SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) December 3, 2001
CHICAGO MERCANTILE EXCHANGE HOLDINGS INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-32645 36-4459170
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
30 South Wacker Drive, Chicago, Illinois 60606
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(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (312) 930-1000
N/A
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. Other Events.
On December 3, 2001, Chicago Mercantile Exchange Inc., a Delaware
corporation ("CME"), reorganized into a holding company structure (the
"Reorganization") whereby CME became a wholly owned subsidiary of Chicago
Mercantile Exchange Holdings Inc., a Delaware corporation ("CME Holdings").
Pursuant to an Agreement and Plan of Merger (the "Merger Agreement"),
dated October 1, 2001, by and among CME, CME Holdings and CME Merger
Subsidiary Inc., a Delaware corporation and wholly owned subsidiary of CME
Holdings ("Merger Sub"), Merger Sub merged with and into CME (the "Merger"),
with CME as the surviving corporation. In accordance with the provisions of
the Delaware General Corporation Law, the Merger Agreement was adopted by a
majority vote of the outstanding shares of Class A and Class B common stock of
CME, voting together as a single class.
Pursuant to the Merger Agreement, each share of Class A common stock,
par value $.01 per share, of CME issued and outstanding immediately prior to
the Merger was converted into four shares of Class A common stock, par value
$.01 per share, of CME Holdings as follows: one share of Class A-1, one share
of Class A-2, one share of Class A-3 and one share of Class A-4. In addition,
each share of Class B common stock, par value $.01 per share, of CME issued
and outstanding immediately prior to the Merger was divided into two pieces:
Class A common stock of CME Holdings in an amount of shares essentially the
same as the Class A share equivalents that were embedded in that Class B share
of CME, and one share of Class B common stock of CME Holdings that corresponds
to the series of the Class B share of CME surrendered in the Merger. The Class
B common stock of CME was converted into the common stock of CME Holdings as
follows:
Share of CME Class B
common stock pre-Merger Converted into shares of CME Holdings common stock post-Merger
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Class A common stock, Class B common stock, Total shares of
common stock in
by class by class CME Holdings
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Series B-1 common stock (included
1,800 Class A share equivalents).... 450 Class A-1 shares 1 Class B-1 share 1,800 shares
450 Class A-2 shares
450 Class A-3 shares
449 Class A-4 shares
Series B-2 common stock (included
1,200 Class A share equivalents).... 300 Class A-1 shares 1 Class B-2 share 1,200 shares
300 Class A-2 shares
300 Class A-3 shares
299 Class A-4 shares
Series B-3 common stock (included 600
Class A share equivalents).......... 150 Class A-1 shares 1 Class B-3 share 600 shares
150 Class A-2 shares
150 Class A-3 shares
149 Class A-4 shares
Series B-4 common stock (included 100
Class A share equivalents).......... 25 Class A-1 shares 1 Class B-4 share 100 shares
25 Class A-2 shares
25 Class A-3 shares
24 Class A-4 shares
At the time of the Merger, the common stock of CME was registered
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). As a result of the Merger, the common stock of CME
Holdings, as successor issuer of CME, is deemed registered pursuant to Section
12(g) of the Exchange Act.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The Exhibits to this report are listed in the Exhibit Index set forth
below.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
CHICAGO MERCANTILE EXCHANGE HOLDINGS INC.
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Registrant
Date: December 4, 2001 By: /s/ C.S. Donohue
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Craig S. Donohue
Managing Director and
Chief Administrative Officer
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
2.1 Agreement and Plan of Merger, dated as of October 1, 2001,
between Chicago Mercantile Exchange Inc., Chicago Mercantile
Exchange Holdings Inc. and CME Merger Subsidiary Inc.
(incorporated by reference to Exhibit 2.1 to Chicago
Mercantile Exchange Holdings Inc.'s Form S-4, filed with the
SEC on August 7, 2001, File Number 33-66988).
3.1 Amended and Restated Certificate of Incorporation of Chicago
Mercantile Exchange Holdings Inc.
3.2 Amended and Restated Bylaws of Chicago Mercantile Exchange
Holdings Inc.
Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CHICAGO MERCANTILE EXCHANGE HOLDINGS INC.
Pursuant to Sections 242 and 245 of the
Delaware General Corporation Law
Chicago Mercantile Exchange Holdings Inc. (the
"Corporation"), a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "GCL"), does hereby certify as
follows:
(1) The name of the Corporation is Chicago Mercantile
Exchange Holdings Inc. The Corporation was originally incorporated under the
name Chicago Mercantile Exchange Holdings Inc. The original certificate of
incorporation of the Corporation was filed with the office of the Secretary of
State of the State of Delaware on August 2, 2001.
(2) This Restated Certificate of Incorporation was duly
adopted by the Board of Directors of the Corporation and by the sole
stockholder of the Corporation in accordance with Sections 228, 242 and 245 of
the GCL.
(3) This Restated Certificate of Incorporation restates and
integrates and further amends the certificate of incorporation of the
Corporation, as heretofore amended or supplemented.
(4) The text of the Certificate of Incorporation is amended
and restated in its entirety as follows:
ARTICLE ONE: The name of the corporation is CHICAGO MERCANTILE
EXCHANGE HOLDINGS INC.
ARTICLE TWO: The address of the corporation's registered office in
the State of Delaware is 1209 Orange Street, City of Wilmington, County of New
Castle, Delaware 19801. The name of the corporation's registered agent at such
address is The Corporation Trust Company.
ARTICLE THREE: The purpose of the corporation shall be to engage in
any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware, as set forth in Title 8 of
the Delaware Code (the "DGCL").
ARTICLE FOUR: The total number of shares of all classes of capital
stock that the corporation is authorized to issue is 148,003,138 shares, of
which:
10,000,000 shares shall be shares of Preferred Stock, par value $.01
per share (the "Preferred Stock"), including 140,000 authorized
shares of Series A Junior Participating Preferred Stock (the "Series
A Junior Participating Preferred Stock");
100,000,000 shares shall be shares of Class A Common Stock, par value
$.01 per share (the "Class A Common Stock");
9,500,000 shares shall be shares of Class A-1 Common Stock, par value
$.01 per share (the "Class A-1 Common Stock");
9,500,000 shares shall be shares of Class A-2 Common Stock, par value
$.01 per share (the "Class A-2 Common Stock");
9,500,000 shares shall be shares of Class A-3 Common Stock, par value
$.01 per share (the "Class A-3 Common Stock");
9,500,000 shares shall be shares of Class A-4 Common Stock, par value
$.01 per share (the "Class A-4 Common Stock");
625 shares shall be shares of Class B-1 Common Stock, par value $.01
per share (the "Class B-1 Common Stock");
813 shares shall be shares of Class B-2 Common Stock, par value $.01
per share (the "Class B-2 Common Stock");
1,287 shares shall be shares of Class B-3 Common Stock, par value
$.01 per share (the "Class B-3 Common Stock"); and
413 shares shall be shares of Class B-4 Common Stock, par value $.01
per share (the "Class B-4 Common Stock").
The term "Common Stock" shall mean, collectively, the Class A Common
Stock, the Class A-1 Common Stock, the Class A-2 Common Stock, the Class A-3
Common Stock, the Class A-4 Common Stock, the Class B-1 Common Stock, the
Class B-2 Common Stock, the Class B-3 Common Stock and the Class B-4 Common
Stock. The board of directors is expressly authorized to designate and issue
any number of authorized but unissued shares of Class A Common Stock as Class
A-1 Common Stock, Class A-2 Common Stock, Class A-3 Common Stock or Class A-4
Common Stock. The designations, voting powers, optional or other special
rights and the qualifications, limitations or restrictions thereof, of the
above classes shall be as follows:
DIVISION A
PREFERRED STOCK
The rights, preferences and privileges and qualifications,
limitations and restrictions granted to and imposed on the shares of Preferred
Stock of the corporation shall be as set forth below in this Division A.
Shares of Preferred Stock may be issued in one or more series at such
time or times, and for such consideration or considerations, as the board of
directors shall determine. The board of directors is hereby authorized to fix,
state and establish, in the resolution or resolutions providing for the
issuance of any wholly unissued series of Preferred Stock, the relative
powers, rights, designations, preferences, qualifications, limitations and
restrictions of such series in relation to any other series of Preferred Stock
at the time outstanding. The board of directors is also expressly authorized
to fix the number of shares of each such series, but not below the number of
shares thereof then outstanding. The authority of the board of directors with
respect to each series of Preferred Stock shall include (without limitation)
the determination of the following:
(a) the dividend rate on the shares of such series,
whether dividends shall be cumulative, and, if so, from which date or
dates, and the rights of priority, if any, with respect to the payment of
dividends on the shares of such series relative to other series of
Preferred Stock or classes of stock;
(b) whether the shares of such series shall have voting
rights (other than the voting rights provided by law) and, if so, the terms
and extent of such voting rights;
(c) whether the shares of such series shall have
conversion privileges, and, if so, the terms and conditions of such
conversion, including provision for adjustment of the conversion rate upon
the occurrence of such events as the board of directors may prescribe;
(d) whether the shares of such series shall be subject to
redemption by the corporation or at the request of the holder(s) thereof,
and, if so, the terms and conditions of any such redemption;
(e) the rights of the shares of such series in the event
of voluntary or involuntary liquidation, dissolution or winding up of the
corporation, and the rights of priority, if any, with respect to the
distribution of assets on the shares of such series relative to other
series of Preferred Stock or classes of stock; and
(f) any other preferences, privileges and powers, and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions of such series, as the board of
directors may deem advisable and as shall not be inconsistent with the
provisions of this Certificate of Incorporation, as the same may be amended
from time to time.
* * * *
Pursuant to the above stated authority, the board of
directors has designated the following series of Preferred Stock:
SECTION 1. DESIGNATION AND AMOUNT.
The shares of such series shall be designated as "Series A
Junior Participating Preferred Stock" and the number of shares constituting
such series shall be 140,000.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(a) The holders of shares of Series A Junior Participating
Preferred Stock shall be entitled to receive, when, as and if declared by the
board of directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the last day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or fraction of a share of Series A
Junior Participating Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (x) $.01 or (y) subject to the provision
for adjustment hereinafter set forth, 1,000 times the aggregate per share
amount of all cash dividends, and 1,000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than
a dividend payable in shares of Class A Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Class A Common Stock, since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Junior Participating Preferred Stock. In the event the
corporation shall at any time after the date of consummation of the merger of
CME Merger Subsidiary Inc. with and into the Exchange (as defined below) (the
"Rights Declaration Date") (i) declare any dividend on Class A Common Stock
payable in shares of Class A Common Stock, (ii) subdivide the outstanding
Class A Common Stock, or (iii) combine the outstanding Class A Common Stock
into a smaller number of shares, then in each such case the amount to which
holders of shares of Series A Junior Participating Preferred Stock were
entitled immediately prior to such event under clause (y) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Class A Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Class A Common Stock that were outstanding immediately prior to such
event.
(b) The corporation shall declare a dividend or distribution
on the Series A Junior Participating Preferred Stock as provided in Paragraph
(a) above immediately after it declares a dividend or distribution on the
Class A Common Stock (other than a dividend payable in shares of Class A
Common Stock); provided that, in the event no dividend or distribution shall
have been declared on the Class A Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $.01 per share on the Series A Junior
Participating Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such
shares of Series A Junior Participating Preferred Stock, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on the shares of
Series A Junior Participating Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. The board of directors may fix a record date for the
determination of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date
fixed for the payment thereof.
SECTION 3. VOTING RIGHTS.
The holders of shares of Series A Junior Participating
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to 1,000 votes on all matters submitted to a vote
of the shareholders of the corporation. In the event the corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on Class A
Common Stock payable in shares of Class A Common Stock, (ii) subdivide the
outstanding Class A Common Stock, or (iii) combine the outstanding Class A
Common Stock into a smaller number of shares, then in each such case the
number of votes per share to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of
which is the number of shares of Class A Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of Class
A Common Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the
holders of shares of Series A Junior Participating Preferred Stock and the
holders of shares of Class A Common Stock and Class B Common Stock shall vote
together as one class on all matters submitted to a vote of shareholders of
the corporation.
(c) (i) If at any time dividends on any Series A
Junior Participating Preferred Stock shall be in arrears in an amount
equal to six quarterly dividends thereon, the occurrence of such
contingency shall mark the beginning of a period (herein called a
"default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and
for the current quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default
period, all holders of Preferred Stock (including holders of the
Series A Junior Participating Preferred Stock) with dividends in
arrears in an amount equal to six quarterly dividends thereon, voting
as a class, irrespective of series, shall have the right to elect two
directors.
