CHICAGO MERCANTILE EXCHANGE INC, S-4/A, 2000-03-10

CHICAGO MERCANTILE EXCHANGE INC
S-4/A, 2000-03-10
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES

Previous: CROWN MEDIA HOLDINGS INC, S-1/A, 2000-03-10

Next: CLIENTLOGIC CORP, S-1/A, 2000-03-10

<PAGE>

As filed with the Securities and Exchange Commission on March 10, 2000

Registration No. 333-95561

================================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

___________

Amendment No.2
to
FORM S-4

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
___________

CHICAGO MERCANTILE EXCHANGE INC.
(Exact name of registrant as specified in its charter)

___________

<TABLE>
<S> <C> <C>
Delaware 6231 36-4340266
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

30 South Wacker Drive
Chicago, Illinois 60606
(312) 930-1000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

Craig S. Donohue, Esq.
Senior Vice President and General Counsel
30 South Wacker Drive
Chicago, Illinois 60606
(312) 930-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

copies to:
Richard W. Astle, Esq.
Sidley & Austin
Bank One Plaza -- 10 South Dearborn Street
Chicago, Illinois 60603
(312) 853-7270
___________

Approximate date of commencement of proposed sale to the public: As
promptly as practicable after this Registration Statement becomes effective and
the satisfaction or waiver of certain other conditions under the Agreement and
Plan of Merger described herein.

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

================================================================================
<PAGE>

The information in this proxy statement and prospectus is not complete and may
be changed. We may not issue these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This proxy
statement and prospectus is not an offer to sell these securities and we are not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.

SUBJECT TO COMPLETION, DATED MARCH __, 2000

[LOGO]

CHICAGO MERCANTILE EXCHANGE

CHICAGO MERCANTILE EXCHANGE
30 SOUTH WACKER DRIVE
CHICAGO, ILLINOIS 60606

March ___, 2000

Dear Member:

I would like to invite you to attend a special members' meeting at which we
will consider a proposed "demutualization" of our organization in which we will
change from a not-for-profit membership corporation to a for-profit stock
corporation.

As a result of the demutualization, shares of Class B common stock will be
issued to our members in series corresponding to our present membership
divisions. Each series will confer the trading privileges associated with the
membership interests that are converted into that series along with the
traditional features of common stock. In addition, shares of Class A common
stock will be issued only to CME, IMM and IOM members and will contain only the
traditional features of common stock. We have no current plans to list these
shares on an exchange. Additional information regarding the Class A and Class B
common stock is provided in this document under "Description of Capital Stock of
New CME."

Our board unanimously approved the proposed demutualization and unanimously
recommends that you vote for its approval. The board believes that the
demutualization will better position us to compete in the rapidly changing and
consolidating financial services industry. We will have greater organizational
flexibility and will be able to raise additional equity capital, if needed. In
addition, we will be better able to grow and to continue to provide high quality
products and services to all of our customers.

Please review the attached document which provides important information
regarding the proposed demutualization. You should consider the matters
discussed under "Risk Factors" commencing on page 15 of the attached document.

Sincerely,
Scott Gordon
Chairman of the Board

The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this proxy statement
and prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

This proxy statement and prospectus is dated March __, 2000 and was first
mailed to members on or about March __, 2000.
<PAGE>

CHICAGO MERCANTILE EXCHANGE
30 SOUTH WACKER DRIVE
CHICAGO, ILLINOIS 60606

NOTICE OF SPECIAL MEMBERS MEETING TO BE HELD ON APRIL ____, 2000

To the Members of the Chicago Mercantile Exchange:

We will hold a special meeting of the members of the Chicago Mercantile
Exchange on ____________, April _____, 2000 at _____ p.m., Central Standard
Time, at 30 South Wacker Drive, Chicago, Illinois 60606, to consider and vote on
an agreement and plan of merger whereby we would become a Delaware stock
corporation by merging into a Delaware nonstock corporation and then merging
into a Delaware stock corporation. We will not transact any other business at
the special meeting.

Only members owning memberships at the close of business on ______________,
2000, the record date for the special meeting, are entitled to notice of, and to
vote at, the special meeting and any adjournments or postponements of it. The
merger agreement requires approval by the affirmative vote of two-thirds of the
votes present and voted, either in person or by proxy, at the special meeting.

