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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 26, 1997
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
[X] Definitive proxy statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
THE EMERGING MEXICO FUND, INC.
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
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(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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.:
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(3) Filing Party:
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(4) Date Filed:
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THE EMERGING MEXICO FUND, INC.
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
OCTOBER 8, 1997
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To the Stockholders of
The Emerging Mexico Fund, Inc.:
Notice is hereby given that a Special Meeting of Stockholders (the
"Meeting") of The Emerging Mexico Fund, Inc. (the "Fund") will be held at the
offices of Brown & Wood LLP, One World Trade Center, New York, New York on
October 8, 1997 at 10:30 A.M. for the following purposes:
(1) To consider and act upon a proposal to amend the fundamental
investment restrictions of the Fund to allow the lending of portfolio
securities; and
(2) To consider and act upon such other business as may properly come
before the Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on August 18, 1997
as the record date for the determination of stockholders entitled to notice
of and to vote at the Meeting or any adjournment thereof.
A complete list of the stockholders of the Fund entitled to vote at the
Meeting will be available and open to the examination of any stockholder of
the Fund for any purpose germane to the Meeting during ordinary business
hours from and after September 24, 1997, at the offices of the Fund, 1285
Avenue of the Americas, New York, New York.
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. The enclosed proxy is being solicited on behalf of
the Board of Directors of the Fund.
By Order of the Board of
Directors
Thomas R. Smith, Jr.
Secretary
New York, New York
Dated: August 26, 1997
YOUR VOTE IS IMPORTANT--Please execute and return the enclosed proxy
promptly, whether or not you plan to attend the Special Meeting of
Stockholders of The Emerging Mexico Fund, Inc.
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THE EMERGING MEXICO FUND, INC.
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
SPECIAL MEETING OF STOCKHOLDERS
OCTOBER 8, 1997
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PROXY STATEMENT
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INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of The Emerging Mexico Fund,
Inc., a Maryland corporation (the "Fund"), to be voted at the Special Meeting
of Stockholders of the Fund (the "Meeting"), to be held at the offices of
Brown & Wood LLP, One World Trade Center, New York, New York on October 8,
1997 at 10:30 A.M. The approximate mailing date of this Proxy Statement is
August 27, 1997.
All properly executed proxies received prior to the Meeting will be voted
at the Meeting in accordance with the instructions marked thereon or
otherwise as provided therein. Unless instructions to the contrary are
marked, proxies will be voted FOR the proposal to amend the fundamental
investment restrictions of the Fund regarding making loans to other persons.
Any proxy may be revoked at any time prior to the exercise thereof by giving
written notice to the Secretary of the Fund at the Fund's address indicated
above or by voting in person at the Meeting.
The Board of Directors has fixed the close of business on August 18, 1997
as the record date for the determination of stockholders entitled to notice
of and to vote at the Meeting and at any adjournment 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 August 18, 1997, the Fund had
outstanding 12,913,231 shares of Common Stock, par value $0.10 per share.
The Board of Directors of the Fund knows of no business other than that
mentioned in Item 1 of the Notice of 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.
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ITEM 1. PROPOSAL TO AMEND THE FUNDAMENTAL INVESTMENT RESTRICTIONS
OF THE FUND TO ALLOW THE LENDING OF PORTFOLIO SECURITIES
The Fund has adopted investment restrictions that govern generally the
operations of the Fund. Investment restrictions that are deemed to be
fundamental may not be changed without a vote of the outstanding shares of
Common Stock of the Fund. The Board of Directors of the Fund recommends
amending the Fund's fundamental investment restrictions to allow the Fund to
lend its portfolio securities in order to enhance total return to the Fund's
stockholders.
At the time the Fund was organized in 1989, a well-developed market for
the lending of Mexican equity securities did not exist and, therefore, the
reservation of the Fund's ability to enter into such transactions was not
considered necessary. In more recent years, however, such a lending market
has developed, to the potential benefit of the Fund and its stockholders. The
Board of Directors of the Fund believes that the removal of the restriction
on the Fund's ability to lend its portfolio securities, subject to the
guidelines described below, could present an opportunity for the Fund to
increase its total return to stockholders.
