As filed with the Securities and Exchange Commission on May 14, 2003
Registration No. 333-
==========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------------
CHICAGO MERCANTILE EXCHANGE HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware 36-4459170
- ----------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
30 South Wacker Drive
Chicago, Illinois 60606
(312) 930-1000
(Address of Principal Executive
Offices)
CHICAGO MERCANTILE EXCHANGE HOLDINGS INC.
AMENDED AND RESTATED OMNIBUS STOCK PLAN
(Full Title of Plan)
Kathleen M. Cronin, Esq.
Corporate Secretary
Chicago Mercantile Exchange Holdings Inc.
30 South Wacker Drive
Chicago, Illinois 60606
(312) 930-1000
(Name, Address and Telephone Number, including Area Code, of Agent for Service)
----------------------------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------
Proposed Maximum
Amount To Proposed Maximum Aggregate Amount of
Title of Shares Be Registered Offering Price Offering Price Registration
Name of Plan To Be Registered (2) Per Share (3) (3) Fee
- -------------------------------------------------------------------------------------------------------------------
Chicago Mercantile Class A Common 1,300,000 $56.375 $73,287,500 $5,929
Exchange Holdings Inc. Stock, par value
Amended and Restated $.01 per share (1)
Omnibus Stock Plan
- -------------------------------------------------------------------------------------------------------------------
(1) Including rights to acquire Series A Junior Participating Preferred Stock
pursuant to the Registrant's rights plan.
(2) Together with an indeterminate number of shares of the Registrant's Class
A common stock that may be necessary to adjust the number of shares
reserved for issuance pursuant to the Registrant's Amended and Restated
Omnibus Stock Plan as a result of a stock split, stock dividend or
similar adjustment of the outstanding shares of the Registrant's Class A
common stock. In accordance with Rule 416 under the Securities Act of
1933, as amended, such indeterminable number of additional shares as may
be issuable as a result of such adjustments are also registered hereby.
(3) Estimated solely for the purpose of calculating the amount of the
registration fee, pursuant to Rule 457(c) of the Securities Act of 1933,
as amended, based upon the average of the high and low prices of the
Registrant's Class A common stock on May 12, 2003, as reported on the New
York Stock Exchange.
EXPLANATORY NOTE
On February 5, 2003, the Board of Directors of Chicago Mercantile
Exchange Holdings Inc. (the "Company") amended the Company's Amended and
Restated Omnibus Stock Plan (the "Plan") to increase the number of shares of
the Company's Class A common stock reserved under the Plan by 1,300,000 shares
from 2,745,975 shares to 4,045,975 shares, along with other modifications to
the Plan (the "Amendment"), subject to shareholder approval. The Company's
shareholders approved the Amendment at the Annual Meeting of Shareholders on
April 22, 2003.
The Company is filing this Registration Statement on Form S-8 with
the Securities and Exchange Commission (the "Commission") to register the
additional shares of the Company's Class A common stock that may be issued
under the Plan as a result of the above-described actions by the Company's
Board of Directors and shareholders. In accordance with General Instruction E
of Form S-8, the contents of the Company's Registration Statement on Form S-8
(Registration No. 333-60266), filed with the Commission on May 4, 2001, as
amended by Post-Effective Amendment No. 1 thereto, filed with the Commission
on July 31, 2002, are incorporated herein by reference and the information
required by Part II is omitted, except as supplemented by the information set
forth below.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed with the Commission by the
Company pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act") are incorporated herein by reference:
(a) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2003.
(b) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2002, including portions of the Company's 2002 Annual
Report to Shareholders and definitive Proxy Statement for the 2003 Annual
Meeting of Shareholders incorporated therein by reference.
(c) The description of the Company's Class A common stock contained
in the prospectus included in the Company's Registration Statement on Form S-1
(File No. 333-90106), as amended, incorporated by reference in the Company's
Registration Statement on Form 8-A filed on November 29, 2002 (File No.
001-31553).
(d) The description of the Company's Rights Agreement and Series A
Junior Participating Preferred Stock contained in the Company's Registration
Statement on Form 8-A filed on December 4, 2001 (File No. 000-33379).
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
ITEM 8. EXHIBITS.
Exhibit Number Description
- -------------- -----------
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom
(Illinois).
10.1 Chicago Mercantile Exchange Holdings Inc. Amended and
Restated Omnibus Stock Plan, amended and restated
effective as of April 22, 2003.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom
(Illinois) (included in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago, State of Illinois, on May
14, 2003.
CHICAGO MERCANTILE EXCHANGE HOLDINGS INC.
By /s/ James J. McNulty
James J. McNulty
----------------------------------------
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Craig S. Donohue, David G.
Gomach and Kathleen M. Cronin, and each of them, his or her true and lawful
attorney-in-fact and agents with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or his or her substitute or substitutes, may lawfully
do or cause to be done by virtue hereof. This power of attorney may be
executed in counterparts.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below on May 14, 2003.
Signature Title
--------- -----
/s/ James J. McNulty President and Chief Executive
- ---------------------------------- Officer and Director
James J. McNulty
/s/ Terrence A. Duffy Chairman of the Board and Director
- ---------------------------------- Chief Financial Officer
Terrence A. Duffy
/s/ David G. Gomach Managing Director and
- ---------------------------------- Chief Accounting Officer
David G. Gomach
/s/ Nancy W. Goble Managing Director and
- ----------------------------------
Nancy W. Goble
/s/ Timothy R. Brennan Director
- ----------------------------------
Timothy R. Brennan
/s/ Martin J. Gepsman Director
- ----------------------------------
Martin J. Gepsman
/s/ Daniel R. Glickman Director
- ----------------------------------
Daniel R. Glickman
/s/ Scott Gordon Director
- ----------------------------------
Scott Gordon
/s/ Bruce F. Johnson Director
- ----------------------------------
Bruce F. Johnson
/s/ Gary M. Katler Director
- ----------------------------------
Gary M. Katler
/s/ Patrick B. Lynch Director
- ----------------------------------
Patrick B. Lynch
Director
- ----------------------------------
Leo Melamed
/s/ William P. Miller II Director
- ----------------------------------
William P. Miller II
/s/ John D. Newhouse Director
- ----------------------------------
John D. Newhouse
Director
- ----------------------------------
James E. Oliff
/s/ William G. Salatich, Jr. Director
- ----------------------------------
William G. Salatich, Jr.
