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As filed with the Securities and Exchange Commission on July 31, 2002
Registration No. 333-60266
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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CHICAGO MERCANTILE EXCHANGE HOLDINGS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-4459170
- ------------------------------------- -----------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
30 South Wacker Drive
Chicago, Illinois 60606
(312) 930-1000
(Address of Principal Executive Offices)
CHICAGO MERCANTILE EXCHANGE HOLDINGS INC.
AMENDED AND RESTATED OMNIBUS STOCK PLAN
(Full Title of Plan)
Craig S. Donohue, Esq.
Managing Director and Chief Administrative Officer
Chicago Mercantile Exchange Holdings Inc.
30 South Wacker Drive
Chicago, Illinois 60606
(312) 930-1000
(Name, Address and Telephone Number, including Area Code, of Agent for Service)
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 (the "Amendment") to the
Registration Statement on Form S-8 (Registration No. 333-60266) of Chicago
Mercantile Exchange Inc., a Delaware corporation ("CME"), is being filed by
Chicago Mercantile Exchange Holdings Inc., a Delaware corporation (the
"Company"), pursuant to Rule 414 under the Securities Act of 1933, as
amended (the "Securities Act"), to reflect the adoption by CME of a holding
company organizational structure. The holding company organizational
structure was implemented in accordance with Section 251 of the Delaware
General Corporation Law (the "DGCL") pursuant to an Agreement and Plan of
Merger, dated as of October 1, 2001 (the "Merger Agreement"), by and among
the Company, CME and CME Merger Subsidiary Inc., a Delaware corporation and
wholly owned subsidiary of the Company ("MergerSub").
Pursuant to the terms and subject to the conditions of the Merger
Agreement and in accordance with Section 251 of the DGCL, effective on
December 3, 2001, MergerSub was merged with and into CME (the "Merger"). At
the effective time of the Merger, CME continued as the surviving entity and
as a wholly owned subsidiary of the Company and the separate corporate
existence of MergerSub ceased in accordance with the DGCL. Pursuant to the
Merger Agreement, each share of Class A common stock, par value $.01 per
share, of CME ("CME Class A common stock") issued and outstanding
immediately prior to the Merger was converted into four shares of Class A
common stock, par value $.01 per share, of the Company ("Company Class A
common stock") 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 ("CME Class B
common stock," and together with the CME Class A common stock, the "CME
common stock") issued and outstanding immediately prior to the Merger was
divided into two pieces: Company Class A common stock in an amount of
shares essentially the same as the Class A share equivalents that were
embedded in that share of CME Class B common stock, and one share of Class
B common stock, par value $.01 per share, of the Company ("Company Class B
common stock," and together with the Company Class A common stock, the
"Company common stock") that corresponds to the series of CME Class B
common stock surrendered in the Merger. The CME Class B common stock was
converted into Company common stock as follows: (i) each share of CME
Series B-1 common stock, par value $.01 per share, was automatically
converted into (a) one share of the Company's Class B-1 common stock, par
value $.01 per share, and (b) 1,799 shares of Company Class A common stock;
(ii) each share of CME Series B-2 common stock, par value $.01 per share,
was automatically converted into (a) one share of the Company's Class B-2
common stock, par value $.01 per share, and (b) 1,199 shares of Company
Class A common stock; (iii) each share of CME Series B-3 common stock, par
value $.01 per share, was automatically converted into (a) one share of the
Company's Class B-3 common stock, par value $.01 per share, and (b) 599
shares of Company Class A common stock; and (iv) each share of CME Series
B-4 common stock, par value $.01 per share, was automatically converted
into (a) one share of the Company's Class B-4 common stock, par value $.01
per share, and (b) 99 shares of Company Class A common stock.
Additionally, the Company assumed all the rights and obligations
of CME under the Chicago Mercantile Exchange Omnibus Stock Plan and any
other plan or agreement providing for the grant or award to employees or
directors of options or other rights to purchase or receive CME common
stock or any payment in respect thereof as each such plan or agreement was
amended at the effective time of the Merger. Each outstanding option and
other award assumed by the Company is exercisable or issuable upon the same
terms and conditions as were in effect immediately prior to the effective
time of the Merger. The amount of Company common stock issuable upon the
exercise or issuance of such an option or award immediately after the
effective time of the Merger equals the amount of CME common stock subject
to the option prior to the effective time of the Merger. Such Company
common stock will be allocated ratably amongst each class of Company Class
A common stock in accordance with the conversion terms described above and
the option price of each such option or award is equal to the option price
applicable to the option prior to the effective time of the Merger. All
options and awards issued pursuant to any plan or agreement assumed by the
Company after the effective time of the Merger shall entitle the holder
thereof to purchase Company common stock in accordance with the terms of
such plan or agreement as in effect on the date of issuance.
In accordance with Rule 414 under the Securities Act, the Company,
as the successor issuer to CME, hereby expressly adopts Registration
Statement No. 333-60266 on Form S-8 as its own for all purposes of the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Chicago Mercantile Exchange Omnibus Stock Plan, to
which this Registration Statement relates, shall be known as the Chicago
Mercantile Exchange Holdings Inc. Amended and Restated Omnibus Stock Plan
(the "Plan"). The Plan covers employees of the Company and its subsidiaries
(including CME), and shares of stock issued in accordance with the Plan
will be shares of Company common stock instead of shares of CME common
stock.
The applicable registration fees were paid at the time of the
original filing of the Registration Statement.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents heretofore filed with the Securities and
Exchange Commission (the "Commission") by the Company are incorporated
herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2001 (File No. 00-33379).
(b) The Company's Form 10-K/A, filed with the Commission on June
10, 2002 (File No. 00-33379).
(c) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2002 (File No. 00-33379).
(d) The description of the Company's common stock contained in the
Company's Registration Statement on Form S-1, filed with the Commission on
June 10, 2002 (File No. 33-90106).
(e) The description of the Company's Preferred Stock Purchase
Rights contained in the Company's Registration Statement on Form 8-A, filed
with the Commission on December 4, 2001 (File No. 00-33379).
(f) The Company's Current Report on Form 8-K, filed with the
Commission on February 5, 2002 (File No. 00-33379).
(g) The Company's Current Report on Form 8-K, filed with the
Commission on March 28, 2002 (File No. 00-33379).
(h) The Company's Current Report on Form 8-K, filed with the
Commission on May 16, 2002 (File No. 00-33379).
(i) The Company's Current Report on Form 8-K, filed with the
Commission on May 17, 2002 (File No. 00-33379).
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of
this Registration Statement and prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the
respective dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is incorporated or
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of DGCL authorizes a court to award or a corporation's
board of directors to grant indemnity to directors and officers in terms
sufficiently broad to permit such indemnification under some circumstances
for liabilities arising under the Securities Act and to provide for the
reimbursement of expenses incurred.