(ii) During any default period, such voting
right of the holders of Series A Junior Participating Preferred Stock
may be exercised initially at a special meeting called pursuant to
Paragraph (c)(iii) of this Section 3 or at any annual meeting of
shareholders, and thereafter at annual meetings of shareholders,
provided that such voting right shall not be exercised unless the
holders of 10% in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of
the holders of Common Stock shall not affect the exercise by the
holders of Preferred Stock of such voting right. At any meeting at
which the holders of Preferred Stock shall exercise such voting right
initially during an existing default period, they shall have the
right, voting as a class, to elect directors to fill such vacancies,
if any, in the board of directors as may then exist up to two
directors or, if such right is exercised at an annual meeting, to
elect two directors. If the number which may be so elected at any
special meeting does not amount to the required number, the holders
of the Preferred Stock shall have the right to make such increase in
the number of directors as shall be necessary to permit the election
by them of the required number. After the holders of the Preferred
Stock shall have exercised their right to elect directors in any
default period and during the continuance of such period, the number
of directors shall not be increased or decreased except by vote of
the holders of Preferred Stock as herein provided or pursuant to the
rights of any equity securities ranking senior to or pari passu with
the Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock
shall, during an existing default period, have previously exercised
their right to elect directors, the board of directors may order, or
any shareholder or shareholders owning in the aggregate not less than
10% of the total number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a special meeting
of the holders of Preferred Stock, which meeting shall thereupon be
called by the Chairman of the Board, the President, any Managing
Director or the Secretary of the corporation. Notice of such meeting
and of any annual meeting at which holders of Preferred Stock are
entitled to vote pursuant to this Paragraph (c)(iii) shall be given
to each holder of record of Preferred Stock by mailing a copy of such
notice to him or her at his or her last address as the same appears
on the books of the corporation. Such meeting shall be called for a
time not earlier than 20 days and not later than 60 days after such
order or request or in default of the calling of such meeting within
60 days after such order or request, such meeting may be called on
similar notice by any shareholder or shareholders owning in the
aggregate not less than 10% of the total number of shares of
Preferred Stock outstanding. Notwithstanding the provisions of this
Paragraph (c)(iii), no such special meeting shall be called during
the period within 60 days immediately preceding the date fixed for
the next annual meeting of the shareholders.
(iv) In any default period, the holders of
Common Stock, and other classes of stock of the corporation if
applicable, shall continue to be entitled to elect the whole number
of directors until the holders of Preferred Stock shall have
exercised their right to elect two directors voting as a class, after
the exercise of which right (x) the directors so elected by the
holders of Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the board of
directors may (except as provided in Paragraph (c)(ii) of this
Section 3) be filled by vote of a majority of the remaining directors
theretofore elected by the holders of the class of stock which
elected the director whose office shall have become vacant.
References in this Paragraph (c) to directors elected by the holders
of a particular class of stock shall include directors elected by
such directors to fill vacancies as provided in clause (y) of the
foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a class to
elect directors shall cease, (y) the term of any directors elected by
the holders of Preferred Stock as a class shall terminate, and (z)
the number of directors shall be such number as may be provided for
in the certificate of incorporation or bylaws irrespective of any
increase made pursuant to the provisions of Paragraph (c)(ii) of this
Section 3 (such number being subject, however, to change thereafter
in any manner provided by law or in the certificate of incorporation
or bylaws). Any vacancies in the board of directors effected by the
provisions of clauses (y) and (z) in the preceding sentence may be
filled by a majority of the remaining directors.
(d) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
SECTION 4. CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series A Junior Participating Preferred Stock outstanding shall have been paid
in full, the corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any
other distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Junior Participating Preferred Stock, except
dividends paid ratably on the Series A Junior Participating Preferred
Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, provided that the
corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock
of the corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series A Junior Participating Preferred
Stock, or any shares of stock ranking on a parity with the Series A
Junior Participating Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by
the board of directors) to all holders of such shares upon such terms
as the board of directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(b) The corporation shall not permit any subsidiary of the
corporation to purchase or otherwise acquire for consideration any shares of
stock of the corporation unless the corporation could, under Paragraph (a) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. REACQUIRED SHARES.
Any shares of Series A Junior Participating Preferred Stock
purchased or otherwise acquired by the corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the board of
directors, subject to the conditions and restrictions on issuance set forth
herein.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the corporation, no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of Series A
Junior Participating Preferred Stock shall have received an amount equal to
1,000 times the Exercise Price, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 1,000 (as appropriately adjusted as set forth in Paragraph
(c) of this Section 6 to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of
the Series A Liquidation Preference and the Common Adjustment in respect of
all outstanding shares of Series A Junior Participating Preferred Stock and
Common Stock, respectively, holders of Series A Junior Participating Preferred
Stock and holders of shares of both classes of Common Stock shall receive
their ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock, on a per share basis, respectively.
(b) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of preferred
stock, if any, which rank on a parity with the Series A Junior Participating
Preferred Stock, then such remaining assets shall be distributed ratably to
the holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are not sufficient
assets available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of both classes
of Common Stock.
(c) In the event the corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Class A Common Stock
payable in shares of Class A Common Stock, (ii) subdivide the outstanding
Class A Common Stock, or (iii) combine the outstanding Class A Common Stock
into a smaller number of shares, then in each such case the Adjustment Number
in effect immediately prior to such event shall be adjusted by multiplying
such Adjustment Number by a fraction the numerator of which is the number of
shares of Class A Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Class A Common Stock that
were outstanding immediately prior to such event.
SECTION 7. CONSOLIDATION, MERGER, ETC.
In case the corporation shall enter into any consolidation,
merger, combination or other transaction in which the shares of Class A Common
Stock are exchanged for or changed into other stock or securities, cash and/or
any other property, then in any such case the shares of Series A Junior
Participating Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Class A Common Stock is changed or
exchanged. In the event the corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Class A Common Stock payable in
shares of Class A Common Stock, (ii) subdivide the outstanding Class A Common
Stock, or (iii) combine the outstanding Class A Common Stock into a smaller
number of shares, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A Junior
Participating Preferred Stock shall be adjusted by multiplying such amount by
a fraction the numerator of which is the number of shares of Class A Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Class A Common Stock that were outstanding immediately
prior to such event.
SECTION 8. NO REDEMPTION.
The shares of Series A Junior Participating Preferred Stock
shall not be redeemable.
SECTION 9. AMENDMENT.
The Certificate of Incorporation of the corporation shall
not be further amended in any manner which would materially alter or change
the powers, preferences or special rights of the Series A Junior Participating
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding shares of Series A Junior
Participating Preferred Stock, voting separately as a class.
SECTION 10. FRACTIONAL SHARES.
Series A Junior Participating Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holders fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Junior Participating Preferred Stock.
* * * *
DIVISION B
COMMON STOCK
SUBDIVISION 1: GENERAL PROVISIONS
The rights, preferences and privileges, and qualifications,
limitations and restrictions granted to and imposed on the classes of Common
Stock shall be as set forth in this Division B.
SECTION 1. DEFINITIONS.
In addition to the terms defined elsewhere, the following
terms shall have the respective meanings set forth below:
"Class B Common Stock" shall mean, collectively, Class B-1
Common Stock, Class B-2 Common Stock, Class B-3 Common Stock and
Class B-4 Common Stock.
"Conversion Transfers" shall mean any of the following:
(1) Transfers to the corporation;
(2) Transfers in a Secondary Sale Process or in an IPO;
(3) Transfers to satisfy Exchange claims or the claims of
other members as permitted or required under Exchange rules; and
(4) Transfers approved as Conversion Transfers by the board
of directors of the corporation.
"Core Rights" shall mean:
(1) the divisional product allocation rules applicable to
each membership class as set forth in the rules of the Exchange;
(2) the trading floor access rights and privileges granted
to members of the Exchange;
(3) the number of authorized and issued shares of any class
of Class B Common Stock; or
(4) the eligibility requirements for any Person to exercise
any of the trading rights or privileges of members in the Exchange.
"Effectiveness Date" shall mean the date of acceptance by
the Delaware Secretary of State of the filing of this Certificate of
Incorporation.
"Exchange" shall mean Chicago Mercantile Exchange Inc., the
subsidiary of the corporation conducting its exchange operations.
"IPO" shall mean an initial public offering of Class A
Common Stock that has been underwritten by one or more nationally
recognized underwriting firms, following which shares of the Class A
Common Stock are listed on a securities exchange such as the New York
Stock Exchange or the Nasdaq National Market.
"IPO Date" shall mean the date on which the corporation
shall have closed an IPO.
"Non-Conversion Transfers" shall mean any of the following:
(1) Transfers of Restricted Class A Shares with a share of
Class B Common Stock; provided that, in order to qualify as a
Non-Conversion Transfer, a share of Class B Common Stock must be
transferred (in accordance with the rules of the Exchange) as a
bundle with the following shares of Class A-1 Common Stock, Class A-2
Common Stock, Class A-3 Common Stock and Class A-4 Common Stock:
Class B-1 Common Stock -- 4,500 shares each of Class A-1 Common
Stock, Class A-2 Common Stock and Class A-3 Common Stock and 4,499
shares of Class A-4 Common Stock; Class B-2 Common Stock -- 3,000
shares each of Class A-1 Common Stock, Class A-2 Common Stock and
Class A-3 Common Stock and 2,999 shares of Class A-4 Common Stock;
Class B-3 Common Stock -- 1,500 shares each of Class A-1 Common
Stock, Class A-2 Common Stock and Class A-3 Common Stock and 1,499
shares of Class A-4 Common Stock; and Class B-4 Common Stock -- 25
shares each of Class A-1 Common Stock, Class A-2 Common Stock and
Class A-3 Common Stock and 24 shares of Class A-4 Common Stock;
provided further, that the Transfer of Class A-1 Common Stock, Class
A-2 Common Stock, Class A-3 Common Stock or Class A-4 Common Stock as
specified above shall not be required to be transferred with a share
of Class B Common Stock, if any such shares are no longer Restricted
Class A Shares;
(2) Transfers of Restricted Class A Shares to:
(A) the transferor's spouse or child, provided that
the transferor was a holder on the Effective Date of the
shares being transferred, or the transferor is a member of
the Exchange;
(B) a trust for the sole benefit of the transferor
or the transferor's spouse or child, provided that the
transferor was a holder on the Effective Date of the shares
being transferred, or the transferor is a member of the
Exchange;
(C) the beneficial owner of an individual
retirement account, provided that the transferor is such
individual retirement account;
(D) the estate of a deceased holder of shares
provided that either (1) the deceased holder was a holder on
the Effective Date of the shares being transferred; or (2)
the deceased holder was a member of the Exchange on the date
of death; and such transfer was pursuant to the deceased
holder's will or the laws of descent and distribution; or
(E) the beneficiary of an estate referred to in
clause (D) above, provided that the transferor is such
estate and such beneficiary is the spouse or child of the
deceased holder or a trust for the sole benefit of such
spouse or child;
(3) Bona fide pledges to a commercial bank, a savings and
loan institution or any other lending or financial institution or any
member or clearing member as security for indebtedness of the holder
incurred to acquire a membership interest in the Exchange;
(4) Pledges as collateral to or assignment for the benefit
of clearing members as permitted or required under Exchange rules;
and
(5) Transfers approved as Non-Conversion Transfers by the
board of directors of the corporation.
"Notice of Secondary Sale Opportunity" shall mean a written
notice given by the corporation, at least 60 days prior to the
expiration of the applicable transfer restriction period, to each
then registered holder of Restricted Class A Shares to the effect
that the corporation intends to guide a secondary sales opportunity,
which may be a secondary offering of shares underwritten by one or
more nationally recognized underwriting firms, a sale of shares to
one or more purchasers in a limited offering or sales process, a
repurchase of shares by the corporation or such other process or
means as the board of directors may determine.
A "Permitted Transfer" means Conversion Transfers and
Non-Conversion Transfers.
"Person" shall mean any individual, corporation,
partnership, trust or other entity.
"Restricted Class A Shares" shall mean all issued and
outstanding shares of Class A-1 Common Stock, Class A-2 Common Stock,
Class A-3 Common Stock and Class A-4 Common Stock prior to the time
any such shares have converted into Unrestricted Class A Shares
pursuant to this Certificate of Incorporation.
"Secondary Sale Process" shall mean a sale process guided by
the corporation pursuant to Paragraphs (a)(ii) or (iii) of Section 1
of Subdivision 3 as provided in the Notice of Secondary Sale
Opportunity.
A "Transfer" (and the related term "Transferred") shall mean
any sale, pledge, gift, assignment or other transfer of any ownership
in any share of Class A-1 Common Stock, Class A-2 Common Stock, Class
A-3 Common Stock, Class A-4 Common Stock or Class B Common Stock.
"Unrestricted Class A Shares" shall mean shares of Class A
Common Stock.
SECTION 2. GENERAL.
Except as otherwise set forth in this Division B, the
relative powers, preferences and participating, optional or other special
rights, and the qualifications, limitations or restrictions of each class of
Common Stock shall be identical in all respects.
