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Exhibit 2.1
AMENDMENT NO. 2
TO
AGREEMENT AND PLAN OF MERGER
This AMENDMENT NO. 2, dated as of May 11, 2007 (this "
Amendment "), to the Agreement and Plan of Merger, dated as
of October 17, 2006 and amended as of December 20, 2006
(the " Agreement "), is by and among Chicago Mercantile
Exchange Holdings Inc., a Delaware corporation (" CME
Holdings "), CBOT Holdings, Inc., a Delaware corporation ("
CBOT Holdings "), and Board of Trade of the City of Chicago,
Inc., a Delaware non-stock corporation and subsidiary of CBOT
Holdings (" CBOT ").
RECITALS
WHEREAS, CME Holdings, CBOT Holdings and CBOT desire to amend
and supplement certain terms of the Agreement as described in this
Amendment;
WHEREAS, the Boards of Directors of CME Holdings, CBOT Holdings
and CBOT have each determined that the Amendment is consistent
with, and will further, their respective business strategies and
goals, and have deemed it advisable and in the best interests of
their respective companies, stockholders and members that CME
Holdings and CBOT Holdings engage in a business combination;
and
WHEREAS, all capitalized terms not defined in this Amendment
shall have the meaning ascribed to such terms in the Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained
herein, the Parties agree as follows:
1. Amendment to Section 1.1 . Section 1.1 of
the Agreement is hereby amended as follows:
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a. Each of the following definitions is deleted in its entirety:
" Actual Cash Amount ", " Available Cash Amount ", "
Average CME Holdings Stock Price ", " Cash Fraction
", " Cash Share ", " Determination Date ", "
Election Date ", " Election Form ", " Mailing
Date ", " No Election Shares ", " Per Share Cash
Consideration " and " Stock Consideration ".
b. The following definitions are added immediately after the
definition of " NYSE ":
2. Amendment to Section 1.7(a) . The
first sentence of Section 1.7(a) of the Agreement is hereby
amended and restated as follows:
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"At the Effective Time, as reflected in the Certificate of
Incorporation and By-Laws, the number of directors of the Surviving
Entity shall be thirty (30), consisting of twenty
(20) directors of CME Holdings as of immediately prior to the
Effective Time (the " CME Holdings Directors ") and ten
(10) directors of CBOT Holdings as of immediately prior to the
Effective Time (the " CBOT Holdings Directors ")."
The fourth sentence of Section 1.7(a) of the Agreement is
hereby amended and restated as follows:
3. Amendment to Section 1.9(a) . Section 1.9(a)
of the Agreement is hereby amended and restated in its entirety as
follows:
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"At the Effective Time, subject to the other provisions of
Article I and Article II , each share of CBOT
Holdings Class A Common Stock issued and outstanding
immediately prior to the Effective Time (other than shares of CBOT
Holdings Class A Common Stock owned by CME Holdings or CBOT
Holdings or any of their respective wholly-owned subsidiaries),
together with the CBOT Holdings Rights attached thereto or
associated therewith, shall, by virtue of this Agreement and
without any action on the part of the holder thereof, be converted
into the right to receive 0.3500 shares (the " Exchange
Ratio ") of CME Holdings Class A Common Stock, together
with the CME Holdings Rights attached thereto or associated
therewith and subject to adjustment in accordance with
Section 1.9(c) (the " Merger Consideration
")."
4. Amendment to Section 1.9(b) . Section 1.9(b)
of the Agreement is hereby amended and restated in its entirety as
follows:
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"From and after the Effective Time, all of the shares of CBOT
Holdings Class A Common Stock, and associated CBOT Holdings
Rights, converted into the Merger Consideration pursuant to this
Article I shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist,
and each holder of a certificate (each a " Certificate ")
previously representing any such shares of CBOT Holdings
Class A Common Stock shall thereafter cease to have any rights
with respect to such securities, except the right to receive
(i) the Merger Consideration, (ii) any dividends and
other distributions in accordance with Section 2.1(f)
and (iii) any dividends or other distributions on the CBOT
Holdings Class A Common Stock permitted by
Section 5.1(b)(i) and which remain unpaid at the
Effective Time.
5. Amendment to Section 1.9(c) . Section 1.9(c)
of the Agreement is hereby amended by deleting the phrase "the
Stock Consideration, the Per Share Cash Consideration" and
replacing it with the phrase "the Offer Price, the Offer
Shares".
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6. Amendment to Section 1.9(e) .
Section 1.9(e) of the Agreement is hereby amended and restated
in its entirety as follows:
7. Amendment to Section 1.10 . Section 1.10 of
the Agreement is hereby deleted in its entirety and replaced with
the phrase "[Reserved]."
