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Exhibit 99.1(a)
ARTICLES OF INCORPORATION
OF
MERCURY SPECIAL VALUE FUND, INC.
THE UNDERSIGNED, MATTHEW C. MCMURDO whose post office address is One
World Trade Center, New York, New York 10048-0557, being at least eighteen years
of age, does hereby act as an incorporator, under and by virtue of the General
Laws of the State of Maryland authorizing the formation of corporations and with
the intention of forming a corporation.
ARTICLE I.
NAME
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The name of the corporation is MERCURY SPECIAL VALUE FUND, INC. (the
"Corporation").
ARTICLE II.
PURPOSES AND POWERS
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The purpose or purposes for which the Corporation is formed, the
powers, rights and privileges that the Corporation shall be authorized to
exercise and enjoy, and the business or objects to be transacted, carried on and
promoted by it are as follows:
(1) To conduct and carry on the business of an investment company of
the management type.
(2) To hold, invest and reinvest its assets in securities, and in
connection therewith, without limiting the foregoing, to hold part or all of its
assets (a) in cash and/or (b) in shares of or beneficial interests in another
corporation known in the investment company industry as a master fund in a
master/feeder structure, which corporation holds securities and other assets for
investment purposes (the "Master Fund").
(3) To issue and sell shares of its own capital stock in such amounts
and on such terms and conditions, for such purposes and for such amount or kind
of consideration now or hereafter permitted by the General Laws of the State of
Maryland and by these Articles of Incorporation, as its Board of Directors may
determine.
(4) To exchange, classify, reclassify, change the designation of,
convert, rename, redeem, purchase or otherwise acquire, hold, dispose of,
resell, transfer, reissue or cancel (all without the vote or consent of the
stockholders of the Corporation) shares of its issued or
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unissued capital stock, in any manner and to the extent now or hereafter
permitted by the General Laws of the State of Maryland and by these Articles of
Incorporation.
(5) To transfer all or substantially all the assets of the Corporation
to the Master Fund, in exchange for shares of or beneficial interests in the
Master Fund or for such other consideration as permitted by the General Laws of
the State of Maryland and the Investment Company Act of 1940, as amended (the
"Investment Company Act") (all without the vote or consent of the stockholders
of the Corporation), and all such actions, regardless of the frequency with
which they are pursued, shall be deemed in furtherance of the ordinary, usual
and customary business of the Corporation.
(6) To do any and all such further acts or things and to exercise any
and all such further powers or rights as may be necessary, incidental, relative,
conducive, appropriate or desirable for the accomplishment, carrying out or
attainment of all or any of the foregoing purposes or objects.
The Corporation shall be authorized to exercise and enjoy all of the
powers, rights and privileges granted to, or conferred upon, corporations by the
General Laws of the State of Maryland now or hereafter in force, and the
enumeration of the foregoing shall not be deemed to exclude any powers, rights
or privileges so granted or conferred.
ARTICLE III.
PRINCIPAL OFFICE AND RESIDENT AGENT
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The post office address of the principal office of the Corporation in
the State of Maryland is c/o The Corporation Trust Incorporated, 300 East
Lombard Street, Baltimore, Maryland 21202. The name of the resident agent of the
Corporation in this State is The Corporation Trust Incorporated, a corporation
of this State, and the post office address of the resident agent is 300 East
Lombard Street, Baltimore, Maryland 21202.
ARTICLE IV.
CAPITAL STOCK
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(1) The total number of shares of capital stock which the Corporation
shall have authority to issue is Four Hundred Million (400,000,000) shares, of
the par value of Ten Cents ($.10) per share, and of the aggregate par value of
Forty Million Dollars ($40,000,000). The capital stock initially is classified
into four classes, consisting of One Hundred Million (100,000,000) shares of
Class I Common Stock, One Hundred Million (100,000,000) shares of Class A Common
Stock, One Hundred Million (100,000,000) shares of Class B Common Stock and One
Hundred Million (100,000,000) shares of Class C Common Stock.
(2) The Board of Directors may classify and reclassify any unissued
shares of capital stock into one or more additional or other classes or series
as may be established from time to time by setting or changing in any one or
more respects the designations, preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications or terms or
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conditions of redemption of such shares of stock and pursuant to such
classification or reclassification to increase or decrease the number of
authorized shares of any existing class or series.