As permitted by the Delaware law, Article XI of the Company's
certificate of incorporation and Article IX of the Company's bylaws provide
that (1) the Company is permitted to indemnify its directors, officers and
other employees to the fullest extent permitted by Delaware law; (2) the
Company is permitted to advance expenses, as incurred, to its directors,
officers and other employees in connection with defending a legal
proceeding if the Company has received in advance an undertaking by the
person receiving such advance to repay all amounts advanced if it should be
determined that he or she is not entitled to be indemnified by the Company;
and (3) the rights conferred in the bylaws are not exclusive. As permitted
by the DGCL, the Company's certificate of incorporation includes a
provision that eliminates the personal liability of its directors for
monetary damages for breach of fiduciary duty as a director, except for
liability (1) for any breach of the director's duty of loyalty to the
Company or its shareholders; (2) for acts of omissions not in good faith or
that involve intentional misconduct or a knowing violation of law; (3)
under Section 174 of the DGCL (regarding payments of dividends; stock
purchases or redemptions which are unlawful); or (4) for any transaction
from which the director derived an improper personal benefit. This
provision in the certificate of incorporation does not eliminate the
directors' fiduciary duty, and in appropriate circumstances equitable
remedies such as injunctive or other forms of non-monetary relief will
remain available under Delaware law. In addition, each director will
continue to be subject to liability for breach of the director's duty of
loyalty to the Company for acts or omissions not in good faith or involving
intentional misconduct, for knowing violations of law, for actions leading
to improper personal benefit to the director and for payment of dividends
or approval of stock repurchases or redemptions that are unlawful under
Delaware law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws
or state or federal environmental laws.
In addition to the above, the Company also maintains indemnity
insurance pursuant to which officers and directors are indemnified or
insured against liability or loss under certain circumstances, which may
include liability or related loss under the Securities Act and the Exchange
Act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS.
A list of exhibits included as part of this Registration Statement
is set forth in the Exhibit Index appearing elsewhere herein and is
incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement.
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago, State of Illinois, on
this 31st day of July 2002.
CHICAGO MERCANTILE EXCHANGE HOLDINGS INC.
Registrant
CHICAGO MERCANTILE EXCHANGE HOLDINGS INC.
Date: July 31, 2002 By: /s/ James J. McNulty
------------------------------
James J. McNulty
President and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors of Chicago Mercantile Exchange
Holdings Inc., do hereby constitute and appoint Craig S. Donohue our true
and lawful attorney-in-fact and agent, to do any and all acts and things in
our names and on our behalf in our capacities as directors and to execute
any and all instruments for us and in our name in the capacities indicated
below, which said attorney and agent may deem necessary or advisable to
enable said Registrant to comply with the Securities Act of 1933 and any
rules, regulations and requirements of the Securities and Exchange
Commission, in connection with this registration statements, or any
registration statement related hereto that is to be effective upon filing
pursuant to Rule 462 under the Securities Act of 1933, including
specifically, but without limitation, power and authority to sign for us or
any of us in our names in the capacities indicated below, any and all
amendments (including post-effective amendments) hereof; and we do hereby
ratify and confirm all that said attorney and agent shall do our cause to
be done by virtue thereof
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below on July 31, 2002.
Signature Title
/s/ James J. McNulty President and Chief Executive Officer
- ---------------------------- and Director
James J. McNulty
/s/ Terrence A. Duffy Chairman of the Board and Director
- ---------------------------
Terrence A. Duffy
/s/ David G. Gomach Managing Director and Chief Financial
- --------------------------- Officer
David G. Gomach
/s/ Nancy W. Goble Managing Director and Chief Accounting
- --------------------------- Officer
Nancy W. Goble
/s/ Timothy R. Brennan Director
- ---------------------------
Timothy R. Brennan
/s/ John W. Croghan Director
- ---------------------------
John W. Croghan
/s/ Martin J. Gepsman Director
- ---------------------------
Martin J. Gepsman
/s/ Daniel R. Glickman Director
- ---------------------------
Daniel R. Glickman
/s/ Scott Gordon Director
- ---------------------------
Scott Gordon
/s/ Yra G. Harris Director
- ---------------------------
Yra G. Harris
/s/ Bruce F. Johnson Director
- ---------------------------
Bruce F. Johnson
/s/ Gary M. Katler Director
- ---------------------------
Gary M. Katler
/s/ Patrick B. Lynch Director
- ---------------------------
Patrick B. Lynch
/s/ Leo Melamed Director
- ---------------------------
Leo Melamed
/s/ John D. Newhouse Director
- ----------------------------
John D. Newhouse
/s/ James E. Oliff Director
- ----------------------------
James E. Oliff
/s/ William G. Salatich, Jr. Director
- ---------------------------
William G. Salatich, Jr.
/s/ John F. Sandner Director
- ---------------------------
John F. Sandner
/s/ Myron Scholes Director
- ---------------------------
Myron S. Scholes
/s/ Verne O. Sedlacek Director
- ---------------------------
Verne O. Sedlacek
/s/ William R. Shepard Director
- ---------------------------
William R. Shepard
/s/ Howard Siegel Director
- ---------------------------
Howard J. Siegel
INDEX TO EXHIBITS
Exhibit Number Description
10.1 Chicago Mercantile Exchange Holdings Inc. Amended and
Restated Omnibus Stock Plan, amended and restated
effective as of April 23, 2002.
23.1 Consent of Arthur Andersen LLP (incorporated by
reference to Exhibit 23.1 of the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 2001 (File No. 00-33379)).
24.1 Powers of Attorney (included on signature page).
Exhibit 10.1
CHICAGO MERCANTILE EXCHANGE HOLDINGS INC.
AMENDED AND RESTATED OMNIBUS STOCK PLAN
ARTICLE 1
EFFECTIVE DATE AND PURPOSE
1.1. Effective Date. The Plan is effective as the Chicago
Mercantile Exchange Omnibus Stock Plan as of February 7, 2000, and is
amended and restated as the Chicago Mercantile Exchange Holdings Inc.
Amended and Restated Omnibus Stock Plan as of April 23, 2002.
1.2. Purpose of the Plan. The Plan is intended to further the
growth and profitability of the Company by increasing incentives and
encouraging Share ownership on the part of Employees of the Company and its
Subsidiaries. The Plan is intended to permit the grant of Awards that
constitute "qualified performance-based compensation" under section 162(m)
of the Code.
ARTICLE 2
DEFINITIONS
The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:
2.1. "1934 Act" means the Securities Exchange Act of 1934, as
amended. Reference to a specific section of the 1934 Act or regulation
thereunder shall include such section or regulation, any valid regulation
promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such
section or regulation.
2.2. "Affiliate" means any corporation or any other entity
(including, but not limited to, partnerships and joint ventures) controlled
by the Company.
2.3. "Award" means, individually or collectively, a grant under
the Plan of Non-Qualified Stock Options, Incentive Stock Options, SARs,
Stock Awards or Performance Shares.
2.4. "Award Agreement" means the written agreement setting forth
the terms and conditions applicable to an Award.
2.5. "Board" means the Board of Directors of the Company.