SECTION 3. DIVIDENDS.
Subject to the rights of the holders of Preferred Stock,
holders of Common Stock shall be entitled to receive such dividends and other
distributions in cash, stock of any corporation or property of the corporation
as may be declared thereon by the board of directors from time to time out of
assets or funds of the corporation legally available therefore, and shall
share equally on a per share basis in all such dividends and other
distributions.
SECTION 4. VOTING RIGHTS.
Subject to the rights of holders of Class B Common Stock set
forth in this Division B, at every meeting of the shareholders of the
corporation in connection with the election of Equity Directors (as defined
below) and all other matters submitted to a vote of shareholders, every holder
of Common Stock shall be entitled to one vote in person or by proxy for each
share of Common Stock registered in his or her name on the transfer books of
the corporation. Except as otherwise required by law or by this Division B,
the holders of each class of Common Stock shall vote together as a single
class, subject to any right that may be conferred upon holders of Preferred
Stock to vote together with holders of Common Stock on all matters submitted
to a vote of shareholders of the corporation.
SECTION 5. LIQUIDATION RIGHTS.
Upon the liquidation, dissolution or winding up of the
corporation, holders of Common Stock shall be entitled to receive any amounts
available for distribution to holders of Common Stock after the payment of, or
provision for, obligations of the corporation and any preferential amounts
payable to holders of any outstanding shares of Preferred Stock.
SECTION 6. REORGANIZATION, CONSOLIDATION OR MERGER.
In case of any reorganization or any consolidation of the
corporation with one or more other corporations or a merger of the corporation
with another corporation, each holder of a share of Class A Common Stock,
Class A-1 Common Stock, Class A-2 Common Stock, Class A-3 Common Stock and
Class A-4 Common Stock shall be entitled to receive with respect to that share
the same kind and amount of shares of stock and other securities and property
(including cash) receivable upon the reorganization, consolidation or merger
by a holder of a share of any of them.
SUBDIVISION 2: CLASS B COMMON STOCK
The rights, preferences and privileges, and qualifications,
limitations and restrictions granted to and imposed on the shares of Class B
Common Stock of the corporation shall be as set forth in Subdivision 1 and
this Subdivision 2 of this Division B.
SECTION 1. SPECIAL VOTING RIGHTS.
In addition to the voting rights set forth in Subdivision 1
of this Division B, the holders of shares of Class B Common Stock shall,
subject to Paragraph (c) of this Section 1, have the following additional
voting rights:
(a) ELECTION OF CLASS B DIRECTORS. Subject to and in
accordance with Article Five, Holders of shares of Class B-1 Common Stock
shall have the sole right to elect three directors to the corporation's board
of directors (the "Class B-1 Directors"), and each holder of Class B-1 Common
Stock shall have one vote per share in any such election. Holders of shares of
Class B-2 Common Stock shall have the sole right to elect two directors to the
corporation's board of directors (the "Class B-2 Directors"), and each holder
of Class B-2 Common Stock shall have one vote per share in any such election.
Holders of shares of Class B-3 Common Stock shall have the sole right to elect
one director to the corporation's board of directors (the "Class B-3
Director"), and each holder of Class B-3 Common Stock shall have one vote per
share in any such election.
(b) CORE RIGHTS. Any change, amendment or modification of
the Core Rights or of the terms of Section 3 of this Subdivision 2 shall be
submitted to a vote of the holders of the Class B Common Stock for their
consideration and approval. In any such vote, holders of Class B-1 Common
Stock shall be entitled to six votes for each share of Class B-1 Common Stock
held, holders of Class B-2 Common Stock shall be entitled to two votes for
each share of Class B-2 Common Stock held, holders of Class B-3 Common Stock
shall be entitled to one vote for each share of Class B-3 Common Stock held
and holders of Class B-4 Common Stock shall be entitled to one-sixth of one
vote for each share of Class B-4 Common Stock held. Any such change, amendment
or modification must be approved by a majority of the aggregate votes cast by
the holders of the Class B Common Stock present (in person or by proxy) and
voting at the meeting of holders of Class B Common Stock called for the
purpose of voting on the proposed change, amendment or modification; provided
that holders of at least a majority of the aggregate number of votes entitled
to vote on the matter shall be present, in person or by proxy, at such
meeting. The absence of a quorum of the holders of Common Stock shall not
effect the exercise by the holders of Class B Common Stock of the voting
rights granted pursuant to this Paragraph (b).
(c) LIMITATION ON VOTING RIGHTS. Notwithstanding anything to
the contrary contained in this Section 1 of this Subdivision 2, for so long as
any Person or group of Persons acting in concert beneficially own (as defined
below) 15% or more of the outstanding shares of any class of Class B Common
Stock, then in any election of directors elected by that class or other
exercise of voting rights with respect to Core Rights or with respect to the
election or removal of directors elected by that class, such Person or group
shall only be entitled to vote (or otherwise exercise voting rights with
respect to a number of shares of that class of Class B Common Stock that
constitutes a percentage of the total number of shares of that class of Class
B Common Stock then outstanding which is less than or equal to such Person or
group's Entitled Voting Percentage (as defined below). For the purposes
hereof, a Person or group's "Entitled Voting Percentage" at any time shall
mean the percentage of the then outstanding shares of Class A Common Stock,
Class A-1 Common Stock, Class A-2 Common Stock, Class A-3 Common Stock and
Class A-4 Common Stock in the aggregate, beneficially owned by such Person or
group at such time. For purposes of this Paragraph (c), a "beneficial owner"
of Common Stock includes any Person or group of Persons who, directly or
indirectly, including through any contract, arrangement, understanding,
relationship or otherwise, written or oral, formal or informal, control the
voting power (which includes the power to vote or to direct the voting) of
such Common Stock.
SECTION 2. LIMITATION ON OWNERSHIP AND TRANSFER
RESTRICTIONS.
(a) Shares of Class B Common Stock may not be Transferred at
any time except as follows and subject to the following limitations:
(i) No person may own a share of Class B-1 Common
Stock unless that person is recognized on the books and
records of the Exchange as the owner of a Chicago Mercantile
Exchange Division membership ("CME Membership") in the
Exchange as governed by the rules of the Exchange; provided
that each holder shall not be permitted to own more than one
share of Class B-1 Common Stock for each CME Membership;
(ii) No person may own a share of Class B-2 Common
Stock unless that person is recognized on the books and
records of the Exchange as the owner of an International
Monetary Market Division membership ("IMM Membership") in
the Exchange as governed by the rules of the Exchange;
provided that each holder shall not be permitted to own more
than one share of Class B-2 Common Stock for each IMM
Membership;
(iii) No person may own a share of Class B-3 Common
Stock unless that person is recognized on the books and
records of the Exchange as the owner of an Index and Option
Market Division membership ("IOM Membership") in the
Exchange as governed by the rules of the Exchange; provided
that each holder shall not be permitted to own more than one
share of Class B-3 Common Stock for each IOM Membership;
(iv) No person may own a share of Class B-4 Common
Stock unless that person is recognized on the books and
records of the Exchange as an owner of a Growth and Emerging
Markets Division membership ("GEM Membership") as governed
by the rules of the Exchange; provided that each holder
shall not be permitted to own more than one share of Class
B-4 Common Stock for each GEM Membership;
(b) No share of Class B-1 Common Stock may be Transferred
other than in connection with the Transfer of a CME Membership made in
accordance with the rules of the Exchange; provided that no more than one
share of Class B-1 Common Stock may be Transferred with a CME Membership;
(c) No share of Class B-2 Common Stock may be Transferred
other than in connection with the Transfer of an IMM Membership made in
accordance with the rules of the Exchange; provided that no more than one
share of Class B-2 Common Stock may be Transferred with an IMM Membership;
(d) No share of Class B-3 Common Stock may be Transferred
other than in connection with the Transfer of an IOM Membership made in
accordance with the rules of the Exchange; provided that no more than one
share of Class B-3 Common Stock may be Transferred with an IOM Membership;
(e) No share of Class B-4 Common Stock may be Transferred
other than in connection with the Transfer of a GEM Membership made in
accordance with the rules of the Exchange; provided that no more than one
share of Class B-4 Common Stock may be Transferred with a GEM Membership;
(f) Every certificate for shares of Class B-1 Common Stock,
Class B-2 Common Stock, Class B-3 Common Stock and Class B-4 Common Stock
shall bear a legend on its face reading as follows:
"The shares of Common Stock represented by this
certificate may not be Transferred to any person in
connection with a Transfer that does not meet the rules of
Chicago Mercantile Exchange Inc. or the terms of the
Certificate of Incorporation of this corporation until the
transfer restrictions applicable to the shares represented
by this certificate expire, and no person who receives the
shares represented by this certificate in connection with a
Transfer that does not satisfy the rules of Chicago
Mercantile Exchange Inc. or the terms of the Certificate of
Incorporation of this corporation prior to such time is
entitled to own or to be registered as the record holder of
the shares of Common Stock represented by this certificate.
Each holder of this certificate, by accepting the
certificate, accepts and agrees to all of the foregoing."
(g) Except as permitted by this Section 2 of this
Subdivision 2, any proposed Transfer of shares of Class B-1 Common Stock,
Class B-2 Common Stock, Class B-3 Common Stock or Class B-4 Common Stock shall
be void.
SECTION 3. COMMITMENT TO MAINTAIN FLOOR TRADING.
The corporation shall cause the Exchange, (i) as long as an
open outcry market is liquid (as defined below), to maintain for such open
outcry market a facility for conducting business, for the dissemination of
price information, for clearing and delivery and (ii) to provide reasonable
financial support (consistent with the calendar year 1999 budget levels
established by Chicago Mercantile Exchange, an Illinois not-for-profit
corporation, the predecessor of the Exchange) for technology, marketing and
research for open outcry markets. If an open outcry market is not liquid, as
determined by the board of directors, the board may determine, in its sole
discretion, whether such obligations will continue, and for how long, in
respect of such market. For purposes of this Section, an open outcry market
will be deemed "liquid" if it meets any of the following tests on a quarterly
basis:
(a) if a comparable exchange-traded product exists,
including electronic trading at the Exchange, the Exchange's open outcry
market has maintained at least 30% of the average daily volume of such
comparable product (including, for calculation purposes, volume from
exchange-for-physical transactions in such open outcry market); or
(b) if a comparable exchange-traded product exists and the
product trades exclusively by open outcry at the Exchange, the Exchange's open
outcry market has maintained at least 30% of the open interest of such
comparable product; or
(c) if no comparable exchange-traded product exists, the
open outcry market has maintained at least 40% of the average quarterly volume
in that market during 1999 at Chicago Mercantile Exchange, an Illinois
not-for-profit corporation, the predecessor of the Exchange (including, for
calculation purposes, volume from exchange-for-physical transactions in such
open outcry market); or
(d) if no comparable exchange-traded product exists and the
product trades exclusively by open outcry, the open outcry market has
maintained at least 40% of the average open interest in that market during
1999 at Chicago Mercantile Exchange, an Illinois not-for-profit corporation,
the predecessor of the Exchange.
SUBDIVISION 3: CLASS A COMMON STOCK
The rights, preferences and privileges, and qualifications,
limitations and restrictions granted to and imposed on the shares of Class A
Common Stock of the corporation shall be as set forth in Subdivision 1 and
this Subdivision 3 of this Division B.
SECTION 1. TRANSFER RESTRICTIONS; CONVERSION INTO CLASS A
COMMON STOCK.
(a) In the event that an IPO Date is on or prior to December
15, 2002, then, no Restricted Class A Shares may be Transferred other than in
a Permitted Transfer, except as follows:
(i) During the period commencing on the
Effectiveness Date and ending on the date occurring 180 days after
the IPO Date, Restricted Class A Shares may only be Transferred in a
Permitted Transfer.