8. Amendment to Section 2.1(a) . Section 2.1(a)
of the Agreement is hereby amended and restated in its entirety as
follows:
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"Prior to the Effective Time, CME Holdings shall appoint an
exchange agent reasonably acceptable to CBOT Holdings (the "
Exchange Agent ") for the purpose of exchanging Certificates
representing shares of CBOT Holdings Class A Common Stock and
non-certificated shares represented by book entry (" Book-Entry
Shares ") for the Merger Consideration. Promptly after the
Effective Time, but in no event more than three (3) Business
Days thereafter, the Surviving Entity will send, or will cause the
Exchange Agent to send, to each holder of record of shares of CBOT
Holdings Class A Common Stock as of the Effective Time, a
letter of transmittal for use in such exchange (which shall specify
that the delivery shall be effected, and risk of loss and title
shall pass, only upon proper delivery of the Certificates to the
Exchange Agent) in such form as CBOT Holdings and CME Holdings may
reasonably agree, for use in effecting delivery of shares of CBOT
Holdings Class A Common Stock to the Exchange Agent. At the
Effective Time, CME Holdings shall deposit with the Exchange Agent
the number of shares of CME Holdings Class A Common Stock
(including fractional shares) to be delivered as Merger
Consideration in exchange for shares of CBOT Holdings Class A
Common Stock. CME Holdings shall also make sufficient funds
available to the Exchange Agent from time to time as needed to pay
cash in respect of dividends or other distributions contemplated by
Section 2.1(f) and any dividends or other distributions
on the CBOT Holdings Class A Common Stock permitted by
Section 5.1(b)(i) and which remain unpaid at the
Effective Time. Exchange of any Book-Entry Shares shall be effected
in accordance with CME Holdings’ customary procedures with
respect to securities represented by book entry."
9. Amendment to Section 2.1(b) . Section 2.1(b)
of the Agreement is hereby amended by amending and restating clause
(B) in the first sentence as follows:
10. Amendment to Section 3.23 . Section 3.23 of
the Agreement is hereby amended by deleting the phrase "October 17,
2006" and replacing it with the phrase "May 11, 2007".
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11. Amendment to Section 4.21 .
Section 4.21 of the Agreement is hereby amended by deleting
the phrase "October 16, 2006" and replacing it with the phrase "May
11, 2007".
12. Amendment to Section 5.1(b).
Section 5.1(b)(i) of the Agreement is hereby amended and
restated as follows:
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"declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property) in respect of any
of its Securities, other than dividends or distributions by wholly
owned CBOT Holdings Subsidiaries; provided, that CBOT Holdings may
pay a quarterly cash dividend of $0.29 per outstanding share of
CBOT Holdings Common Stock to holders of record on the applicable
record date (as determined in accordance with applicable Law and
the rules of the NYSE) in each of the three month periods ending
September 30, 2007 and December 31, 2007; provided,
however, that no record date shall be set or dividend shall be paid
in any such three month period in which the Effective Time occurs
or is expected to occur; and provided, further, that in the event
the Effective Time has not occurred prior to March 31, 2008,
CBOT Holdings may pay a quarterly cash dividend to holders of
record on March 31, 2008 of CBOT Holdings Common Stock in the
aggregate amount equal to 30% of (A) the sum of (w) 2007
consolidated net income, plus (x) consolidated depreciation
and amortization expense in 2007, plus (y) the after-tax
impact on CBOT Holdings and its consolidated subsidiaries of
stock-based compensation in 2007, minus (z) the amount of
expenditures for property, plant and equipment made by CBOT
Holdings and its consolidated subsidiaries in 2007, in each case of
clause (w), (x), (y) and (z) as reflected in the CBOT
Holdings audited financial statements for fiscal year 2007,
multiplied by (B) 25%,"
13. Amendment to Article VI. Article VI of the Agreement
is hereby amended to add a new Section 6.18 as follows:
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"As promptly as practicable after the Effective Time, CME
Holdings shall commence and consummate a tender offer for 6,250,000
shares of CME Holdings Class A Common Stock (the " Offer
Shares ") (or such lesser number of shares that are tendered in
the tender offer) at a fixed cash price of $560.00 per share (the "
Offer Price "). For the sake of clarity, nothing in this
paragraph and no action contemplated by this paragraph, shall give
rise to any adjustment to the Exchange Ratio pursuant to
Section 1.9(a) or give rise to a breach of any of the
covenants in Section 5.2 ."
14. Amendment to Section 8.3(a) .
Section 8.3(a) of the Agreement is hereby amended by deleting
the phrase "$240.0 million" and replacing it with the phrase
"$288.0 million".
15. Amendment to Section 9.2 . Section 9.2 of
the Agreement is hereby amended by revising the notice provision
for CBOT Holdings as follows:
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16. Amendment of Certificate of Incorporation of the
Surviving Entity . The form of the Certificate of Incorporation
of the Surviving Entity attached to the Agreement as Exhibit
A is hereby removed and replaced in its entirety with the form
of Certificate of Incorporation attached hereto as Exhibit A
.
17. Amendment of By-Laws of the Surviving Entity . The
form of By-Laws of the Surviving Entity attached to the Agreement
as Exhibit B is hereby removed and replaced in its entirety
with the form of By-Laws attached hereto as Exhibit B .
18. Interpretation . The Agreement shall not be amended
or otherwise modified by this Amendment except as set forth in
Sections 1 through 17 of this Amendment. The provisions of the
Agreement that have not been amended hereby shall remain in full
force and effect. The provisions of the Agreement amended hereby
shall remain in full force and effect as amended hereby. In the
event of any inconsistency or contradiction between the terms of
this Amendment and the Agreement, the provisions of this Amendment
shall prevail and control.