2.6. "Bonus Stock" means Shares under a Stock Award which are not
subject to a Period of Restriction.
2.7. "Cause" means, except as otherwise specified in a particular
Award Agreement, (a) the willful and continued failure (other than a
failure resulting from the Participant's Disability) to substantially
perform the duties assigned by the Company, (b) the willful engaging in
conduct which is demonstrably injurious to the Company, monetarily or
otherwise, including conduct that, in the reasonable judgment of the
Company, does not conform to the standard of the Company's executives or
employees, (c) any act of dishonesty, commission of a felony, or (d) a
significant violation of any statutory or common law duty of loyalty to the
Company.
2.8. "Change of Control" means, except as otherwise specified in a
particular Award Agreement, the occurrence of any of the following events:
(a) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
1934 Act) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of 50%
or more of either (1) the then outstanding Class A Shares
(the "Outstanding Class A Common Stock") or (2) the combined
voting power of the then-outstanding voting securities of the
Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this paragraph (a)
the following acquisitions shall not constitute, or be deemed
to cause, a Change of Control: (i) any increase in such
percentage ownership of a Person to 50% or more resulting
solely from any acquisition of shares directly from the
Company or any acquisition of shares by the Company;
provided, that any subsequent acquisitions of shares by such
Person that would add, in the aggregate, 1% or more (measured
as of the date of each such subsequent acquisition) to such
Person's beneficial ownership of Outstanding Class A Common
Stock or Outstanding Company Voting Securities shall be
deemed to constitute a Change of Control, (ii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Affiliate; or
(iii) any acquisition by any corporation pursuant to a
transaction which complies with clauses (1), (2) and (3) of
paragraph (c) below; or
(b) Individuals who, as of the Effective Date,
constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a Director
subsequent to the date hereof whose election, or nomination
for election, was approved by a vote of at least a majority
of the Directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with
respect to the election or removal of Directors or other
actual or threatened solicitation of proxies or consents, by
or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Business
Combination"), in each case, unless, following such Business
Combination, (1) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of
the then Outstanding Class A Common Stock and Outstanding
Company Voting Securities, immediately prior to such Business
Combination beneficially own, directly or indirectly, more
than 50% of, respectively, the then-outstanding shares of
common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally
in the election of directors, as the case may be, of the
corporation resulting from such Business Combination
(including, without limitation, a corporation which as a
result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination, of the Outstanding Class A Common Stock
and Outstanding Company Voting Securities, as the case may
be, (2) no Person (excluding any corporation resulting from
such Business Combination or any employee benefit plan (or
related trust) of the Company or of such corporation
resulting from such Business Combination) beneficially owns,
directly or indirectly, 50% or more of, respectively, the
then-outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined
voting power of the then-outstanding voting securities of
such corporation except to the extent that such ownership
existed prior to the Business Combination and (3) individuals
who were on the Incumbent Board continue to constitute at
least a majority of the members of the board of directors of
the corporation resulting from the Business Combination;
provided, however, that any individual becoming a Director
subsequent to the date hereof whose election, or nomination
for election, was approved by a vote of at least a majority
of the Directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with
respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents, by
or on behalf of a Person other than the Board; or
(d) Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
2.9. "Class A Shares" means shares of the Company's Class A common
stock, $.01 par value, Class A-1 common stock, $.01 par value, Class A-2
common stock, $.01 par value, Class A-3 common stock, $.01 par value, and
Class A-4 common stock, $.01 par value.
2.10. "Code" means the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code or regulation thereunder shall
include such section or regulation, any valid regulation promulgated
thereunder, and any comparable provision of any future legislation or
regulation amending, supplementing or superseding such section or regulation.
2.11. "Committee" means the committee appointed by the Board
(pursuant to Section 3.1) to administer the Plan.
2.12. "Company" means Chicago Mercantile Exchange Holdings Inc.
(formerly Chicago Mercantile Exchange), a Delaware corporation, or any
successor thereto.
2.13. "Director" means any individual who is a member of the Board.
2.14. "Disability" means a Participant's permanent and total
disability as determined by the Committee in accordance with
non-discriminatory standards consistently applied.
2.15. "Employee" means an employee of the Company, its
subsidiaries, or an Affiliate designated by the Board or the Committee
(collectively "an Employer"). "Employee" does not include an individual who
is not contemporaneously classified as an Employee for purposes of an
Employer's payroll system. In the event any such individual is reclassified
as an Employee for any purpose, including, without limitation, any
government agency or as a result of any private lawsuit, action, or
administrative proceeding, such individual will, notwithstanding such
reclassification, remain ineligible for participation hereunder and will
not be considered an Employee for purposes of this Plan. In addition to and
not in derogation of the foregoing, the exclusive means for an individual
who is not contemporaneously classified as an Employee of an Employer on an
Employer's payroll system to become eligible to participate in this Plan is
through an amendment to this Plan which specifically renders such
individual eligible for participation hereunder.
2.16. "Exercise Price" means the price at which a Share subject to
an Option may be purchased pursuant to the exercise of the Option or the
base price at which an SAR may be exercised with respect to a Share, as
applicable.
2.17. "Fair Market Value" means, except as otherwise specified in
a particular Award Agreement, (a) in the case of Shares that are traded on
an established national or regional securities exchange, the closing
transaction price of such a Share as reported by such exchange on the date
as of which such value is being determined or, if there shall be no
reported transaction for such date, on the next preceding date for which a
transaction was reported, (b) in the case of Shares that are not traded on
an established securities exchange, the average of the bid and ask prices
for such a Share, where quoted for such Shares, or (c) if Fair Market Value
cannot be determined under clause (a) or clause (b) above, or if the
Committee determines in its sole discretion that the Shares are too thinly
traded for Fair Market Value to be determined pursuant to clause (a) or
clause (b), the value as determined by an outside expert selected by the
Committee.
2.18. "Fiscal Year" means the fiscal year of the Company.
2.19. "Grant Date" means, with respect to an Award, the date that
the Award is granted.
2.20. "Incentive Stock Option" means an Option that is designated
as an Incentive Stock Option and is intended by the Committee to meet the
requirements of section 422 of the Code.
2.21. "Non-Qualified Stock Option" means an Option that is not an
Incentive Stock Option.
2.22. "Option" means an option to purchase Shares which is granted
by the Committee pursuant to Article 5.
2.23. "Participant" means an individual with respect to whom an
Award has been granted and remains outstanding.