(ii) On the 181st day after the IPO Date the
restrictions on Transfer applicable to the Class A-1 Common Stock
shall expire and all issued and outstanding Class A-1 Common Stock
shall automatically convert (without any action by the holder) into
Unrestricted Class A Shares; PROVIDED, HOWEVER, if the corporation
shall give, on or before the 120th day after the IPO Date, a Notice
of Secondary Sale Opportunity, then (x) the corporation shall have
until the 240th day after the IPO Date in order to complete the
Secondary Sale Process contemplated in said notice, and (y) the Class
A-1 Common Stock shall not convert into Unrestricted Class A Shares
on such 181st day and such shares may not be Transferred (other than
in a Permitted Transfer); PROVIDED FURTHER, HOWEVER:
(A) if (x) the Secondary Sale Process is
completed on or before the 240th day after the IPO Date and
(y) not less than the lesser of all of the issued and
outstanding shares of Class A-1 Common Stock or the number
of such shares of Class A-1 Common Stock requested to be
included in such sale process are sold, no shares of Class
A-1 Common Stock shall convert into Unrestricted Class A
Shares and such shares may not be Transferred other than in
a Permitted Transfer (other than the shares sold in such
Secondary Sale Process); or
(B) if (x) the Secondary Sale Process is
so completed on or before the 240th day after the IPO Date
and (y) less than the lesser of all of the issued and
outstanding shares of Class A-1 Common Stock or the number
of such shares of Class A-1 Common Stock requested to be
included in such sale process are sold, then on the 241st
day after the IPO Date the shares of Class A-1 Common Stock
requested by holders to be included in the Secondary Sale
Process and not sold in such sale process shall
automatically convert (without any action by the holder)
into Unrestricted Class A Shares. Any shares of Class A-1
Common Stock not requested to be included in such sale
process shall not convert into Unrestricted Class A Shares
and may not be Transferred other than in a Permitted
Transfer; or
(C) if the Secondary Sale Process is not
completed on or before the 240th day after the IPO Date,
then on the 241st day after the IPO Date all issued and
outstanding shares of Class A-1 Common Stock shall
automatically convert into Unrestricted Class A Shares.
(iii) On the 361st day after the IPO Date the
restrictions on Transfer applicable to the Class A-2 Common Stock
shall expire and all issued and outstanding Class A-2 Common Stock
shall automatically convert (without any action by the holder) into
Unrestricted Class A Shares; PROVIDED, HOWEVER, if the corporation
shall give, on or before the 300th day after the IPO Date, a Notice
of Secondary Sale Opportunity, then (x) the corporation shall have
until the 420th day after the IPO Date in order to complete the
Secondary Sale Process contemplated in said notice, and (y) the Class
A-2 Common Stock shall not convert into Unrestricted Class A Shares
on such 361st day and such shares may not be Transferred (other than
in a Permitted Transfers); PROVIDED FURTHER, HOWEVER:
(A) if (x) the Secondary Sale Process is
so completed on or before the 420th day after the IPO Date
and (y) not less than the lesser of all of the issued and
outstanding shares of Class A-2 Common Stock or the number
of such shares of Class A-2 Common Stock requested to be
included in such sale process are sold, no shares of Class
A-1 Common Stock or Class A-2 Common Stock shall convert
into Unrestricted Class A Shares and such shares may not be
Transferred other than in a Permitted Transfer (other than
the shares sold in such Secondary Sale Process); or
(B) if (x) the Secondary Sale Process is
so completed on or before the 420th day after the IPO Date
and (y) less than the lesser of all of the issued and
outstanding shares of Class A-2 Common Stock or the number
of such shares of Class A-2 Common Stock requested to be
included in such sale process are sold, then on the 421st
day after the IPO Date all issued and outstanding shares of
Class A-1 Common Stock and all shares of Class A-2 Common
Stock requested to be included in such sale and not sold in
such sale shall automatically convert (without any action by
the holder) into Unrestricted Class A Shares. Any shares of
Class A-2 Common Stock not requested to be included in such
sale process shall not convert into Unrestricted Class A
Shares and may not be Transferred other than in a Permitted
Transfer; or
(C) if the Secondary Sale Process is not
completed on or before the 420th day after the IPO Date,
then on the 421st day after the IPO Date all issued and
outstanding shares of Class A-1 Common Stock and Class A-2
Common Stock shall automatically convert (without any action
by the holder) into Unrestricted Class A Shares.
(iv) On the 541st day after the IPO Date, all
remaining Restricted Class A Shares shall automatically convert
(without any action by the holder) into Unrestricted Class A Shares.
(v) Following each Notice of Secondary Sale
Opportunity, each holder of Restricted Class A Shares may elect to
include any or all of such holder's Restricted Class A Shares in the
Secondary Sales Process contemplated by such notice by providing
written notice of such election (a "Shareholder Election Notice"),
including the number and class of shares elected to be included in
such sale, to the secretary of the corporation within 20 days after
the receipt of the Notice of Secondary Sale Opportunity. In the event
that a Shareholder Election Notice is not received from a holder
prior to such twentieth day, then such holder shall be deemed to have
elected not to include any of such holder's shares in such Secondary
Sale Process. Any Notice of Secondary Sale Opportunity shall be
deemed to have been received by a holder three business days after
deposited into the United States mail, if sent first class mail and
addressed to the holder at such holder's address as it appears on the
books and records of the corporation. Any Shareholder Election Notice
shall be deemed received by the corporation when actually received by
the secretary of the corporation at the principal place of business
of the corporation in Chicago, Illinois or as otherwise provided in a
notice by the corporation to holders of Restricted Class A Shares.
Each shareholder shall be responsible for insuring that such holder's
notice has been received by the corporation within the 20-day time
period specified above. In the event that holders request to include
more shares in the Secondary Sale Process than the board of directors
determines in its sole discretion should be included in such sale,
the board of directors shall develop, in its sole discretion, a
mechanism for determining the Restricted Class A Shares that may be
included in such sale; provided that preference shall be given to the
class of Class A Common Stock that is scheduled to convert into
Unrestricted Class A Shares in connection with the Secondary Sale
Process. Each Shareholder Election Notice shall be irrevocable. Each
holder's right to participate in a Secondary Sale Process is
conditioned on such holder executing such agreements, including
without limitation, underwriting agreements, placement agreements,
agency agreements, custody agreements and powers of attorney, and
providing such information as are required to complete the Secondary
Sale Process. In the event that a holder fails to deliver such
agreements and provide such information by the deadline specified in
the Notice of Secondary Sale Opportunity, such holder shall be deemed
to have elected not to participate in the Secondary Sale Process. The
corporation shall not be responsible for the fees and expenses of any
holder, including without limitation, broker commissions, agency fees
and underwriting discounts and commissions which shall be the sole
responsibility of each holder participating in the Secondary Sale
Process. Nothing contained in this Subdivision 3 shall require the
corporation to complete any Secondary Sales Process described in a
Notice of Secondary Sale Opportunity, it being understood that the
decision at any time to proceed shall be made in the sole discretion
of the board of directors and that the board of directors may abandon
any such Secondary Sales Process at any time.
(b) If, and only if, the IPO Date is not on or prior to
December 15, 2002, then the provisions of Paragraph (a) shall cease to apply
and shares of Class A-1 Common Stock, Class A-2 Common Stock, Class A-3 Common
Stock and Class A-4 Common Stock may not be Transferred (other than in a
Permitted Transfer) until such shares convert into Unrestricted Class A Shares
on the following dates:
Date of Conversion
Class into Unrestricted Class A Shares
Class A-1 Common Stock December 16, 2002
Class A-2 Common Stock March 16, 2003
Class A-3 Common Stock June 16, 2003
Class A-4 Common Stock September 16, 2003
(c) CONVERSION OF RESTRICTED CLASS A SHARES. Each share of
Class A-1 Common Stock, Class A-2 Common Stock, Class A-3 Common Stock and
Class A-4 Common Stock shall automatically convert (without any action by the
holder) into one Unrestricted Class A Share upon a Conversion Transfer or when
the transfer restrictions applicable to such share shall expire and such share
converts into an Unrestricted Class A Share as described in this Subdivision
3. Unrestricted Shares are not subject to restrictions on Transfer. Restricted
Class A Shares shall not convert into Unrestricted Class A Shares upon a
Non-Conversion Transfer.
(d) Any Person who takes shares of Class A-1 Common Stock,
Class A-2 Common Stock, Class A-3 Common Stock or Class A-4 Common Stock in a
Transfer that complies with the provisions of this Section 1 may treat the
endorsement on the certificate representing such shares, or the instrument of
Transfer accompanying such shares, or the written instrument specified in the
bylaws of the corporation with respect to uncertificated shares, as
authorizing such Person on behalf of the transferor to convert the shares for
the purpose of registering the Transfer to such Person of the shares of Class
A Common Stock issuable upon conversion, and may convert such shares of Class
A-1 Common Stock, Class A-2 Common Stock, Class A-3 Common Stock and Class A-4
Common Stock accordingly.
(e) Every certificate for shares of Class A-1 Common Stock,
Class A-2 Common Stock, Class A-3 Common Stock and Class A-4 Common Stock
shall bear a legend on its face reading as follows:
"The shares of Common Stock represented by this
certificate may not be Transferred to any person in
connection with a Transfer that does not meet the
qualifications set forth in the definition of "Permitted
Transfers" of the Certificate of Incorporation of this
corporation until the transfer restrictions applicable to
the shares represented by this certificate expire, and no
person who receives the shares represented by this
certificate in connection with a Transfer that does not meet
the qualifications prescribed by the definition of
"Permitted Transfers" of the Certificate of Incorporation of
this corporation prior to such time is entitled to own or to
be registered as the record holder of the shares of Common
Stock represented by this certificate. Each holder of this
certificate, by accepting the certificate, accepts and
agrees to all of the foregoing."
(f) Upon any conversion of shares of Class A-1 Common Stock,
Class A-2 Common Stock, Class A-3 Common Stock and Class A-4 Common Stock into
shares of Unrestricted Class A Shares, any dividend, for which the record date
or payment date is subsequent to the conversion, that has been declared on the
shares of Class A-1 Common Stock, Class A-2 Common Stock, Class A-3 Common
Stock or Class A-4 Common Stock so converted shall be deemed to have been
declared, and shall be payable, with respect to the Unrestricted Class A
Shares into or for which the shares of Class A-1 Common Stock, Class A-2
Common Stock, Class A-3 Common Stock or Class A-4 Common Stock are so
converted, and any such dividend that is declared on the shares of Class A-1
Common Stock, Class A-2 Common Stock, Class A-3 Common Stock and Class A-4
Common Stock payable in shares of Class A-1 Common Stock, Class A-2 Common
Stock, Class A-3 Common Stock and Class A-4 Common Stock shall be deemed to
have been declared, and shall be payable, in Unrestricted Class A Shares.
(g) Any shares of Class A-1 Common Stock, Class A-2 Common
Stock, Class A-3 Common Stock or Class A-4 Common Stock that have been
converted into Unrestricted Class A Shares will be retired with no further
action by the corporation, and will become authorized and unissued shares of
Class A Common Stock.
(h) The corporation at all times shall reserve and keep
available, out of its authorized but unissued Class A Common Stock, at least
the number of shares of Class A Common Stock that would become issuable upon
the conversion of all shares of Class A-1 Common Stock, Class A-2 Common
Stock, Class A-3 Common Stock and Class A-4 Common Stock then outstanding.
(i) In connection with any Transfer or conversion of any
shares of any class of Common Stock pursuant to or as permitted by the
provisions of this Section 1, or in connection with the making of any
determination referred to in this Section 1, neither the corporation nor any
director, officer, employee or agent of the corporation shall be liable in any
manner for any action taken or omitted in good faith.
(j) Except as permitted by this Section 1 of this
Subdivision 3, any proposed Transfer of shares of Class A-1 Common Stock,
Class A-2 Common Stock, Class A-3 Common Stock or Class A-4 Common Stock shall
be void.
ARTICLE FIVE:
(A) The initial board of directors of the corporation shall
consist of 29 members, including 26 Equity Directors, one Class B-1
Director, one Class B-2 Director and one Class B-3 Director. The
terms of 20 Equity Directors shall expire at the annual meeting of
shareholders to be held in April 2002 (the "April 2002 Annual
Meeting"). The terms of the remaining six Equity Directors, one Class
B-1 Director, one Class B-2 Director and one Class B-3 Director shall
expire at the annual meeting of shareholders to be held in April
2003.
(B) At the April 2002 Annual Meeting, the size of the board
of directors of the corporation shall be reduced to 19 members by
eliminating 10 Equity Director memberships. At the 2002 Annual
Meeting, 10 directors shall be elected to serve two-year terms as
follows:
(i) Seven directors shall be elected as Equity
Directors;
(ii) Two directors shall be elected as Class B-1
Directors; and
(iii) One director shall be elected as a Class B-2
Director.
Of the nine directors whose terms expire at the annual
meeting of shareholders to be held in April 2003:
(i) Six directors shall be elected as Equity
Directors;
(ii) One director shall be elected as a Class B-1
Director;
(iii) One director shall be elected as a Class B-2
Director; and
(iv) One director shall be elected as a Class B-3
Director.
(C) At each succeeding annual meeting of shareholders, the
successors of the Class B-1 Directors, the Class B-2 Directors, any
Class B-3 Director and the Equity Directors whose terms expire at
that meeting shall be elected by the holders of the Class B-1 Common
Stock, the Class B-2 Common Stock, the Class B-3 Common Stock, and
the Common Stock voting as a single class, respectively. The
directors so elected shall be elected for a term expiring at the
annual meeting of shareholders held in the second year following the
year of their election, and until their successors are duly elected
and qualified and have accepted office, subject to death, resignation
or removal from office. Any vacancy occurring in a directorship may
be filled by the board of directors; PROVIDED, HOWEVER, that any
vacancy occurring with respect to a Class B-1 Director, a Class B-2
Director or a Class B-3 Director shall be filled from the candidates
who lost for such position from the most recent election, with the
candidates being selected to fill such vacancy in the order of the
aggregate number of votes received in such previous election. Any
persons so elected shall serve for the remaining term of his or her
predecessor in office.