19. Reference to the Agreement . On and after the date
hereof, each reference in the Agreement to "this Agreement",
"hereof", "herein", "herewith", "hereunder" and words of similar
import shall, unless otherwise stated, be construed to refer to the
Agreement as amended by this Amendment. No reference to this
Amendment need be made in any instrument or document at any time
referring to the Agreement, a reference to the Agreement in any
such instrument or document to be deemed to be a reference to the
Agreement as amended by this Amendment.
20. Counterparts; Effectiveness . This Amendment may be
executed in two or more counterparts, each of which shall be deemed
to be an original but all of which shall constitute one and the
same instrument. This Amendment shall become effective when each
Party hereto shall have received counterparts thereof signed and
delivered (by telecopy or otherwise) by the other Parties
hereto.
21. Governing Law . This Amendment shall be deemed to be
made in and in all respects shall be interpreted, construed and
governed by and in accordance with the law of the State of Delaware
without regard to its rules of conflicts of law.
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IN WITNESS WHEREOF, this Amendment has been duly
executed and delivered by the duly authorized officers of the
parties hereto as of the date first written above.
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CHICAGO MERCANTILE EXCHANGE HOLDINGS
INC.
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By:
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/s/ Terrence A. Duffy
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Name:
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Terrence A. Duffy
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Title:
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Executive Chairman
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By:
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/s/ Craig S. Donohue
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Name:
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Craig S. Donohue
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Title:
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Chief Executive Officer
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CBOT HOLDINGS, INC.
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By:
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/s/ Charles P. Carey
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Name:
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Charles P. Carey
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Title:
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Chairman
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By:
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/s/ Bernard W. Dan
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Name:
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Bernard W. Dan
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Title:
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President and Chief Executive Officer
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BOARD OF TRADE OF THE CITY OF CHICAGO,
INC.
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By:
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/s/ Charles P. Carey
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Name:
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Charles P. Carey
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Title:
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Chairman
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By:
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/s/ Bernard W. Dan
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Name:
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Bernard W. Dan
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Title:
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President and Chief Executive Officer
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EXHIBIT A
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CME GROUP INC.
ARTICLE ONE: The name of the corporation is CME Group Inc.
ARTICLE TWO: The address of the corporation’s registered
office in the State of Delaware is 1209 Orange Street, City of
Wilmington, County of New Castle, Delaware 19801. The name of the
corporation’s registered agent at such address is The
Corporation Trust Company.
ARTICLE THREE: The purpose of the corporation shall be to engage
in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of
Delaware, as set forth in Title 8 of the Delaware Code (the "
DGCL ").
ARTICLE FOUR: The total number of shares of all classes of
capital stock that the corporation is authorized to issue is
1,010,003,138 shares, of which:
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10,000,000 shares shall be shares of Preferred Stock, par value
$.01 per share (the " Preferred Stock "), including 140,000
authorized shares of Series A Junior Participating Preferred Stock
(the " Series A Junior Participating Preferred Stock ");
1,000,000,000 shares shall be shares of Class A Common
Stock, par value $.01 per share (the " Class A Common Stock
");
625 shares shall be shares of Class B-1 Common Stock, par value
$.01 per share (the " Class B-1 Common Stock ");
813 shares shall be shares of Class B-2 Common Stock, par value
$.01 per share (the " Class B-2 Common Stock ");
1,287 shares shall be shares of Class B-3 Common Stock, par
value $.01 per share (the " Class B-3 Common Stock ");
and
413 shares shall be shares of Class B-4 Common Stock, par value
$.01 per share (the " Class B-4 Common Stock ").
The term " Class B Common Stock " shall mean,
collectively, Class B-1 Common Stock, Class B-2 Common Stock, Class
B-3 Common Stock and Class B-4 Common Stock. The term " Common
Stock " shall mean, collectively, the Class A Common Stock
and the Class B Common
Stock. The designations, voting powers, optional
or other special rights and the qualifications, limitations or
restrictions thereof, of the above classes shall be as
follows:
DIVISION A
PREFERRED STOCK
The rights, preferences and privileges and qualifications,
limitations and restrictions granted to and imposed on the shares
of Preferred Stock of the corporation shall be as set forth below
in this Division A.
Shares of Preferred Stock may be issued in one or more series at
such time or times, and for such consideration or considerations,
as the board of directors shall determine. The board of directors
is hereby authorized to fix, state and establish, in the resolution
or resolutions providing for the issuance of any wholly unissued
series of Preferred Stock, the relative powers, rights,
designations, preferences, qualifications, limitations and
restrictions of such series in relation to any other series of
Preferred Stock at the time outstanding. The board of directors is
also expressly authorized to fix the number of shares of each such
series, but not below the number of shares thereof then
outstanding. The authority of the board of directors with respect
to each series of Preferred Stock shall include (without
limitation) the determination of the following:
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(a) the dividend rate on the shares of such series, whether
dividends shall be cumulative, and, if so, from which date or
dates, and the rights of priority, if any, with respect to the
payment of dividends on the shares of such series relative to other
series of Preferred Stock or classes of stock;
(b) whether the shares of such series shall have voting rights
(other than the voting rights provided by law) and, if so, the
terms and extent of such voting rights;
(c) whether the shares of such series shall have conversion
privileges, and, if so, the terms and conditions of such
conversion, including provision for adjustment of the conversion
rate upon the occurrence of such events as the board of directors
may prescribe;
(d) whether the shares of such series shall be subject to
redemption by the corporation or at the request of the holder(s)
thereof, and, if so, the terms and conditions of any such
redemption;
(e) the rights of the shares of such series in the event of
voluntary or involuntary liquidation, dissolution or winding up of
the corporation, and the rights of priority, if any, with respect
to the distribution of assets on the shares of such series relative
to other series of Preferred Stock or classes of stock; and
(f) any other preferences, privileges and powers, and relative,
participating, optional or other special rights, and
qualifications, limitations or restrictions of such series, as the
board of directors may deem advisable and as shall not be
inconsistent with the provisions of this Certificate of
Incorporation, as the same may be amended from time to time.