2.24. "Performance Goals" means such criteria and objectives as
may be established by the Committee, which shall be satisfied or met (i) as
a condition to the exercisability of all or a portion of an Option or SAR,
(ii) as a condition to the grant of an Award, or (iii) during the
applicable Performance Period or Period of Restriction, as a condition to
the Participant's receipt of the Shares subject to a Restricted Stock Award
or, in the case of a Performance Share Award, of the Shares subject to such
Award and/or the payment with respect to such Award. In the case of an
Award that is intended to qualify as "qualified performance-based
compensation" under section 162(m) of the Code, such criteria and
objectives shall be one or more of the following with respect to the
Company as a whole or with respect to an Affiliate or a division, operating
segment, business unit, joint venture, alliance or project of the Company
or an Affiliate: (a) pre-tax net income, (b) net income, (c) efficiency
ratio, (d) return to stockholders (including dividends), (e) pre-tax return
on average equity, (f) return on average equity, (g) return on assets, (h)
trading volume, (i) earnings per Share, (j) revenues, (k) market share, (l)
cash flow, (m) cost or expense reductions, (n) the attainment by a Share of
a specified Fair Market Value for a specified period of time, (o) increase
in the Fair Market Value of a Share, (p) enhancement of stockholder value,
or any combination of the foregoing. If the Committee desires that
compensation payable pursuant to any Award subject to Performance Goals be
"qualified performance-based compensation" within the meaning of section
162(m) of the Code, the Performance Goals (i) shall be established by the
Committee no later than the end of the first 90 days of the Performance
Period or Period of Restriction, as applicable (or such other time
prescribed by the Internal Revenue Service) and (ii) shall satisfy all
other applicable requirements imposed by Treasury Regulations promulgated
under section 162(m) of the Code, including the requirement that such
Performance Goals be stated in terms of an objective formula or standard.
2.25. "Performance Period" means the period designated by the
Committee during which the Performance Goals applicable to an Award shall
be measured.
2.26. "Performance Share" means a right, contingent upon the
attainment of specified Performance Goals within a specified Performance
Period, to receive one Share, which may be Restricted Stock, or in lieu of
all or a portion thereof, the Fair Market Value of such Share in cash.
2.27. "Period of Restriction" means the period during which
Restricted Stock is subject to forfeiture and/or restrictions on
transferability.
2.28. "Plan" means this Chicago Mercantile Exchange Holdings Inc.,
Amended and Restated Omnibus Stock Plan, as set forth in this instrument
and as hereafter amended from time to time.
2.29. "Restricted Stock" means Shares under a Stock Award which
are subject to a Period of Restriction.
2.30. "Retirement" means a Participant's Termination of Service
(other than for Cause) on or after attaining his or her "normal retirement
date" as defined in the Pension Plan for Employees of Chicago Mercantile
Exchange Inc.
2.31. "Rule 16b-3" means Rule 16b-3 promulgated under the 1934
Act, as amended, and any future regulation amending, supplementing or
superseding such regulation.
2.32. "Share" means a share of any class, and of any series within
a class, of the Company's common stock.
2.33. "Stock Appreciation Right" or "SAR" means an Award, granted
alone, in reference to or in tandem with a related Option, which pursuant
to Article 6 is designated by the Committee as an SAR.
2.34. "Stock Award" means an Award of Restricted Stock or Bonus Stock.
2.35. "Ten Percent Holder" means an Employee (together with
persons whose stock ownership is attributed to the Employee pursuant to
section 424(d) of the Code) who, at the time an Option is granted, owns
stock representing more than ten percent of the voting power of all classes
of stock of the Company (or of any parent or subsidiary as defined in
section 424 of the Code).
2.36. "Termination of Service" means a cessation of the
employee-employer relationship between an Employee and the Company and
Affiliates for any reason, including, but not by way of limitation, a
termination by resignation, discharge with or without Cause, death,
Disability, Retirement, or the disaffiliation of an Affiliate, but
excluding any such termination where there is a simultaneous reemployment
by the Company or an Affiliate.
ARTICLE 3
ADMINISTRATION
3.1. The Committee. The Plan shall be administered by the
Committee. The Committee shall consist of not less than two (2) Directors.
The members of the Committee shall be appointed from time to time by, and
serve at the pleasure of, the Board. It is intended that each member of the
Committee shall qualify as (a) a "non-employee director" under Rule 16b-3,
and (b) an "outside director" under section 162(m) of the Code. If it is
later determined that one or more members of the Committee do not so
qualify, actions taken by the Committee prior to such determination shall
be valid despite such failure to qualify.
3.2. Authority and Action of the Committee. It shall be the duty
of the Committee to administer the Plan in accordance with the Plan's
provisions. The Committee shall have all powers and discretion necessary or
appropriate to administer the Plan and to control its operation, including,
but not limited to, the power to
(a) determine which Employees shall be eligible to receive
Awards and to grant Awards,
(b) prescribe the form, amount, timing and other terms and
conditions of each Award,
(c) interpret the Plan and the Award Agreements,
(d) adopt such procedures as it deems necessary or
appropriate to permit participation in the Plan by eligible
Employees,
(e) adopt such rules as it deems necessary or appropriate
for the administration, interpretation and application of the
Plan, and
(f) interpret, amend or revoke any such procedures or rules.
A majority of the Committee shall constitute a quorum. The acts of
the Committee shall be either (i) acts of a majority of the members of the
Committee present at any meeting at which a quorum is present or (ii) acts
approved in writing by all of the members of the Committee without a meeting.
3.3. Delegation by the Committee. The Committee, in its sole
discretion and on such terms and conditions as it may provide, may delegate
all or any part of its authority and powers under the Plan to one or more
Directors and/or officers of the Company; provided, however, that the
Committee may not delegate its authority or power with respect to (a) any
officer of the Company with regard to the selection for participation in
this Plan of an officer or other person subject to Section 16 of the 1934
Act or decisions concerning the timing, pricing or amount of an award to
such an officer or person or (b) any Award that is intended to satisfy the
requirements applicable to "qualified performance-based compensation" under
section 162(m) of the Code.
3.4. Decisions Binding. All determinations, decisions and
interpretations by the Committee, the Board, and any delegate of the
Committee pursuant to the provisions of the Plan shall be final,
conclusive, and binding on all persons, and shall be given the maximum
deference permitted by law.
ARTICLE 4
SHARES SUBJECT TO THE PLAN
4.1. Number of Shares. Subject to adjustment as provided in
Section 4.3, 2,745,975 million Shares shall be available for grants of Awards
under the Plan. In the case of an Award that is intended to qualify as
"qualified performance-based compensation" under section 162(m) of the
Code, the maximum number of Shares with respect to which Options or SARs or
a combination thereof may be granted during any Fiscal Year to any person
shall be 1.5 million, subject to adjustment as provided in Section 4.3.
Shares awarded under the Plan may be either authorized but unissued Shares,
authorized and issued Shares reacquired and held as treasury Shares or a
combination thereof.
4.2. Lapsed Awards. To the extent that Shares subject to an
outstanding Option (except to the extent Shares are issued or delivered by
the Company in connection with the exercise of a tandem SAR) or other Award
are not issued or delivered by reason of the expiration, cancellation,
forfeiture or other termination of such Award or by reason of the delivery
or withholding of Shares to pay all or a portion of the exercise price of
an Award, if any, or to satisfy all or a portion of the tax withholding
obligations relating to an Award, then such Shares shall again be available
under this Plan.