For more information about the demutualization, please review the attached
document. The merger agreement is attached as Exhibit B.

Whether or not you plan to attend the special meeting, please complete,
sign and date the enclosed proxy and return it promptly in the enclosed postage-
paid envelope. The giving of a proxy does not affect your right to vote in
person in the event that you attend the special meeting. In the absence of
specific direction, proxies will be voted "FOR" approval of the merger
agreement. Proxies that are marked both "FOR" and "AGAINST" will not count and
will not be treated as votes cast. Unsigned proxies will not be counted. Proxies
must be received at the Chicago Mercantile Exchange, Membership Department, 30
South Wacker Drive, Chicago, Illinois 60606 prior to the start of the meeting in
order to be counted.

Your Board of Directors has carefully considered the proposed
demutualization and unanimously recommends that you vote "FOR" its approval.

By Order of the Board of Directors,

Craig S. Donohue
Senior Vice President and General Counsel

March ___, 2000

<PAGE>

TABLE OF CONTENTS

Page Page
---- ----

Exhibits

<PAGE>

This document describes a proposed series of mergers in which the existing
Chicago Mercantile Exchange would be converted from a membership organization
into a Delaware stock corporation. For ease of reference in this document, the
existing membership organization has been referred to as the "Exchange" or
"Existing CME," and the Delaware stock corporation as "New CME." The Exchange
has four membership divisions, which are referred to in this document as "CME,"
meaning members of the Chicago Mercantile Exchange division; "IMM," meaning
members of the International Monetary Market division; "IOM," meaning members of
the Index and Option Market division; and "GEM," meaning members of the Growth
and Emerging Markets division. These membership divisions, and their relative
trading rights, are described under the subheading "Our Members" in "Business."
Finally, members of the GEM division hold both full and fractional membership
interests. These fractional interests must be combined into full interests by
November 3, 2000 or, under the Exchange's rules, they will be combined by the
Exchange and sold for cash. Because of this provision, fractional GEM membership
interests have been treated differently in the proposed demutualization than
have full GEM membership interests.

<PAGE>

SUMMARY OF DEMUTUALIZATION PROPOSAL

This summary highlights information contained elsewhere in this document.
It is not complete. It does not contain all of the information which you should
consider before voting on the proposed demutualization and may not contain all
of the information that is important to your individual situation. Consequently,
you should read this entire document carefully.

Proposed Mergers

We are proposing to convert Existing CME from an Illinois not-for-profit
membership corporation into a Delaware for-profit stockholder corporation. As a
result, you would become a stockholder of New CME.

The demutualization would be effected in a two-step process. First, our
existing corporation would be merged into an intermediate Delaware nonstock
membership corporation, which we have formed called "CME Transitory Co." Second,
CME Transitory Co. would be merged into a Delaware stock corporation. These
steps are depicted in the following chart.

[Graphic: Three rectangular boxes aligned from left to right, with an arrow
silhouette pointing from the first to the second box and pointing from the
second to the third box. Inscribed in the first box is "Chicago Mercantile
Exchange (Illinois not-for-profit corporation)", inscribed in the second is "CME
Transitory Co. (Delaware nonstock corporation)", and inscribed in the third is
"Chicago Mercantile Exchange Inc. (Delaware stock corporation)". The phrase
"Membership Interests for Membership Interests" appears below the first arrow
and the phrase "Membership Interests for series of Class B shares and, in the
case of CME, IMM and IOM members, Class A shares" appears below the second
arrow.]

Immediately after the demutualization is completed, Exchange members will
be the only stockholders of New CME.