The Fund's guidelines for the lending of portfolio securities would
provide that the Fund could from time to time lend securities from its
portfolio with a value not exceeding the maximum amount allowed under the
Fund's fundamental investment restrictions, to banks, brokers and other
financial institutions and receive collateral in cash or securities issued or
guaranteed by the United States Government, which will be maintained at all
times in an amount equal to at least 100% of the current market value of the
loaned securities.
The purpose of such loans would be to permit the borrower to use the
borrowed securities for delivery to purchasers when such borrower has sold
short. If cash collateral were received by the Fund, it would be invested in
short-term money market securities, and a portion of the yield received in
respect of such investment would be retained by the Fund. Alternatively, if
securities were delivered to the Fund as collateral, the Fund and the
borrower would negotiate a rate for the loan premium to be received by the
Fund for lending its portfolio securities. In either event, the total yield
on the Fund's portfolio would be increased by loans of its portfolio
securities.
The Fund would have the right to retain record ownership of the loaned
securities to exercise beneficial rights such as voting rights, subscription
rights and rights to dividends, interest and other distributions. The loans
would be terminable at any time. The Fund may pay reasonable finder's,
administrative and custodial fees in connection with such loans.
In the event that a borrower defaults on its obligation to return borrowed
securities, because of insolvency or otherwise, the Fund could experience
delays and costs in gaining access to the collateral and could suffer a loss
to the extent that the value of the collateral falls below the market value
of the borrowed securities.
Currently, a fundamental investment restriction of the Fund prevents the
Fund from lending its portfolio securities by providing that the Fund may
not:
Make loans to other persons, except that the Fund may purchase debt
securities and enter into repurchase agreements in accordance with its
investment objective and policies.
The revised investment restriction would add an exception from the lending
restriction for the lending of portfolio securities by the Fund. The proposed
revised restriction was approved by the Board of Directors on June 2, 1997.
Under the proposed amended investment restriction, the Fund may not:
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Make loans to other persons, except that the Fund may purchase debt
securities and enter into repurchase agreements in accordance with its
investment objective and policies, and except further that the Fund may
lend securities from its portfolio with a value not exceeding 33 1/3% of
the Fund's total assets, provided that the lending of portfolio
securities may be made only in accordance with applicable law and the
guidelines established by the Fund's Board of Directors, as they may be
amended from time to time.
VOTE REQUIRED. The proposal to amend the Fund's fundamental investment
restriction requires the approval of the holders of a majority of the Fund's
outstanding shares of Common Stock (which for this purpose and under the
Investment Company Act of 1940, as amended, means the lesser of (i) 67% of
the shares of Common Stock represented at a meeting at which more than 50% of
the outstanding shares of Common Stock are present or represented by proxy or
(ii) more than 50% of the outstanding shares of Common Stock of the Fund). If
the proposed amendment to the Fund's fundamental investment restrictions is
not approved by the stockholders of the Fund, the Fund will not lend its
portfolio securities. The Board of Directors recommends a vote "FOR" the
amendment of the fundamental investment restrictions.
ADDITIONAL INFORMATION
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
expenses in forwarding proxy solicitation material to the beneficial owners
of the shares of the Fund. The Fund has retained Shareholder Communications
Corporation, a proxy solicitation firm, to assist in the solicitation of
proxies for the Meeting, for a fee of approximately $7,500, plus
reimbursement of such firm's expenses.
In order to obtain the necessary quorum at the Meeting, supplementary
solicitation may be made by mail, telephone, telegraph, or personal
interview. It is anticipated that the cost of such supplementary
solicitation, if any, will be nominal.
Broker-dealer firms holding Fund shares in "street name" for the benefit
of their customers and clients will request the instructions of such
customers and clients on how to vote their shares on Item 1 before the
Meeting. The Fund understands that, under the rules of the New York Stock
Exchange, such broker-dealer firms may not, without instructions from their
customers and clients, grant authority to the proxies designated to vote on
the proposal to amend the Fund's fundamental investment restrictions. Proxies
that are returned but that are marked "abstain" or on which a broker-dealer
has declined to vote on any proposal ("broker non-votes") will be counted as
present for purposes of a quorum. However, abstentions and broker non-votes
will not be counted as votes cast. Abstentions and broker non-votes,
therefore, will have the same effect as a vote against Item 1.
