ARTICLES OF INCORPORATION
MERCURY TARGET SELECT EQUITY FUND, INC.
THE UNDERSIGNED, Wayne H. Chan, whose post office address is Swidler
Berlin Shereff Friedman, LLP, The Chrysler Building, 405 Lexington Avenue, New
York, New York 10174, 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 (the "General Laws") authorizing the formation of corporations and with
the intention of forming a corporation.
ARTICLE I
NAME
The name of the corporation is Mercury Target Select Equity Fund, Inc.
(the "Corporation").
ARTICLE II
PURPOSES AND POWERS
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 business of an investment company of the
open-ended 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 interests of another registered investment
company, trust or other pooled investment vehicle known in the investment
company industry as a master fund in a master/feeder structure, which registered
investment company, trust or other pooled investment vehicle holds securities
and other assets for investment purposes.
(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 and by these
Articles of Incorporation, as its Board of Directors may determine; provided,
however, that the value of the consideration per share to be received by the
Corporation upon the sale or other disposition of any shares of its capital
stock shall not be less than the net asset value per share of such capital stock
outstanding at the time of such event.
(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 unissued capital
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stock of any class or Series, as its Board of Directors may determine, in any
manner and to the extent now or hereafter permitted by the General Laws and by
these Articles of Incorporation.
(5) 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.
(6) 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 now or hereafter in force, and the enumeration of the foregoing
purposes, powers, rights and privileges, shall not be deemed to exclude any
powers, rights or privileges so granted or conferred.
ARTICLE III
PRINCIPAL OFFICE AND RESIDENT AGENT
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
(1) The total number of shares of capital stock which the Corporation
shall have authority to issue is Five Hundred Million (500,000,000) shares, of
the par value of One Hundredth of One Cent ($.0001) per share, and of the
aggregate par value of Fifty Thousand Dollars ($50,000). The capital stock
initially is classified into four classes, consisting of One Hundred Twenty Five
Million (125,000,000) shares of Class I Common Stock, One Hundred Twenty Five
Million (125,000,000) shares of Class A Common Stock, One Hundred Twenty Five
Million (125,000,000) shares of Class B Common Stock, and One Hundred Twenty
Five Million (125,000,000) shares of Class C Common Stock.
(2) Unless otherwise expressly provided in the charter of the Corporation,
the Class I, Class A, Class B and Class C shares of each Series of the
Corporation (the "Series"), if any, shall represent an equal proportionate
interest in the assets belonging to that Series (subject to the liabilities of
that Series) and each share of a particular Series shall have identical voting,
dividend, liquidation and other rights; provided, however, that notwithstanding
anything in the charter of the Corporation to the contrary:
(i) The Class I, Class A, Class B and Class C shares may be issued
and sold subject to such different sales loads or charges, whether
initial, deferred or contingent, or any combination thereof, as the
Board of Directors may from time
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to time establish in accordance with the Investment Company Act of
1940, as amended and in effect from time to time, or any rules,
regulations or orders issued thereunder (collectively, the
"Investment Company Act"), and other applicable law.
(ii) Liabilities of a Series, if any, which are determined by or
under the supervision of the Board of Directors to be attributable
to a particular Class of that Series may be charged to that Class
and appropriately reflected in the net asset value of, or dividends
payable on, the shares of that Class of the Series.
(iii) The Class I, Class A, Class B and Class C shares of a
particular Series may have such different exchange and conversion
rights as the Board of Directors shall provide in compliance with
the Investment Company Act.
(3) The Board of Directors may establish and designate one or more Series
of the Corporation, and may establish and designate one or more classes of
shares for each such Series, from time to time. The Board of Directors may
classify and reclassify any unissued shares of capital stock, of any class or
Series, 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 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.
(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 Sections (2) and (4) of Article II 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
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class or Series is required by the Investment Company Act or by the General
Laws, 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, and (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.
(6) Notwithstanding any provision of the General Laws 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),
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, subject to compliance with the requirements of the Investment Company
Act, the Board of Directors shall have the authority to provide that holders of
shares of any class or Series shall have the right to convert or exchange said
shares into shares of one or more other classes or Series in accordance with
such requirements and procedures as may be established by the Board of
Directors.
(8) 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.
(9) Any fractional shares shall carry proportionately all 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; provided, however, that the Corporation shall not be
required to issue share certificates for such fractional shares.
(10) 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 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 entitled to vote as a
separate class shall constitute a quorum.
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(11) All persons who shall acquire stock in the Corporation, of any class
or Series, shall acquire the same subject to the provisions of this charter and
By-Laws of the Corporation. Any reference to "shares," "stock" or "shares of
stock" in these Articles of Incorporation shall be deemed to refer, unless the
context otherwise requires, to the shares of each separate class and/or Series.
As used in the charter of the Corporation, the terms "charter" and "Articles of
Incorporation" shall mean and include these 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.
