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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 Section 240.14a-11(c) or Section 240.14a-12
THE MEXICO EQUITY AND INCOME 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)
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:
N/A
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2) Aggregate number of securities to which transaction applies:
N/A
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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):
N/A
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4) Proposed maximum aggregate value of transaction:
N/A
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5) Total fee paid:
N/A
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[ ] 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:
N/A
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2) Form, Schedule or Registration Statement No.:
N/A
--------------------------------------------------------------------------------
3) Filing Party:
N/A
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4) Date Filed:
N/A
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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
THE MEXICO EQUITY AND INCOME FUND, INC.
615 E. Michigan St., 2nd Floor
Milwaukee, Wisconsin 53202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held November 29, 2005
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of The Mexico Equity and Income Fund, Inc. (the "Fund"), a Maryland
corporation, will be held at the offices of Blank Rome LLP, 405 Lexington
Avenue, 23rd Floor, New York, New York 10174 on Tuesday, November 29, 2005, at
10:00 a.m., Eastern time, for the following purposes:
1. To elect the Class I Directors to hold office until the year 2008
Annual Meeting (Proposal 1); and
2. To consider and vote upon such other matters as may properly come
before said Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on October 17,
2005 as the record date for the determination of stockholders entitled to notice
of, and to vote at this Meeting or any adjournment thereof. The stock transfer
books will not be closed.
Copies of the Fund's most recent annual report and semi-annual report
may be ordered free of charge to any stockholder by writing to the Fund c/o U.S.
Bancorp Fund Services, LLC, 615 E. Michigan St., 2nd Floor, Milwaukee, Wisconsin
53202, or by telephone at (888) 294-8217.
By Order of the Board of Directors,
Francisco Lopez
Dated: October 24, 2005 Secretary
UNLESS YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE FILL IN, DATE, SIGN AND
MAIL THE ENCLOSED PROXY CARD IN THE ENCLOSED REPLY ENVELOPE. YOUR PROMPT
RESPONSE WILL ASSURE A QUORUM AT THE MEETING.
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense to the Fund involved in
validating your vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. Other Accounts: The capacity of the individual signing the proxy card
should be indicated unless it is reflected in the form of registration.
For example:
REGISTRATION
Corporate Accounts Valid Signature
------------------ ---------------
(1) ABC Corp.............................ABC Corp. (by John Doe, Treasurer)
(2) ABC Corp.............................John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer..............John Doe
(4) ABC Corp. Profit Sharing Plan........John Doe, Trustee
Trust Accounts
--------------
(1) ABC Trust............................Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d/ 12/28/78......................Jane B. Doe
Custodial or Estate Accounts
----------------------------
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA........John B. Smith
(2) John B. Smith........................John B. Smith, Jr., Executor
(i)
THE MEXICO EQUITY AND INCOME FUND, INC.
615 E. Michigan St., 2nd Floor
Milwaukee, Wisconsin 53202
-------------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
to be held on November 29, 2005
-------------------------------
PROXY STATEMENT
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 (the "Meeting") to be
held at the offices of Blank Rome LLP, 405 Lexington Avenue, 23rd Floor, New
York, New York 10174 on November 29, 2005, at 10:00 a.m., Eastern time, and at
any and all adjournments thereof. A form of proxy is enclosed herewith. This
Proxy Statement and the accompanying form of proxy are being first mailed to
stockholders on or about October 24, 2005.
Any stockholder who executes and delivers a proxy may revoke it by
written communication to the Secretary of the Fund at any time prior to its use
or by voting in person at the Meeting. Unrevoked proxies will be voted in
accordance with the specifications thereon and, unless specified to the
contrary, will be voted FOR the election of the nominees for Directors.
In general, abstentions and broker non-votes (reflected by signed but
unvoted proxies), as defined below, count for purposes of obtaining a quorum but
do not count as votes cast with respect to any proposal where the broker does
not have discretion. With respect to a proposal requiring the affirmative vote
of a majority of the Fund's outstanding shares of common stock, the effect of
abstentions and broker non-votes is the same as a vote against such proposal.