4.3. Adjustments in Awards and Authorized Shares. In the event of
any merger, reorganization, consolidation, recapitalization, liquidation,
stock dividend, split-up, Share combination, or other similar change in the
corporate structure of the Company affecting the Shares, the Committee may
adjust the number, class and series of securities available under the Plan,
the number, class, series and purchase price of securities subject to
outstanding Awards, and the numerical limits of Sections 4.1, 7.1 and 8.2.1
in such manner as the Committee in its sole discretion shall determine to
be appropriate to prevent the dilution or diminution of such Awards. If any
such adjustment would result in a fractional security being (a) available
under this Plan, such fractional security shall be disregarded, or (b)
subject to an outstanding Award under this Plan, the Company shall pay the
holder of such Award, in connection with the first vesting, exercise or
settlement of such Award in whole or in part occurring after such
adjustment, an amount in cash determined by multiplying (i) the fraction of
such security (rounded to the nearest hundredth) by (ii) the excess, if
any, of (A) the Fair Market Value on the vesting, exercise or settlement
date over (B) the Exercise Price, if any, of such Award.
ARTICLE 5
STOCK OPTIONS
5.1. Grant of Options. Subject to the provisions of the Plan,
Options may be granted to such Employees at such times, and subject to such
terms and conditions, as determined by the Committee in its sole
discretion. An Award of Options may include Incentive Stock Options,
Non-Qualified Stock Options, or a combination thereof; provided, that no
Incentive Stock Option shall be granted more than ten years after the date
this Plan is adopted by the Board.
5.2. Award Agreement. Each Option shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the expiration date of the
Option, the number, class and, if applicable, series of Shares to which the
Option pertains (provided that Incentive Stock Options may be granted only
with respect to Class A Shares), any conditions to the exercise of all or a
portion of the Option, and such other terms and conditions as the
Committee, in its discretion, shall determine. The Award Agreement
pertaining to an Option shall designate such Option as an Incentive Stock
Option or a Non-Qualified Stock Option. Notwithstanding any such
designation, to the extent that the aggregate Fair Market Value (determined
as of the Grant Date) of Shares with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by a Participant
during any calendar year (under this Plan or any other plan of the Company,
or any parent or subsidiary as defined in section 424 of the Code) exceeds
the amount established by the Code, such Options shall constitute
Non-Qualified Stock Options. For purposes of the preceding sentence,
Incentive Stock Options shall be taken into account in the order in which
they are granted.
5.3. Exercise Price. Subject to the provisions of this Section
5.3, the Exercise Price with respect to Shares subject to an Option shall
be determined by the Committee in its sole discretion.
5.3.1. Non-Qualified Stock Options. In the case of a
Non-Qualified Stock Option, the Exercise Price may be equal to or
greater than one hundred percent (100%) of the Fair Market Value
of a Share on the Grant Date, as shall be determined by the
Committee in its sole discretion.
5.3.2. Incentive Stock Options. In the case of an Incentive
Stock Option, the Exercise Price shall be not less than one
hundred percent (100%) of the Fair Market Value of a Share on the
Grant Date; provided, however, that the Exercise Price with
respect to a Ten Percent Shareholder shall not be less than one
hundred-ten percent (110%) of the Fair Market Value of a Share on
the Grant Date.
5.4. Expiration of Options.
5.4.1. Expiration Dates. Each Option shall terminate not
later than the expiration date specified in the Award Agreement
pertaining to such Option; provided, however, that the expiration
date with respect to an Incentive Stock Option shall not be later
than the tenth anniversary of its Grant Date and the expiration
date with respect to an Incentive Stock Option granted to a Ten
Percent Holder shall not be later than the fifth anniversary of
its Grant Date.
5.4.2. Termination of Service. Unless otherwise specified in
the Award Agreement pertaining to an Option, each Option granted
to a Participant shall terminate no later than the first to occur
of the following events:
(a) The expiration of ninety (90) days from the date
of the Participant's Termination of Service for any reason
other than the Participant's death, Disability, Retirement
or termination for Cause;
(b) The expiration of one (1) year from the date of
the Participant's Termination of Service by reason of
Disability;
(c) The expiration of one (1) year from the date of
the Participant's Termination of Service by reason of the
Participant's Retirement (provided, that the portion of any
Incentive Stock Option exercised more than three months
after such Termination of Service shall be deemed to be a
Non-Qualified Option);
(d) The date of the Participant's Termination of
Service for Cause; or
(e) The expiration date specified in the Award
Agreement pertaining to such Option.
5.4.3. Death of Employee. Unless otherwise specified in the
Award Agreement pertaining to an Option, if a Participant to whom
an Option has been granted dies while an Employee but prior to the
expiration, cancellation, forfeiture or other termination of such
Option, such Option shall become exercisable in full upon the
Participant's death and shall be exercisable thereafter until the
earlier of (a) the expiration of one (1) year after the date of
death, or (b) the expiration date specified in the Award Agreement
pertaining to such Option.
5.5. Exercisability of Options. Subject to Section 5.4, Options
granted under the Plan shall be exercisable at such times, and shall be
subject to such restrictions and conditions, as the Committee shall
determine in its sole discretion. After an Option is granted, the
Committee, in its sole discretion, may accelerate the exercisability of the
Option.
5.6. Method of Exercise. Options shall be exercised by the
Participant's delivery of a written notice of exercise to the Secretary of
the Company (or its designee), setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by full payment
of the Exercise Price with respect to each such Share. The Exercise Price
shall be payable to the Company in full in cash or its equivalent
(including, but not limited to, by means of, a broker-assisted cashless
exercise). The Committee, in its sole discretion, also may permit exercise
(a) by tendering previously acquired Shares having an aggregate Fair Market
Value at the time of exercise equal to the aggregate Exercise Price of the
Shares with respect to which the Option is to be exercised, or (b) by any
other means which the Committee, in its sole discretion, determines to both
provide legal consideration for the Shares, and to be consistent with the
purposes of the Plan.
As soon as practicable after receipt of a written notification of
exercise and full payment for the Shares with respect to which the Option
is exercised, the Company shall deliver to the Participant, as determined
by the Committee in its sole discretion, either (i) Share certificates
(which may be in book entry form) for such Shares, (ii) Share certificates
for Class A Shares, (iii) cash or (iv) a combination thereof, in each case
with an aggregate Fair Market Value equal to the Fair Market Value of the
Shares with respect to which the Option is exercised.
5.7. Restrictions on Share Transferability. The Committee may
impose such restrictions on any Shares acquired pursuant to the exercise of
an Option as it may deem advisable, including, but not limited to,
restrictions related to applicable Federal securities laws, the
requirements of any national securities exchange or system upon which
Shares are then listed or traded, or any blue sky or state securities laws.
ARTICLE 6
STOCK APPRECIATION RIGHTS
6.1. Grant of SARs. Subject to the provisions of the Plan, SARs
may be granted to such Employees at such times, and subject to such terms
and conditions, as shall be determined by the Committee in its sole
discretion; provided, that any tandem SAR related to an Incentive Stock
Option shall be granted at the same time that such Incentive Stock Option
is granted.