* * * *
Pursuant to the above stated authority, the board
of directors has designated the following series of Preferred
Stock:
SECTION 1. DESIGNATION AND AMOUNT.
The shares of such series shall be designated as " Series A
Junior Participating Preferred Stock " and the number of shares
constituting such series shall be 140,000.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
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(a) The holders of shares of Series A Junior Participating
Preferred Stock shall be entitled to receive, when, as and if
declared by the board of directors out of funds legally available
for the purpose, quarterly dividends payable in cash on the last
day of March, June, September and December in each year (each such
date being referred to herein as a " Quarterly Dividend Payment
Date "), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or fraction of a share of
Series A Junior Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of
(x) $.01 or (y) subject to the provision for adjustment
hereinafter set forth, 1,000 times the aggregate per share amount
of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of
Class A Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared
on the Class A Common Stock, since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Junior Participating
Preferred Stock. In the event the corporation shall at any time
after the date of consummation of the merger of CME Merger
Subsidiary Inc. with and into the Exchange (as defined below) (the
" Rights Declaration Date ") (i) declare any dividend
on Class A Common Stock payable in shares of Class A
Common Stock, (ii) subdivide the outstanding Class A
Common Stock, or (iii) combine the outstanding Class A
Common Stock into a smaller number of shares, then in each such
case the amount to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to
such event under clause (y) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Class A Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Class A Common Stock that
were outstanding immediately prior to such event.
(b) The corporation shall declare a dividend or distribution on
the Series A Junior Participating Preferred Stock as provided in
Paragraph (a) above immediately after it declares a dividend
or distribution on the Class A Common Stock (other than a
dividend payable in shares of Class A Common Stock); provided
that, in the event no dividend or distribution shall have been
declared on the Class A Common Stock during the period between
any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $.01 per share on
the Series A Junior Participating Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(c) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Junior Participating
Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Junior
Participating Preferred Stock, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A
Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Junior Participating Preferred Stock in an
amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
The board of directors may fix a record date for the determination
of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS.
The holders of shares of Series A Junior Participating Preferred
Stock shall have the following voting rights:
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(a) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock
shall entitle the holder thereof to 1,000 votes on all matters
submitted to a vote of the shareholders of the corporation. In the
event the corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Class A
Common Stock payable in shares of Class A Common Stock,
(ii) subdivide the outstanding Class A Common Stock, or
(iii) combine the outstanding Class A Common Stock into a
smaller number of shares, then in each such case the number of
votes per share to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a
fraction the numerator of which is the number of shares of
Class A Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of
Class A Common Stock that were outstanding immediately prior
to such event.
(b) Except as otherwise provided herein or by law, the holders
of shares of Series A Junior Participating Preferred Stock and the
holders of shares of Class A Common Stock and Class B Common
Stock shall vote together as one class on all matters submitted to
a vote of shareholders of the corporation.
(c) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount
equal to six quarterly dividends thereon, the occurrence of such
contingency shall mark the beginning of a period (herein called a "
default period ") which shall extend until such time when
all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on
all shares of Series A Junior Participating Preferred Stock
then
outstanding shall have been declared and paid or
set apart for payment. During each default period, all holders of
Preferred Stock (including holders of the Series A Junior
Participating Preferred Stock) with dividends in arrears in an
amount equal to six quarterly dividends thereon, voting as a class,
irrespective of series, shall have the right to elect two
directors.