Conversion of Membership Interests into Shares of Stock

Existing memberships will be converted into shares of Class B common stock
of New CME and, in the cases of the CME, IMM and IOM memberships, shares of
Class A common stock. Both Class A and Class B shares will have the traditional
features of common stock; however, the primary purpose of the Class B shares is
to confer the trading privileges associated with the memberships in Existing
CME. Consequently, the Class B shares will be issued in four series
corresponding to those existing membership divisions, with a fifth series
corresponding to the GEM fractional membership interests. Each series will
confer the trading privileges associated with the membership interest that is
converted into that series. These conversions are illustrated below:

<PAGE>

<TABLE>
<CAPTION>
Distribution of Class A and B Shares By Individual Membership Interest
- --------------------------------------------------------------------------------------------
Number of Shares to Be Received Per Membership Interest
Class B Shares
Membership -----------------------------------------
Division Class A Shares Number Series
---------- -------------- ------ ------
<S> <C> <C> <C>
CME 16,200 1 B-1
IMM 10,800 1 B-2
IOM 5,400 1 B-3
GEM 1 B-4
GEM Fractions 1 B-5
</TABLE>

The following table indicates the number of outstanding memberships and
members in each membership division of the Exchange. The tables below that
table indicate the relative distribution of shares of Class A and B common stock
following the demutualization:

<TABLE>
<CAPTION>
Membership Divisions
- ------------------------------------------------------------------------------------
Membership Number of Number of Percentage of
Division Memberships Members Total Members
---------- ----------- --------- --------------
<S> <C> <C> <C>
CME 625 512 15.3%
IMM 813 676 20.3
IOM 1,287 1,026 30.8
GEM* 253 217 6.5
GEM Fractions* 2,140 902 27.1
- ------------------------------------------------------------------------------------
5,118 3,333 100.0%
==============================================================
</TABLE>

<TABLE>
<CAPTION>
Distribution of Class A and B Shares By Membership Division
- ----------------------------------------------------------------------------------------
Membership Aggregate Class A Class A Aggregate Class B
Division Shares Percentage Shares
--------- ----------------- ---------- -----------------
<S> <C> <C> <C>
CME 10,125,000 39.1% 625
IMM 8,780,400 34.0 813
IOM 6,949,800 26.9 1,287
GEM* 253
GEM fractions* 2,140
- --------------------------------------------------------------------------------------
25,855,200 100.0% 5,118
========== ===== =====
</TABLE>

<TABLE>
<CAPTION>
Distribution of Relative Equity by Membership Division
- --------------------------------------------------------------------------------------------------------
Equivalent Total Equity Percentage of
Class A Shares (expressed in Equity
Membership Class A Class B Represented by equivalent Distributed
Division Shares Series Class B Shares Class A shares) to Members
---------- ------- ------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
CME 10,125,000 B-1 1,125,000 11,250,000 39.1%
IMM 8,780,400 B-2 975,600 9,756,000 33.9%
IOM 6,949,800 B-3 772,200 7,722,000 26.8%
GEM* B-4 25,300 25,300 0.2%
GEM Fractions* B-5 21,400 21,400
- -----------------------------------------------------------------------------------------------------------

Total 25,855,200 2,919,500 28,774,700 100%
========== ========= ========== ===========
</TABLE>

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

* Based upon outstanding GEM fractions as of December 31, 1999. The
conversion of additional GEM fractions into full GEM membership interests
prior to the effectiveness of the demutualization will reduce the number of
series B-5 shares issued and increase the number of series B-4 shares
actually issued.

2
<PAGE>

Description of Class B Shares to be Received

The following table summarizes several features of the Class B shares that
will be issued to members in the demutualization:

<TABLE>
<CAPTION>
Number of Votes Equivalent Class A Shares
"Core Rights" Represented by Series
--------------------- ---------------------------
Number of As Percentage
Maximum Directors As Percentage of Aggregate
Number of Trading Series Per of Aggregate Number of Class A
Series Shares Privileges Can Elect Share Class B Vote* Shares Equivalents
- ------ --------- ---------- --------- ----- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
B-1 625 CME 3 6 55.7% 1,125,000 3.9%
B-2 813 IMM 2 2 24.1 975,600 3.4
B-3 1,287 IOM 1 1 19.1 772,200 2.7
B-4 253 GEM* 0 1/6 0.6 25,300 0.1
B-5 2,140 GEM 0 1/60 0.5 21,400 0.1
Fractions*
- ----------------------------------------------------------------------------------------------------
5,118 6 100.0% 2,919,500 10.2
===== - ===== ========= ====
</TABLE>
- ----------------------

* Based upon outstanding GEM fractions as of December 31, 1999. The conversion
of additional GEM fractions into full GEM membership interests prior to the
effectiveness of the demutualization will reduce the number of series B-5 shares
issued and increase the number of series B-4 shares actually issued.