Otherwise, abstentions and broker non-votes have no effect on the outcome of a
proposal. Broker non-votes occur when shares, held in the name of the broker or
nominees for whom an executed proxy is received by the Fund, are not voted on a
proposal because voting instructions have not been received from the beneficial
owners or persons entitled to vote and the broker or nominee does not have
discretionary voting power.
In the event that a quorum is not present at the Meeting, the persons
named as proxies may propose one or more adjournments of the Meeting to a date
not more than one hundred twenty (120) days after the original record date to
permit further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote those proxies that
they are entitled to vote FOR or AGAINST any such proposal in their discretion.
Under the By-laws of the Fund, a quorum is constituted by the presence in person
or by proxy of the holders of
1
record of a majority of the outstanding shares of common stock of the Fund
entitled to vote at the Meeting.
The cost of soliciting the proxies will be borne by the Fund. Proxy
solicitations will be made primarily by mail, but solicitations may also be made
by telephone, telegraph or personal interviews conducted by officers or
employees of the Fund, Pichardo Asset Management, S.A. de C.V. ("PAM"), the
Fund's investment adviser, or U.S. Bancorp Fund Services, LLC, the administrator
to the Fund (the "Administrator").
The Fund will, upon request, bear the reasonable expenses of brokers,
banks and their nominees who are holders of record of the Fund's common stock on
the record date, incurred in mailing copies of this Notice of Meeting and Proxy
Statement and the enclosed form of proxy to the beneficial owners of the Fund's
common stock.
Only holders of issued and outstanding shares of the Fund's common
stock of record at the close of business on October 17, 2005 are entitled to
notice of, and to vote at, the Meeting. Each such holder is entitled to one vote
per share of common stock so held. The number of shares of common stock
outstanding on October 17, 2005 was 2,473,504. The Fund is a closed-end,
management investment company.
A copy of the Fund's most recent annual report for the year ended July
31, 2005 may be ordered free of charge to any stockholder by writing to the Fund
c/o U.S. Bancorp Fund Services, LLC, 615 E. Michigan St., 2nd Floor, Milwaukee,
Wisconsin 53202, or by telephone at (888) 294-8217.
This Proxy Statement is first being mailed to stockholders on or about
October 24, 2005.
2
PROPOSAL 1
ELECTION OF DIRECTORS
In accordance with the Fund's Articles of Incorporation, the terms of
the Fund's Board of Directors are staggered. The Board of Directors is divided
into three classes: Class I, Class II and Class III, each class having a term of
three years. Each year the term of office of one Class expires. The effect of
these staggered terms is to limit the ability of other entities or persons to
acquire control of the Fund by delaying the replacement of a majority of the
Board of Directors.
At the Meeting, stockholders will be asked to elect two Class I
Directors to hold office until the year 2008 Annual Meeting of Stockholders or
thereafter until their successors are duly elected and qualified. In the event
that the nominees become unavailable for election for any presently unforeseen
reason, the persons named in the form of proxy will vote for any nominee who
shall be designated by the present Board of Directors. Directors shall be
elected by a plurality of the shares voting at the Meeting.
At the Meeting, stockholders will be asked to vote for the election of
Messrs. Goldstein and Goodstein as the Class I Directors to serve until the year
2008 Annual Meeting of Stockholders or thereafter until each of their respective
successors are duly elected and qualified. If elected, Messrs. Goldstein and
Goodstein have consented to serve as Directors of the Fund until their
successors are duly elected and qualified.
The persons named in the accompanying form of proxy intend to vote at
the Meeting (unless directed not to vote) FOR the election of Messrs. Goldstein
and Goodstein. The nominees have indicated that they will serve if elected, and
the Board of Directors has no reason to believe that the nominees named above
will become unavailable for election as Directors, but if Messrs. Goldstein and
Goodstein should be unable to serve, the proxy will be voted for any other
persons determined by the persons named in the proxy in accordance with their
judgment.