(3) The Board of Directors may vary among all of the holders of a
particular class or series (a) the length of time shares must be held prior to
conversion into shares of another class or series (the "Holding Period(s)"), (b)
the manner in which the time for such Holding Period(s) is determined and (c)
the class or series into which the particular class or series is being
converted; provided, however, that with respect to holders of the Corporation's
shares issued on or after the date of the Corporation's first effective
prospectus which sets forth Holding Period(s), the Holding Periods(s), the
manner in which the time for such Holding Period(s) is determined and the class
or series into which the particular class or series is being converted shall be
disclosed in the Corporation's prospectus or statement of additional information
in effect at the time such shares, which are the subject of the conversion, were
issued.
(4) Unless otherwise expressly provided in the charter of the
Corporation, including any Articles Supplementary creating any class or series
of capital stock, the holders of each class or series of capital stock shall be
entitled to dividends and distributions in such amounts and at such times as may
be determined by the Board of Directors, and the dividends and distributions
paid with respect to the various classes or series of capital stock may vary
among such classes and series. Dividends on a class or series may be declared or
paid only out of the net assets of that class or series. Expenses related to the
distribution of, and other identified expenses that should properly be allocated
to, the shares of a particular class or series of capital stock may be charged
to and borne solely by such class or series and the bearing of expenses solely
by a class or series of capital stock may be appropriately reflected (in a
manner determined by the Board of Directors) and cause differences in the net
asset value attributable to, and the dividend, redemption and liquidation rights
of, the shares of each class or series of capital stock.
(5) Unless otherwise expressly provided in the charter of the
Corporation, including those matters set forth in Article II, Sections (2), (4)
and (5) hereof and including any Articles Supplementary creating any class or
series of capital stock, on each matter submitted to a vote of stockholders,
each holder of a share of capital stock of the Corporation shall be entitled to
one vote for each share standing in such holder's name on the books of the
Corporation, irrespective of the class or series thereof, and all shares of all
classes and series shall vote together as a single class; provided, however,
that (a) as to any matter with respect to which a separate vote of any class or
series is required by the Investment Company Act or any rules, regulations or
orders issued thereunder, or by the Maryland General Corporation Law, such
requirement as to a separate vote by that class or series shall apply in lieu of
a general vote of all classes and series as described above, (b) in the event
that the separate vote requirements referred to in (a) above apply with respect
to one or more classes or series, then, subject to paragraph (c) below, the
shares of all other classes and series not entitled to a separate class vote
shall vote as a single class, (c) as to any matter which does not affect the
interest of a particular class or series, such class or series shall not be
entitled to any vote and only the holders of shares of the affected classes and
series, if any, shall be entitled to vote and (d) the shares of capital stock of
the Corporation shall have no voting rights in connection with the transfer of
all or substantially all of the assets of the Corporation to the Master Fund in
exchange for shares of or beneficial
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interests in the Master Fund or for such other consideration as permitted by
Maryland General Corporation Law and the Investment Company Act.
(6) Notwithstanding any provision of the Maryland General Corporation
Law requiring a greater proportion than a majority of the votes of all classes
or series of capital stock of the Corporation (or of any class or series
entitled to vote thereon as a separate class or series) to take or authorize any
action, the Corporation is hereby authorized (subject to the requirements of the
Investment Company Act and any rules, regulations and orders issued thereunder)
to take such action upon the concurrence of a majority of the votes entitled to
be cast by holders of capital stock of the Corporation (or a majority of the
votes entitled to be cast by holders of a class or series entitled to vote
thereon as a separate class or series).
(7) Unless otherwise expressly provided in the charter of the
Corporation, including any Articles Supplementary creating any class or series
of capital stock, in the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, the holders of each class or
series of capital stock of the Corporation shall be entitled, after payment or
provision for payment of the debts and other liabilities of the Corporation, to
share ratably in the remaining net assets of the Corporation applicable to that
class or series.
(8) Any fractional shares shall carry proportionately all of the rights
of a whole share, excepting any right to receive a certificate evidencing such
fractional share, but including, without limitation, the right to vote and the
right to receive dividends.
(9) The presence in person or by proxy of the holders of shares
entitled to cast one-third of the votes entitled to be cast shall constitute a
quorum at any meeting of stockholders, except with respect to any matter which
requires approval by a separate vote of one or more classes or series of stock,
in which case the presence in person or by proxy of the holders of shares
entitled to cast one-third of the votes entitled to be cast by each class or
series entitled to vote as a separate class shall constitute a quorum.