/s/ John F. Sandner Director
- ----------------------------------
John F. Sandner
/s/ Terry L. Savage Director
- ----------------------------------
Terry L. Savage
/s/ Myron S. Scholes Director
- ----------------------------------
Myron S. Scholes
/s/ William R. Shepard Director
- ----------------------------------
William R. Shepard
/s/ Howard J. Siegel Director
- ----------------------------------
Howard J. Siegel
/s/ David J. Wescott Director
- ----------------------------------
David J. Wescott
INDEX TO EXHIBITS
Exhibit Number Description
- -------------- -----------
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom
(Illinois).
10.1 Chicago Mercantile Exchange Holdings Inc. Amended and
Restated Omnibus Stock Plan, amended and restated
effective as of April 22, 2003.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom
(Illinois) (included in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
Exhibit 5.1
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606
May 14, 2003
Chicago Mercantile Exchange Holdings Inc.
30 South Wacker Drive
Chicago, Illinois 60606
Re: Chicago Mercantile Exchange Holdings Inc.
Registration Statement on Form S-8
-----------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Chicago Mercantile
Exchange Holdings Inc., a Delaware corporation (the "Company"), in connection
with the registration of 1,300,000 shares (the "Shares") of the Company's
Class A common stock, par value $.01 per share (the "Common Stock"), issuable
pursuant to the Company's Amended and Restated Omnibus Stock Plan (the
"Plan").
This opinion is being furnished in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of
1933, as amended (the "Act").
In rendering the opinions set forth herein, we have examined
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the Company's Registration Statement on Form S-8 (the "Registration
Statement") as filed with the Securities and Exchange Commission (the
"Commission") on May 14, 2003 under the Act; (ii) a specimen certificate
representing the Common Stock; (iii) the Amended and Restated Certificate of
Incorporation of the Company, as amended to date and currently in effect; (iv)
the Amended and Restated By-Laws of the Company, as amended to date and
currently in effect; (v) the Plan; (vi) certain resolutions of the Board of
Directors of the Company relating to the issuance and sale of the Shares and
related matters under the Plan; and (vii) the report of the inspector of
election confirming approval by the shareholders of the Company at the 2003
annual meeting of shareholders of the Company of the amendment of the Plan to,
among other things, increase the number of shares reserved under the Plan. We
also have examined originals or copies, certified or otherwise identified to
our satisfaction, of such records of the Company and such agreements,
certificates of public officials, certificates of officers or other
representatives of the Company and others, and such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In our examination, we have assumed the legal capacity of
all natural persons, the genuineness of all signatures, the authenticity of
all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified, conformed or
photostatic copies and the authenticity of the originals of such latter
documents. In making our examination of executed documents, we have assumed
that the parties thereto, other than the Company, its directors and officers,
had the power, corporate or other, to enter into and perform all obligations
thereunder and have also assumed the due authorization by all requisite
action, corporate or other, and execution and delivery by such parties of such
documents and the validity and binding effect thereof on such parties. As to
any facts material to the opinions expressed herein which we have not
independently established or verified, we have relied upon statements and
representations of officers and other representatives of the Company and
others.
Members of our firm are admitted to the bar in the State of
Illinois and we do not express any opinion as to the laws of any jurisdiction
other than the corporate laws of the State of Delaware, and we do not express
any opinion as to the effect of any other laws on the opinions stated herein.
Based upon and subject to the foregoing, we are of the
opinion that when (i) the Registration Statement becomes effective under the
Act; and (ii) certificates representing the Shares to be issued under the Plan
in the form of the specimen certificate examined by us have been manually
signed by an authorized officer of the transfer agent and registrar for the
Common Stock and registered by such transfer agent and registrar, and have
been delivered and paid for in accordance with the terms and conditions of the
Plan at a price per share not less than the per share par value of the Common
Stock, the issuance and sale of such Shares will have been duly authorized,
and such Shares will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. In giving this
consent, we do not thereby admit that we are included in the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom (Illinois)
Skadden, Arps, Slate, Meagher & Flom (Illinois)
Exhibit 10.1
CHICAGO MERCANTILE EXCHANGE HOLDINGS INC.
AMENDED AND RESTATED OMNIBUS STOCK PLAN
ARTICLE 1
EFFECTIVE DATE AND PURPOSE
--------------------------
1.1. Effective Date. The Plan is effective as the Chicago Mercantile
Exchange Omnibus Stock Plan as of February 7, 2000, and is amended and
restated as the Chicago Mercantile Exchange Holdings Inc., Amended and
Restated Omnibus Stock Plan as of April 23, 2002, and is further amended on
February 5, 2003.
1.2. Purpose of the Plan. The Plan is intended to further the growth and
profitability of the Company by increasing incentives and encouraging
Share ownership on the part of Employees of the Company and its
Subsidiaries. The Plan is intended to permit the grant of Awards that
constitute "qualified performance-based compensation" under section
162(m) of the Code.
ARTICLE 2
DEFINITIONS
-----------
The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:
2.1. "1934 Act" means the Securities Exchange Act of 1934, as
amended. Reference to a specific section of the 1934 Act or regulation
thereunder shall include such section or regulation, any valid regulation
promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section
or regulation.
2.2. "Affiliate" means any corporation or any other entity
(including, but not limited to, partnerships and joint ventures) controlled by
the Company.
2.3. "Award" means, individually or collectively, a grant under the
Plan of Non-Qualified Stock Options, Incentive Stock Options, SARs, Stock
Awards or Performance Shares.
2.4. "Award Agreement" means the written agreement setting forth the
terms and conditions applicable to an Award.
2.5. "Board" means the Board of Directors of the Company.
2.6. "Bonus Stock" means Shares under a Stock Award which are not
subject to a Period of Restriction.
2.7. "Cause" means, except as otherwise specified in a particular
Award Agreement, (a) the willful and continued failure (other than a failure
resulting from the Participant's Disability) to substantially perform the
duties assigned by the Company, (b) the willful engaging in conduct which is
demonstrably injurious to the Company, monetarily or otherwise, including
conduct that, in the reasonable judgment of the Company, does not conform to
the standard of the Company's executives or employees, (c) any act of
dishonesty, commission of a felony, or (d) a significant violation of any
statutory or common law duty of loyalty to the Company.