The following tables set forth the year born and principal occupation
of each of the Directors and the nominees for election as Class I Directors:
3
NOMINEES
Directorships held by
Term of Nominee Director
Name, Address and Office Principal Occupation Outside of Fund
Year Born Position(s) with Fund Since during past 5 years Complex*
CLASS I INDEPENDENT DIRECTOR NOMINEES TO SERVE UNTIL THE YEAR 2008 ANNUAL MEETING OF STOCKHOLDERS:
Glenn Goodstein (1963) Director 2001 Registered investment None
2308 Camino Robledo adviser; Managing
Carlsbad, CA 92009 Member of the General
Partner of Mercury
Partners LP (an
investment partnership)
Phillip Goldstein (1945) Director 2000 President, Kimball & Director of Brantley
60 Heritage Drive Winthrop, Inc. (an Capital Corporation
Pleasantville, NY 10570 investment advisory (a business
firm); and general development company);
partner of Opportunity The Emerging Markets
Partners L.P. (an Telecommunications
investment partnership) Fund (a registered
closed-end investment
company) and First
Israel Funds (a
registered closed-end
investment Company)
----------
* The Fund Complex is comprised of only the Fund because the nominees did
not serve as directors to another investment company which was managed
by Pichardo Asset Management, S.A. de C.V. during the fiscal year ended
July 31, 2005.
REMAINING BOARD OF DIRECTORS
The following tables set forth the name, address, year born and
principal occupation of each of the remaining Directors of the Fund:
Term of Directorships held by
Name, Address and Office Principal Occupation Director Outside of
Year Born Position with Fund Since during past 5 years Fund Complex*
CLASS III INTERESTED DIRECTOR SERVING UNTIL THE YEAR 2007 ANNUAL MEETING OF STOCKHOLDERS:
Gerald Hellerman** Director, Chief Financial 2001 Managing Director, Director, Brantley
(1937) Officer and Chief Hellerman Associates, Capital Corporation
10965 Eight Bells Lane Compliance Officer (a financial and (a business
Columbia, MD 21044 corporate consulting development company);
firm) Director, MVC
Capital, Inc. (a
business development
company); and
Director, AirNet
Systems, Inc. (a
specialty air courier)
4
CLASS II INDEPENDENT DIRECTORS SERVING UNTIL THE YEAR 2006 ANNUAL MEETING OF STOCKHOLDERS:
Rajeev Das (1968) Director 2001 Senior Analyst, Kimball None
68 Lafayette Ave. & Winthrop, Inc. (an
Dumont, NJ 07628 investment advisory
firm)
Andrew Dakos (1966) Director and Chairman of 2001 President and CEO of None
43 Waterford Drive Audit Committee Uvitec Printing Ink,
Montville, NJ 07045 Inc. (an ink and
coating manufacturing
company); Managing
Member of the general
partner of Full Value
Partners L.P. (an
investment
partnership); President
of Elmhurst Capital,
Inc. (an investment
advisory firm)
----------
* The Fund Complex is comprised of only the Fund.
** Mr. Hellerman shall be considered an "interested" director, as defined
in the Investment Company Act of 1940 (the "1940" Act).
The following table sets forth, for each Director, the aggregate dollar
range of equity securities in the Fund that is owned by the Director as of
October 17, 2005. The information as to beneficial ownership is based on
statements furnished to the Fund by each Director.
-------------------------------------------------
Dollar Range of
Equity Securities in
Name the Fund.
