SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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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)
THE MEXICO FUND, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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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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Notes:
[THE MEXICO FUND, INC.
LOGO APPEARS HERE] The Mexico Fund, Inc.
February 14, 2002
Dear Fellow Shareholder:
Over the past eighteen months, your Board of Directors and investment
manager have executed a number of initiatives intended to maximize the
investment performance of the Fund and return value to shareholders. We believe
that these efforts have begun to pay off, including those since October 2000
when the Fund's diversification and concentration policies were changed.
Consider the following results, expressed in U.S. dollars and assuming
reinvestment of distributions:
o Since May 2000, the discount between the Fund's market price and its
net asset value (NAV) has narrowed significantly from 33% to around
12%.
o In 2001, the market price of each share increased 32.45%.
o In 2001, the price of the Fund's stock outperformed the Fund's
benchmark by 17.91%.
At this year's annual meeting on March 7, you have the opportunity to
make a significant impact on your investment. The Fund is proposing additional
initiatives intended to maximize shareholder value and further align the
interests of the investment manager with those of the shareholders. The Fund is
asking for your approval to:
o Modify the Fund's investment advisory and management agreement to
incorporate a performance fee component that will better align the
interest of the Fund's investment adviser (Impulsora del Fondo Mexico,
S.A. de C.V.) with those of the fund's shareholders (Proposal 2)
o Adopt a share repurchase policy that would require the Fund to
periodically offer to repurchase at least 5% of its shares on an annual
basis in-kind at no less than 98% of net asset value (NAV) (Proposal 3)
Your Board of Directors unanimously recommends you
vote the WHITE Proxy Card FOR Proposals 1, 2 & 3 and AGAINST Proposal 4.
Despite the performance of your Fund and the continued efforts of your
Board and investment adviser to increase shareholder value, your Fund faces a
serious threat from a relatively new shareholder, Laxey Partners Ltd.
Laxey Partners Ltd. is based in the Isle of Man. Through tax haven
entities in the Cayman Islands, the British Virgin Islands and with other
unidentified third parties, Laxey claims to be a shareholder of 5.6% of the
Fund's shares. We believe the Laxey entities concentrate on arbitrage led
investments, with an emphasis on exploiting closed end funds, like your Fund. We
believe Laxey Partners is a short-term investor who has no regard for all
shareholders of The Mexico Fund.
Your Board of Directors recommends
you discard any gold proxy card sent to you from Laxey.
PROTECT YOUR INVESTMENT! DON'T BE MISLED!
Laxey Partners Ltd. is seeking to replace two of your Board's directors
with two of its own nominees who are paid consultants to Laxey. They are also
seeking approval of a proposal to terminate the investment management agreement
between the Fund and its investment adviser.
We believe Laxey's proposals will be harmful to the Fund and, if implemented,
will disrupt important initiatives presently being pursued by your Board.
Laxey is seeking shareholder approval to terminate the agreement
between the Fund and its investment adviser within 60 days of a shareholder
vote. We believe that this is an ill-advised tactic that could put the Fund in a
precarious position of having no adviser, incurring additional expenses for
shareholders and potentially disrupting the course of initiatives which have
already had positive effects on the Fund's performance and discount.
We believe it is naive for Laxey to think that the Fund could easily
engage a new investment manager willing and able to manage your Fund within 60
days. Also, any new adviser would likely require a higher management fee,
putting a greater burden on the Fund's low expense structure and on the
shareholders.
Terminating the investment management agreement could hinder, rather
than accelerate, the implementation of the repurchase policy, once SEC approval
of the interval structure is received, as it would require the new manager to
become intimate with the complexities of operating the in-kind repurchase
policy.
Furthermore, should the investment manager be replaced, there could be
a time during the transition when performance could suffer while the new manager
became familiar with the Mexican securities markets. Additionally, it is your
Board and not the adviser who makes the fundamental decisions regarding your
Fund's structure. The adviser fully concurs and supports your Board regarding
the proposed interval structure.
Laxey has no plan!
Laxey offers no specific steps to achieve what your Board believes is
an ill-advised scheme. Instead of a plan, Laxey wants shareholders to replace
your Board's experienced directors and terminate the agreement between the Fund
and its investment adviser. All this so that the new directors and adviser can
then start the process to "...explore methods to offer Stockholders at least 98%
of NAV..."
While Laxey would have the Fund start exploring alternatives,
your Board and investment adviser have already taken action.