6.2. Exercise Price and Other Terms. The Committee, subject to the
provisions of the Plan, shall have complete discretion to determine the
terms and conditions of SARs granted under the Plan; provided, however,
that SARs may be granted only with respect to Class A Shares. Without
limiting the foregoing, the Exercise Price with respect to Shares subject
to an SAR may be equal to or greater than one hundred percent (100%) of the
Fair Market Value of a Share on the Grant Date, as shall be determined by
the Committee in its sole discretion; provided, that the Exercise Price
with respect to Shares subject to a tandem SAR shall be the same as the
Exercise Price with respect to the Shares subject to the related Option.
6.3. SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the
Committee, in its sole discretion, shall determine.
6.4. Expiration of SARS
6.4.1. Expiration Dates. Each SAR shall terminate not later
than as of the expiration date specified in the Award Agreement
pertaining to such SAR; provided, however, that the expiration
date with respect to a tandem SAR shall not be later than
expiration date of the related Option.
6.4.2. Termination of Service. Unless otherwise specified in
the Award Agreement pertaining to an SAR, each SAR granted to a
Participant shall terminate no later than the first to occur of
the following events:
(a) The expiration of ninety (90) days from the date
of the Participant's Termination of Service for any reason
other than the Participant's death, Disability, Retirement
or termination for Cause;
(b) The expiration of one (1) year from the date of
the Participant's Termination of Service by reason of the
Participant's Disability or Retirement;
(c) The date of the Participant's Termination of
Service for Cause; or
(d) The expiration date specified in the Award
Agreement pertaining to such SAR.
6.4.3. Death of Employee. Unless otherwise specified in the
Award Agreement pertaining to an SAR, if a Participant to whom an
SAR has been granted dies while an Employee but prior to the
expiration, cancellation, forfeiture or other termination of such
SAR, such SAR shall become exercisable in full upon the
Participant's death and shall be exercisable thereafter until the
earlier of (a) the expiration of one (1) year after the date of
death, or (b) the expiration date specified in the Award Agreement
pertaining to such SAR.
6.5. Payment of SAR Amount. An SAR may be exercised (a) by the
Participant's delivery of a written notice of exercise to the Secretary of
the Company (or its designee) setting forth the number of whole SARs which
are being exercised, (b) in the case of a tandem SAR, by surrendering to
the Company any Options which are cancelled by reason of the exercise of
such SAR, and (c) by executing such documents as the Company may reasonably
request. Upon exercise of an SAR, the Participant shall be entitled to
receive payment from the Company in an amount determined by multiplying:
(i) The amount by which the Fair Market Value of a
Share on the date of exercise exceeds the Exercise Price
specified in the Award Agreement pertaining to such SAR;
times
(ii) The number of Shares with respect to which the
SAR is exercised.
6.6. Payment Upon Exercise of SAR. Unless otherwise specified in
the Award Agreement pertaining to an SAR, payment to a Participant upon the
exercise of the SAR may be made, as determined by the Committee in its sole
discretion, either (a) in cash, (b) in Shares with a Fair Market Value
equal to the amount of the payment or (c) in a combination thereof.
ARTICLE 7
STOCK AWARDS
7.1. Grant of Stock Awards. Subject to the provisions of the Plan,
Stock Awards may be granted to such Employees at such times, and subject to
such terms and conditions, as determined by the Committee in its sole
discretion; provided, however, that Stock Awards may be granted only with
respect to Class A Shares. The Award Agreement pertaining to a Stock Award
shall specify whether it is a Restricted Stock Award or a Bonus Stock
Award. In the case of a Stock Award that is intended to qualify as
"qualified performance-based compensation" under section 162(m) of the
Code, the maximum number of Shares with respect to which a Stock Award may
be granted during any Fiscal Year to any person shall be 500,000.
7.2. Stock Award Agreement. Each Stock Award shall be evidenced by
an Award Agreement that shall specify the number of Shares granted, any
price to be paid for the Shares, the Performance Goals (if any) and Period
of Restriction applicable to a Restricted Stock Award and such other terms
and conditions as the Committee, in its sole discretion, shall determine.
Bonus Stock Awards shall not be subject to any Periods of Restriction.
7.3. Transferability/Share Certificates. Shares subject to an
Award of Restricted Stock may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated during a Period of Restriction.
During the Period of Restriction, a Restricted Stock Award may be
registered in the holder's name or a nominee name at the discretion of the
Company and may bear a legend as described in Section 7.4.3. Unless the
Committee determines otherwise, Shares of Restricted Stock shall be held by
the Company as escrow agent during the applicable Period of Restriction,
together with stock powers or other instruments of assignment (including a
power of attorney), each endorsed in blank with a guarantee of signature if
deemed necessary or appropriate by the Company, which would permit transfer
to the Company of all or a portion of the Shares subject to the Restricted
Stock Award in the event such Award is forfeited in whole or in part. Upon
the grant of a Bonus Stock Award, subject to the Company's right to require
payment of any taxes, a certificate or certificates evidencing ownership of
the requisite number of Shares shall be delivered to the Participant.
7.4. Other Restrictions. The Committee, in its sole discretion,
may impose such other restrictions on Shares subject to an Award of
Restricted Stock as it may deem advisable or appropriate, in accordance
with this Section 7.4.
7.4.1. General Restrictions. The Committee may set
restrictions based upon the achievement of specific performance
objectives (Company-wide, business unit or individual), applicable
federal or state securities laws, or any other basis determined by
the Committee in its discretion.
7.4.2. Section 162(m) Performance Restrictions. In the case
of Awards of Restricted Stock which are intended to satisfy the
requirements for "qualified performance-based compensation" under
section 162(m) of the Code, the Committee shall set restrictions
based upon the achievement of Performance Goals.
7.4.3. Legend on Certificates. The Committee, in its
discretion, may legend the certificates representing Restricted
Stock during the Period of Restriction to give appropriate notice
of such restrictions. For example, the Committee may determine
that some or all certificates representing Shares of Restricted
Stock shall bear the following legend:
"The sale or other transfer of the shares of
stock represented by this certificate, whether voluntary,
involuntary, or by operation of law, is subject to
certain restrictions on transfer as set forth in the
Chicago Mercantile Exchange Holdings Inc., Amended and
Restated Omnibus Stock Plan (the "Plan"), and in a
Restricted Stock Agreement (as defined by the Plan). A
copy of the Plan and such Restricted Stock Agreement may
be obtained from the Secretary of Chicago Mercantile
Exchange Holdings Inc.."
7.5. Removal of Restrictions. Shares of Restricted Stock covered
by a Restricted Stock Award made under the Plan shall be released from
escrow as soon as practicable after the termination of the Period of
Restriction (and the satisfaction or attainment of any applicable
Performance Goals) and, subject to the Company's right to require payment
of any taxes, a certificate or certificates evidencing ownership of the
requisite number of Shares shall be delivered to the Participant.