INVESTMENT ADVISERS AND ADMINISTRATOR
Santander Management Inc., Bahamas Financial Centre, Charlotte and Shirley
Streets, Nassau, Bahamas, is the Fund's investment adviser (the "Investment
Adviser"). The Investment Adviser is an indirect subsidiary of Banco
Santander, S.A.
Gestion Santander Mexico, S.A. de C.V., Monte Pelvoux 220, Lomas de
Chapultepec, 11000 Mexico, D.F., Mexico, an affiliate of the Investment
Adviser, serves as the Fund's sub-adviser in Mexico.
Mitchell Hutchins Asset Management Inc., 1285 Avenue of the Americas, New
York, New York, is the administrator of the Fund.
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STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the beneficial ownership of the Company's
Common Stock for each person known to be the beneficial owner of more than
five percent of the Common Stock.
SHARES OF COMMON STOCK
BENEFICIALLY OWNED AS OF
AUGUST 18, 1997
NAME AND ADDRESS OF -----------------------------------
BENEFICIAL OWNER NUMBER PERCENT OF TOTAL
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Olliff & Partners PLC 1,554,900(1) 12.0%(1)
10 Eastcheap
London EC3M IAJ
England
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(1) This information is based upon information reported by the stockholder
in a filing on Schedule 13G made with the Securities and Exchange
Commission (the "SEC") on February 26, 1997 and upon information
reported on a Schedule 13D filed with the SEC on April 18, 1997 by The
Investable Emerging Markets County Fund, an affiliate of Olliff &
Partners PLC located at the same address (the "April 1997 Schedule
13D"). The Company has been informed by representatives of the
stockholder that such 1,554,900 shares of Common Stock includes the
beneficial ownership of 1,465,900 shares of Common Stock (or 11.4% of
total) reported on a Schedule 13G filed with the SEC on February 26,
1997 by City of London Investment Management Company Ltd. (an
affiliate of Olliff & Partners PLC located at the same address) and on
the April 1997 Schedule 13D and that such 1,465,900 shares of Common
Stock includes the beneficial ownership of 765,700 shares of Common
Stock (or 5.9% of total) reported on a Schedule 13D filed with the SEC
on February 26, 1997 by The MP Emerging Markets Country Fund (an
affiliate of Olliff & Partners PLC located at the same address) and
the beneficial ownership of 650,000 shares of Common Stock (or 5.0% of
total) reported on the April 1997 Schedule 13D.
ANNUAL REPORT DELIVERY
The Fund will furnish, without charge, a copy of its annual report for the
fiscal year ended June 30, 1997 to any stockholder upon request. Such
requests should be directed by mail to PNC Bank, N.A., Attn: The Emerging
Mexico Fund, Inc., P.O. Box 8950, Wilmington, Delaware 19809 or by telephone
to 1-800-852-4750.
By Order of the Board of Directors
Thomas R. Smith, Jr.
Secretary
Dated: August 26, 1997
4
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THE EMERGING MEXICO FUND, INC.
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints C. William Maher and Brian S. Shlissel as
proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated on the reverse hereof, all the
shares of Common Stock of The Emerging Mexico Fund, Inc. (the "Fund") held of
record by the undersigned on August 18, 1997 at a special meeting of
stockholders of the Company to be held on October 8, 1997 or any adjournment
thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy
will be voted FOR Proposal 1.
1. Proposal to amend the fundamental investment restrictions of the Fund
to allow the lending of portfolio securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. In the discretion of such proxies, upon such other business as may
properly come before the meeting or any adjournment thereof.
(CONTINUE ON REVERSE SIDE)
<PAGE>
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney or as executor, adminis-
trator, trustee or guardian, please
give full title as such. If a corporation,
please sign in full corporate name by
president or other authorized officer. If
a partnership, please sign in partnership
name by authorized person.
Dated 1997
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X
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Signature
X
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Signature, if held jointly
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.