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(ii) During any default period, such voting right of the holders
of Series A Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to Paragraph
(c)(iii) of this Section 3 or at any annual meeting of
shareholders, and thereafter at annual meetings of shareholders,
provided that such voting right shall not be exercised unless the
holders of 10% in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of
the holders of Common Stock shall not affect the exercise by the
holders of Preferred Stock of such voting right. At any meeting at
which the holders of Preferred Stock shall exercise such voting
right initially during an existing default period, they shall have
the right, voting as a class, to elect directors to fill such
vacancies, if any, in the board of directors as may then exist up
to two directors or, if such right is exercised at an annual
meeting, to elect two directors. If the number which may be so
elected at any special meeting does not amount to the required
number, the holders of the Preferred Stock shall have the right to
make such increase in the number of directors as shall be necessary
to permit the election by them of the required number. After the
holders of the Preferred Stock shall have exercised their right to
elect directors in any default period and during the continuance of
such period, the number of directors shall not be increased or
decreased except by vote of the holders of Preferred Stock as
herein provided or pursuant to the rights of any equity securities
ranking senior to or pari passu with the Series A
Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to
elect directors, the board of directors may order, or any
shareholder or shareholders owning in the aggregate not less than
10% of the total number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a special
meeting of the holders of Preferred Stock, which meeting shall
thereupon be called by the Chairman of the Board, the President,
any Managing Director or the Secretary of the corporation. Notice
of such meeting and of any annual meeting at which holders of
Preferred Stock are entitled to vote pursuant to this Paragraph
(c)(iii) shall be given to each holder of record of Preferred Stock
by mailing a copy of such notice to him or her at his or her last
address as the same appears on the books of the corporation. Such
meeting shall be called for a time not earlier than 20 days and not
later than 60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or request,
such meeting may be called on similar notice by any shareholder or
shareholders owning in the aggregate not less than 10% of the total
number of shares of Preferred Stock outstanding. Notwithstanding
the provisions of this Paragraph (c)(iii), no such special meeting
shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of the
shareholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the corporation if applicable,
shall continue to be entitled to elect the whole number of
directors until the holders of Preferred Stock shall have exercised
their right to elect two directors voting as a class, after the
exercise of which right (x) the directors so elected by the
holders of Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the
board of directors may (except as provided in Paragraph (c)(ii) of
this Section 3) be filled by vote of a majority of the
remaining directors theretofore elected by the holders of the class
of stock which elected the director whose office shall have become
vacant. References in this Paragraph (c) to directors elected
by the holders of a particular class of stock shall include
directors elected by such directors to fill vacancies as provided
in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to
elect directors shall cease, (y) the term of any directors
elected by the holders of Preferred Stock as a class shall
terminate, and (z) the number of directors shall be such
number as may be provided for in the certificate of incorporation
or bylaws irrespective of any increase made pursuant to the
provisions of Paragraph (c)(ii) of this Section 3 (such number
being subject, however, to change thereafter in any manner provided
by law or in the certificate of incorporation or bylaws). Any
vacancies in the board of directors effected by the provisions of
clauses (y) and (z) in the preceding sentence may be
filled by a majority of the remaining directors.
(d) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
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(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating
Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A
Junior Participating Preferred Stock outstanding shall have been
paid in full, the corporation shall not:
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(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A
Junior Participating Preferred Stock, except dividends paid ratably
on the Series A Junior Participating Preferred Stock and all such
parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, provided that the
corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock
of the corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Junior Participating Preferred Stock, or any shares of
stock ranking on a parity with the Series A Junior Participating
Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the board of directors)
to all holders of such shares upon such terms as the board of
directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or
classes.
(b) The corporation shall not permit any subsidiary of the
corporation to purchase or otherwise acquire for consideration any
shares of stock of the corporation unless the corporation could,
under Paragraph (a) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
SECTION 5. REACQUIRED SHARES.
Any shares of Series A Junior Participating Preferred Stock
purchased or otherwise acquired by the corporation in any manner
whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be created
by resolution or resolutions of the board of directors, subject to
the conditions and restrictions on issuance set forth herein.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
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(a) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the corporation, no distribution shall be made to
the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received an amount equal to 1,000 times
the Exercise Price, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to
the date of such payment (the " Series A Liquidation
Preference "). Following the payment of the full amount of the
Series A Liquidation Preference, no additional distributions shall
be made to the holders of shares of Series A Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "
Common Adjustment ") equal to the quotient obtained by
dividing (i) the Series A Liquidation Preference by
(ii) 1,000 (as appropriately adjusted as set forth in
Paragraph (c) of this Section 6 to reflect such events as
stock splits, stock dividends and recapitalizations with respect to
the Common Stock) (such number in clause (ii), the " Adjustment
Number ").
Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series A Junior Participating
Preferred Stock and Common Stock, respectively, holders of Series A
Junior Participating Preferred Stock and holders of shares of both
classes of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock, on a per share basis,
respectively.
(b) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of
preferred stock, if any, which rank on a parity with the Series A
Junior Participating Preferred Stock, then such remaining assets
shall be distributed ratably to the holders of such parity shares
in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to
permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of
both classes of Common Stock.
(c) In the event the corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on
Class A Common Stock payable in shares of Class A Common
Stock, (ii) subdivide the outstanding Class A Common
Stock, or (iii) combine the outstanding Class A Common
Stock into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Class A Common
Stock outstanding immediately after such event and the denominator
of which is the number of shares of Class A Common Stock that
were outstanding immediately prior to such event.
SECTION 7. CONSOLIDATION, MERGER, ETC.
In case the corporation shall enter into any consolidation,
merger, combination or other transaction in which the shares of
Class A Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any
such case the shares of Series A Junior Participating Preferred
Stock shall at the same time be similarly exchanged or changed in
an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate amount of
stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of
Class A Common Stock is changed or exchanged. In the event the
corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Class A Common Stock payable
in shares of Class A Common Stock, (ii) subdivide the
outstanding Class A Common Stock, or (iii) combine the
outstanding Class A Common Stock into a smaller number of
shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares
of Series A Junior Participating Preferred Stock shall be adjusted
by multiplying such amount by a fraction the numerator of which is
the number of shares of Class A Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Class A Common Stock that were outstanding
immediately prior to such event.
SECTION 8. NO REDEMPTION.
The shares of Series A Junior Participating Preferred Stock
shall not be redeemable.