(D) No person shall be eligible for election as a Class B-1
Director, a Class B-2 Director or a Class B-3 Director unless he or
she shall own, or be recognized as the owner for the purposes of the
Exchange of, at least one share of the class of Class B Common Stock
entitled to elect such director.
(E) Any director may be removed from office at any time, but
only for cause and only by the affirmative vote of the holders of at
least two-thirds of the voting power of the shares entitled to elect
such person as a director.
(F) The Equity Directors shall include two non-voting
members until the April 2002 Annual Meeting at which time such
directorships will be eliminated.
ARTICLE SIX: The board of directors is hereby authorized to create
and issue, whether or not in connection with the issuance and sale of any of
its stock or other securities or property, rights entitling the holders
thereof to purchase from the corporation shares of Preferred Stock, Class A
Common Stock or securities of any other corporation. The times at which and
the terms upon which such rights are to be issued will be determined by the
board of directors and set forth in the contracts or instruments that evidence
such rights. The authority of the board of directors with respect to such
rights shall include, without limitation, determination of the following:
(A) The initial purchase price per share or other unit of
the stock or other securities or property to be purchased upon
exercise of such rights;
(B) Provisions relating to the times at which and the
circumstances under which such rights may be exercised or sold or
otherwise transferred, either together with or separately from, any
other stock or other securities of the corporation;
(C) Provisions which adjust the number or exercise price of
such rights or amount or nature of the stock or other securities or
property receivable upon exercise of such rights in the event of a
combination, split or recapitalization of any stock of the
corporation, a change in ownership of the corporation's stock or
other securities or a reorganization, merger, consolidation, sale of
assets or other occurrence relating to the corporation or any stock
of the corporation, and provisions restricting the ability of the
corporation to enter into any such transaction absent an assumption
by the other party or parties thereto of the obligations of the
corporation under such rights;
(D) Provisions which deny the holder of a specified
percentage of the outstanding stock or other securities of the
corporation the right to exercise such rights and/or cause the rights
held by such holder to become void;
(E) Provisions which permit the corporation to redeem or to
exchange such rights; and
(F) The appointment of a rights agent with respect to such
rights.
ARTICLE SEVEN:
(A) In furtherance of and not in limitation of the powers
conferred by law, the board of directors is expressly authorized and
empowered to adopt, amend or repeal the bylaws of the corporation;
PROVIDED, HOWEVER, that the bylaws may also be altered, amended or
repealed by the affirmative vote of the holders of two-thirds of the
voting power of the then outstanding Common Stock, voting together as
a single class.
(B) Unless and except to the extent that the bylaws of the
corporation shall so require, the election of directors of the
corporation need not be by written ballot.
ARTICLE EIGHT: No shareholder shall have any preemptive right to
subscribe to an additional issue of any class or series of the corporation's
capital stock or to any securities of the corporation convertible into such
stock.
ARTICLE NINE: Notwithstanding anything contained in this Certificate
of Incorporation to the contrary, the affirmative vote of at least two-thirds
of the voting power of the then outstanding Common Stock, voting together as a
single class, shall be required to amend, repeal or adopt any provisions
inconsistent with Paragraph (E) of Article Five or Articles Six, Nine, Ten,
Eleven, Twelve, Thirteen or Fourteen of this Certificate of Incorporation.
ARTICLE TEN: No director of the corporation shall be personally
liable to the corporation or its shareholders for monetary damages for breach
of fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the corporation or its shareholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL,
or (iv) for any transaction from which the director derived an improper
personal benefit. Any amendment or repeal of this Article by the shareholders
shall not adversely affect any right or protection of a director of the
corporation existing hereunder in respect of any act or omission occurring
prior to such amendment or repeal.
ARTICLE ELEVEN: The corporation shall indemnify its directors and
officers to the fullest extent authorized or permitted by law, as now or
hereafter in effect, and such right to indemnification shall continue as to a
person who has ceased to be a director or officer of the corporation and shall
inure to the benefit of his or her heirs, executors and personal and legal
representatives; PROVIDED, HOWEVER, that, except for proceedings to enforce
rights to indemnification, the corporation shall not be obligated to indemnify
any director or officer (or his or her heirs, executors or personal or legal
representatives) in connection with a proceeding (or part thereof) initiated
by such person unless such proceeding (or part thereof) was authorized or
consented to by the board of directors. The right to indemnification conferred
by this Article Eleven shall include the right to be paid by the corporation
the expenses incurred in defending or otherwise participating in any
proceeding in advance of its final disposition.
The corporation may, to the extent authorized from time to time by
the board of directors, provide rights to indemnification and to the
advancement of expenses to employees and agents of the corporation similar to
those conferred in this Article Eleven to directors and officers of the
corporation.
The rights to indemnification and to the advance of expenses
conferred in this Article Eleven shall not be exclusive of any other right
which any person may have or hereafter acquire under this Certificate of
Incorporation, the bylaws of the corporation, any statute, agreement, vote of
shareholders or disinterested directors or otherwise.
Any repeal or modification of this Article Eleven by the shareholders
of the corporation shall not adversely affect any rights to indemnification
and to the advancement of expenses of a director or officer of the corporation
existing at the time of such repeal or modification with respect to any acts
or omissions occurring prior to such repeal or modification.
ARTICLE TWELVE: In furtherance and not in limitation of the powers
conferred by law or in this Certificate of Incorporation, the board of
directors (and any committee of the board of directors) is expressly
authorized, to the extent permitted by law, to take such action or actions as
the board of directors or such committee may determine to be reasonably
necessary or desirable to (A) encourage any person to enter into negotiations
with the board of directors and management of the corporation with respect to
any transaction which may result in a change in control of the corporation
which is proposed or initiated by such Person or (B) contest or oppose any
such transaction which the board of directors or such committee determines to
be unfair, abusive or otherwise undesirable with respect to the corporation
and its business, assets or properties or the shareholders of the corporation,
including, without limitation, the adoption of such plans or the issuance of
such rights, options, capital stock, notes, debentures or other evidences of
indebtedness or other securities of the corporation, which rights, options,
capital stock, notes, debentures or other evidences of indebtedness and other
securities (i) may be exchangeable for or convertible into cash or other
securities on such terms and conditions as may be determined by the board of
directors or such committee and (ii) may provide for the treatment of any
holder or class of holders thereof designated by the board of directors or any
such committee in respect of the terms, conditions, provisions and rights of
such securities which is different from, and unequal to, the terms,
conditions, provisions and rights applicable to all other holders thereof.
ARTICLE THIRTEEN: No action required to, or which may, be taken at an
annual or special meeting of shareholders of the corporation may be taken
without a meeting, and the power of the shareholders of the corporation to act
by written consent, whether pursuant to Section 228 of the DGCL or otherwise,
is specifically denied.
ARTICLE FOURTEEN: Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by this
Certificate of Incorporation, may be called by the Chairman of the Board, in
his discretion, and shall be called by the Chairman of the Board or the
Secretary at the request in writing of a majority of the directors then
holding office. Any such written request shall state the purpose or purposes
of the proposed meeting.
IN WITNESS WHEREOF, the Corporation has caused this Amended and
Restated Certificate of Incorporation to be executed on its behalf as of the
3rd day of December, 2001.
CHICAGO MERCANTILE EXCHANGE
HOLDINGS INC.
By: /s/ C.S. Donohue
-----------------------------------
Name: Craig S. Donohue
Title: Managing Director and Chief
Administrative Officer
Exhibit 3.2
AMENDED AND RESTATED BYLAWS
OF
CHICAGO MERCANTILE EXCHANGE HOLDINGS INC.
ARTICLE I
Shareholders' Meetings
Section 1.1 Annual Meetings. (a) The annual meetings of shareholders
shall be held on such date, at such time and at such place, either within or
without the state of Delaware, as shall be designated from time to time by the
Board of Directors and stated in the notice of the meeting. Subject to
paragraph (b) of this Section 1.1, any other proper business may be transacted
at an annual meeting.
(b) At the annual meetings the shareholders shall elect the Board
of Directors, and transact such other business as may properly be brought
before the meeting. For such business to be properly brought before the
meeting, it must be: (i) authorized by the Board of Directors and specified in
the notice, or a supplemental notice, of the meeting, (ii) otherwise brought
before the meeting by or at the direction of the Board of Directors or the
chairman of the meeting, or (iii) otherwise properly brought before the
meeting by a shareholder. For business to be properly brought before an annual
meeting by a shareholder, the shareholder must have given written notice
thereof to the Secretary, delivered or mailed to and received at the principal
executive offices of the Corporation (x) not less than 90 days nor more than
120 days prior to the meeting, or (y) if less than 100 days notice of the
meeting or prior public disclosure of the date of the meeting is given or made
to shareholders, not later than the close of business on the tenth day
following the day on which the notice of the meeting was mailed or, if
earlier, the day on which such public disclosure was made. A shareholder's
notice to the Secretary shall set forth as to each item of business the
shareholder proposes to bring before the meeting (1) a brief description of
such item and the reasons for conducting such business at the meeting and a
representation that the shareholder intends to appear in person or by proxy at
the meeting to introduce the business specified in the notice, (2) the name
and address, as they appear on the Corporation's records, of the shareholder
proposing such business, (3) the class, and series if any, and number of
shares of stock of the Corporation which are beneficially owned by the
shareholder (for purposes of the regulations under Sections 13 and 14 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), and (4) any
material interest of the shareholder in such business. No business shall be
conducted at any annual meeting except in accordance with the procedures set
forth in this paragraph (b). The chairman of the meeting at which any business
is proposed by a shareholder shall, if the facts warrant, determine and
declare to the meeting that such business was not properly brought before the
meeting in accordance with the provisions of this paragraph (b), and, in such
event, the business not properly before the meeting shall not be transacted.
Section 1.2 Special Meetings. Special meetings of shareholders for any
purpose or purposes may be called at any time only by the Chairman of the
Board or by a majority of the total number of authorized directors. The
business transacted at a special meeting of shareholders shall be limited to
the purpose or purposes for which such meeting is called.
Section 1.3 Notice of Meetings. A written notice of each annual or
special meeting of shareholders shall be given stating the place, date and
time of the meeting, and, in the case of a special meeting, the purpose or
purposes for which the meeting is called. Unless otherwise provided by law,
the Certificate of Incorporation or these Bylaws, such notice of meeting shall
be given not less than 10 nor more than 60 days before the date of the meeting
to each shareholder of record entitled to vote at such meeting. If mailed,
such notice shall be deemed to be given when deposited in the mail, postage
prepaid, directed to the shareholder at such shareholder's address as it
appears on the records of the Corporation. An affidavit of the Secretary or an
Assistant Secretary or of the transfer agent of the Corporation that the
notice has been given shall, in the absence of fraud, be prima facie evidence
of the facts stated therein.
Section 1.4 Adjournments. Any annual or special meeting of shareholders
may be adjourned from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the date,
time and place thereof are announced at the meeting at which the adjournment
is taken. At the adjourned meeting any business may be transacted which might
have been transacted at the original meeting. If the adjournment is for more
than 30 days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
shareholder of record entitled to vote at the adjourned meeting in accordance
with Section 1.3 of these Bylaws.
Section 1.5 Quorum. Except as otherwise provided by law, the Certificate
of Incorporation or these Bylaws, the presence in person or by proxy of the
holders of stock having not less than one-third of the votes which could be
cast by the holders of all outstanding stock entitled to vote at the meeting
shall constitute a quorum at each meeting of shareholders. In the absence of a
quorum, then either (i) the chairman of the meeting or (ii) the shareholders
may, by the affirmative vote of the holders of stock having a majority of the
votes which could be cast by all such holders, adjourn the meeting from time
to time in the manner provided in Section 1.4 of these Bylaws until a quorum
is present. If a quorum is present when a meeting is convened, the subsequent
withdrawal of shareholders, even though less than a quorum remains, shall not
affect the ability of the remaining shareholders lawfully to transact
business.
Section 1.6 Organization. Meetings of shareholders shall be presided
over by the Chairman of the Board, the Vice Chairman of the Board, the Second
Vice Chairman of the Board or the President (in that order), or in their
absence, inability or unwillingness, by a chairman designated by the Board of
Directors, or in the absence of such designation, by a chairman chosen at the
meeting. The Secretary shall act as secretary of the meeting, but in his or
her absence, the chairman of the meeting may appoint any person to act as
secretary of the meeting. The chairman of any meeting of the shareholders
shall determine the order of business and the procedure at the meeting,
including such regulation of the manner of voting and the conduct of business.