---- ---------
Phillip Goldstein $0-10,000
Glenn Goodstein $0-10,000
Andrew Dakos $0-10,000
Rajeev Das $0-10,000
Gerald Hellerman $0-10,000
-------------------------------------------------
EXECUTIVE OFFICERS
In addition to Mr. Hellerman, the current officers of the Fund are:
-------------------------------------------------------------------------------------------------
Term of
Position(s) Office Principal Occupation during Directorships
Name, Address and Age with Fund Since past 5 years held by Officer
-------------------------------------------------------------------------------------------------
Maria Eugenia Pichardo President 2004 Portfolio manager of the None
(1950) Fund since the Fund's
408 Teopanzolco Avenue inception in 1990;
3rd Floor - Reforma President and General
Cuernavaca, 62260 Partner of Pichardo Asset
Morelos Mexico Management, S.A. de C.V.,
the Fund's registered
investment adviser
-------------------------------------------------------------------------------------------------
5
-------------------------------------------------------------------------------------------------
Francisco Lopez (1971) Secretary 2005 For the period May 1997 None
408 Teopanzolco Avenue through December 2002,
3rd Floor - Reforma acted as portfolio manager
Cuernavaca, 62260 assistant to the Fund at
Morelos Mexico Acciones y Valores de
Mexico, S.A. de C.V., a
wholly owned subsidiary of
Acciworldwide, S.A. de
C.V., the Fund's registered
investment adviser prior to
2002; Portfolio manager at
Pichardo Asset Management,
S.A. de C.V., the Fund's
registered investment
adviser
-------------------------------------------------------------------------------------------------
Under the federal securities laws, the Fund is required to provide to
stockholders in connection with the Meeting information regarding compensation
paid to Directors by the Fund as well as by the various other U.S. registered
investment companies advised by the Fund's investment manager during its prior
fiscal year. The Fund pays each of its directors who is not a director, officer
or employee of the Investment Adviser, the Administrator or any affiliate
thereof an annual fee of $12,000 plus $1,000 for each Board of Directors meeting
attended in person and $100 for each special telephonic meeting attended. In
addition, the Fund pays the members of the Audit Committee, comprised of Messrs.
Rajeev Das, Phillip Goldstein and Andrew Dakos, $250 per meeting attended. The
Fund's Pricing Committee members, consisting of all of the independent Directors
of the Fund, are paid $100 each for each pricing committee meeting that does not
occur in conjunction with a regularly scheduled Board meeting. At the Board of
Directors meeting held on September 28, 2004, Mr. Gerald Hellerman was appointed
Chief Compliance Officer of the Fund. For serving the Fund as Chief Compliance
Officer, in addition to the aforementioned Directors' fees, Mr. Hellerman
receives an annual salary in the amount of $24,000, which is paid by the Fund.
In addition, the Fund reimburses the Directors for travel and out-of-pocket
expenses incurred in connection with Board of Directors' meetings.
The following table provides information concerning the compensation
paid during the fiscal year ending July 31, 2005, to each Director of the Fund.
All of the Directors received compensation for serving as a Director of the
Fund. Please note that the Fund has no bonus, profit sharing, pension or
retirement plans.
Aggregate
Director Compensation
Name of Director Since From Fund
-------------------------- -------- ------------
Phillip Goldstein 2000 $ 8,600
Glenn Goodstein 2001 $ 7,900
Andrew Dakos 2001 $ 8,600
Rajeev Das 2001 $ 8,600
Gerald Hellerman 2001 $26,500
6
Each Director attended, in person or by telephone, at least
seventy-five (75%) percent or more of the four (4) meetings of the Board of
Directors (including regularly scheduled and special meetings) held during the
last fiscal year in which he was a Director.
Nominating Committee
At the Quarterly Meeting of the Board of Directors held on June 20,
2002, the Board of Directors established a Nominating Committee. The Nominating
Committee is comprised of all of the directors who are non-interested, namely,
Messrs. Goodstein, Goldstein, Dakos and Das. The Nominating Committee is
responsible for seeking and reviewing candidates for consideration as nominees
for Directors as is from time to time considered necessary or appropriate. It is
the policy of the Nominating Committee to consider nominees recommended by
stockholders of the Fund so long as the stockholders properly submit their
recommendations in accordance with the requirements contained in the Proposals
To Be Submitted By Stockholders section contained herein. During the last fiscal
year, the Nominating Committee conducted no meetings.
AUDIT COMMITTEE
The members of the Audit Committee are Messrs. Das, Dakos and
Goldstein, each of whom is an independent director. The principal functions of
the Audit Committee include, but are not limited to, (i) the oversight of the
accounting and financial reporting processes of the und and its internal control
over financial reporting; (ii) the oversight of the quality and integrity of the
Fund's financial statements and the independent audit thereof; and (iii) the
approval, prior to the engagement of, the Fund's independent auditors and, in
connection therewith, to review and evaluate the qualifications, independence
and performance of the Fund's independent auditors. The Audit Committee convened
twice during the fiscal year ending July 31, 2005.
