President,
10281 Oppenheimer & Co., Inc.
(1992-1994); Vice
President, Oppenheimer &
Co., Inc. (1989-1992);
Associate, Fulbright &
Jaworski (1984-1989);
Director of The India
Fund, Inc. and The Asia
Tigers Fund, Inc.;
Officer of various
investment companies
managed by Advantage
Advisers, Inc.
Dennis Feeney (45) Executive Vice President Treasurer since None --
World Financial Center (since 1995), Chief 1991
200 Liberty Street Financial Officer (since
New York, New York 1994), Controller (since
10281 1986), Oppenheimer & Co.,
Inc.
All directors and officers
as a group 5,154 (2)
</TABLE>
- ----------
(1) The information as to beneficial ownership is based on statements furnished
to the Fund by the directors and officers or based on filings made with the
U.S. Securities and Exchange Commission.
(2) Less than 1%.
* Directors so noted are deemed to be "interested persons" (as defined in the
Investment Company Act of 1940, as amended) of the Fund or of the Fund's
U.S. Co-Adviser. Mr. Rappaport is an interested person because of his
affiliation with Oppenheimer & Co., Inc., the parent company of the Fund's
U.S. Co-Adviser. Mr. Bohen is an interested person because of his
affiliation with Oppenheimer & Co., Inc., the parent company of the Fund's
U.S. Co-Adviser.
The Fund's Board of Directors held four regular meetings during the fiscal
year ended July 31, 1997. Each director attended at least seventy-five percent
of the aggregate number of meetings of the Board and any committee on which he
served. The Fund's Board of Directors has an Audit Committee which is
responsible for reviewing financial and accounting matters. The current members
of the Audit Committee are Messrs. Gittleman and Brewster and Dr. Rubio. The
Audit Committee met twice during the fiscal year ended July 31, 1997.
7
<PAGE>
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Fund's officers and directors, 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 with the U.S. Securities and Exchange Commission and
the New York Stock Exchange, Inc. The Fund believes that during the fiscal year
ended July 31, 1997 its officers and directors complied with all filing
requirements applicable to them.
On July 22, 1997, CIBC Wood Gundy Securities Corp. ("CIBC Wood Gundy"),
Oppenheimer Group, Inc. and Oppenheimer Equities, Inc. entered into an agreement
for CIBC Wood Gundy to acquire all of the stock of Oppenheimer Holdings, Inc.,
whose subsidiary, Advantage Advisers, Inc. ("Advantage"), serves as U.S.
Co-Adviser to the Fund. Because such acquisition will result in a change of
control of Advantage and, in accordance with the Investment Company Act of 1940,
as amended (the "1940 Act"), a termination of the Fund's existing Co-Advisory
Agreement with Advantage, a special meeting of the Fund's stockholders was held
on September 30, 1997, at which the stockholders approved a new Co-Advisory
Agreement with Advantage to be in effect following such acquisition. The new
agreement is substantially identical to the existing agreement with the Fund.
Following the acquisition, Mr. Bohen will resign from the Fund's Board of
Directors in connection with the requirement under Section 15 (f) of the 1940
Act that during the three-year period following a sale of a controlling interest
in an investment adviser, at least 75% of the investment company's board of
directors must not be "interested persons" of the investment adviser or
predecessor adviser.
Transactions with and Remuneration of Officers and Directors
The aggregate remuneration paid or accrued for directors not affiliated
with Acci Worldwide, S.A. de C.V. (the "Mexican Adviser") or Advantage was
approximately US$23,700 during the fiscal year ended July 31, 1997, and, for
that period, the aggregate amount of expenses reimbursed by the Fund for
directors' attendance at directors' meetings was US$6,140. The Fund pays each
non-affiliated director an annual fee of US$5,000 plus US$700 for each
directors' meeting and committee meeting attended in person and $100 for each
meeting attended by means of a telephonic conference. The officers and
interested directors of the Fund received no compensation from the Fund.
The following table sets forth the aggregate compensation paid by the Fund
to each director during the fiscal year ended July 31, 1997, as well as the
total compensation paid by the Fund and other funds advised by the Mexican
Adviser or Advantage or otherwise affiliated with the Fund to each director.
88
<PAGE>
<TABLE>
<CAPTION>
Pension or Total
Retirement Compensation
Aggregate Benefits Accrued Estimated Annual From Fund
Compensation As Part of Fund Benefits Upon and Fund Complex
Name of Person, Position From Fund Expenses Retirement Paid to Directors
- ------------------------ --------- -------- ---------- -----------------
<S> <C> <C> <C> <C>
Alan H. Rappaport, Director $0 $0 $0 $0
Frederick M. Bohen, Director $0 $0 $0 $0
Carroll W. Brewster, Director $7,900 $0 $0 $ 7,900
Sol Gittleman, Director $7,900 $0 $0 $ 7,900
Dr. Luis Rubio, Director $7,900 $0 $0 $16,000
</TABLE>
- ----------
+ Messrs. Rappaport and Bohen, who are considered "interested persons" of the
Fund, did not receive any compensation from the Fund for their services as
directors. Mr. Bohen did receive $9150 from the U.S. Co-Adviser for his
services as a director of the Fund.