2.8. "Change of Control" means, except as otherwise specified in a
particular Award Agreement, the occurrence of any of the following events:
(a) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act)
(a "Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the 1934 Act) of 50% or more of either (1)
the then outstanding Class A Shares (the "Outstanding Class A Common
Stock") or (2) the combined voting power of the then-outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this paragraph (a) the
following acquisitions shall not constitute, or be deemed to cause, a
Change of Control: (i) any increase in such percentage ownership of a
Person to 50% or more resulting solely from any acquisition of shares
directly from the Company or any acquisition of shares by the
Company; provided, that any subsequent acquisitions of shares by such
Person that would add, in the aggregate, 1% or more (measured as of
the date of each such subsequent acquisition) to such Person's
beneficial ownership of Outstanding Class A Common Stock or
Outstanding Company Voting Securities shall be deemed to constitute a
Change of Control, (ii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any
Affiliate; or (iii) any acquisition by any corporation pursuant to a
transaction which complies with clauses (1), (2) and (3) of paragraph
(c) below; or
(b) Individuals who, as of the Effective Date, constitute
the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a Director subsequent to the date hereof whose
election, or nomination for election, was approved by a vote of at
least a majority of the Directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal
of Directors or other actual or threatened solicitation of proxies or
consents, by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially
all of the assets of the Company (a "Business Combination"), in each
case, unless, following such Business Combination, (1) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the then Outstanding Class A
Common Stock and Outstanding Company Voting Securities, immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then-outstanding
shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns
the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such
Business Combination, of the Outstanding Class A Common Stock and
Outstanding Company Voting Securities, as the case may be, (2) no
Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the
Company or of such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 50% or more
of, respectively, the then-outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined
voting power of the then-outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the Business Combination and (3) individuals who were on the
Incumbent Board continue to constitute at least a majority of the
members of the board of directors of the corporation resulting from
the Business Combination; provided, however, that any individual
becoming a Director subsequent to the date hereof whose election, or
nomination for election, was approved by a vote of at least a
majority of the Directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or
consents, by or on behalf of a Person other than the Board; or
(d) Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
2.9. "Class A Shares" means shares of the Company's Class A common
stock, $.01 par value, Class A-1 common stock, $.01 par value, Class A-2
common stock, $.01 par value, Class A-3 common stock, $.01 par value, and
Class A-4 common stock, $.01 par value.
2.10. "Code" means the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code or regulation thereunder shall
include such section or regulation, any valid regulation promulgated
thereunder, and any comparable provision of any future legislation or
regulation amending, supplementing or superseding such section or regulation.
2.11. "Committee" means the Compensation Committee of the Board of
Directors appointed (pursuant to Section 3.1) to administer the Plan.
2.12. "Company" means Chicago Mercantile Exchange Holdings Inc.
(formerly Chicago Mercantile Exchange), a Delaware corporation, or any
successor thereto.
2.13. "Director" means any individual who is a member of the Board.
2.14. "Disability" means a Participant's permanent and total
disability as determined by the Committee in accordance with
non-discriminatory standards consistently applied.
2.15. "Employee" means an employee of the Company, its subsidiaries,
or an Affiliate designated by the Board or the Committee (collectively "an
Employer"). "Employee" does not include an individual who is not
contemporaneously classified as an Employee for purposes of an Employer's
payroll system. In the event any such individual is reclassified as an
Employee for any purpose, including, without limitation, any government agency
or as a result of any private lawsuit, action, or administrative proceeding,
such individual will, notwithstanding such reclassification, remain ineligible
for participation hereunder and will not be considered an Employee for
purposes of this Plan. In addition to and not in derogation of the foregoing,
the exclusive means for an individual who is not contemporaneously classified
as an Employee of an Employer on an Employer's payroll system to become
eligible to participate in this Plan is through an amendment to this Plan
which specifically renders such individual eligible for participation
hereunder.
2.16. "Exercise Price" means the price at which a Share subject to an
Option may be purchased pursuant to the exercise of the Option or the base
price at which an SAR may be exercised with respect to a Share, as applicable.
2.17. "Fair Market Value" means, except as otherwise specified in a
particular Award Agreement, (a) in the case of Shares that are traded on an
established national or regional securities exchange, the closing transaction
price of such a Share as reported by such exchange on the date as of which
such value is being determined or, if there shall be no reported transaction
for such date, on the next preceding date for which a transaction was
reported, (b) in the case of Shares that are not traded on an established
securities exchange, the average of the bid and ask prices for such a Share,
where quoted for such Shares, or (c) if Fair Market Value cannot be determined
under clause (a) or clause (b) above, or if the Committee determines in its
sole discretion that the Shares are too thinly traded for Fair Market Value to
be determined pursuant to clause (a) or clause (b), the value as determined by
an outside expert selected by the Committee.
2.18. "Fiscal Year" means the fiscal year of the Company.
2.19. "Grant Date" means, with respect to an Award, the date that the
Award is granted.
2.20. "Incentive Stock Option" means an Option that is designated as
an Incentive Stock Option and is intended by the Committee to meet the
requirements of section 422 of the Code.
2.21. "Non-Qualified Stock Option" means an Option that is not an
Incentive Stock Option.
2.22. "Option" means an option to purchase Shares which is granted by
the Committee pursuant to Article 5.
2.23. "Participant" means an individual with respect to whom an Award
has been granted and remains outstanding.
2.24. "Performance Goals" means such criteria and objectives as may
be established by the Committee, which shall be satisfied or met (i) as a
condition to the exercisability of all or a portion of an Option or SAR, (ii)
as a condition to the grant of an Award, or (iii) during the applicable
Performance Period or Period of Restriction, as a condition to the
Participant's receipt of the Shares subject to a Restricted Stock Award or, in
the case of a Performance Share Award, of the Shares subject to such Award
and/or the payment with respect to such Award. In the case of an Award that is
intended to qualify as "qualified performance-based compensation" under
section 162(m) of the Code, such Performance Goals may include any or all of
the following or any combination thereof: gross margin, operating margin,
revenue growth, free cash flow, operating cash flow, earnings per share,
economic value added, cash-flow return on investment, net income, total
shareholder return, return on investment, return on equity, return on assets,
the attainment by a Share of a specified Fair Market Value for a specified
period of time, an increase in the Fair Market Value of a Share, or any
increase or decrease of one or more of the foregoing over a specified period.
Such Performance Goals may relate to the performance of the Company, an
Affiliate, any portion of the business, product line, or any combination
thereof, relative to a market index, a group of other companies (or their
subsidiaries, business units or product lines), or a combination thereof, all
as determined by the Committee. If the Committee desires that compensation
payable pursuant to any Award subject to Performance Goals be "qualified
performance-based compensation" within the meaning of section 162(m) of the
Code, the Performance Goals (i) shall be established by the Committee no later
than the end of the first 90 days of the Performance Period or Period of
Restriction, as applicable (or such other time prescribed by the Internal
Revenue Service) and (ii) shall satisfy all other applicable requirements
imposed by Treasury Regulations promulgated under section 162(m) of the Code,
including the requirement that such Performance Goals be stated in terms of an
objective formula or standard.