SECTION 9. AMENDMENT.
The Certificate of Incorporation of the corporation shall not be
further amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A
Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more
of the outstanding shares of Series A Junior Participating
Preferred Stock, voting separately as a class.
SECTION 10. FRACTIONAL SHARES.
Series A Junior Participating Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion
to such holders fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the
benefit of all other rights of holders of Series A Junior
Participating Preferred Stock.
* * * *
DIVISION B
COMMON STOCK
SUBDIVISION 1: GENERAL PROVISIONS
The rights, preferences and privileges, and qualifications,
limitations and restrictions granted to and imposed on the classes
of Common Stock shall be as set forth in this Division B.
SECTION 1. DEFINITIONS.
In addition to the terms defined elsewhere, the following terms
shall have the respective meanings set forth below:
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" Core Rights " shall mean:
(1) the divisional product allocation rules applicable to each
membership class as set forth in the rules of the Exchange;
(2) the trading floor access rights and privileges granted to
members of the Exchange;
(3) the number of authorized and issued shares of any class of
Class B Common Stock; or
(4) the eligibility requirements for any Person to exercise any
of the trading rights or privileges of members in the Exchange.
" Exchange " shall mean Chicago Mercantile Exchange Inc.,
a subsidiary of the corporation.
" Person " shall mean any individual, corporation,
partnership, trust or other entity.
" CBOT " shall mean Board of Trade of the City of
Chicago, Inc., a subsidiary of the corporation.
A " Transfer " (and the related term " Transferred
") shall mean any sale, pledge, gift, assignment or other transfer
of any ownership in any share of Class B Common Stock.
SECTION 2. GENERAL.
Except as otherwise set forth in this Division B, the
relative powers, preferences and participating, optional or other
special rights, and the qualifications, limitations or restrictions
of each class of Common Stock shall be identical in all
respects.
SECTION 3. DIVIDENDS.
Subject to the rights of the holders of Preferred Stock, holders
of Common Stock shall be entitled to receive such dividends and
other distributions in cash, stock of any corporation or property
of the corporation as may be declared thereon by the board of
directors from time to time out of assets or funds of the
corporation legally available therefore, and shall share equally on
a per share basis in all such dividends and other
distributions.
SECTION 4. VOTING RIGHTS.
Subject to the rights of holders of Class B Common Stock set
forth in this Division B, at every meeting of the shareholders of
the corporation in connection with the election of Equity
Directors (as defined below) and all other
matters submitted to a vote of shareholders, every holder of Common
Stock shall be entitled to one vote in person or by proxy for each
share of Common Stock registered in his or her name on the transfer
books of the corporation. Except as otherwise required by law or by
this Division B, the holders of each class of Common Stock shall
vote together as a single class, subject to any right that may be
conferred upon holders of Preferred Stock to vote together with
holders of Common Stock on all matters submitted to a vote of
shareholders of the corporation.
SECTION 5. LIQUIDATION RIGHTS.
Upon the liquidation, dissolution or winding up of the
corporation, holders of Common Stock shall be entitled to receive
any amounts available for distribution to holders of Common Stock
after the payment of, or provision for, obligations of the
corporation and any preferential amounts payable to holders of any
outstanding shares of Preferred Stock.
SUBDIVISION 2: CLASS B COMMON STOCK
In addition to the rights, preferences and privileges, and
qualifications, limitations and restrictions granted to and imposed
on the shares of Class B Common Stock of the corporation as
set forth in Subdivision 1 of this Division B, the rights,
preferences and privileges, and qualifications, limitations and
restrictions granted to and imposed on the shares of Class B
Common Stock of the corporation shall be as set forth in this
Subdivision 2 of this Division B.
SECTION 1. SPECIAL VOTING RIGHTS.
In addition to the voting rights set forth in Subdivision 1
of this Division B, the holders of shares of Class B Common
Stock shall, subject to Paragraph (c) of this Section 1,
have the following additional voting rights:
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(a) ELECTION OF CLASS B DIRECTORS. Subject to and in accordance
with Article Five, Holders of shares of Class B-1 Common Stock
shall have the sole right to elect three directors to the
corporation’s board of directors (the " Class B-1
Directors "), and each holder of Class B-1 Common Stock shall
have one vote per share in any such election. Holders of shares of
Class B-2 Common Stock shall have the sole right to elect two
directors to the corporation’s board of directors (the "
Class B-2 Directors "), and each holder of Class B-2 Common
Stock shall have one vote per share in any such election. Holders
of shares of Class B-3 Common Stock shall have the sole right to
elect one director to the corporation’s board of directors
(the " Class B-3 Director " and together with the Class B-1
Directors and Class B-2 Directors, the " Class B Directors
"), and each holder of Class B-3 Common Stock shall have one vote
per share in any such election.
