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))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
THE MEXICO FUND, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
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was paid previously. Identify the previous filing by registration statement
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Notes:
THE MEXICO FUND, INC.
1775 Eye Street, N.W.
Washington, DC 20006-2401
March 5, 2001
Dear Shareholder:
We are writing today to inform you of recent initiatives the Board of
Directors of The Mexico Fund, Inc. (the "Fund") has undertaken on your behalf.
Periodic Repurchases of Fund Shares from Shareholders
On March 2, 2001, the Fund filed with federal regulatory authorities
applications seeking necessary approval to conduct periodic in-kind
repurchases of Fund shares. The Board of Directors has approved a policy
whereby the Fund would offer to repurchase a previously disclosed percentage
of Fund shares from shareholders at least annually and as frequently as
quarterly. Shareholders able to participate would have a period of time in
which to submit their shares for repurchase. Participating shareholders would
receive not less than 98% of net asset value for their shares in order to
reflect the costs of conducting the repurchase offers. Shareholders would
receive a pro-rata "slice" of the Fund's portfolio securities in return for
their repurchased shares. In other words, in exchange for shares of the Fund,
shareholders would receive actual shares of Mexican companies from the Fund's
portfolio, generally in proportion to the interest represented by the shares
submitted for repurchase. The Board of Directors would regularly review the
policy to determine if the frequency of repurchases and the percentage of
shares offered for repurchase is adequate. To participate, a shareholder may
have to tender a significant minimum number of shares.
The Board of Directors of the Fund believes that periodic repurchases on the
terms provided above would be in the best interests of the Fund's long-term
shareholders. Repurchases with proceeds paid in portfolio securities of the
Fund would not require liquidation of the Fund's investments to pay for the
repurchases as would be the case if repurchases were paid in cash. The Fund
could continue to focus on its investment objective without having to maintain
cash reserves or liquid investments which may not be desirable or available in
the Mexican securities market. Also, shareholders would know in advance the
frequency of the repurchases and the amounts to be repurchased which provides
more certainty and predictability than open market repurchases.
Performance Fee
In addition, the Board of Directors has approved modifying the Investment
Management and Advisory Agreement with the Fund's investment adviser to
incorporate a performance fee component to the Fund's advisory fee. The Fund
would continue to pay its investment adviser a base advisory fee (which is
currently among the lowest for a closed-end actively managed fund), but this
fee would be adjusted upward or downward depending upon the Fund's performance
against its benchmark, the IFCG Mexico Index calculated by Standard & Poor's.
The Board of Directors believes that the performance fee provides additional
incentive to the Investment Adviser in managing the Fund's portfolio and is in
the best interests of shareholders.
Implementation of Periodic Repurchase and Performance Fee
We will be seeking your approval to implement the performance fee and the
periodic repurchase policy. We anticipate holding a special shareholders'
meeting to vote on these two new initiatives once the regulatory authorities
have provided us with a response to our requests that will permit the Board of
Directors to determine the final details of the periodic repurchase policy.
While we cannot predict the timing of the responses from the regulatory
authorities, we hope to schedule the special shareholders' meeting later this
year.
Other Initiatives
The two initiatives discussed above represent continuing steps the Board of
Directors has taken to respond to developments in the Mexican securities
markets and the concerns of all shareholders.
In August 2000 the Fund commenced a Stock Repurchase Program which permitted
the Fund to purchase up to ten percent of its outstanding shares in the open
market. As of January 31, 2001, the Fund had repurchased seventy-seven percent
of this amount or 3.9 million shares. The periodic repurchase policy announced
today is different because under it, the Fund would repurchase shares directly
from shareholders in accordance with terms publicly announced in advance and
repurchases would not require any sale of Fund assets to generate cash.
In October 2000, shareholders approved converting the Fund to a non-
diversified fund and adopting a concentration policy. The Board of Directors
recommended these changes in the structure of the Fund to provide the Fund
with greater flexibility to respond to Mexico's involvement in the globalized
economy and the changing nature of the securities markets.
Recent Results
During 2001, the Fund has performed consistently with its benchmark partly
as a result of the structural changes. Moreover, in the last six months, aided
by the structural changes and the repurchase program, the Fund's market
discount has narrowed from 31% on July 31, 2000 to 17.9% as of February 28,
2001.
Annual Meeting of Shareholders--March 22, 2001
You should have received a proxy statement for the Fund's upcoming Annual
Meeting of Shareholders on March 22, 2001. If you did not, please telephone
the Fund's information agent at 1-800-607-0088 to obtain a copy. The Board of
Directors of your Fund believes that the new initiatives announced in this
letter are in the best interests of all of the Fund's shareholders and
appropriately consider the nature of the Fund and the market in which it
invests. The Board has considered the exchange-traded fund structure proposed
by a Fund shareholder in the proxy statement and believes it is neither
legally nor practically feasible. The Board of Directors hopes that you agree
and will vote your shares in accordance with the recommendations made by the
Board in the Proxy Statement (FOR Proposals 1 and 2 and AGAINST Proposal 3).
Please take a few minutes to review the proxy statement and return your
proxy card today. If you have any questions regarding the proposals to be
voted on or need assistance in completing your proxy card, please contact the
Fund's representatives at 1-800-607-0088.
Thank you for investing with us and for your continuing support.
Sincerely,
/s/ Jose Luis Gomez Pimienta /s/ Juan Gallardo
Jose Luis Gomez Pimienta Juan Gallardo
President Chairman of the Board
2
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
THE MEXICO FUND, INC.
March 22, 2001
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 30 Rockfeller Plaza,
23rd Floor, New York, New York 10112, on March 22, 2001 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 and 2 and against proposal 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 February 22, 2001.
(Continued on reverse side)
Please Detach and Mail in the Envelope Provided
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A [X] Please mark your votes as in this example.
The Board of Directors of the Fund recommends that Shareholders vote FOR
proposals 1 and 2 and AGAINST proposal 3.
1. Election of the nominees Nominees:
listed at right to serve Robert L. Knauss
as members of the Fund's Jose Luis Gomez Pimienta
Board of Directors, as Claudio X. Gonzalez
Class II Directors, for
a term expiring in 2004
and until their successors
are elected and qualified;
FOR WITHHELD
[_] [_]
For, except as marked to the contrary below:
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2. Ratification of the selection of Arthur Andersen LLP as independent public
accountants of the Fund for the fiscal year ending October 31, 2001.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. To consider a shareholder proposal that the shareholders of the fund
recommend that the Board of Directors consider implementing a policy that on
any business day, any unit of 100,000 shares of the Fund's stock may be
delivered to the Fund in exchange for proportionate amounts of the underlying
assets securities and money) represented by the unit (adjusted for accrued
but unpaid income and expenses).
FOR AGAINST ABSTAIN
[_] [_] [_]
4. 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.