7.6. Voting Rights. During the Period of Restriction, Participants
holding Shares of Restricted Stock granted hereunder may exercise full
voting rights with respect to those Shares, unless otherwise provided in
the Award Agreement.
7.7. Dividends and Other Distributions. During the Period of
Restriction, Participants holding Shares of Restricted Stock shall be
entitled to receive all dividends and other distributions paid with respect
to such Shares unless otherwise provided in the Award Agreement. If any
such dividends or distributions are paid in Shares, the Shares shall be
deposited with the Company and shall be subject to the same restrictions on
transferability and forfeitability as the Shares of Restricted Stock with
respect to which they were paid.
7.8. Return of Restricted Stock to Company. On the date set forth
in the Award Agreement, the Restricted Stock for which restrictions have
not lapsed shall revert to the Company and again shall become available for
Awards under the Plan.
7.9. Termination of Service.
7.9.1. Disability, Retirement and Death. Unless otherwise
specified in the Award Agreement pertaining to a Restricted Stock
Award granted to a Participant, upon the Participant's Termination
of Service by reason of Disability, Retirement or death, the
Period of Restriction shall terminate as of such date and all
Performance Goals shall be deemed to have been satisfied at the
target level.
7.9.2. Other Termination of Service. Unless otherwise
specified in the Award Agreement pertaining to a Restricted Stock
Award granted to a Participant, upon the Participant's Termination
of Service for any reason other than Disability, Retirement or
death, the portion of such Award which is subject to a Period of
Restriction on such date shall be forfeited by the Participant and
canceled by the Company
ARTICLE 8
PERFORMANCE SHARE AWARDS
8.1. Performance Share Awards. Subject to the provisions of the
Plan, Performance Share Awards may be granted to such Employees at such
times, and subject to such terms and conditions, as determined by the
Committee in its sole discretion; provided, however, that Performance Share
Awards may be granted only with respect to Class A Shares.
8.2. Terms of Performance Share Award Agreement.
8.2.1. Number of Performance Shares and Performance Goals.
The Award Agreement pertaining to a Performance Share Award shall
specify the number of Performance Shares subject to the Award and
the Performance Goals and the Performance Period. In the case of a
Performance Share Award which is intended to qualify as "qualified
performance-based compensation" under section 162(m) of the Code,
the maximum number of Shares with respect to which a Performance
Share Award may be granted during any Fiscal Year to any person
shall be 500,000.
8.2.2. Vesting and Forfeiture. The Award Agreement
pertaining to a Performance Share Award shall specify, in the
Committee's discretion and subject to the terms of the Plan, for
the vesting of such Award if specified Performance Goals are
satisfied or met during the Performance Period, and for the
forfeiture of all or a portion of such Award if specified
Performance Goals are not satisfied or met during the Performance
Period.
8.2.3. Settlement of Vested Performance Share Awards. The
Award Agreement pertaining to a Performance Share Award (i) shall
specify whether such Award may be settled in Shares (including
Shares of Restricted Stock) or cash or a combination thereof and
(ii) may specify whether the holder thereof shall be entitled to
receive, on a current or deferred basis, dividend equivalents,
and, if determined by the Committee, interest on or the deemed
reinvestment of any deferred dividend equivalents, with respect to
the number of Shares subject to such Award. If a Performance Share
Award is settled in Shares of Restricted Stock, a certificate or
certificates representing such Restricted Stock shall be issued in
accordance with Section 7.5 and the Participant shall have such
rights of a stockholder of the Company as determined pursuant to
Section 7.6 and 7.7. Prior to the settlement of a Performance
Share Award in Shares, including Restricted Stock, the Participant
shall have no rights as a stockholder of the Company with respect
to the Shares subject to such Award.
8.3. Termination of Service.
8.3.1. Disability, Retirement and Death. Unless otherwise
specified in the Award Agreement pertaining to a Performance Share
Award granted to a Participant, upon the Participant's Termination
of Service by reason of Disability, Retirement or death, all
Performance Goals shall be deemed to have been satisfied at the
target level with respect to such Performance Share Award.
8.3.2. Other Termination of Service. Unless otherwise
specified in the Award Agreement pertaining to a Performance Share
Award granted to a Participant, upon the Participant's Termination
of Service for any reason other than Disability, Retirement or
death, the portion of such Award which is subject to outstanding
Performance Goals on such date shall be forfeited by the
Participant and canceled by the Company
ARTICLE 9
MISCELLANEOUS
9.1. No Effect on Employment or Service. Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate
any Participant's employment or service at any time, with or without cause.
For purposes of the Plan, transfer of employment of a Participant between
the Company and any one of its Affiliates (or between Affiliates) shall not
be deemed a Termination of Service. Employment with the Company and
Affiliates is on an at-will basis only.
9.2. Participation. No Employee shall have the right to be
selected to receive an Award under this Plan, or, having been so selected,
to be selected to receive a future Award.
9.3. Indemnification. Each person who is or shall have been a
member of the Committee, or of the Board, shall be indemnified and held
harmless by the Company against and from (a) any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be involved by
reason of any good faith action taken or good faith failure to act under
the Plan or any Award Agreement, and (b) from any and all amounts paid by
him or her in settlement thereof, with the Company's approval, or paid by
him or her in satisfaction of any judgment in any such claim, action, suit,
or proceeding against him or her, provided he or she shall give the Company
an opportunity, at its own expense, to handle and defend the same before he
or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Certificate of Incorporation or Bylaws, by contract, as a matter
of law, or otherwise, or under any power that the Company may have to
indemnify them or hold them harmless.
9.4. Successors. All obligations of the Company under the Plan,
with respect to Awards granted hereunder, shall be binding on any successor
to the Company, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation or otherwise, of all or
substantially all of the business or assets of the Company.
9.5. Beneficiary Designations. If permitted by the Committee, a
Participant under the Plan may name a beneficiary or beneficiaries to whom
any vested but unpaid Award shall be paid in the event of the Participant's
death. Each such designation shall revoke all prior designations by the
Participant and shall be effective only if given in a form and manner
acceptable to the Committee. In the absence of any such designation, any
vested benefits remaining unpaid a the Participant's death shall be paid to
the Participant's estate and, subject to the terms of the Plan and of the
applicable Award Agreement, any unexercised vested Award may be exercised
by the administrator or executor of the Participant's estate.
9.6. Nontransferability of Awards. Unless otherwise determined by
the Committee with respect to an Award other than an Incentive Stock
Option, no Award granted under the Plan may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will, by
the laws of descent and distribution, or to the limited extent provided in
Section 9.5. All rights with respect to an Award granted to a Participant
shall be available during his or her lifetime only to the Participant and
may be exercised only by the Participant or the Participant's legal
representative.