(b) CORE RIGHTS. Any change, amendment or modification of the
Core Rights or of the terms of Section 3 of this Subdivision 2
shall be submitted to a vote of the holders of the Class B Common
Stock for their consideration and approval. In any such vote,
holders of Class B-1 Common Stock shall be entitled to six votes
for each share of Class B-1 Common Stock held, holders of Class B-2
Common Stock shall be entitled to two votes for each share of Class
B-2 Common Stock held, holders of Class B-3 Common Stock shall be
entitled to one vote for each share of Class B-3 Common Stock held
and holders of Class B-4 Common
Stock shall be entitled to one-sixth of one vote
for each share of Class B-4 Common Stock held. Any such change,
amendment or modification must be approved by a majority of the
aggregate votes cast by the holders of the Class B Common Stock
present (in person or by proxy) and voting at the meeting of
holders of Class B Common Stock called for the purpose of voting on
the proposed change, amendment or modification; provided that
holders of at least a majority of the aggregate number of votes
entitled to vote on the matter shall be present, in person or by
proxy, at such meeting. The absence of a quorum of the holders of
Common Stock shall not effect the exercise by the holders of Class
B Common Stock of the voting rights granted pursuant to this
Paragraph (b).
(c) LIMITATION ON VOTING RIGHTS. Notwithstanding anything to the
contrary contained in this Section 1 of this Subdivision 2,
for so long as any Person or group of Persons acting in concert
beneficially own (as defined below) 15% or more of the outstanding
shares of any class of Class B Common Stock, then in any election
of directors elected by that class or other exercise of voting
rights with respect to Core Rights or with respect to the election
or removal of directors elected by that class, such Person or group
shall only be entitled to vote (or otherwise exercise voting rights
with respect to) a number of shares of that class of Class B Common
Stock that constitutes a percentage of the total number of shares
of that class of Class B Common Stock then outstanding which is
less than or equal to such Person or group’s Entitled Voting
Percentage (as defined below). For the purposes hereof, a Person or
group’s " Entitled Voting Percentage " at any time
shall mean the percentage of the then outstanding shares of
Class A Common Stock in the aggregate, beneficially owned by
such Person or group at such time. For purposes of this Paragraph
(c), a "beneficial owner" of Common Stock includes any Person or
group of Persons who, directly or indirectly, including through any
contract, arrangement, understanding, relationship or otherwise,
written or oral, formal or informal, control the voting power
(which includes the power to vote or to direct the voting) of such
Common Stock.
SECTION 2. LIMITATION ON OWNERSHIP AND TRANSFER
RESTRICTIONS.
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(a) Shares of Class B Common Stock may not be Transferred at any
time except as follows and subject to the following
limitations:
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(i) No person may own a share of Class B-1 Common Stock
unless that person is recognized on the books and records of the
Exchange as the owner of a CME Division membership (" CME
Membership ") in the Exchange as governed by the rules of the
Exchange; provided that each holder shall not be permitted to own
more than one share of Class B-1 Common Stock for each CME
Membership;
(ii) No person may own a share of Class B-2 Common Stock
unless that person is recognized on the books and records of the
Exchange as the owner of an International Monetary Market Division
membership (" IMM Membership ") in the Exchange as governed
by the rules of the Exchange; provided that each holder shall not
be permitted to own more than one share of Class B-2 Common Stock
for each IMM Membership;
(iii) No person may own a share of Class B-3
Common Stock unless that person is recognized on the books and
records of the Exchange as the owner of an Index and Option Market
Division membership (" IOM Membership ") in the Exchange as
governed by the rules of the Exchange; provided that each holder
shall not be permitted to own more than one share of Class B-3
Common Stock for each IOM Membership;
(iv) No person may own a share of Class B-4 Common Stock
unless that person is recognized on the books and records of the
Exchange as an owner of a Growth and Emerging Markets Division
membership (" GEM Membership ") as governed by the rules of
the Exchange; provided that each holder shall not be permitted to
own more than one share of Class B-4 Common Stock for each GEM
Membership;
(b) No share of Class B-1 Common Stock may be Transferred
other than in connection with the Transfer of a CME Membership made
in accordance with the rules of the Exchange; provided that no more
than one share of Class B-1 Common Stock may be Transferred with a
CME Membership;
(c) No share of Class B-2 Common Stock may be Transferred
other than in connection with the Transfer of an IMM Membership
made in accordance with the rules of the Exchange; provided that no
more than one share of Class B-2 Common Stock may be Transferred
with an IMM Membership;
(d) No share of Class B-3 Common Stock may be Transferred
other than in connection with the Transfer of an IOM Membership
made in accordance with the rules of the Exchange; provided that no
more than one share of Class B-3 Common Stock may be Transferred
with an IOM Membership;
(e) No share of Class B-4 Common Stock may be Transferred
other than in connection with the Transfer of a GEM Membership made
in accordance with the rules of the Exchange; provided that no more
than one share of Class B-4 Common Stock may be Transferred with a
GEM Membership;
(f) Every certificate for shares of Class B-1 Common Stock,
Class B-2 Common Stock, Class B-3 Common Stock and Class B-4 Common
Stock shall bear a legend on its face reading as follows:
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"The shares of Common Stock represented by this certificate may
not be Transferred to any person in connection with a Transfer that
does not meet the rules of the Exchange or the terms of the
Certificate of Incorporation of this corporation until the transfer
restrictions applicable to the shares represented by this
certificate expire, and no person who receives the shares
represented by this certificate in connection with a Transfer that
does not satisfy the rules of the Exchange or the terms of the
Certificate of Incorporation of this corporation prior to such time
is entitled to own or to be registered as the record holder of the
shares of Common Stock represented by this certificate. Each holder
of this certificate, by accepting the certificate, accepts and
agrees to all of the foregoing."