Section 1.7 Voting. (a) The shareholders entitled to vote at any meeting
of shareholders shall be determined in accordance with the provisions of
Section 1.10 of these Bylaws, subject to the provisions of Sections 217 and
218 of the General Corporation Law of Delaware (relating to voting rights of
fiduciaries, pledgors and joint owners of stock and to voting trusts and other
voting agreements).
(b) Except as may be otherwise provided in the Certificate of
Incorporation or in these Bylaws, or as may be otherwise required by
applicable law: (i) in all matters other than the election of Directors, the
affirmative vote of the holders of shares representing a majority of the votes
present in person or represented by proxy at the meeting and entitled to vote
on the subject matter shall be the act of the shareholders; (ii) each Director
shall be elected by a plurality of the votes of the shares present in person
or represented by proxy at the meeting and entitled to vote on the election of
such Director; and (iii) where a separate vote by a class or series is
required, other than with respect to the election of Directors, the
affirmative vote of the holders of shares of such class or series representing
a majority of the votes present in person or represented by proxy at the
meeting shall be the act of such class or series.
(c) Voting at meetings of shareholders need not be by written
ballot and need not be conducted by inspectors of election unless so required
by Section 1.9 of these Bylaws or so determined by the holders of stock having
a majority of the votes which could be cast by the holders of all outstanding
stock entitled to vote which are present in person or represented by proxy at
such meeting.
(d) Stock of the Corporation belonging to the Corporation, or to
another Corporation, a majority of the shares entitled to vote in the election
of Directors of which are held by the Corporation, shall not be voted at any
meeting of shareholders and shall not be counted in the total number of
outstanding shares for the purpose of determining whether a quorum is present.
Nothing in this Section 1.7 shall limit the right of the Corporation to vote
shares of stock of the Corporation held by it in a fiduciary capacity.
Section 1.8 (a) Each shareholder entitled to vote at a meeting of
shareholders may authorize another person or persons to act for such
shareholder by proxy filed with the Secretary before or at the time of the
meeting. No such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A shareholder may revoke any proxy which is not irrevocable
by attending the meeting and voting in person or by filing with the Secretary
an instrument in writing revoking the proxy or another duly executed proxy
bearing a later date.
(b) A shareholder may authorize another person or persons to act
for such shareholder as proxy (i) by executing a writing authorizing such
person or persons to act as such, which execution may be accomplished by such
shareholder or such shareholder's authorized officer, Director, partner,
employee or agent (or, if the stock is held in a trust or estate, by a
trustee, executor or administrator thereof) signing such writing or causing
his or her signature to be affixed to such writing by any reasonable means,
including, but not limited to, facsimile signature, or (ii) by transmitting or
authorizing the transmission of a telegram, cablegram or other means of
electronic transmission (a "Transmission") to the person who will be the
holder of the proxy or to a proxy solicitation firm, proxy support service
organization or like agent duly authorized by the person who will be the
holder of the proxy to receive such Transmission; provided that any such
Transmission must either set forth or be submitted with information from which
it can be determined that such Transmission was authorized by such
shareholder.
(c) Any inspector or inspectors appointed pursuant to Section 1.9
of these Bylaws shall examine each Transmission to determine whether it is
valid. If no inspector or inspectors are so appointed, the Secretary or such
other person or persons as shall be appointed from time to time by the Board
of Directors shall examine Transmissions to determine if they are valid. If it
is determined a Transmission is valid, the person or persons making that
determination shall specify the information upon which such person or persons
relied. Any copy, facsimile telecommunication or other reliable reproduction
of such a writing or Transmission may be substituted or used in lieu of the
original writing or Transmission for any and all purposes for which the
original writing or Transmission could be used; provided that such copy,
facsimile telecommunication or other reproduction shall be a complete
reproduction of the entire original writing or Transmission.
Section 1.9 Voting Procedures and Inspectors of Elections. (a) Unless
otherwise provided in the Certificate of Incorporation or required by law, the
following provisions of this Section 1.9 shall apply only if and when the
Corporation has a class of voting stock that is (i) listed on a national
securities exchange, (ii) authorized for quotation on an interdealer quotation
system of a registered national securities association or (iii) held of record
by more than 2,000 shareholders.
(b) The Corporation shall, in advance of any meeting of
shareholders, appoint one or more inspectors of election (individually an
"inspector," and collectively the "inspectors") to act at such meeting and
make a written report thereof. The Board of Directors may designate one or
more persons as alternate inspectors to replace any inspector who fails to
act. If no inspector or alternate is able to act at such meeting, the chairman
of the meeting shall appoint one or more inspectors to act at the meeting.
Each inspector of election, before entering upon the discharge of his duties,
shall take and sign an oath to execute faithfully the duties of inspector with
strict impartiality and according to the best of his ability.
(c) The inspectors shall (i) ascertain the number of shares of
stock of the Corporation outstanding and the voting power of each, (ii)
determine the number of shares of stock of the Corporation present in person
or by proxy at such meeting and the validity of proxies and ballots, (iii)
count all votes and ballots, (iv) determine and retain for a reasonable period
a record of the disposition of any challenges made to any determination by the
inspectors and (v) certify their determination of the number of such shares
present in person or by proxy at such meeting and their count of all votes and
ballots. The inspectors may appoint or retain other persons or entities to
assist them in the performance of their duties.
(d) The date and time of the opening and the closing of the polls
for each matter upon which the shareholders will vote at a meeting shall be
announced at such meeting. No ballots, proxies or votes, nor any revocations
thereof or changes thereto, shall be accepted by the inspectors after the
closing of the polls unless the Court of Chancery of the State of Delaware
upon application by any shareholder shall determine otherwise.
(e) In determining the validity and counting of proxies and
ballots, the inspectors shall be limited to an examination of the proxies, any
envelopes submitted with such proxies, any information referred to in
paragraphs (b) and (c) of Section 1.8 of these Bylaws, ballots and the regular
books and records of the Corporation, except that the inspectors may consider
other reliable information for the limited purpose of reconciling proxies and
ballots submitted by or on behalf of banks, brokers, their nominees or similar
persons which represent more votes than the holder of a proxy is authorized by
a shareholder of record to cast or more votes than such shareholder holds of
record. If the inspectors consider other reliable information for the limited
purpose permitted herein, the inspectors, at the time they make their
certification pursuant to paragraph (c) of this Section 1.9, shall specify the
precise information considered by them, including the person or persons from
whom such information was obtained, when and the means by which such
information was obtained and the basis for the inspectors' belief that such
information is accurate and reliable.
Section 1.10 Fixing Date of Determination of Shareholders of Record. (a)
In order that the Corporation may determine the shareholders entitled (i) to
notice of or to vote at any meeting of shareholders or any adjournment
thereof, (ii) to receive payment of any dividend or other distribution or
allotment of any rights, (iii) to exercise any rights in respect of any
change, conversion or exchange of stock or (iv) to take, receive or
participate in any other action, the Board of Directors may fix a record date,
which shall not be earlier than the date upon which the resolution fixing the
record date is adopted by the Board of Directors and which (1) in the case of
a determination of shareholders entitled to notice of or to vote at any
meeting of shareholders or adjournment thereof, shall, unless otherwise
required by law, be not more than 60 nor less than 10 days before the date of
such meeting; and (2) in the case of any other action, shall be not more than
60 days before such action.
(b) If no record date is fixed, (i) the record date for
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held; and
(ii) the record date for determining shareholders for any other purpose shall
be at the close of business on the day on which the Board of Directors adopts
the resolution relating thereto.
(c) A determination of shareholders of record entitled to notice
of or to vote at a meeting of shareholders shall apply to any adjournment of
the meeting, but the Board of Directors may fix a new record date for the
adjourned meeting.
Section 1.11 List of Shareholders Entitled to Vote. The Secretary shall
prepare, at least 10 days before every meeting of shareholders, a complete
list of the shareholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address and the number of shares
registered in the name of each shareholder. Such list shall be open to the
examination of any shareholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least 10 days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole
time thereof and may be inspected by any shareholder who is present. The stock
ledger shall be the only evidence as to who are the shareholders entitled to
examine the stock ledger or to vote in person or by proxy at any meeting of
shareholders.
ARTICLE II
Board of Directors
Section 2.1 Number; Qualifications. The Board of Directors shall consist
of the number of Directors as provided in the Certificate of Incorporation,
and no person shall serve as a Director unless he or she meets the
requirements, if any, provided in the Certificate of Incorporation for service
on the Board of Directors.
Section 2.2 Election; Resignation; Vacancies. (a) Subject to the
provisions of the Certificate of Incorporation, at each annual meeting of
shareholders, the shareholders shall elect, pursuant to the terms of the
Certificate of Incorporation, the successors to the Directors whose terms
expire at that meeting, and each Director shall hold office until the annual
meeting at which such Director's term expires and the election and
qualification of his or her successor, or until his or her earlier death,
resignation or removal. Any Director may resign at any time by giving written
notice to the Chairman of the Board, if any, the President or the Secretary.
Unless otherwise stated in a notice of resignation, it shall take effect when
received by the officer to whom it is directed, without any need for its
acceptance.
(b) Only persons who are nominated in accordance with the
following procedures shall be eligible for election as Equity Directors (as
defined in the Certificate of Incorporation). Nominations of persons for
election as Equity Directors may be made at any annual meeting of
shareholders, or at any special meeting of shareholders called for the purpose
of electing directors, (i) by or at the direction of the Board of Directors
(or any duly authorized committee thereof) or (ii) by any shareholder of the
Corporation (A) who is a shareholder of record on the date of the giving of
the notice provided for in this Section 2.2(b) and on the record date for the
determination of shareholders entitled to vote at such meeting and (B) who
complies with the notice procedures set forth in this Section 2.2(b).
In addition to any other applicable requirements, for a nomination to be
made by a shareholder, such shareholder must have given timely notice thereof
in proper written form to the Secretary of the Corporation.
To be timely, a shareholder's notice to the Secretary must be delivered
or mailed to and received at the principal executive offices of the
Corporation (x) not less than 90 days nor more than 120 days prior to the
meeting, or (y) if less than 100 days notice of the meeting or prior public
disclosure of the date of the meeting is given or made to shareholders, not
later than the close of business on the tenth day following the day on which
notice of the meeting was made, or if earlier, the day on which such public
disclosure was made.
To be in proper written form, a shareholder's notice to the Secretary
must set forth (1) as to each person whom the shareholder proposes to nominate
for election as a director (A) the name, age, business address and residence
address of the person, (B) the principal occupation or employment of the
person, (C) the class and series, if any, and number of shares of stock of the
Corporation which are beneficially owned by the person (for purposes of the
regulations under Sections 13 and 14 of the Exchange Act) and (D) any other
information relating to the person that would be required to be disclosed in a
proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of
the Exchange Act, and the rules and regulations promulgated thereunder; and
(2) as to the shareholder giving the notice (i) the name and address, as they
appear in the Corporation's records, of the shareholder proposing such
nomination, (ii) the class and series, if any, and number of shares of stock
of the Corporation which are beneficially owned by the shareholder (for
purposes of the regulations under Sections 13 and 14 of the Exchange Act),
(iii) a description of all arrangements or understandings between the
shareholder and each proposed nominee and any other person or persons
(including their names) pursuant to which the nomination(s) are to be made by
the shareholder, (iv) a representation that the shareholder intends to appear
in person or by proxy at the meeting to nominate the persons named in its
notice and (v) any other information relating to the shareholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written consent
of each proposed nominee to being named as a nominee and to serve as an Equity
Director if elected.
No person shall be eligible for election as an Equity Director of the
Corporation unless nominated in accordance with the procedures set forth in
this Section 2.2(b). If the Chairman of the meeting determines that a
nomination was not made in accordance with the foregoing procedures, the
Chairman shall declare to the meeting that the nomination was defective and
such defective nomination shall be disregarded.
(c) Nominees for election as Class B-1 Directors, Class B-2
Directors and Class B-3 Directors (as such terms are defined in the
Certificate of Incorporation) shall be selected by the respective Class B
Nominating Committees as provided in Article IV.
(d) A vacancy, howsoever occurring, in a directorship shall be
filled in the manner specified in the Certificate of Incorporation.
Section 2.3 Regular Meetings. Regular meetings of the Board of Directors
may be held without call or notice at such times and at such places, within or
without the state of Delaware, as shall be fixed by resolution of the Board of
Directors.
Section 2.4 Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board, the President, or a majority of
the members of the Board of Directors then in office and may be held at any
time, date or place, within or without the State of Delaware, as the person or
persons calling the meeting shall fix. Notice of the time and place of special
meetings shall be delivered personally or by telephone to each Director or
sent by first-class mail or telegram, charges prepaid, addressed to each
Director at that Director's address as it is shown on the records of the
Corporation. If the notice is mailed, it shall be deposited in the United
States mail at least four days before the time of the holding of the meeting.