(12) The Board of Directors may classify and reclassify any issued 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
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; provided, however, that any
such classification or reclassification shall not substantially adversely affect
the rights of holders of such issued shares. The Board's authority pursuant to
this paragraph shall include, but not be limited to, the power to vary among all
the holders of a particular class or Series (a) the length of time shares must
be held prior to reclassification to 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 reclassified; provided, however, that, subject to the
first sentence of this section, 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 "First Holding Period
Prospectus"), the Holding Period(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 reclassified 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 reclassification, were issued.
(13)(a) Each Series of capital stock of the Corporation, as may be
established, shall relate to a separate portfolio of investments. All shares of
stock in each Series shall be identical except that there may be variations
between the different Series as to the purchase price, determination of net
asset value, designations, preferences, conversion or other rights, voting
powers, restrictions, special and relative rights and limitations as to
dividends and on liquidation, qualifications or terms or conditions of
redemption of such shares of stock.
(b) Each Series of stock of the Corporation shall have the following
powers, preferences and voting or other special rights, and the qualifications,
restrictions and limitations thereof shall be as follows:
(i) All consideration received by the Corporation for the issue or
sale of stock of each Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings,
profits and proceeds received thereon, including any proceeds
derived from the
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sale, exchange or liquidation thereof, and any assets, funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, shall irrevocably belong to the Series of
stock with respect to which such assets, payments or funds were
received by the Corporation for all purposes, subject only to the
rights of creditors, and shall be so handled in the books of account
of the Corporation. Such assets, funds and payments, including any
proceeds derived from the sale, exchange or liquidation thereof, and
any assets, funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, are herein referred to as
"assets belonging to" such Series. In the event that there are any
income, earnings, profits, and proceeds thereof, assets, funds or
payments that are not readily identifiable as belonging to any
particular Series, the Board of Directors of the Corporation shall
allocate them among any one or more of the Series established and
designated from time to time in such manner and on such basis as the
Board of Directors, in its sole discretion, deem fair and equitable.
Each allocation by the Board of Directors shall be conclusive and
binding on the stockholders of the Corporation of all Series for all
purposes.
(ii) The assets belonging to each Series of stock shall be charged
with the liabilities in respect of such Series, and also shall be
charged with its share of the general liabilities of the
Corporation, in proportion to the asset value of the respective
Series determined in accordance with the Articles of Incorporation
of the Corporation. The determination of the Board of Directors
shall be conclusive as to the amount of liabilities, including
accrued expenses and reserves, as to the allocation of the same to a
given Series, and as to whether the same or general assets of the
Corporation are allocable to one or more Series.
ARTICLE V
PROVISIONS FOR DEFINING, LIMITING AND
REGULATING CERTAIN POWERS OF THE CORPORATION
AND OF THE DIRECTORS AND STOCKHOLDERS
(1) The number of directors of the Corporation shall be three, which
number may be changed pursuant to the By-Laws of the Corporation but shall never
be less than three. The names of the current directors who shall act until their
successors are duly elected and qualify are:
Allan J. Oster
Martin G. Byrne
Armento Kirkland
(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 ByLaws of the Corporation
or in the General Laws.
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(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, of
any class or Series, 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 acting and former director and officer of the Corporation shall
be indemnified by the Corporation to the full extent permitted by the General
Laws, 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. The foregoing rights of indemnification shall not be exclusive of any
other rights to which those seeking indemnification may be entitled.
(5) To the fullest extent permitted by the General Laws, 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, or change the name or other designation of any class or
Series of its stock, 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 and by these Articles of Incorporation.
(8) Notwithstanding any other provision of these Articles of Incorporation
or the By-Laws of the Corporation, or the General Laws, the Board of Directors
of the Corporation may, upon the affirmative vote of the majority of the entire
Board of Directors and without the vote or consent of the stockholders, dissolve
the Corporation in the manner otherwise provided by the laws of the State of
Maryland.
ARTICLE VI
REDEMPTION
(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
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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.
(2) All full and fractional shares of stock of the Corporation shall be
redeemable at the option of the Corporation. The Board of Directors may by
resolution from time to time authorize the Corporation to require the redemption
of all or any part of the outstanding shares of any class or Series upon such
terms and conditions as the Board of Directors, in its discretion, shall deem
advisable, and upon the sending of written notice thereof to each holder whose
shares are to be redeemed.
(3) 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 other charge, if any, as may be
fixed by resolution of the Board of Directors of the Corporation. Payment of the
redemption price shall be made in cash 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.
ARTICLE VII
DETERMINATION BINDING
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
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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
The duration of the Corporation shall be perpetual.
ARTICLE IX
AMENDMENT
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 stockholder's rights, and all rights
conferred upon stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, the undersigned incorporator of Mercury Target Select
Equity Fund, Inc. hereby executes the foregoing Articles of Incorporation and
acknowledges the same to be his act and further acknowledges that, to the best
of his knowledge, the matters and facts set forth therein are true in all
material respects under penalties for perjury.
Dated this 2nd day of August, 2000
/s/ Wayne H. Chan
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Wayne H. Chan
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