Election of Directors. As described below in this summary under "Board of
Directors," New CME's board of directors will ultimately consist of 19
directors. Holders of series B-1, B-2 and B-3 shares will have the right to
elect the number of directors set forth in the table. Holders of all series of
Class B shares will have the right, voting together with holders of the Class A
shares, to elect the remaining 13 directors.

"Core Rights." New CME's charter grants solely to holders of Class B shares
the right to approve changes to specified "rights" associated with the trading
privileges conferred by those shares. Those rights, referred to as "Core Rights"
in the charter and this document, consist of:

. the allocation of products which a holder of a series of Class B shares
is permitted to trade on New CME's exchange facilities

. the trading floor access rights and privileges which a holder of a series
of Class B shares has, including the circumstances under which New CME
can determine that an existing open outcry-traded product will no longer
be traded by means of open outcry

. the number of authorized and issued shares of any series of Class B
shares

. the eligibility requirements to hold shares of a series of Class B shares
or to exercise the associated trading rights or privileges

As indicated in the table, votes on changes to Core Rights are weighted by
series. Changes to Core Rights must be approved by a majority of the votes cast
by the holders of the Class B shares. Holders of Class A shares do not have the
right to vote on changes to Core Rights.

Class A Equivalence. Each Class B share is treated as representing the
number of Class A shares specified in the table for purposes of:

3
<PAGE>

. voting on matters on which holders of Class A and B shares vote together,
including the election of 13 directors

. the receipt of dividends if, and when, declared by the board

. the receipt of liquidating distributions if New CME is liquidated and
dissolved

Shares of Class B common stock will represent approximately 10% of the
outstanding equity of New CME following the demutualization. Consequently, the
voting privileges of the Class B shares will not have any significant impact on
matters put to a vote that includes both the Class A and B stockholders. Class A
stockholders do not have the right to vote on Core Rights or in the election of
the six directors to be elected by the series of Class B shares.

Series B-5 Shares. The series B-5 shares will be issued to holders of GEM
fractional membership interests. Each GEM fractional membership interest
represents one-tenth of a full GEM membership interest and will be converted
into one series B-5 share. There were 2,140 GEM fractional membership interests
outstanding as of December 31, 1999 held by 902 members. Series B-5 shares may
be converted into series B-4 shares by their holders at the ratio of ten series
B-5 shares for one series B-4 share. Individuals holding less than the necessary
ten shares may either sell their shares to another holder so that holder will
obtain the necessary ten shares, or purchase additional shares from other
holders to obtain the necessary ten shares. In the event that a holder does not
convert his or her shares on or before November 3, 2000, those shares will be
converted automatically into shares of Class A common stock at the rate of ten
Class A shares for each series B-5 share.

Differences in Ownership Rights

Following the demutualization, you will become a stockholder in a Delaware
corporation as opposed to a member in an Illinois not-for-profit corporation.
There are differences in your ownership rights that will result from this change
in structure that you should consider. Some of these differences arise from
differences between the corporate law applicable to Illinois not-for-profit
corporations versus Delaware stock corporations. Some of these differences arise
from choices that we have made in drafting the charter and by-laws for New CME.
These differences are described under the subheading "Differences in Ownership
Rights" under "Demutualization Proposal."

Market for Shares; Stock Exchange Listing

No market presently exists for either the Class A shares or the Class B
shares. We expect a market for the Class B shares will develop that is similar
to the current market for corresponding membership interests. The current
markets for CME, IMM, IOM and GEM membership interests, and for GEM fractional
membership interests, should facilitate the development of new markets for each
series of Class B shares. We expect that, over time, a market for Class A shares
will develop. We will undertake educational and promotional efforts to
communicate the value of Class A shares to holders of those shares and to
potential investors.

We have no current plans to list either the Class A or B shares on a stock
exchange.

4
<PAGE>

Transfer Restrictions

Class B shares will be subject to the same transfer process as applies to
your current membership interest. Class A shares will be subject to transfer
restrictions, which will fall away over time. For the first six months, Class A
shares may be transferred only with the associated Class B shares. Each three
months thereafter, a portion of the Class A shares (in 25% increments) will
become transferable. After fifteen months, the shares will not be subject to the
transfer restrictions.