The following table sets forth the aggregate fees billed by Tait,
Weller & Baker, the independent accountants for the Fund's most recent fiscal
year, for professional services rendered for: (i) the audit of the Fund's annual
financial statements and the review of financial statements included in the
Fund's reports to stockholders ("Audit Fees"); (ii) financial information
systems design and implementation services provided to the Fund, its investment
manager and entities that control, are controlled by or under common control
with the Fund's investment manager that provides services to the Fund
("Financial Information Systems Design"); and (iii) all other services provided
to the Fund, its investment manager and entities that control, are controlled by
or under common control with the Fund's investment manager that provides
services to the Fund ("All Other Fees").
--------------------------------------------------------------------
Audit Fees Financial Information Systems Design All Other Fees
--------------------------------------------------------------------
$21,500 $0 $2,200
--------------------------------------------------------------------
All of the services performed by the Fund's independent auditors,
including audit related and non-audit related services, were pre-approved by the
Audit Committee, as required under the Audit Committee Charter.
The Audit Committee has considered and determined that the services
provided by Tait, Weller & Baker are compatible with maintaining Tait, Weller &
Baker's independence. The
7
aggregate fees included in Audit Fees are fees billed for the calendar year for
the audit of the Fund's annual financial statements. Of the time expended by the
Fund's principal accountant to audit the Fund's financial statements for the
Fund's most recent fiscal year, less than 50% of such time involved work
performed by persons other than the principal accountant's full time, permanent
employees.
Audit Committee Report
The Audit Committee has met and held discussions with the Fund's
Administrator and the Fund's independent accountants. The independent
accountants represented to the Audit Committee that the Fund's financial
statements were prepared in accordance with U.S. generally accepted accounting
principles, and the Audit Committee has reviewed and discussed the financial
statements with the Fund's Administrator and its independent accountants. The
Audit Committee also discussed with the independent accountants matters required
to be discussed by Statement on Auditing Standards No. 61.
The Fund's independent accountants also provided to the Audit Committee
the written disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Audit Committee
discussed with the independent accountants' their independence, in light of the
services they were providing.
Based upon the Audit Committee's discussion with the Fund's
Administrator and the independent accountants and the Audit Committee's review
of the representations of the Fund's Administrator and the report of the
independent accountants to the Audit Committee, the Audit Committee recommended
that the Board of Directors include the audited financial statements in the
Fund's Annual Report for the fiscal year ended July 31, 2005 filed with the U.S.
Securities and Exchange Commission.
Respectfully submitted,
Andrew Dakos, Chairman
Phillip Goldstein
Rajeev Das
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") and Section 30(h) of the 1940 Act in combination require the Fund's
directors and officers, persons who own more than ten (10%) percent of the
Fund's common stock, and the Fund's investment adviser and their respective
directors and officers, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and the New York Stock Exchange,
Inc. The Fund believes that the Fund's directors and officers, the Fund's
investment adviser and their respective directors and officers have complied
with applicable filing requirements during the year ended July 31, 2005.
8
Required Vote
Directors are elected by a plurality of the votes cast by the holders
of shares of common stock of the Fund present in person or represented by proxy
at a meeting with a quorum present. For purposes of the election of Directors,
abstentions and broker non-votes will be counted as shares present for quorum
purposes, may be considered votes cast, and may affect the plurality vote
required for Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE ELECTION
OF MESSRS. GLENN GOODSTEIN AND PHILLIP GOLDSTEIN AS THE CLASS I DIRECTORS OF THE
FUND.
9
ADDITIONAL INFORMATION PERTAINING TO THE
PROPOSED PUT WARRANT PROGRAM
On February 14, 2003, the Fund obtained stockholder approval for the
creation, issuance and registration of put warrants, pursuant to a put warrant
program, which are designed to afford stockholders a series of opportunities to
realize NAV for their shares. Initially conceived by Mr. Goldstein as an
innovative means by which stockholders of a closed-end management investment
company might realize NAV for their shares, Mr. Goldstein has developed the
terms for the creation and issuance of a new instrument entitled a "put
warrant." A Registration Statement covering the issuance of the proposed put
warrants and certain no-action and/or exemptive relief requested by the Fund
with respect thereto is currently under review by the staff of the Investment
Company Division and the staff of the Division of Corporate Finance of the U.S.