2.25. "Performance Period" means the period designated by the
Committee during which the Performance Goals applicable to an Award shall be
measured.
2.26. "Performance Share" means a right, contingent upon the
attainment of specified Performance Goals within a specified Performance
Period, to receive one Share, which may be Restricted Stock, or in lieu of all
or a portion thereof, the Fair Market Value of such Share in cash.
2.27. "Period of Restriction" means the period during which
Restricted Stock is subject to forfeiture and/or restrictions on
transferability.
2.28. "Plan" means this Chicago Mercantile Exchange Holdings Inc.,
Amended and Restated Omnibus Stock Plan, as set forth in this instrument and
as hereafter amended from time to time.
2.29. "Restricted Stock" means Shares under a Stock Award which are
subject to a Period of Restriction.
2.30. "Retirement" means a Participant's Termination of Service
(other than for Cause) on or after attaining his or her "normal retirement
date" as defined in the Pension Plan for Employees of Chicago Mercantile
Exchange Inc.
2.31. "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act,
as amended, and any future regulation amending, supplementing or superseding
such regulation.
2.32. "Share" means a share of any class, and of any series within a
class, of the Company's common stock.
2.33. "Stock Appreciation Right" or "SAR" means an Award, granted
alone, in reference to or in tandem with a related Option, which pursuant to
Article 6 is designated by the Committee as an SAR.
2.34. "Stock Award" means an Award of Restricted Stock or Bonus
Stock.
2.35. "Ten Percent Holder" means an Employee (together with persons
whose stock ownership is attributed to the Employee pursuant to section 424(d)
of the Code) who, at the time an Option is granted, owns stock representing
more than ten percent of the voting power of all classes of stock of the
Company (or of any parent or subsidiary as defined in section 424 of the
Code).
2.36. "Termination of Service" means a cessation of the
employee-employer relationship between an Employee and the Company and
Affiliates for any reason, including, but not by way of limitation, a
termination by resignation, discharge with or without Cause, death,
Disability, Retirement, or the disaffiliation of an Affiliate, but excluding
any such termination where there is a simultaneous reemployment by the Company
or an Affiliate.
ARTICLE 3
ADMINISTRATION
--------------
3.1. The Committee. The Plan shall be administered by the Committee.
The Committee shall consist of not less than two (2) Directors. The members of
the Committee shall be appointed from time to time by, and serve at the
pleasure of, the Board. It is intended that each member of the Committee shall
qualify as (a) a "non-employee director" under Rule 16b-3, and (b) an "outside
director" under section 162(m) of the Code. If it is later determined that one
or more members of the Committee do not so qualify, actions taken by the
Committee prior to such determination shall be valid despite such failure to
qualify.
3.2. Authority and Action of the Committee. It shall be the duty of
the Committee to administer the Plan in accordance with the Plan's provisions.
The Committee shall have all powers and discretion necessary or appropriate to
administer the Plan and to control its operation, including, but not limited
to, the power to
(a) determine which Employees shall be eligible to receive
Awards and to grant Awards,
(b) prescribe the form, amount, timing and other terms and
conditions of each Award,
(c) interpret the Plan and the Award Agreements,
(d) adopt such procedures as it deems necessary or
appropriate to permit participation in the Plan by eligible
Employees,
(e) adopt such rules as it deems necessary or appropriate
for the administration, interpretation and application of the Plan,
and
(f) interpret, amend or revoke any such procedures or rules.
A majority of the Committee shall constitute a quorum. The acts of
the Committee shall be either (i) acts of a majority of the members of the
Committee present at any meeting at which a quorum is present or (ii) acts
approved in writing by all of the members of the Committee without a meeting.
3.3. Delegation by the Committee. The Committee, in its sole
discretion and on such terms and conditions as it may provide, may delegate
all or any part of its authority and powers under the Plan to one or more
Directors and/or officers of the Company; provided, however, that the
Committee may not delegate its authority or power with respect to (a) any
officer of the Company with regard to the selection for participation in this
Plan of an officer or other person subject to Section 16 of the 1934 Act or
decisions concerning the timing, pricing or amount of an award to such an
officer or person or (b) any Award that is intended to satisfy the
requirements applicable to "qualified performance-based compensation" under
section 162(m) of the Code.
3.4. Decisions Binding. All determinations, decisions and
interpretations by the Committee, the Board, and any delegate of the Committee
pursuant to the provisions of the Plan shall be final, conclusive, and binding
on all persons, and shall be given the maximum deference permitted by law.
ARTICLE 4
SHARES SUBJECT TO THE PLAN
--------------------------
4.1. Number of Shares. Subject to adjustment as provided in Section
4.3, 4,045,975 Shares shall be available for grants of Awards under the Plan.
The maximum number of Shares with respect to which Options or SARs or a
combination thereof may be granted during any Fiscal Year to any person shall
be 500,000, subject to adjustment as provided in Section 4.3. Shares awarded
under the Plan may be either authorized but unissued Shares, authorized and
issued Shares reacquired and held as treasury Shares or a combination thereof.
4.2. Lapsed Awards. To the extent that Shares subject to an
outstanding Option (except to the extent Shares are issued or delivered by the
Company in connection with the exercise of a tandem SAR) or other Award are
not issued or delivered by reason of the expiration, cancellation, forfeiture
or other termination of such Award or by reason of the delivery or withholding
of Shares to pay all or a portion of the exercise price of an Award, if any,
or to satisfy all or a portion of the tax withholding obligations relating to
an Award, then such Shares shall again be available under this Plan.
4.3. Adjustments in Awards and Authorized Shares. In the event of any
merger, reorganization, consolidation, recapitalization, liquidation, stock
dividend, split-up, Share combination, or other similar change in the
corporate structure of the Company affecting the Shares, the Committee may
adjust the number, class and series of securities available under the Plan,
the number, class, series and purchase price of securities subject to
outstanding Awards, and the numerical limits of Sections 4.1, 7.1 and 8.2.1 in
such manner as the Committee in its sole discretion shall determine to be
appropriate to prevent the dilution or diminution of such Awards. If any such
adjustment would result in a fractional security being (a) available under
this Plan, such fractional security shall be disregarded, or (b) subject to an
outstanding Award under this Plan, the Company shall pay the holder of such
Award, in connection with the first vesting, exercise or settlement of such
Award in whole or in part occurring after such adjustment, an amount in cash
determined by multiplying (i) the fraction of such security (rounded to the
nearest hundredth) by (ii) the excess, if any, of (A) the Fair Market Value on
the vesting, exercise or settlement date over (B) the Exercise Price, if any,
of such Award.
