Chicago Mercantile Exchange Inc – ‘8-K’ for 6/26/01

On:  Tuesday, 6/26/01, at 5:05pm ET   ·   For:  6/26/01   ·   Accession #:  950172-1-500433   ·   File #:  333-95561

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         4±    19K 

Document Table of Contents

SECURITIES AND EXCHANGE COMMISSION    
WASHINGTON, D.C. 20549    

FORM 8-K    

CURRENT REPORT    
PURSUANT TO SECTION 13 OR 15(d) OF THE    
SECURITIES EXCHANGE ACT OF 1934     

Date of report (Date of earliest event reported)    
June 26, 2001     

CHICAGO MERCANTILE EXCHANGE INC.    
-------------------------------------     
(Exact Name of Registrant as Specified in Charter)    

   Delaware                   000-32645               36-4340266
     ----------                 ----------           ---------------
(State or Other Jurisdiction        (Commission             (IRS Employer     
    of Incorporation)               File Number)         Identification No.)

30 South Wacker Drive, Chicago, Illinois                           60606        
--------------------------------------------                      --------      
(Address of Principal Executive Office)                          (Zip Code)     

Registrant's telephone number, including area code:  (312) 930-1000             

N/A     
---------------------------------------------------     
(Former Name or Former Address, if Changed Since Last Report)     

ITEM 9.  Regulation FD Disclosure                                               

   On June 26, 2001, Chicago Mercantile Exchange Inc. issued a press
release with an attached letter to shareholders announcing the approval by      
its board of directors of the formation of a holding company structure.         

A copy of the press release, dated June 26, 2001, is attached 
hereto as Exhibit 99.1.                                                         

EXHIBIT INDEX     

Exhibit                                                                         
Number            Description                                                   
-----------       --------------                                                

99.1              Press Release dated June 26, 2001.                            

SIGNATURES    

  Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf     
by the undersigned hereunto duly authorized.                                    

                                        CHICAGO MERCANTILE EXCHANGE INC.

                  Registrant

Date:  June 26, 2001                        By: /S/ David Gomach                
                                            ------------------------------
                                David Gomach
                                         Managing Director and
                                           Chief Financial Officer

EXHIBIT 99.1    

June 26, 2001                                                                   

To Media Covering Chicago Mercantile Exchange Inc.                              

For your information, please see the attached letter to shareholders            
disseminated this morning.                                                      

Ellen G. Resnick                                                                
Director, Corporate Communications                                              
312/930-3435                                                                    
eresnick@cme.com                                                                

William Burks                                                                   
Associate Director, Corporate Communications                                    
312/930-3446                                                                    
wburks@cme.com                                                                  

In connection with the proposed formation of a holding company and related      
transactions, CME will file with the Securities and Exchange Commission, as     
soon as reasonably practicable, a registration statement on SEC Form S-4.       
The registration statement will contain a joint proxy statement/prospectus,     
which describes the proposed terms and conditions of the holding company        
formation. Shareholders are encouraged to read the registration statement       
after it is filed, and the joint proxy statement/prospectus contained in        
the registration statement, because these documents will contain important      
information about the holding company formation. The registration               
statement, including the joint proxy statement/prospectus, will be              
available for free, both on the SEC's Web site (www.sec.gov) and on the         
Investor Information section of CME's Web site at www.cme.com. Final            
materials will be mailed to all shareholders.                                   

------------------------------------        

June 26, 2001                                                                   

To All Shareholders:                                                            

On March 13, 2001, we announced that the Board of Directors authorized          
preparations for a possible initial public offering of Class A shares in        
Chicago Mercantile Exchange Inc. These steps included an examination of our     
corporate structure, our charter and our bylaws to ensure that CME is well      
positioned for the future. Upon the advice and recommendations of our           
financial and legal advisors, the Board of Directors approved the formation     
of a new holding company structure that will enable us to address a number      
of important issues relating to our business and corporate structure. This      
holding company proposal will be submitted for shareholder approval. We         
intend to file a registration/proxy statement shortly with the Securities       
and Exchange Commission.                                                        

o        Implementation of Transfer Restrictions. In connection with our        
review, it has come to our attention that the recent charter  
    amendment extending the transfer restrictions on Class A shares to
 all shareholders is not valid under Delaware law. Consequently,
    the original transfer restrictions put in place in connection with
   our November 13 demutualization are in effect. This means that 25
   percent of your Class A shares can be transferred separately from
the related Series B share.                                   