(10) All persons who shall acquire stock in the Corporation shall
acquire the same subject to the provisions of the charter and the By-Laws of the
Corporation. As used in the charter of the Corporation, the terms "charter" and
"Articles of Incorporation" shall mean and include the Articles of Incorporation
of the Corporation as amended, supplemented and restated from time to time by
Articles of Amendment, Articles Supplementary, Articles of Restatement or
otherwise.
ARTICLE V.
PROVISIONS FOR DEFINING, LIMITING AND
REGULATING CERTAIN POWERS OF THE CORPORATION
AND OF THE DIRECTORS AND STOCKHOLDERS
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(1) The initial number of directors of the Corporation shall be eight,
which number may be increased or decreased pursuant to the By-Laws of the
Corporation but shall never be less than the minimum number permitted by the
General Laws of the State of Maryland. The names of the directors who shall act
until their successors are duly elected and qualify are:
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Terry K. Glenn
M. Colyer Crum
Laurie Simon Hodrick
Jack B. Sunderland
Stephen B. Swensrud
J. Thomas Touchton
Fred G. Weiss
Arthur Zeikel
(2) The Board of Directors of the Corporation is hereby empowered to
authorize the issuance from time to time of shares of capital stock of any class
or series, whether now or hereafter authorized, for such consideration as the
Board of Directors may deem advisable, subject to such limitations as may be set
forth in these Articles of Incorporation or in the By-Laws of the Corporation or
in the General Laws of the State of Maryland.
(3) No holder of stock of the Corporation shall, as such holder, have
any right to purchase or subscribe for any shares of the capital stock of the
Corporation or any other security of the Corporation which it may issue or sell
(whether out of the number of shares authorized by these Articles of
Incorporation, or out of any shares of the capital stock of the Corporation
acquired by it after the issue thereof, or otherwise) other than such right, if
any, as the Board of Directors, in its discretion, may determine.
(4) Each director and each officer of the Corporation shall be
indemnified and advanced expenses by the Corporation to the full extent
permitted by the General Laws of the State of Maryland, subject to the
requirements of the Investment Company Act. No amendment of these Articles of
Incorporation or repeal of any provision hereof shall limit or eliminate the
benefits provided to directors and officers under this provision in connection
with any act or omission that occurred prior to such amendment or repeal.
(5) To the fullest extent permitted by the General Laws of the State of
Maryland, subject to the requirements of the Investment Company Act, no director
or officer of the Corporation shall be personally liable to the Corporation or
its security holders for money damages. No amendment of these Articles of
Incorporation or repeal of any provision hereof shall limit or eliminate the
benefits provided to directors and officers under this provision in connection
with any act or omission that occurred prior to such amendment or repeal.
(6) The Board of Directors of the Corporation is vested with the sole
power, to the exclusion of the stockholders, to make, alter or repeal from time
to time any of the By-Laws of the Corporation except any particular By-Law which
is specified as not subject to alteration or repeal by the Board of Directors,
subject to the requirements of the Investment Company Act.
(7) The Board of Directors of the Corporation from time to time may
change the Corporation's name, without the vote or consent of the stockholders
of the Corporation, in any manner and to the extent now or hereafter permitted
by the General Laws of the State of Maryland and by these Articles of
Incorporation.
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(8) Notwithstanding any other provision of these Articles of
Incorporation or the By-Laws of the Corporation, or the General Laws of the
State of Maryland, the transfer of all or substantially all of the assets of the
Corporation to the Master Fund shall be deemed to be in the ordinary course of
business of the Corporation, and the Board of Directors of the Corporation is
vested with the sole power, to the exclusion of the stockholders, upon the
affirmative vote of the majority of the entire Board of Directors, to transfer
all or substantially all of the assets of the Corporation to the Master Fund in
exchange for shares of or beneficial interests in the Master Fund or for such
other consideration as permitted by the General Laws of the State of Maryland
and the Investment Company Act.
ARTICLE VI.