ARTICLE 5
STOCK OPTIONS
-------------
5.1. Grant of Options. Subject to the provisions of the Plan, Options
may be granted to such Employees at such times, and subject to such terms and
conditions, as determined by the Committee in its sole discretion. An Award of
Options may include Incentive Stock Options, Non-Qualified Stock Options, or a
combination thereof; provided, that no Incentive Stock Option shall be granted
more than ten years after the date this Plan is adopted by the Board.
5.2. Award Agreement. Each Option shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the expiration date of the
Option, the number, class and, if applicable, series of Shares to which the
Option pertains (provided that Incentive Stock Options may be granted only
with respect to Class A Shares), any conditions to the exercise of all or a
portion of the Option, and such other terms and conditions as the Committee,
in its discretion, shall determine. The Award Agreement pertaining to an
Option shall designate such Option as an Incentive Stock Option or a
Non-Qualified Stock Option. Notwithstanding any such designation, to the
extent that the aggregate Fair Market Value (determined as of the Grant Date)
of Shares with respect to which Options designated as Incentive Stock Options
are exercisable for the first time by a Participant during any calendar year
(under this Plan or any other plan of the Company, or any parent or subsidiary
as defined in section 424 of the Code) exceeds the amount established by the
Code, such Options shall constitute Non-Qualified Stock Options. For purposes
of the preceding sentence, Incentive Stock Options shall be taken into account
in the order in which they are granted.
5.3. Exercise Price. Subject to the provisions of this Section 5.3,
the Exercise Price with respect to Shares subject to an Option shall be
determined by the Committee in its sole discretion.
5.3.1. Non-Qualified Stock Options. In the case of a Non-Qualified
Stock Option, the Exercise Price may be equal to or greater than one hundred
percent (100%) of the Fair Market Value of a Share on the Grant Date, as shall
be determined by the Committee in its sole discretion. 5.3.2.Incentive Stock
Options. In the case of an Incentive Stock Option, the Exercise Price shall be
not less than one hundred percent (100%) of the Fair Market Value of a Share
on the Grant Date; provided, however, that the Exercise Price with respect to
a Ten Percent Shareholder shall not be less than one hundred-ten percent
(110%) of the Fair Market Value of a Share on the Grant Date.
5.4. Expiration of Options.
5.4.1. Expiration Dates. Each Option shall terminate not later than
the expiration date specified in the Award Agreement pertaining to such
Option; provided, however, that the expiration date with respect to an
Incentive Stock Option shall not be later than the tenth anniversary of its
Grant Date and the expiration date with respect to an Incentive Stock Option
granted to a Ten Percent Holder shall not be later than the fifth anniversary
of its Grant Date.
5.4.2. Termination of Service. Unless otherwise specified in the
Award Agreement pertaining to an Option, each Option granted to a Participant
shall terminate no later than the first to occur of the following events:
(a) The expiration of ninety (90) days from the
date of the Participant's Termination of Service for any
reason other than the Participant's death, Disability,
Retirement or termination for Cause;
(b) The expiration of one (1) year from the date of
the Participant's Termination of Service by reason of
Disability;
(c) The expiration of one (1) year from the date of
the Participant's Termination of Service by reason of the
Participant's Retirement (provided, that the portion of any
Incentive Stock Option exercised more than three months
after such Termination of Service shall be deemed to be a
Non-Qualified Option);
(d) The date of the Participant's Termination of
Service for Cause; or
(e) The expiration date specified in the Award
Agreement pertaining to such Option. 5.4.3.Death of
Employee.Unless otherwise specified in the Award Agreement
pertaining to an Option, if a Participant to whom an Option
has been granted dies while an Employee but prior to the
expiration, cancellation, forfeiture or other termination of
such Option, such Option shall become exercisable in full
upon the Participant's death and shall be exercisable
thereafter until the earlier of (a) the expiration of one
(1) year after the date of death, or (b) the expiration date
specified in the Award Agreement pertaining to such Option.
5.5. Exercisability of Options. Subject to Section 5.4, Options
granted under the Plan shall be exercisable at such times, and shall be
subject to such restrictions and conditions, as the Committee shall determine
in its sole discretion. After an Option is granted, the Committee, in its sole
discretion, may accelerate the exercisability of the Option.
5.6. Method of Exercise. Options shall be exercised by the
Participant's delivery of a written notice of exercise to the Secretary of the
Company (or its designee), setting forth the number of Shares with respect to
which the Option is to be exercised, accompanied by full payment of the
Exercise Price with respect to each such Share. The Exercise Price shall be
payable to the Company in full in cash or its equivalent (including, but not
limited to, by means of, a broker-assisted cashless exercise). The Committee,
in its sole discretion, also may permit exercise (a) by tendering previously
acquired Shares having an aggregate Fair Market Value at the time of exercise
equal to the aggregate Exercise Price of the Shares with respect to which the
Option is to be exercised, or (b) by any other means which the Committee, in
its sole discretion, determines to both provide legal consideration for the
Shares, and to be consistent with the purposes of the Plan.
As soon as practicable after receipt of a written notification of
exercise and full payment for the Shares with respect to which the Option is
exercised, the Company shall deliver to the Participant Share certificates
(which may be in book entry form) for such Shares with respect to which the
Option is exercised.
5.7. Restrictions on Share Transferability. The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
as it may deem advisable, including, but not limited to, restrictions related
to applicable Federal securities laws, the requirements of any national
securities exchange or system upon which Shares are then listed or traded, or
any blue sky or state securities laws.
ARTICLE 6
STOCK APPRECIATION RIGHTS
-------------------------
6.1. Grant of SARs. Subject to the provisions of the Plan, SARs may
be granted to such Employees at such times, and subject to such terms and
conditions, as shall be determined by the Committee in its sole discretion;
provided, that any tandem SAR related to an Incentive Stock Option shall be
granted at the same time that such Incentive Stock Option is granted.
6.2. Exercise Price and Other Terms. The Committee, subject to the
provisions of the Plan, shall have complete discretion to determine the terms
and conditions of SARs granted under the Plan; provided, however, that SARs
may be granted only with respect to Class A Shares. Without limiting the
foregoing, the Exercise Price with respect to Shares subject to an SAR may be
equal to or greater than one hundred percent (100%) of the Fair Market Value
of a Share on the Grant Date, as shall be determined by the Committee in its
sole discretion; provided, that the Exercise Price with respect to Shares
subject to a tandem SAR shall be the same as the Exercise Price with respect
to the Shares subject to the related Option.