(2) RATIFICATION OR REJECTION OF SELECTION OF
INDEPENDENT ACCOUNTANTS
At a meeting held on June 6, 1997, the Board of Directors of the Fund,
including a majority of the directors who are not "interested persons" of the
Fund (as defined in the Investment Company Act of 1940, as amended), recommended
the selection of Price Waterhouse LLP to act as independent accountants for the
Fund for the fiscal year ending July 31, 1998. The Fund knows of no direct
financial or material indirect financial interest of that firm in the Fund. One
or more representatives of Price Waterhouse LLP are expected to be present at
the meeting and will have an opportunity to make a statement if they so desire.
Such representatives are expected to be available to respond to appropriate
questions from stockholders.
The Fund's financial statements for the fiscal year ended July 31, 1997
were audited by Price Waterhouse LLP. In connection with its audit services,
Price Waterhouse LLP reviewed the financial statements included in the Fund's
annual report to shareholders and its filings with the U.S. Securities and
Exchange Commission.
The selection of independent auditors is subject to the ratification or
rejection of the stockholders of the Fund at the meeting. Ratification of the
selection of independent accountants will require the affirmative vote of a
majority of the votes cast at the meeting. For this purpose, abstentions and
broker non-votes will not be counted as votes cast at the meeting.
MISCELLANEOUS
Proxies will be solicited by mail and may be solicited in person or by
telephone or facsimile by officers of the Fund or personnel of Oppenheimer &
Co., Inc. The Fund has retained PNC Bank, National Association, 400 Bellevue
Parkway, Wilmington, DE 19809 to assist in the proxy solicitation. The cost of
their services is estimated at US$1,080, plus reimbursement of expenses. The
expenses connected with the solicitation of these proxies and with any further
proxies which may
9
<PAGE>
be solicited by the Fund's officers or agents in person, by telephone or by
telegraph will be borne by the Fund. The Fund will reimburse banks, brokers, and
other persons holding the Fund's shares registered in their names or in the
names of their nominees for their expenses incurred in sending proxy material to
and obtaining proxies from the beneficial owners of such shares.
In the event that sufficient votes in favor of any proposal set forth in
the Notice of this meeting are not received by November 7, 1997, the persons
named as attorneys in the enclosed proxy may propose one or more adjournments of
the meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of the holders 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 attorneys in the enclosed proxy will vote in favor of such adjournment
those proxies which they are entitled to a vote in favor of the proposal for
which further solicitation of proxies is to be made. They will vote against any
such adjournment those proxies required to be voted against such proposal. The
costs of any such additional solicitation and of any adjourned session will be
borne by the Fund.
STOCKHOLDER PROPOSALS
Any proposal by a stockholder intended to be presented at the Fund's 1998
Annual Meeting of Stockholders must be received by the Fund (addressed to The
Mexico Equity and Income Fund, Inc., World Financial Center, 200 Liberty Street,
New York, New York 10281) not later than May 30, 1998.
By order of the Board of Directors,
ROBERT A. BLUM
President and Secretary
World Financial Center
200 Liberty Street
New York, New York 10281
September 30, 1997
10
<PAGE>
THE MEXICO EQUITY AND INCOME FUND, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS - NOVEMBER 7, 1997
The undersigned stockholder of The Mexico Equity and Income Fund, Inc.,
(the "Fund") hereby appoints Alan H. Rappaport and Dennis Feeney, or either of
them, proxies of the undersigned, with full power of substitution, to vote and
act for and in the name and stead of the undersigned at the Annual Meeting of
Stockholders of the Fund, to be held at the offices of Oppenheimer & Co., Inc.,
200 Liberty Street, 39th floor, New York, New York 10281, on Friday, November 7,
1997, at 11:00 am New York time, and at any and all adjournments thereof
according to the number of votes the undersigned would be entitled to cast if
personally present.
PROPOSALS (Please check one box for each proposal.)
1. The election of Alan H. Rappaport as a Class I Director to serve for a term
expiring on the date on which the annual meeting of stockholders is held in
2000.
[ ] FOR [ ] WITHHOLD AUTHORITY
the nominee listed below to vote for the nominee listed below
NOMINEE: Class I: Alan H. Rappaport
2. The ratification of the selection of Price Waterhouse LLP as Independent
Accountants of the Fund for its fiscal year ending July 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on the other side)
<PAGE>
(Continued from the other side)
The Shares represented by this proxy will be voted in accordance with
instructions given by the stockholders, but if no instructions are given, this
proxy will be voted in favor of proposals 1 and 2 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 September 30, 1997.
Dated: , 1997
---------------------------------------
---------------------------------------------------
Signature
---------------------------------------------------
Signature if held jointly
If shares are held jointly, each Shareholder named should sign. If only one
signs, his or her signature will be binding. If the Shareholder is a
corporation, the President or a Vice President should sign in his or her own
name, indicating title. If the Shareholder is a partnership, a partner should
sign in his or her own name, indicating that he or she is a "Partner".
SIGN, DATE AND MAIL YOUR PROXY TODAY