Unlike Laxey, your Board has evaluated every option, and concluded that
the in-kind share repurchase is the best vehicle to allow shareholders to redeem
their shares in an orderly fashion (proposal 3 on the enclosed WHITE proxy
card). The in-kind policy was designed, in part, to provide shareholders with
additional liquidity for their Fund shares and possibly to reduce the discount
to NAV at which shares of the Fund have historically traded.
Your Board of Directors unanimously recommends you
vote the WHITE Proxy Card
FOR Proposals 1, 2 & 3 and AGAINST Proposal 4.
As mentioned earlier, Laxey Partners Ltd. is seeking to replace two of
your Board's directors (including Juan Gallardo, the Chairman of your Board)
with two of its own nominees who are paid consultants to Laxey. We urge you to
look closely at the Laxey nominees and ask yourself whose interests they will
represent - all shareholders or the ones paying them a fee?
Laxey's proposed directors have NO EXPERIENCE with closed-end funds
and do not appear to have any experience or knowledge relating to the U.S. and
Mexican securities markets. Furthermore, they entered into consulting agreements
signed with Laxey's Value Catalyst Fund on December 20, 2001, one day before
Laxey notified the Fund that it intended to submit its shareholder proposal.
How can they be expected to act independently and in the best interests
of ALL shareholders when they have no common economic interest with fund
shareholders and are paid consultants of Laxey's?
Your Board of Directors recommends you
discard any gold proxy card sent to you from Laxey.
PROTECT YOUR INVESTMENT! DON'T BE MISLED!
This is a critical time in your Fund's history. We have taken significant steps
to reduce the discount, more completely align the interests of our investment
adviser with those of our fellow shareholders, and enhance performance through a
new non-diversified structure.
We urge you to support your Board and not allow the Laxey Group, with its
ill-conceived, self-serving platform, to disrupt the new initiatives introduced
by your Fund's Board and your investment adviser. We urge you to sign and return
the enclosed WHITE proxy card today.
Sincerely,
Your Board of Directors
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Sign, date and return the WHITE proxy card today.
Vote FOR Proposals 1, 2 & 3 and AGAINST Proposal 4.
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Important!
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1. Regardless of how many shares you own, your vote is very important. Please
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sign, date and mail the enclosed WHITE proxy card. Please vote each WHITE
proxy card you receive since each account must be voted separately. Only
your latest dated proxy counts.
2. We urge you NOT to sign any gold proxy card sent to you by Laxey.
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3. Even if you have sent a gold proxy card to Laxey, you have every right to
change your vote. You may revoke that proxy, and vote as recommended by
your Board by signing, dating and mailing the enclosed WHITE proxy card in
the enclosed envelope.
4. If your shares are held in the name of a bank, broker or other nominee,
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please direct the party responsible for your account to vote the WHITE
proxy card as recommended by your Board.
If you have any questions on how to vote your shares,
please call our proxy solicitor:
MORROW & CO. at (800) 607-0088.
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WHITE PROXY CARD
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 Rockefeller Plaza,
23rd Floor, New York, NY, 10112, on March 7, 2002 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, 2 and 3 against proposal 4 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 January 23, 2002.
(Continued on reverse side)
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Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
THE MEXICO FUND, INC.
March 7, 2002
Please Detach and Mail in the Envelope Provided
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A [X] Please mark your
votes as in this
example
This proxy/voting instruction card will be voted FOR proposals 1, 2 and 3 if no choice is specified.
The Board of Directors recommends a vote FOR proposals 1, 2 and 3.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of the [_] [_] Nominees: 2. Approval of addition of a [_] [_] [_]
nominees listed Juan Gallardo T. performance fee component
at right to serve Emilio Carrillo Gamboa to the Fund's investment
as members of advisory fee.
the Fund's Board of Directors, as Class III
Directors, for a term expiring in 2005 and until 3. Approval of adoption of a [_] [_] [_]
their successors are elected and qualified: share repurchase policy
requiring the Fund, on a
For, except as marked to the contrary below: periodic basis, to offer
to repurchase in-kind Fund
______________________________________________ shares at no less than 98%
of net asset value.
This proxy/voting instruction card will be voted AGAINST
proposal 4 if no choice is specified.
The Board of Directors recommends a vote AGAINST proposal 4.
FOR AGAINST ABSTAIN
4. To consider a shareholder [_] [_] [_]
proposal that the shareholders
of the Fund recommend that the
Board of Directors expedite the
process to convert the Fund to
an open-end investment management
company.
5. In the discretion of the above named proxy holders, such
other business as may properly come before the Meeting
or any adjournment thereof.
SIGNATURE(s)________________________________________ DATED_________________
SIGNATURE(s)________________________________________
TITLE:__________________________________________
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.
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