6.3. SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the Committee,
in its sole discretion, shall determine.
6.4. Expiration of SARS
6.4.1. Expiration Dates. Each SAR shall terminate not later than as
of the expiration date specified in the Award Agreement pertaining to such
SAR; provided, however, that the expiration date with respect to a tandem SAR
shall not be later than expiration date of the related Option.
6.4.2. Termination of Service. Unless otherwise specified in the
Award Agreement pertaining to an SAR, each SAR granted to a Participant shall
terminate no later than the first to occur of the following events:
(a) The expiration of ninety (90) days from the
date of the Participant's Termination of Service for any
reason other than the Participant's death, Disability,
Retirement or termination for Cause;
(b) The expiration of one (1) year from the date of
the Participant's Termination of Service by reason of the
Participant's Disability or Retirement;
(c) The date of the Participant's Termination of
Service for Cause; or
(d) The expiration date specified in the Award
Agreement pertaining to such SAR. 6.4.3.Death of
Employee.Unless otherwise specified in the Award Agreement
pertaining to an SAR, if a Participant to whom an SAR has
been granted dies while an Employee but prior to the
expiration, cancellation, forfeiture or other termination of
such SAR, such SAR shall become exercisable in full upon the
Participant's death and shall be exercisable thereafter
until the earlier of (a) the expiration of one (1) year
after the date of death, or (b) the expiration date
specified in the Award Agreement pertaining to such SAR.
6.5. Payment of SAR Amount. An SAR may be exercised (a) by the
Participant's delivery of a written notice of exercise to the Secretary of the
Company (or its designee) setting forth the number of whole SARs which are
being exercised, (b) in the case of a tandem SAR, by surrendering to the
Company any Options which are cancelled by reason of the exercise of such SAR,
and (c) by executing such documents as the Company may reasonably request.
Upon exercise of an SAR, the Participant shall be entitled to receive payment
from the Company in an amount determined by multiplying:
(i) The amount by which the Fair Market Value of a Share on
the date of exercise exceeds the Exercise Price specified in the
Award Agreement pertaining to such SAR; times
(ii) The number of Shares with respect to which the SAR is
exercised.
6.6. Payment Upon Exercise of SAR. Unless otherwise specified in the
Award Agreement pertaining to an SAR, payment to a Participant upon the
exercise of the SAR may be made, as determined by the Committee in its sole
discretion, either (a) in cash, (b) in Shares with a Fair Market Value equal
to the amount of the payment or (c) in a combination thereof.
ARTICLE 7
STOCK AWARDS
------------
7.1. Grant of Stock Awards. Subject to the provisions of the Plan,
Stock Awards may be granted to such Employees at such times, and subject to
such terms and conditions, as determined by the Committee in its sole
discretion; provided, however, that Stock Awards may be granted only with
respect to Class A Shares. The Award Agreement pertaining to a Stock Award
shall specify whether it is a Restricted Stock Award or a Bonus Stock Award.
The maximum number of Shares with respect to which a Stock Award may be
granted during any Fiscal Year to any person shall be 500,000, subject to
adjustment as provided in Section 4.3.
7.2. Stock Award Agreement. Each Stock Award shall be evidenced by an
Award Agreement that shall specify the number of Shares granted, any price to
be paid for the Shares, the Performance Goals (if any) and Period of
Restriction applicable to a Restricted Stock Award and such other terms and
conditions as the Committee, in its sole discretion, shall determine. Bonus
Stock Awards shall not be subject to any Periods of Restriction.
7.3. Transferability/Share Certificates. Shares subject to an Award
of Restricted Stock may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated during a Period of Restriction. During the
Period of Restriction, a Restricted Stock Award may be registered in the
holder's name or a nominee name at the discretion of the Company and may bear
a legend as described in Section 7.4.3. Unless the Committee determines
otherwise, Shares of Restricted Stock shall be held by the Company as escrow
agent during the applicable Period of Restriction, together with stock powers
or other instruments of assignment (including a power of attorney), each
endorsed in blank with a guarantee of signature if deemed necessary or
appropriate by the Company, which would permit transfer to the Company of all
or a portion of the Shares subject to the Restricted Stock Award in the event
such Award is forfeited in whole or in part. Upon the grant of a Bonus Stock
Award, subject to the Company's right to require payment of any taxes, a
certificate or certificates evidencing ownership of the requisite number of
Shares shall be delivered to the Participant.
7.4. Other Restrictions. The Committee, in its sole discretion, may
impose such other restrictions on Shares subject to an Award of Restricted
Stock as it may deem advisable or appropriate, in accordance with this Section
7.4.
7.4.1. General Restrictions. The Committee may set restrictions based
upon the achievement of specific performance objectives (Company-wide,
business unit or individual), applicable federal or state securities laws, or
any other basis determined by the Committee in its discretion.
7.4.2. Section 162(m) Performance Restrictions. In the case of Awards
of Restricted Stock which are intended to satisfy the requirements for
"qualified performance-based compensation" under section 162(m) of the Code,
the Committee shall set restrictions based upon the achievement of Performance
Goals.
7.4.3. Legend on Certificates. The Committee, in its discretion, may
legend the certificates representing Restricted Stock during the Period of
Restriction to give appropriate notice of such restrictions. For example, the
Committee may determine that some or all certificates representing Shares of
Restricted Stock shall bear the following legend:
"The sale or other transfer of the shares of stock
represented by this certificate, whether voluntary,
involuntary, or by operation of law, is subject to certain
restrictions on transfer as set forth in the Chicago
Mercantile Exchange Holdings Inc., Amended and Restated
Omnibus Stock Plan (the "Plan"), and in a Restricted Stock
Agreement (as defined by the Plan). A copy of the Plan and
such Restricted Stock Agreement may be obtained from the
Secretary of Chicago Mercantile Exchange Holdings Inc.."
7.5. Removal of Restrictions. Shares of Restricted Stock covered by a
Restricted Stock Award made under the Plan shall be released from escrow as
soon as practicable after the termination of the Period of Restriction (and
the satisfaction or attainment of any applicable Performance Goals) and,
subject to the Company's right to require payment of any taxes, a certificate
or certificates evidencing ownership of the requisite number of Shares shall
be delivered to the Participant.
7.6. Voting Rights. During the Period of Restriction, Participants
holding Shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares, unless otherwise provided in the Award
Agreement.
7.7. Dividends and Other Distributions. During the Period of
Restriction, Participants holding Shares of Restricted Stock shall be entitled
to receive all dividends and other distributions paid with respect to such
Shares unless otherwise provided in the Award Agreement. If any such dividends
or distributions are paid in Shares, the Shares shall be deposited with the
Company and shall be subject to the same restrictions on transferability and
forfeitability as the Shares of Restricted Stock with respect to which they
were paid.