REDEMPTION
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(1) Each holder of shares of capital stock of the Corporation shall be
entitled to require the Corporation to redeem all or any part of the shares of
capital stock of the Corporation standing in the name of such holder on the
books of the Corporation, and all shares of capital stock issued by the
Corporation shall be subject to redemption by the Corporation, at the redemption
price of such shares as in effect from time to time as may be determined by the
Board of Directors of the Corporation in accordance with the provisions hereof,
subject to the right of the Board of Directors of the Corporation to suspend the
right of redemption of shares of capital stock of the Corporation or postpone
the date of payment of such redemption price in accordance with provisions of
applicable law. The redemption price of shares of capital stock of the
Corporation shall be the net asset value thereof as determined by the Board of
Directors of the Corporation from time to time in accordance with the provisions
of applicable law, less such redemption fee or liquidation fee, contingent
deferred sales charge or other charge or fee (which fees and charges may vary
within and among the classes and series of capital stock), if any, as may be
approved by the Board of Directors of the Corporation. Payment of the redemption
price shall be made by the Corporation at such time and in such manner as may be
determined from time to time by the Board of Directors of the Corporation.
(2) The Corporation shall, to the extent permitted by applicable law,
have the right at any time to redeem the shares owned by any holder of capital
stock of the Corporation (i) if the redemption is, in the opinion of the Board
of Directors, desirable in order to prevent the Corporation from being deemed a
"personal holding company" within the meaning of the Internal Revenue Code of
1986, as amended, or (ii) if the value of the shares in the account maintained
by the Corporation or its transfer agent for any class of stock for the
stockholder is below an amount determined from time to time by the Board of
Directors (the "Minimum Account Balance") and the stockholder has been given
written notice of the redemption as required by the General Laws of the State of
Maryland and has failed to make additional purchases of shares in an amount
sufficient to bring the value in his account to at least the Minimum Account
Balance before the redemption is effected by the Corporation.
(3) Payment of the redemption price by the Corporation may be made
either in cash or in securities or other assets at the time owned by the
Corporation or partly in cash and partly in securities or other assets at the
time owned by the Corporation.
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ARTICLE VII.
DETERMINATION BINDING
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Any determination made in good faith, so far as accounting matters are
involved, in accordance with accepted accounting practice by or pursuant to the
direction of the Board of Directors, as to the amount of assets, obligations or
liabilities of the Corporation, as to the amount of net income of the
Corporation from dividends and interest for any period or amounts at any time
legally available for the payment of dividends, as to the amount of any reserves
or charges set up and the propriety thereof, as to the time of or purpose for
creating reserves or as to the use, alteration or cancellation of any reserves
or charges (whether or not any obligation or liability for which such reserves
or charges shall have been created, shall have been paid or discharged or shall
be then or thereafter required to be paid or discharged), as to the price of any
security owned by the Corporation or as to any other matters relating to the
issuance, sale, redemption or other acquisition or disposition of securities or
shares of capital stock of the Corporation, and any reasonable determination
made in good faith by the Board of Directors as to whether any transaction
constitutes a purchase of securities on "margin," a sale of securities "short,"
or an underwriting or the sale of, or a participation in any underwriting or
selling group in connection with the public distribution of, any securities,
shall be final and conclusive, and shall be binding upon the Corporation and all
holders of its capital stock, past, present and future, and shares of the
capital stock of the Corporation are issued and sold on the condition and
understanding, evidenced by the purchase of shares of capital stock or
acceptance of share certificates, that any and all such determinations shall be
binding as aforesaid. No provision of these Articles of Incorporation shall be
effective to (a) require a waiver of compliance with any provision of the
Securities Act of 1933, as amended, or the Investment Company Act, or of any
valid rule, regulation or order of the Securities and Exchange Commission
thereunder or (b) protect or purport to protect any director or officer of the
Corporation against any liability to the Corporation or its security holders to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office.
ARTICLE VIII.
PERPETUAL EXISTENCE
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The duration of the Corporation shall be perpetual.
ARTICLE IX.
AMENDMENT
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The Corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles of Incorporation, in any manner now or
hereafter prescribed by statute, including any amendment which alters the
contract rights, as expressly set forth in the charter, of any outstanding stock
and substantially adversely affects the stockholders' rights, and all rights
conferred upon stockholders herein are granted subject to this reservation.
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IN WITNESS WHEREOF, the undersigned incorporator of Mercury Special
Value Fund, Inc. hereby executes these Articles of Incorporation and
acknowledges the same to be his act.
Dated this 1st day of May, 2000.
/s/ Matthew C. McMurdo
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Matthew C. McMurdo
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