Pre-Effective Amendment to Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4/A Amendment No. 2 to Form S-4 142 611K
2: EX-2.2 Form of Agrmnt & Plan - Cme Trans Co & Registrant 8 29K
3: EX-3.3 By-Laws of the Registrant 20 82K
4: EX-5.1 Opinion of Sidley & Austin 2 12K
5: EX-10.1 Exchange Omnibus Stock Plan 20 73K
6: EX-10.13 License Agreement Effective September 24, 1997 28 107K
7: EX-21.1 Subsidiaries of the Registrant 1 5K
8: EX-27.1 Financial Data Schedule 2 7K
EX-10.1 — Exchange Omnibus Stock Plan
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Exhibit 10.1
CHICAGO MERCANTILE EXCHANGE
OMNIBUS STOCK PLAN
ARTICLE 1
EFFECTIVE DATE AND PURPOSE
1.1. Effective Date. The Plan is effective as of February 7, 2000.
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, no longer conforms 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
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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.
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
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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 Inc., 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 a common law employee of the Company or an Affiliate
designated by the Board or the Committee.
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.
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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.
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2.28. "Plan" means this Chicago Mercantile Exchange 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 the Chicago Mercantile Exchange.
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
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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,
2.6 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 and calculated, in the case of any Shares other than
Class A Shares, by using the number of
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Class A Shares that is equivalent to the number of such Shares under the table
of Share equivalencies contained in the Agreement and Plan of Merger dated as of
March ___, 2000, between CME Transitory Co. and the Company. 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
8
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 (currently $100,000) 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 as
of 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:
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(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.
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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.
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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.
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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
13
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 Omnibus Stock Plan, and in a Restricted Stock Agreement. A copy of the
Plan and such Restricted Stock Agreement may be obtained from the Secretary of
the Chicago Mercantile Exchange."
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.
14
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
15
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
16
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.
17
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
18
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.
19
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.
20
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-4/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 2/7/03 | | 19 | | | | | None on these Dates |
| Filed on: | | 3/10/00 |
| | 2/7/00 | | 1 |
| List all Filings |
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