Securities and Exchange Commission (the "SEC").
In addition to the SEC's review, the New York Stock Exchange (the
"NYSE") has informally indicated that, if the put warrants are approved by the
SEC, the put warrants should be eligible to be listed on the NYSE.
As initially conceived, the put warrants would entitle a holder thereof
to surrender to the Fund one share of the Fund's common stock for each put
warrant held once each calendar quarter, in exchange for cash equal to NAV per
share.
THERE CAN, HOWEVER, BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
REGISTER THE PUT WARRANTS AS CONCEIVED BY MR. GOLDSTEIN IN THE NEAR FUTURE.
INFORMATION PERTAINING TO THE
RIGHTS OFFERING FOR PREFERRED STOCK
On September 1, 2005, the Board of Directors authorized the filing of a
preliminary registration statement for a rights offering to the Fund's
stockholders. Each Fund stockholder as of a certain record date will receive
rights that will entitle such holder to purchase shares of preferred stock. The
Fund intends to conduct the rights offering prior to January 31, 2006. The terms
of the offering are subject to change prior to filing a definitive registration
statement, and such offer will be made only by means of a prospectus. The
commencement of the offer will be announced through the public media and the
definitive terms of the offer, including the subscription price, will be
included in the prospectus.
INFORMATION PERTAINING TO THE FUND'S
INVESTMENT ADVISER AND ADMINISTRATOR
The Investment Adviser
Pichardo Asset Management, S.A. de C.V. ("PAM"), is the current
investment adviser of the Fund. PAM is located at 408 Teopanzolco Avenue, 3rd
Floor - Reforma Cuernavaca 62260, Morelos, Mexico. PAM manages the Fund's
day-to-day operations and provides the Fund with investment advisory services.
Under the terms of an Investment Advisory Agreement, PAM will conduct all
investment research and supervision and is responsible for the purchase and sale
of
10
the Fund's investment portfolio securities, subject to the supervision and
direction of the Board. PAM also provides the Fund with advice, supervises
management and investment programs and provides investment advisory facilities
and executive and supervisory personnel for managing the investments and
effectuating portfolio transactions. PAM also furnishes, at its own expense, all
necessary administrative services, office space, equipment and clerical
personnel for servicing the Fund's investments.
The Administrator
U.S. Bancorp Fund Services, LLC serves as the Fund's administrator
pursuant to an Administrative Agreement with the Fund dated July 21, 2001. The
Administrator is located at 615 E. Michigan St., 2nd Floor, Milwaukee, Wisconsin
53202.
INFORMATION PERTAINING TO CERTAIN STOCKHOLDERS
The following table sets forth information based on filings made with
the Securities and Exchange Commission concerning persons who may be deemed
beneficial owners of 5% or more of the shares of common stock of the Fund
because they possessed or share voting or investment power with respect to the
shares of the Fund:
Type of Shares of Common Stock % of Fund's Outstanding
Name and Address of Beneficial Owner ownership Beneficially Owned Shares Beneficially Owned
------------------------------------ --------- ------------------ -------------------------
QVT Financial LP (1) Record and
527 Madison Avenue, 8th Floor beneficial
New York, New York 10022 359,650 14.54%
Deutsche Bank AG (2) Record and
Taunusanlage 12, D-60325 beneficial
Frankfurt am Main 287,154 11.61%
Federal Republic of Germany
Richard J. Shaker, d/b/a Shaker Financial Record and
Services (3) beneficial 159,200 6.40%
1094 Magothy Circle
Annapolis, MD 21401
All officers and directors as a group Record and
(7 persons)(4) beneficial 1 *
--------------------------------
* All of the officers and directors as a group hold less than 1% of the
Fund's shares of common stock.