9.7. No Rights as Stockholder. Except to the limited extent
provided in Sections 7.6 and 7.7, no Participant (nor any beneficiary)
shall have any of the rights or privileges of a stockholder of the Company
with respect to any Shares issuable pursuant to an Award (or exercise
thereof), unless and until certificates representing such Shares shall have
been issued, recorded on the records of the Company or its transfer agents
or registrars, and delivered to the Participant (or beneficiary).
9.8. Withholding Requirements. Prior to the delivery of any Shares
or cash pursuant to an Award (or exercise thereof), the Company shall have
the power and the right to deduct (including, but not limited to, deduction
through a broker-assisted cashless exercise) or withhold, or require a
Participant to remit to the Company, an amount sufficient to satisfy
federal, state, local and foreign taxes (including, but not limited to, the
Participant's FICA and SDI obligations) required to be withheld with
respect to such Award (or exercise thereof). Notwithstanding any contrary
provision of the Plan, if a Participant fails to remit to the Company such
withholding amount within the time period specified by the Committee (in
its discretion), the Participant's Award may, in the Committee's
discretion, be forfeited and in such case the Participant shall not receive
any of the Shares subject to such Award.
9.9. Withholding Arrangements. The Committee, in its sole
discretion and pursuant to such procedures as it may specify from time to
time, may permit or require a Participant to satisfy all or part of the tax
withholding obligations in connection with an Award by (a) having the
Company withhold otherwise deliverable Shares, or (b) delivering to the
Company already-owned Shares having a Fair Market Value equal to the amount
required to be withheld.
9.10. Deferrals. The Committee, in its sole discretion, may permit
a Participant to defer receipt of the payment of cash or the delivery of
Shares that would otherwise be delivered to a Participant under the Plan.
Any such deferral elections shall be subject to such rules and procedures
as shall be determined by the Committee in its sole discretion.
9.11. Change of Control. (a)(1) Notwithstanding any provision in
this Plan or any Award Agreement, in the event of a Change of Control
pursuant to paragraphs (c) or (d) of Section 2.8 in connection with which
the holders of Shares receive shares of common stock that are registered
under Section 12 of the 1934 Act, (i) all outstanding Options and SARS
shall immediately become exercisable in full, (ii) the Period of
Restriction applicable to any outstanding Restricted Stock Award shall
lapse, (iii) the Performance Period applicable to any outstanding
Performance Share shall lapse, (iv) the Performance Goals applicable to any
outstanding award shall be deemed to be satisfied at the maximum level and
(v) there shall be substituted for each Share available under this Plan,
whether or not then subject to an outstanding award, the number and class
of shares into which each outstanding Share shall be converted pursuant to
such Change of Control. In the event of any such substitution, the purchase
price per share in the case of an Option and the base price in the case of
an SAR shall be appropriately adjusted by the Committee (whose
determination shall be final, binding and conclusive), such adjustments to
be made in the case of outstanding Options and SARs without an increase in
the aggregate purchase price or base price.
(2) Notwithstanding any provision in this Plan or any Award
Agreement, in the event of a Change of Control pursuant to paragraph (a) or
(b) of Section 2.8, or in the event of a Change of Control pursuant to
paragraph (c) or (d) of Section 2.8 in connection with which the holders of
Shares receive consideration other than shares of common stock that are
registered under Section 12 of the 1934 Act, each outstanding Award shall
be surrendered to the Company by the holder thereof, and each such Award
shall immediately be canceled by the Company, and the holder shall receive,
within ten days of the occurrence of a Change of Control, a cash payment
from the Company in an amount equal to (i) in the case of an Option, the
number of Shares then subject to such Option, multiplied by the excess, if
any, of the greater of (A) the highest per Share price offered to
stockholders of the Company in any transaction whereby the Change of
Control takes place or (B) the Fair Market Value of a Share on the date of
occurrence of the Change of Control, over the purchase price per Share
subject to the Option, (ii) in the case of an SAR other than a tandem SAR,
the number of Shares then subject to such SAR, multiplied by the excess, if
any, of the greater of (A) the highest per Share price offered to
stockholders of the Company in any transaction whereby the Change of
Control takes place or (B) the Fair Market Value of a Share on the date of
occurrence of the Change of Control, over the base price of the SAR, (iii)
in the case of a Restricted Stock Award or Performance Share Award, the
number of Shares or the number of Performance Shares, as the case may be,
then subject to such Award, multiplied by the greater of (A) the highest
per Share price offered to stockholders of the Company in any transaction
whereby the Change of Control takes place or (B) the Fair Market Value of a
Share on the date of occurrence of the Change of Control. In the event of a
Change of Control, each tandem SAR shall be surrendered by the holder
thereof and shall be canceled simultaneously with the cancellation of the
related Option. The Company may, but is not required to, cooperate with any
person who is subject to Section 16 of the Exchange Act to assure that any
cash payment in accordance with the foregoing to such person is made in
compliance with Section 16 and the rules and regulations thereunder.
9.12. Restrictions on Shares. Each Award made hereunder shall be
subject to the requirement that if an any time the Company determines that
the listing, registration or qualification of the Shares subject to such
Award upon any securities exchange or under a any law, or the consent or
approval of any governmental body, or the taking of any other action is
necessary or desirable as a condition of, or in connection with, the
exercise or settlement of such Award or the delivery of Shares thereunder,
such Award shall not be exercised or settled and such Shares shall not be
delivered unless such listing, registration, qualification, consent,
approval or other action shall have been effected or obtained, free of any
conditions not acceptable to the Company. The Company may require that
certificates evidencing shares delivered pursuant to any Award made
hereunder bear a legend in indicating that the ale, transfer o other
disposition thereof by the holder is prohibited except in compliance with
the Securities Act of 1933, as amended, and the rules and regulations
thereunder.
ARTICLE 10
AMENDMENT, TERMINATION AND DURATION
10.1. Amendment, Suspension or Termination. The Board, in its sole
discretion, may amend, suspend or terminate the Plan, or any part thereof,
at any time and for any reason, subject to any requirement of stockholder
approval required by applicable law, rule or regulation, including section
162(m) and section 422 of the Code. The amendment, suspension or
termination of the Plan shall not, without the consent of the Participant,
alter or impair any rights or obligations under any Award theretofore
granted to such Participant. No Award may be granted during any period of
suspension or after termination of the Plan.
10.2. Duration of the Plan. The Plan shall, subject to Section
10.1 (regarding the Board's right to amend or terminate the Plan),
terminate on February 7, 2003, unless earlier terminated by the Board. The
termination of the Plan shall not affect any Awards granted prior to the
termination of the Plan.
ARTICLE 11
LEGAL CONSTRUCTION
11.1. Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine;
the plural shall include the singular and the singular shall include the
plural.
11.2. Severability. In the event any provision of the Plan shall
be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been
included.
11.3. Requirements of Law. The granting of Awards and the issuance
of Shares under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
11.4. Governing Law. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of
Delaware, but without regard to its conflict of law provisions.
11.5. Captions. Captions are provided herein for convenience only,
and shall not serve as a basis for interpretation or construction of the Plan.