(g) Except as permitted by this Section 2 of
this Subdivision 2, any proposed Transfer of shares of
Class B-1 Common Stock, Class B-2 Common Stock,
Class B-3 Common Stock or Class B-4 Common Stock shall be
void.
SECTION 3. COMMITMENT TO MAINTAIN FLOOR TRADING.
The corporation shall cause the Exchange, (i) as long as an
open outcry market is liquid (as defined below), to maintain for
such open outcry market a facility for conducting business, for the
dissemination of price information, for clearing and delivery and
(ii) to provide reasonable financial support (consistent with
the calendar year 1999 budget levels established by Chicago
Mercantile Exchange, an Illinois not-for-profit corporation, the
predecessor of the Exchange) for technology, marketing and research
for open outcry markets. If an open outcry market is not liquid, as
determined by the board of directors, the board may determine, in
its sole discretion, whether such obligations will continue, and
for how long, in respect of such market. For purposes of this
Section, an open outcry market will be deemed "liquid" if it meets
any of the following tests on a quarterly basis:
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(a) if a comparable exchange-traded product exists, including
electronic trading at the Exchange, the Exchange’s open
outcry market has maintained at least 30% of the average daily
volume of such comparable product (including, for calculation
purposes, volume from exchange-for-physical transactions in such
open outcry market); or
(b) if a comparable exchange-traded product exists and the
product trades exclusively by open outcry at the Exchange, the
Exchange’s open outcry market has maintained at least 30% of
the open interest of such comparable product; or
(c) if no comparable exchange-traded product exists, the open
outcry market has maintained at least 40% of the average quarterly
volume in that market during 1999 at Chicago Mercantile Exchange,
an Illinois not-for-profit corporation, the predecessor of the
Exchange (including, for calculation purposes, volume from
exchange-for-physical transactions in such open outcry market);
or
(d) if no comparable exchange-traded product exists and the
product trades exclusively by open outcry, the open outcry market
has maintained at least 40% of the average open interest in that
market during 1999 at Chicago Mercantile Exchange, an Illinois
not-for-profit corporation, the predecessor of the Exchange.
ARTICLE FIVE:
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(A) As of the time of acceptance by the Delaware Secretary of
State of the filing of this Certificate of Incorporation (the "
Effective Time "), the board of directors of the corporation
shall consist of 30 members, including 24 directors that are not
Class B Directors (the " Equity Directors "), three Class
B-1 Directors, two Class B-2 Directors and one Class B-3 Director.
Until the annual meeting of shareholders to be held in 2010 (the "
2010 Annual Meeting "), at least ten Equity Directors shall
be CBOT Directors. During the period starting on the Effective Time
and ending on the first business day prior to the 2010 Annual
Meeting (i) it shall be a qualification for any director to be
nominated or elected by the board of directors to replace any CME
Director (whose term
is expiring or has expired or who shall have been
removed or become disqualified or who shall have resigned, retired,
died or otherwise shall fail to continue to serve as a director of
the corporation) that such replacement director shall have been
designated by the CME Nominating Representatives and (ii) it
shall be a qualification for any director to be nominated or
elected by the board of directors to replace any CBOT Director
(whose term is expiring or has expired or who shall have been
removed or become disqualified or who shall have resigned, retired,
died or otherwise shall fail to continue to serve as a director of
the corporation) that such replacement director shall have been
designated by the CBOT Nominating Representatives. For purposes of
this certificate of incorporation, the terms " CME Director
," " CME Nominating Representatives ," " CBOT
Director " and " CBOT Nominating Representatives " shall
have the respective meanings set forth in the corporation’s
bylaws as in effect at the Effective Time.
(B) The board of directors of the corporation shall be divided
into three classes, designated Class I, Class II and Class III.
Each class of directors shall consist, as nearly as may be
possible, of one-third of the total number of directors
constituting the entire board of directors of the corporation. At
the Effective Time, the board of directors shall consist of the
members appointed to the various classes as provided in Article X
of the bylaws of the corporation. The terms of the initial Class I
directors shall expire at the first annual meeting of shareholders
to be held after the Effective Time; the terms of the initial Class
II directors shall expire at the second annual meeting of
shareholders to be held after the Effective Time; and the terms of
the initial Class III directors shall expire at the third annual
meeting of shareholders to be held after the Effective Time.
(C) At each annual meeting of shareholders, successors to the
class of directors whose terms expire at that annual meeting shall
be elected for a three-year term.
(D) A director shall hold office until the annual meeting of
shareholders for the year in which his or her term expires and
until his or her successor shall be elected and shall qualify,
subject, however, to prior death, resignation, retirement,
disqualification or removal from office.
(E) Subject to the provisions of Article X of the bylaws of the
corporation during the Transition Period (as such term is defined
in the bylaws in effect as of the Effective Time) and Paragraph
(A) of this Article Five, any vacancy on the board of
directors of the corporation may be filled by a majority of the
board of directors then in office and any director elected to fill
such a vacancy shall have the same remaining term as that of his or
her predecessor; PROVIDED, HOWEVER, that any vacancy occurring with
respect to a Class B-1 Director, a Class B-2 Director or a Class
B-3 Director shall be filled from the candidates who lost for such
position from the most
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