(1) Based solely upon information presented in a Schedule 13G, dated
September 20, 2005, filed by QVT Financial LP ("QVT Financial"). QVT
Financial is the investment manager for QVT Fund LP ("QVT Fund"), which
beneficially owns 72,496 shares of common stock of the Fund. QVT
Financial is also the investment manager for a separate discretionary
account managed for Deutsche Bank AG (the "Separate Account"), which
holds 287,154 shares of common stock of the Fund. QVT Financial has the
power to direct the vote and disposition of the common stock held by
each of QVT Fund and the Separate Account. Accordingly, QVT Financial
may be deemed to be the beneficial owner of an aggregate amount of
359,650 shares of the Fund's common stock, consisting of the shares
owned by QVT Fund and the shares held in the Separate Account.
(2) Based solely upon information presented in a Schedule 13G/A, dated
February 10, 2005, filed by Deutsche Bank AG.
11
(3) Based solely upon information presented in a Schedule 13G/A, dated
July 12, 2004, filed by Richard J. Shaker, d/b/a Shaker Financial
Services.
(4) The address for all officers and directors is c/o U.S. Bancorp Fund
Services, LLC, 615 East Michigan Street, 2nd Floor, Milwaukee, WI
53202.
OTHER BUSINESS
The Board of Directors of the Fund does not know of any other matter
which may come before the Meeting, but should any other matter requiring a vote
of stockholders arise, including any questions as to the adjournment of the
Meeting, it is the intention of the persons named in the proxy to vote the
proxies in accordance with their judgment on that matter.
12
PROPOSALS TO BE SUBMITTED BY STOCKHOLDERS
All proposals by stockholders of the Fund which are intended to be
presented at the Fund's next Annual Meeting of Stockholders, to be held in the
year 2006, must be received by the Fund addressed to The Mexico Equity and
Income Fund, Inc. c/o U.S. Bancorp Fund Services, LLC, 615 E. Michigan St., 2nd
Floor, Milwaukee, Wisconsin 53202, for inclusion in the Fund's proxy statement
and proxy relating to that meeting in advance of the meeting as set forth below.
Any stockholder who desires to bring a proposal at the Fund's 2006 Annual
Meeting of Stockholders without including such proposal in the Fund's proxy
statement must deliver (via the U.S. Post Office or such other means that
guarantees delivery) written notice thereof to the Secretary of the Fund c/o
U.S. Bancorp Fund Services, LLC, 615 E. Michigan St., 2nd Floor, Milwaukee,
Wisconsin 53202, no less than one hundred twenty (120) calendar days
(approximately July, 2006) before the date of the Annual Meeting of Stockholders
which will be scheduled to be held in October, 2006 or the tenth (10th) day
after public announcement is made by way of publication by the New York Stock
Exchange of the Fund's Meeting date.
THE MEXICO EQUITY AND INCOME FUND, INC.
Francisco Lopez
Secretary
Dated: October 24, 2005
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS WHO DO
NOT EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE, SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
13
THE MEXICO EQUITY AND INCOME FUND, INC.
615 E. MICHIGAN ST., 2ND FLOOR
MILWAUKEE, WISCONSIN 53202
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 29, 2005.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gerald Hellerman and Thomas R. Westle, and
each of them, Proxies, with full power of substitution in each of them, in the
name, place and stead of the undersigned, to vote at the Annual Meeting of
Stockholders of The Mexico Equity and Income Fund, Inc. (the "Fund") on Tuesday,
November 29, 2005, at the offices of Blank Rome LLP, 405 Lexington Avenue, 23rd
Floor, New York, NY 10174 or at any adjournment or adjournments thereof,
according to the number of votes that the undersigned would be entitled to vote
if personally present, upon the following matters:
1. ELECTION OF DIRECTORS. To elect Messrs. Glenn Goodstein and Phillip
Goldstein, the nominees to serve as Class I Directors of the Fund, for the time
period relating such director's class and until a successor has been duly
elected and qualified.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE BELOW.)
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN ABOVE. IF NO
INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE NOMINEES.
DATED: _____________, 2005
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
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.
----------------------------------------
Signature
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Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.