If the notice is delivered personally or by telephone or by telegram, it shall
be delivered personally or by telephone or to the telegraph company at least
48 hours before the time of the holding of the meeting. Any oral notice given
personally or by telephone may be communicated either to the Director or to a
person at the office of the Director who the person giving the notice has
reason to believe will promptly communicate it to the Director. The notice
need not specify the purpose or the place of the meeting, if the meeting is to
be held at the principal executive office of the Corporation.
Section 2.5 Organization. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, the Vice Chairman of the Board,
the Second Vice Chairman of the Board or the President (in that order), or in
their absence, inability or unwillingness, by a chairman chosen at the
meeting. The Secretary shall act as secretary of the meeting, but in his or
her absence the chairman of the meeting may appoint any person to act as
secretary of the meeting. A majority of the Directors present at a meeting,
whether or not they constitute a quorum, may adjourn such meeting to any other
date, time or place without notice other than announcement at the meeting.
Section 2.6 Quorum; Vote Required for Action. (a) At all meetings of the
Board of Directors, a majority of the whole Board of Directors shall
constitute a quorum for the transaction of business. Unless the Certificate of
Incorporation or these Bylaws otherwise provide, the vote of a majority of the
Directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors. A meeting at which a quorum is initially present
may continue to transact business notwithstanding the withdrawal of Directors,
if any action taken is approved by at least a majority of the required quorum
for that meeting.
(b) If a quorum is not present at any meeting of the Board of
Directors, then the Directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum is present.
(c) Whenever notice is required to be given under any provision of
the General Corporation Law of Delaware, the Certificate of Incorporation or
these Bylaws, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Directors, or members of a committee of
Directors, need be specified in any written waiver of notice unless so
required by the Certificate of Incorporation or these Bylaws.
Section 2.7 Telephonic Meetings. Directors, or any committee of
Directors designated by the Board of Directors, may participate in a meeting
of the Board of Directors or such committee by means of conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a
meeting pursuant to this Section 2.7 shall constitute presence in person at
such meeting.
Section 2.8 Informal Action by Directors. Unless otherwise restricted by
the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof, may be taken without a meeting if all members of the Board
of Directors or such committee, as the case may be, consent thereto in writing
(which may be in counterparts), and the written consent or consents are filed
with the minutes of proceedings of the Board of Directors or such committee.
Section 2.9 Reliance Upon Records. Every Director, and every member of
any committee of the Board of Directors, shall, in the performance of his or
her duties, be fully protected in relying in good faith upon the records of
the Corporation and upon such information, opinions, reports or statements
presented to the Corporation by any of its officers or employees, or
committees of the Board of Directors, or by any other person as to matters the
Director or member reasonably believes are within such other person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Corporation, including, but not limited to, such
records, information, opinions, reports or statements as to the value and
amount of the assets, liabilities and/or net profits of the Corporation, or
any other facts pertinent to the existence and amount of surplus or other
funds from which dividends might properly be declared and paid, or with which
the Corporation's capital stock might properly be purchased or redeemed.
Section 2.10 Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors
or officers, or have a financial interest, shall be void or voidable solely
for this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof
which authorizes the contract or transaction, or solely because such person's
or their votes are counted for such purpose if (i) the material facts as to
such person's or their relationship or interest and as to the contract or
transaction are disclosed or are known to the Board of Directors or the
committee, and the Board of Directors or committee in good faith authorizes
the contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than
a quorum; or (ii) the material facts as to such person's or their relationship
or interest and as to the contract or transaction are disclosed or are known
to the shareholders entitled to vote thereon, and the contract or transaction
is specifically approved in good faith by vote of the shareholders; or (iii)
the contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified, by the Board of Directors, a committee
thereof or the shareholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract or transaction.
Section 2.11 Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of Directors. The Directors shall be paid their
reasonable expenses, if any, of attendance at each meeting of the Board of
Directors or a committee thereof and may be paid a fixed sum for attendance at
each such meeting and an annual retainer or salary for services as a Director
or committee member. No such payment shall preclude any Director from serving
the Corporation in any other capacity and receiving compensation therefor.
Section 2.12 Presumption of Assent. Unless otherwise provided by the
laws of the State of Delaware, a Director who is present at a meeting of the
Board of Directors or of a committee thereof at which action is taken on any
matter shall be presumed to have assented to the action taken unless his or
her dissent shall be entered in the minutes of such meeting or unless he or
she shall file his or her written dissent to such action with the person
acting as secretary of such meeting before the adjournment thereof or shall
forward such dissent by registered mail to the Secretary immediately after the
adjournment of such meeting. Such right to dissent shall not apply to a
Director who voted in favor of such action.
ARTICLE III
Committees of the Board of Directors
Section 3.1 Committees. The Board of Directors shall have an Executive
Committee, an Audit Committee, a Compensation Committee, a Nominating
Committee and any additional committees it may designate from time to time by
resolution passed by a majority of the whole Board, with each committee to
consist of one or more of the Directors of the Corporation.
Section 3.2 Executive Committee. The Executive Committee shall consist
of such number of Directors as may be elected from time to time by the Board.
Whenever the Board is not in session, and subject to the provisions of
applicable law, the Certificate of Incorporation or these Bylaws, the
Executive Committee shall have and exercise the authority of the Board in the
management of the Corporation. A majority of the Executive Committee shall
constitute a quorum necessary to transact business.
Section 3.3 Audit Committee. The Audit Committee shall consist of such
number of Directors (none of whom shall be an employee of the Corporation) as
may be elected from time to time by the Board. The Board of Directors shall
adopt a charter setting forth the responsibilities of the Audit Committee. A
majority of the Audit Committee shall constitute a quorum necessary to
transact business.
Section 3.4 Compensation Committee. The Compensation Committee shall
consist of such number of Directors (none of whom shall be an employee of the
Corporation) as may be elected from time to time by the Board. The
Compensation Committee shall oversee the compensation and benefits of the
employees and management of the Corporation. A majority of the Compensation
Committee shall constitute a quorum necessary to transact business.
Section 3.5 Nominating Committee. The Nominating Committee shall be
composed of five Directors. The Committee shall review the qualifications of
potential candidates for the Equity Directors and shall propose nominees for
the Equity Directors who are nominated by the Board. In making their
nominations, the Nominating Committee and the Board of Directors shall take
into consideration that (i) the Board of Directors shall have meaningful
representation of a diversity of interests, including floor brokers, floor
traders, futures commission merchants, producers, consumers, processors,
distributors and merchandisers of commodities traded on Chicago Mercantile
Exchange Inc. (the "Exchange") participants in a variety of pits or principal
groups of commodities traded on the Exchange and other market users or
participants; (ii) at least 10% of the members of Board of Directors shall be
composed of persons representing farmers, producers, merchants or exporters of
principal commodities traded on the Exchange; and (iii) at least 20% of the
members of the Board of Directors shall be composed of persons who do not
possess trading privileges on the Exchange, are not salaried employees of the
Corporation and are not officers, principals or employees who are involved in
operating the futures exchange related business of a firm entitled to members'
rates. A majority of the Nominating Committee shall constitute a quorum
necessary to transact business.
Section 3.6 Committee Governance. The Board may designate one or more
Directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not such
member or members constitute a quorum, may unanimously appoint another member
of the Board to act at the meeting in the place of any such absent or
disqualified member. Subject to the provisions of law, any such committee, to
the extent provided in the resolution of the Board or in these Bylaws, shall
have and may exercise all the powers and authority of the Board in the
management of the business and affairs of the Corporation. Each committee
shall keep regular minutes of its meetings and report the same to the Board of
Directors when required. Each committee may adopt rules for its governance not
inconsistent with the provisions of these Bylaws.
ARTICLE IV
Class B Nominating Committees
Section 4.1 Class B Nominating Committees. The holders of shares of
Class B-1 Common Stock; Class B-2 Common Stock; and Class B-3 Common Stock,
shall each elect a nominating committee for their respective class (each, a "
Class B Nominating Committee"). Each Class B Nominating Committee shall be
composed of five members.
Section 4.2 Election. (a) The initial members of the Class B Nominating
Committee for the Class B-1 Common Stock, shall consist of the members of the
Series B-1 Nominating Committee of the Exchange in office on the date that the
merger of CME Merger Subsidiary Inc., a Delaware corporation, into the
Exchange, becomes effective (the "Effective Date"); the initial members of the
Class B Nominating Committee for the Class B-2 Common Stock, shall consist of
the members of the Series B-2 Nominating Committee of the Exchange in office
on the Effective Date; and the initial members of the Class B Nominating
Committee for the Class B-3 Common Stock, shall consist of the members of the
Series B-3 Nominating Committee of the Exchange in office on the Effective
Date. At each annual meeting of shareholders thereafter, holders of the Class
B-1 Common Stock; Class B-2 Common Stock; and Class B-3 Common Stock, shall
elect the members of their respective Class B Nominating Committees from
candidates selected as provided in Section 4.2(b). Members of each Class B
Nominating Committee shall hold office for a term of one year and until their
successors are duly elected and qualified.
(b) Commencing with the annual meeting held in 2002, each Class B
Nominating Committee shall nominate, by letter directed to the Chairman of the
Board not later than 90 days prior to an annual meeting, candidates for
election to such Committee at such annual meeting. Each Class B Nominating
Committee shall nominate 10 candidates. Such nominations shall include, as
part of or in addition to such 10 candidates, (i) any candidate who is
nominated by the holders of at least 100 shares of Class B-1 Common Stock, in
the case of the Class B Nominating Committee representing such class, (ii) any
candidate who is nominated by the holders of at least 100 shares of Class B-2
Common Stock, in the case of the Class B Nominating Committee representing
such class, and (iii) any candidate who is nominated by the holders of at
least 150 shares of Class B-3 Common Stock, in the case of the Class B
Nominating Committee representing such class; provided, however, in the case
of any such nominations, the nomination is submitted in writing and
accompanied by a description of the proposed nominee's qualifications and
other relevant biographical information and evidence of the consent of the
proposed nominee. The five nominees receiving the greatest number of votes for
a particular Class B Nominating Committee shall be elected to such Committee.
In the event of a vacancy, howsoever occurring, in a committee position, the
candidate in the most recent election for such position who received the next
highest number of votes to the last person currently serving shall be named to
fill such vacancy.
Section 4.3 Director Nominations. Each Class B Nominating Committee
shall be responsible for assessing the qualifications of candidates to serve
as Directors to be elected by the particular class. Not less than 90 days but
not more than 120 days prior to an annual meeting of shareholders at which a
Class B-1 Director, a Class B-2 Director or a Class B-3 Director is to be
elected, the applicable Class B Nominating Committee(s) shall select nominees
for election to such directorship. Such Class B Nominating Committee(s) shall
select, subject to the provisions of the Certificate of Incorporation, two
nominees for each directorship to be filled by the applicable class of Class B
Common Stock at such meeting. Such nominations shall include, as part of or in
addition to such two nominees, (i) any nominee who is nominated by the holders
of at least 100 shares of Class B-1 Common Stock, in the case of the Class B
Nominating Committee representing such class, (ii) any nominee who is
nominated by the holders of at least 100 shares of Class B-2 Common Stock, in
the case of the Class B Nominating Committee representing such class, and
(iii) any nominee who is nominated by the holders of at least 150 shares of
Class B-3 Common Stock, in the case of the Class B Nominating Committee
representing such class; provided, however, in the case of any such
nominations, the nomination is submitted in writing and accompanied by a
description of the proposed nominee's qualifications and other relevant
biographical information and evidence of the consent of the proposed nominee.
All nominees shall meet the requirements, if any, in the Certificate of
Incorporation, in these Bylaws or in the Consolidated Rules of the Exchange
for service on the Board of Directors. No nominee shall be a candidate for
more than one directorship. If a nominee withdraws, dies, becomes
incapacitated or disqualified to serve, the applicable Class B Nominating
Committee shall, as quickly as practicable, submit a new nominee to the
Chairman of the Board. Each Class B Nominating Committee shall submit its
nominees in writing to the Chairman of the Board. Such writing shall set forth
as to each nominee for election or re-election as a Director: (1) the name,
age, business address and residence address of such person, (2) the principal
occupation or employment of such person, (3) the class and number of shares of
stock of the Corporation which are owned (or, under the rules of the
Corporation, would be recognized as a permitted transferee), and (4) such
person's written consent to serving as a Director if elected.
ARTICLE V
Board Officers; Executive Officers
Section 5.1 Board Officers; Executive Officers; Election; Qualification;
Term of Office. The Board of Directors shall elect from among its members a
Chairman of the Board, a Vice Chairman of the Board and a Second Vice Chairman
of the Board. The Board of Directors shall also elect a President, a Secretary
and a Treasurer, and may elect one or more Managing Directors, one or more
Assistant Secretaries and one or more Assistant Treasurers. Any number of
offices may be held by the same person. Each Board officer and executive
officer of the Corporation shall hold office until his or her successor is
elected and qualified or until his or her earlier death, resignation or
removal.