7.8. Return of Restricted Stock to Company. On the date set forth in
the Award Agreement, the Restricted Stock for which restrictions have not
lapsed shall revert to the Company and again shall become available for Awards
under the Plan.
7.9. Termination of Service.
7.9.1. Disability, Retirement and Death. Unless otherwise specified
in the Award Agreement pertaining to a Restricted Stock Award granted to a
Participant, upon the Participant's Termination of Service by reason of
Disability, Retirement or death, the Period of Restriction shall terminate as
of such date, and all Performance Goals shall be deemed to have been satisfied
at the target level.
7.9.2. Other Termination of Service. Unless otherwise specified in the Award
Agreement pertaining to a Restricted Stock Award granted to a Participant,
upon the Participant's Termination of Service for any reason other than
Disability, Retirement or death, the portion of such Award which is subject to
a Period of Restriction on such date shall be forfeited by the Participant and
canceled by the Company.
ARTICLE 8
PERFORMANCE SHARE AWARDS
------------------------
8.1. Performance Share Awards. Subject to the provisions of the Plan,
Performance Share Awards may be granted to such Employees at such times, and
subject to such terms and conditions, as determined by the Committee in its
sole discretion; provided, however, that Performance Share Awards may be
granted only with respect to Class A Shares.
8.2. Terms of Performance Share Award Agreement.
8.2.1. Number of Performance Shares and Performance Goals. The Award
Agreement pertaining to a Performance Share Award shall specify the number of
Performance Shares subject to the Award and the Performance Goals and the
Performance Period. The maximum number of Shares with respect to which a
Performance Share Award may be granted during any Fiscal Year to any person
shall be 500,000, subject to adjustment as provided in Section 4.3
8.2.2. Vesting and Forfeiture. The Award Agreement pertaining to a
Performance Share Award shall specify, in the Committee's discretion and
subject to the terms of the Plan, for the vesting of such Award if specified
Performance Goals are satisfied or met during the Performance Period, and for
the forfeiture of all or a portion of such Award if specified Performance
Goals are not satisfied or met during the Performance Period. 8.2.3.Settlement
of Vested Performance Share Awards.The Award Agreement pertaining to a
Performance Share Award (i) shall specify whether such Award may be settled in
Shares (including Shares of Restricted Stock) or cash or a combination thereof
and (ii) may specify whether the holder thereof shall be entitled to receive,
on a current or deferred basis, dividend equivalents, and, if determined by
the Committee, interest on or the deemed reinvestment of any deferred dividend
equivalents, with respect to the number of Shares subject to such Award. If a
Performance Share Award is settled in Shares of Restricted Stock, a
certificate or certificates representing such Restricted Stock shall be issued
in accordance with Section 7.5, and the Participant shall have such rights of
a stockholder of the Company as determined pursuant to Section 7.6 and 7.7.
Prior to the settlement of a Performance Share Award in Shares, including
Restricted Stock, the Participant shall have no rights as a stockholder of the
Company with respect to the Shares subject to such Award.
8.3. Termination of Service.
8.3.1. Disability, Retirement and Death. Unless otherwise specified
in the Award Agreement pertaining to a Performance Share Award granted to a
Participant, upon the Participant's Termination of Service by reason of
Disability, Retirement or death, all Performance Goals shall be deemed to have
been satisfied at the target level with respect to such Performance Share
Award.
8.3.2. Other Termination of Service. Unless otherwise specified in
the Award Agreement pertaining to a Performance Share Award granted to a
Participant, upon the Participant's Termination of Service for any reason
other than Disability, Retirement or death, the portion of such Award which is
subject to outstanding Performance Goals on such date shall be forfeited by
the Participant and canceled by the Company
ARTICLE 9
MISCELLANEOUS
-------------
9.1. No Effect on Employment or Service. Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or service at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Affiliates (or between Affiliates) shall not be
deemed a Termination of Service. Employment with the Company and Affiliates is
on an at-will basis only.
9.2. Participation. No Employee shall have the right to be selected
to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.
9.3. Indemnification. Each person who is or shall have been a member
of the Committee, or of the Board, shall be indemnified and held harmless by
the Company against and from (a) any loss, cost, liability, or expense that
may be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may
be a party or in which he or she may be involved by reason of any good faith
action taken or good faith failure to act under the Plan or any Award
Agreement, and (b) from any and all amounts paid by him or her in settlement
thereof, with the Company's approval, or paid by him or her in satisfaction of
any judgment in any such claim, action, suit, or proceeding against him or
her, provided he or she shall give the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle
and defend it on his or her own behalf. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such
persons may be entitled under the Company's Certificate of Incorporation or
Bylaws, by contract, as a matter of law, or otherwise, or under any power that
the Company may have to indemnify them or hold them harmless.
9.4. Successors. All obligations of the Company under the Plan, with
respect to Awards granted hereunder, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation or otherwise, of all or substantially
all of the business or assets of the Company.
9.5. Beneficiary Designations. A Participant under the Plan may name
a beneficiary or beneficiaries to whom any vested but unpaid Award shall be
paid in the event of the Participant's death. For purposes of this section, a
beneficiary may include a designated trust having as its primary beneficiary a
family member of a Participant. Each such designation shall revoke all prior
designations by the Participant and shall be effective only if given in a form
and manner acceptable to the Committee. In the absence of any such
designation, any vested benefits remaining unpaid at the Participant's death
shall be paid to the Participant's estate and, subject to the terms of the
Plan and of the applicable Award Agreement, any unexercised vested Award may
be exercised by the administrator or executor of the Participant's estate.
9.6. Nontransferability of Awards. Unless otherwise determined by the
Committee with respect to an Award other than an Incentive Stock Option, no
Award granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will, by the laws of
descent and distribution, or to the limited extent provided in Section 9.5.
All rights with respect to an Award granted to a Participant shall be
available during his or her lifetime only to the Participant and may be
exercised only by the Participant or the Participant's legal representative.
9.7. No Rights as Stockholder. Except to the limited extent provided
in Sections 7.6 and 7.7, no Participant (nor any beneficiary) shall have any
of the rights or privileges of a stockholder of the Company with respect to
any Shares issuable pursuant to an Award (or exercise thereof), unless and
until certificates representing such Shares shall have been issued, recorded
on the records of the Company or its transfer agents or registrars, and
delivered to the Participant (or beneficiary).