Our financial advisors have counseled us that the extended    
 transfer restrictions contained in the recent charter amendment
are critical to the success of an initial public offering. The
formation of a holding company will enable us to address this 
issue. It is the only practical way to implement the extended 
    transfer restrictions for all shareholders. Subject to shareholder
    approval, we will establish the holding company through the merger
of CME into a newly formed subsidiary. In doing so, we will   
  effectively implement the extended transfer restrictions that we
    asked you to support at the April 18 annual shareholders' meeting.
Following the merger, these restrictions will bind all CME    
    shareholders. We continue to believe that CME and its shareholders
  will benefit from effectively implementing the extended transfer
restrictions.                                                 

o        Strategic and Business Flexibility. Other public companies,            
including exchanges, have reorganized as holding companies to 
 prepare for public offerings. A holding company will provide us
with greater strategic flexibility and business opportunities,
allowing us to separate our regulated derivatives exchange    
  business from other businesses that we may pursue. The Boards of
  the holding company and CME will be the same. In the merger, the
shareholders of CME will receive equivalent equity in the new 
    holding company, with trading privileges remaining at the Exchange
  subsidiary. The "core rights" of Class B shareholders, including
the right to elect a specified number of directors, will be   
maintained.                                                   

o        Separate the Value of the "Class A Share Equivalents." At the time     
  of demutualization, we adopted a capital structure consisting of
Class A common stock, representing "pure" equity in Chicago   
  Mercantile Exchange Inc. We also exchanged CME, IMM, IOM and GEM
   memberships and fractions for different series of Class B shares,
   representing trading privileges and membership rights, as well as
allocations of equity rights in the form of "Class A share    
equivalents," which were embedded in the Class B shares. The  
  decision to embed equity in the Class B shares was made in order
   to help ensure a tax-free transaction for our shareholders. Since
the completion of our demutualization transaction, many       
    shareholders have inquired about whether an opportunity exists for
them to achieve the direct benefit of the Class A share equity
   component of their Class B shares. One important advantage of the
    formation of the holding company is that we will extract the Class
   A equity component of each series of Class B shares by issuing to
  each Class B shareholder additional Class A shares equal to that
   equity component. On the basis of both the tax ruling we received
    and the advice of our tax counsel, we believe that this separation
can be done on a tax-free basis. We are seeking a supplemental
 ruling from the Internal Revenue Service to that end. The Board
believes that shareholders will benefit from the ability to   
    realize the existing equity value of their Class B shares, if they
so choose, by selling the newly issued Class A shares when    
permitted.                                                    

Please be advised that, in order to ensure that this significant                
information is widely distributed to our shareholders, the share market         
conducted in the Shareholder Relations and Membership Services Department       
will not open until 12:00 noon (Chicago time) today, Tuesday, June 26,          
2001.                                                                           

Note that we will hold informational meetings at 2:15 and 3:30 p.m. on          
Tuesday, July 17, in the Auditorium to address shareholder questions. In        
the interim, questions regarding the foregoing should be directed to: Ms.       
Ann Cresce, Director and Corporate Secretary, at (312) 930-3488, or Mr. Jim     
Falvey, Director and Associate General Counsel, at (312) 930-3046.              

Scott Gordon                          Jim McNulty                               
Chairman                              President and Chief Executive Officer     

In connection with the proposed formation of the holding company and            
related transactions, we will file with the Securities and Exchange             
Commission, as soon as reasonably practicable, a registration statement on      
SEC Form S-4. The registration statement will contain a joint proxy             
statement/prospectus, which describes the proposed terms and conditions of      
the holding company formation. Shareholders are encouraged to read the          
registration statement after it is filed, and the joint proxy                   
statement/prospectus contained in the registration statement, because these     
documents will contain important information about the holding company          
formation. The registration statement, including the joint proxy                
statement/prospectus, will be available for free, both on the SEC's Web         
site (www.sec.gov) and on the Investor Information section of our Web site      
at www.cme.com. Final materials will be mailed to all shareholders.             

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘8-K’ Filing		Date		Other Filings
Filed on / For Period End:		6/26/01		425
		3/13/01
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