Section 5.2 Resignation; Removal; Vacancies. Any Board officer or
executive officer of the Corporation may resign at any time by giving written
notice to the Chairman of the Board, the President or the Secretary. Unless
otherwise stated in a notice of resignation, it shall take effect when
received by the Board officer or executive officer to whom it is directed,
without any need for its acceptance. Any resignation is without prejudice to
the rights, if any, of the Corporation under any contract to which such
officer is a party. The Board of Directors may remove any Board officer or
executive officer with or without cause at any time by an affirmative vote of
the majority of the Board of Directors, but such removal shall be without
prejudice to the contractual rights, if any, of such officer with the
Corporation. A vacancy occurring in any Board or executive office of the
Corporation may be filled for the unexpired portion of the term thereof by the
Board of Directors at any regular or special meeting.
Section 5.3 Powers and Duties of Board Officers and Executive Officers.
The Board officers and executive officers of the Corporation shall have such
powers and duties in the management of the Corporation as may be prescribed by
the Board of Directors and, to the extent not so provided, as generally
pertain to their respective offices, subject to the control of the Board of
Directors. The Board of Directors may require any officer, agent or employee
to give security for the faithful performance of his or her duties.
ARTICLE VI
Stock Certificates and Transfers
Section 6.1 Certificates; Uncertificated Shares. The shares of the
Corporation's stock shall be represented either by book entries on the
Corporation's books, if authorized by the Board of Directors, or by
certificates signed by, or in the name of the Corporation by its Chairman of
the Board, a Vice Chairman of the Board, its President or a Managing Director,
and may be countersigned by its Secretary or an Assistant Secretary,
certifying the number of shares owned by such shareholder in the Corporation.
Any of or all the signatures on a certificate may be facsimile. In case any
officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if such officer, transfer
agent or registrar continued to be such at the date of issue. Upon the request
of the registered owner of uncertificated shares, the President or his
designee shall send to the registered owner a certificate representing such
shares.
In the case of uncertificated shares, within a reasonable time after the
issuance or transfer thereof, the President or his designee shall send to the
registered owner of shares of Common Stock of the Corporation a written notice
containing (i) (A) a full statement of the designations, relative rights,
preferences and limitations of the shares of the class and series issued or
transferred, so far as the same have been determined and the authority of the
Board of Directors to divide the shares into classes or series and to
determine and change the relative rights, preferences and limitations of any
class or series; or (B) a declaration that the Corporation will furnish to the
shareholder, upon request and without charge, a statement containing the
information described in the preceding clause (A); (ii) a statement that the
Corporation is organized under the laws of the State of Delaware; (iii) the
name of the person to whom the uncertificated shares have been issued or
transferred; (iv) the number and class of shares, and the designation of the
series, if any, to which such notice applies; and (v) any restrictions on
transfer of the shares, in accordance with Section 202 of the Delaware General
Corporation Law. The notice referred to in the preceding sentence shall also
contain the following statement: "This notice is merely a record of the rights
of the addressee as of the time of its issuance. Delivery of this statement,
of itself, confers no rights on the recipient. This notice is neither a
negotiable instrument nor a security."
Section 6.2 Lost, Stolen or Destroyed Certificates; Issuance of New
Certificates. The Corporation may issue a new certificate for stock in the
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Corporation may require the owner of the lost,
stolen or destroyed certificate, or such shareholder's legal representative,
to indemnify the Corporation and/or to give the Corporation a bond sufficient
to indemnify it against any claim that may be made against it on account of
the alleged loss, theft or destruction of any such certificate or the issuance
of such new certificate.
Section 6.3 Transfers of Stock. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for stock of the
Corporation duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer or, if the relevant stock certificate is
claimed to have been lost, stolen or destroyed, upon compliance with the
provisions of Section 6.2 of these Bylaws, and upon payment of applicable
taxes with respect to such transfer, and in compliance with the transfer
restrictions applicable to such shares under the Certificate of Incorporation,
these Bylaws or rules of the Corporation and any other applicable transfer
restrictions of which the Corporation shall have notice, the Corporation shall
issue a new certificate or certificates for such stock to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Transfers of stock shall be made only on the books of the Corporation by the
registered holder thereof or by such holder's attorney or successor duly
authorized as evidenced by documents filed with the Secretary. Whenever any
transfer of stock shall be made for collateral security, and not absolutely,
it shall be so expressed in the entry of transfer if, when the certificate or
certificates representing such stock are presented to the Corporation for
transfer, both the transferor and transferee request the Corporation to do so.
Section 6.4 Transfers of Uncertificated Stock. Except as otherwise
required by law, uncertificated shares of the Corporation's stock shall be
transferable in the manner prescribed in these Bylaws. Transfers of
uncertificated stock shall be made on the books of the Corporation only by the
person then registered on the books of the Corporation as the owner of such
shares or by such person's attorney lawfully constituted in writing and
written instruction to the Corporation containing the following information:
(i) the class of shares, and the designation of the series, if any, to which
such notice applies; (ii) the number of shares transferred; and (iii) the
name, address and taxpayer identification number, if any, of the party to whom
the shares have been transferred and who, as a result of such transfer, is to
become the new registered owner of the shares. No transfer of uncertificated
stock shall be valid as against the Corporation for any purpose until it shall
have been entered in the stock records of the Corporation by an entry showing
from and to whom transferred.
Section 6.5 Special Designation on Certificates. The designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the Corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the Corporation shall issue to represent
such class or series of stock a statement that the Corporation will furnish
without charge to each shareholder who so requests the powers, designations,
preferences, and the relative, participating, optional or other special rights
of each class of stock, or series thereof, and the qualifications limitations
or restrictions of such preferences and/or rights.
Section 6.6 Stock Transfer Agreements. Subject to the provisions of the
Certificate of Incorporation, the Corporation shall have power to enter into
and perform any agreement with any number of shareholders of any one or more
classes, or series thereof, of stock of the Corporation to restrict the
transfer of such shares owned by such shareholders in any manner not
prohibited by the General Corporation Law of Delaware.
Section 6.7 Registered Shareholders. The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends and to vote as such owner, shall be
entitled to hold liable for calls and assessments the person registered on its
books as the owner of shares, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
another person, whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of Delaware.
Section 6.8 Other Regulations. The issue, transfer, conversion and
registration of stock certificates shall be governed by such other regulations
as the Board of Directors may establish.
ARTICLE VII
Notices
Section 7.1 Manner of Notice. Except as otherwise provided by law, the
Certificate of Incorporation or these Bylaws, whenever notice is required to
be given to any shareholder, Director or member of any committee of the Board
of Directors, such notice may be given by personal delivery or by depositing
it, in a sealed envelope, in the United States mails, first class, postage
prepaid, addressed, or by transmitting it via telecopier, to such shareholder,
Director or member, either at the address of such shareholder, Director or
member as it appears on the records of the Corporation or, in the case of such
a Director or member, at his or her business address; and such notice shall be
deemed to be given at the time when it is thus personally delivered, deposited
or transmitted, as the case may be. Such requirement for notice shall also be
deemed satisfied, except in the case of shareholder meetings, if actual notice
is received orally or by other writing by the person entitled thereto as far
in advance of the event with respect to which notice is being given as the
minimum notice period required by law or these Bylaws.
Section 7.2 Dispensation with Notice. (a) Whenever notice is required to
be given by law, the Certificate of Incorporation or these Bylaws to any
shareholder to whom (i) notice of two consecutive annual meetings of
shareholders, and all notices of meetings of shareholders or (ii) all, and at
least two, payments (if sent by first class mail) of dividends or interest on
securities of the Corporation during a 12-month period, have been mailed
addressed to such shareholder at the address of such shareholder as shown on
the records of the Corporation and have been returned undeliverable, the
giving of such notice to such shareholder shall not be required. Any action or
meeting which shall be taken or held without notice to such shareholder shall
have the same force and effect as if such notice had been duly given. If any
such shareholder shall deliver to the Corporation a written notice setting
forth the then current address of such shareholder, the requirement that
notice be given to such shareholder shall be reinstated.
(b) Whenever notice is required to be given by law, the
Certificate of Incorporation or these Bylaws to any person with whom
communication is unlawful, the giving of such notice to such person shall not
be required, and there shall be no duty to apply to any governmental authority
or agency for a license or permit to give such notice to such person. Any
action or meeting which shall be taken or held without notice to any such
person with whom communication is unlawful shall have the same force and
effect as if such notice had been duly given.
Section 7.3 Waiver of Notice. Any written waiver of notice, signed by
the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of any regular or special meeting of the
shareholders, Directors, or members of a committee of Directors need be
specified in any written waiver of notice.
ARTICLE VIII
Indemnification
Section 8.1 Right to Indemnification. In addition and subject to the
indemnification provisions contained in the Certificate of Incorporation, and
subject to applicable law, the following Sections of this Article VIII shall
apply with respect to any person subject to the indemnification provisions of
the Corporation.
Section 8.2 Prepayment of Expenses. The Corporation may pay or reimburse
the reasonable expenses incurred in defending any proceeding in advance of its
final disposition if the Corporation has received in advance an undertaking by
the person receiving such payment or reimbursement to repay all amounts
advanced if it should be ultimately determined that he or she is not entitled
to be indemnified under this Article VIII or otherwise. The Corporation may
require security for any such undertaking.
Section 8.3 Claims. If a claim for indemnification or payment of
expenses under this Article VIII is not paid in full within 60 days after a
written claim therefor has been received by the Corporation, the claimant may
file suit to recover the unpaid amount of such claim and, if successful in
whole or in part, shall be entitled to be paid the expense of prosecuting such
claim. In any such action the Corporation shall have the burden of proving
that the claimant was not entitled to the requested indemnification or payment
of expenses under applicable law.
Section 8.4 Non-Exclusivity of Rights. The rights conferred on any
person by this Article VIII shall not be exclusive of any other rights which
such person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, these Bylaws, agreement, vote of shareholders or
disinterested Directors or otherwise.
Section 8.5 Other Indemnification. The Corporation's obligation, if any,
to indemnify any person who was or is serving at its request as a Director,
officer, employee, partner or agent of another corporation, partnership, joint
venture or other enterprise shall be reduced by any amount such person may
collect as indemnification from such other corporation, partnership, joint
venture or other enterprise.
Section 8.6 Amendment or Repeal. Any repeal or modification of the
foregoing provisions of this Article VIII shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE IX
General
Section 9.1 Form of Records. Any records maintained by the Corporation
in the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, magnetic
tape, diskette, photographs, microphotographs, or any other information
storage device, provided that the records so kept can be converted into
clearly legible form within a reasonable time. The Corporation shall so
convert any records so kept upon the request of any person entitled to inspect
the same.
Section 9.2 Execution of Corporate Contracts and Instruments. The Board
of Directors, except as otherwise provided in these Bylaws, may authorize any
officer or officers, or agent or agents, to enter into any contract or execute
any instrument in the name of and on behalf of the Corporation; such authority
may be general or confined to specific instances. Unless so authorized or
ratified by the Board of Directors or within the agency power of an officer,
no officer, agent or employee shall have any power or authority to bind the
Corporation by any contract or engagement or to pledge its credit or to render
it liable for any purpose or for any amount.
Section 9.3 Severability. If any provision of these Bylaws shall be held
to be invalid, illegal, unenforceable or in conflict with the provisions of
the Corporation's Certificate of Incorporation, then such provision shall
nonetheless be enforced to the maximum extent possible consistent with such
holding and the remaining provisions of these Bylaws (including without
limitation, all portions of any section of these Bylaws containing any such
provision held to be invalid, illegal, unenforceable or in conflict with the
Certificate of Incorporation, that are not themselves invalid, illegal,
unenforceable or in conflict with the Certificate of Incorporation) shall
remain in full force and effect.
Section 9.4 Construction; Definitions. Unless the context requires
otherwise, the general provisions, rules of construction, and definitions in
the General Corporation Law of Delaware shall govern the construction of these
Bylaws. Without limiting the generality of this provision, the singular number
includes the plural, the plural number includes the singular, and the term
"person" includes both a corporation and a natural person.
Section 9.5 Dividends. The Board of Directors, subject to any
restrictions contained in the General Corporation Law of Delaware or the
Certificate of Incorporation, may declare and pay dividends upon the shares of
its capital stock. Dividends may be paid only in cash or in property. The
Board of Directors may set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves for any proper purpose and may
abolish any such reserve. Such purposes shall include, but not be limited to,
equalizing dividends, repairing or maintaining any property of the
Corporation, and meeting contingencies.