9.8. Withholding Requirements. Prior to the delivery of any Shares or
cash pursuant to an Award (or exercise thereof), the Company shall have the
power and the right to deduct (including, but not limited to, deduction
through a broker-assisted cashless exercise) or withhold, or require a
Participant to remit to the Company, an amount sufficient to satisfy federal,
state, local and foreign taxes (including, but not limited to, the
Participant's FICA and SDI obligations) required to be withheld with respect
to such Award (or exercise thereof). Notwithstanding any contrary provision of
the Plan, if a Participant fails to remit to the Company such withholding
amount within the time period specified by the Committee (in its discretion),
the Participant's Award may, in the Committee's discretion, be forfeited and
in such case the Participant shall not receive any of the Shares subject to
such Award.
9.9. Withholding Arrangements. The Committee, in its sole discretion
and pursuant to such procedures as it may specify from time to time, may
permit or require a Participant to satisfy all or part of the tax withholding
obligations in connection with an Award by (a) having the Company withhold
otherwise deliverable Shares, or (b) delivering to the Company already-owned
Shares having a Fair Market Value equal to the amount required to be withheld.
9.10. Deferrals. The Committee, in its sole discretion, may permit a
Participant to defer receipt of the payment of cash or the delivery of Shares
that would otherwise be delivered to a Participant under the Plan. Any such
deferral elections shall be subject to such rules and procedures as shall be
determined by the Committee in its sole discretion.
9.11. Change of Control. (a)(1) Notwithstanding any provision in this
Plan or any Award Agreement, in the event of a Change of Control pursuant to
paragraphs (c) or (d) of Section 2.8 in connection with which the holders of
Shares receive shares of common stock that are registered under Section 12 of
the 1934 Act, (i) all outstanding Options and SARs shall immediately become
exercisable in full, (ii) the Period of Restriction applicable to any
outstanding Restricted Stock Award shall lapse, (iii) the Performance Period
applicable to any outstanding Performance Share shall lapse, (iv) the
Performance Goals applicable to any outstanding award shall be deemed to be
satisfied at the maximum level and (v) there shall be substituted for each
Share available under this Plan, whether or not then subject to an outstanding
award, the number and class of shares into which each outstanding Share shall
be converted pursuant to such Change of Control. In the event of any such
substitution, the purchase price per share in the case of an Option and the
base price in the case of an SAR shall be appropriately adjusted by the
Committee (whose determination shall be final, binding and conclusive), such
adjustments to be made in the case of outstanding Options and SARs without an
increase in the aggregate purchase price or base price.
(2) Notwithstanding any provision in this Plan or any Award
Agreement, in the event of a Change of Control pursuant to paragraph
(a) or (b) of Section 2.8, or in the event of a Change of Control
pursuant to paragraph (c) or (d) of Section 2.8 in connection with
which the holders of Shares receive consideration other than shares
of common stock that are registered under Section 12 of the 1934 Act,
each outstanding Award shall be surrendered to the Company by the
holder thereof, and each such Award shall immediately be canceled by
the Company, and the holder shall receive, within ten days of the
occurrence of a Change of Control, a cash payment from the Company in
an amount equal to (i) in the case of an Option, the number of Shares
then subject to such Option, multiplied by the excess, if any, of the
greater of (A) the highest per Share price offered to stockholders of
the Company in any transaction whereby the Change of Control takes
place or (B) the Fair Market Value of a Share on the date of
occurrence of the Change of Control, over the purchase price per
Share subject to the Option, (ii) in the case of an SAR other than a
tandem SAR, the number of Shares then subject to such SAR, multiplied
by the excess, if any, of the greater of (A) the highest per Share
price offered to stockholders of the Company in any transaction
whereby the Change of Control takes place or (B) the Fair Market
Value of a Share on the date of occurrence of the Change of Control,
over the base price of the SAR, (iii) in the case of a Restricted
Stock Award or Performance Share Award, the number of Shares or the
number of Performance Shares, as the case may be, then subject to
such Award, multiplied by the greater of (A) the highest per Share
price offered to stockholders of the Company in any transaction
whereby the Change of Control takes place or (B) the Fair Market
Value of a Share on the date of occurrence of the Change of Control.
In the event of a Change of Control, each tandem SAR shall be
surrendered by the holder thereof and shall be canceled
simultaneously with the cancellation of the related Option. The
Company may, but is not required to, cooperate with any person who is
subject to Section 16 of the Exchange Act to assure that any cash
payment in accordance with the foregoing to such person is made in
compliance with Section 16 and the rules and regulations thereunder.
9.12. Restrictions on Shares. Each Award made hereunder shall be
subject to the requirement that if an any time the Company determines that the
listing, registration or qualification of the Shares subject to such Award
upon any securities exchange or under a any law, or the consent or approval of
any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the exercise or settlement
of such Award or the delivery of Shares thereunder, such Award shall not be
exercised or settled and such Shares shall not be delivered unless such
listing, registration, qualification, consent, approval or other action shall
have been effected or obtained, free of any conditions not acceptable to the
Company. The Company may require that certificates evidencing shares delivered
pursuant to any Award made hereunder bear a legend in indicating that the ale,
transfer o other disposition thereof by the holder is prohibited except in
compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
ARTICLE 10
AMENDMENT, TERMINATION AND DURATION
-----------------------------------
10.1. Amendment, Suspension or Termination. The Board, in its sole
discretion, may amend, suspend or terminate the Plan, or any part thereof, at
any time and for any reason, subject to any requirement of stockholder
approval required by applicable law, rule or regulation, including section
162(m) and section 422 of the Code. The amendment, suspension or termination
of the Plan shall not, without the consent of the Participant, alter or impair
any rights or obligations under any Award theretofore granted to such
Participant. No Award may be granted during any period of suspension or after
termination of the Plan.
10.2. Duration of the Plan. The Plan shall, subject to Section 10.1
(regarding the Board's right to amend or terminate the Plan), terminate on
June 30, 2007, unless earlier terminated by the Board. The termination of the
Plan shall not affect any Awards granted prior to the termination of the Plan.
ARTICLE 11
LEGAL CONSTRUCTION
------------------
11.1. Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
11.2. Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
11.3. Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
11.4. Governing Law. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of
Delaware, but without regard to its conflict of law provisions.
11.5. Captions. Captions are provided herein for convenience only,
and shall not serve as a basis for interpretation or construction of the Plan.
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-00000) of our report dated January 28, 2003, with respect to
the consolidated financial statements and schedules of Chicago Mercantile
Exchange Holdings Inc. included in its Annual Report (Form 10-K) for the year
ended December 31, 2002, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Chicago, Illinois
May 14, 2003