Board of Directors

Following the demutualization, the size of the board of directors will be
reduced from 39 to 30 directors at the December 2000 annual meeting of
stockholders, and further reduced to 19 at the December 2001 annual meeting of
stockholders. In addition, the manner in which the directors are nominated and
elected will change. These changes are illustrated in the table below.

<TABLE>
<CAPTION>
Nomination and Election of Board of Directors
Current Provisions After Demutualization
- ---------------------------------------------------------------------------------------------------------------------
Number of Candidates Nominated Number of Candidates
Directors By Elected By Directors Nominated By Elected By
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
12 CME Nominating Committee CME members 3 Series B-1 Nominating Series B-1
Committee holders
8 IMM Nominating Committee IMM members 2 Series B-2 Nominating Series B-2
Committee holders
4 IOM Nominating Committee IOM members 1 Series B-3 Nominating Series B-3
Committee holders
1 GEM Nominating Committee GEM members 0

12 Chairman of the Board Board of 0
Directors
2 * *
13 Board Nominating Class A and B
Committee stockholders
- --------- ----------
Total 39 Total 19
========= ==========
</TABLE>

* The Exchange's President serves as a non-voting member of the board. Leo
Melamed serves as a non-voting member of the board.

The Exchange's directors serve staggered two-year terms and will continue to
serve as directors of New CME for the remainder of their present terms.
Directors of New CME will also serve staggered two-year terms. The reduction in
the size of the board will be implemented by electing fewer directors than the
directors whose terms expire. A listing of the present directors and when their
terms expire is set forth under the subheading "Directors and Executive
Officers" under "Management." The right of series B-1, B-2 and B-3 stockholders
and Class A and B

5
<PAGE>

stockholders to elect directors will be phased-in as the terms of the existing
directors expire. This phase-in is described in a table under the subheading
"Description of Class B Common Stock" under "Description of Capital Stock of New
CME."

Federal Income Tax Consequences

We are seeking a ruling from the Internal Revenue Service to the effect
that, for federal income tax purposes, you will not recognize any gain or loss
strictly as a result of receiving Class A common stock and Class B common stock
(or Class B common stock only for holders of GEM memberships or GEM fractional
membership interests) in exchange for your membership interest. Assuming this
nonrecognition treatment, the tax basis in your membership interest would
carryover to the stock received in exchange. If you received both Class A and
Class B common stock, your membership basis would be allocated between the two
classes in proportion to the relative fair market values of those shares at the
time of the demutualization.

Accounting Treatment

The demutualization transaction will be treated in a manner similar to
"pooling-of-interests" accounting. Under this method of accounting, no gain or
loss will be recognized, and the assets and liabilities of Existing CME will
appear on the books of New CME at their same recorded amounts.

Risk Factors

There are risks associated with the proposed demutualization that you
should consider. These and other risks are discussed under "Risk Factors" below.
These risks include our ability to implement in a timely and successful manner
changes to our organizational and managerial structure that are required in
order to operate in a manner that will enhance stockholder value. Although the
Exchange has a long history of operating as a successful member-owned
institution, changes will be required in the manner in which activities are
evaluated and undertaken.

Reasons for Demutualization

Your board believes that the change in our structure resulting from
demutualization will accomplish the following objectives:

. Improve our governance and managerial structure to facilitate more
accelerated decision-making

. Change our financial decision-making model to emphasize stockholder
value

. Create a catalyst for pursuing new business strategies

. Unlock members' equity values by allowing them to sell a portion of
their interest in the Exchange, should they so desire

. Provide a signal and currency for working with strategic partners

Conditions to Demutualization

6
<PAGE>

The completion of the demutualization is subject to:

. Receipt of a favorable ruling from the Internal Revenue Service
regarding the federal income tax consequences to our members and the
Exchange of the contemplated transactions. The ruling request was
filed December 30, 1999.

. Completion of the cash purchase by Existing CME of the assets and
business of P-M-T Limited Partnership, which requires the approval of
the holders of two-thirds of the 4,786 Class A limited partnership
units of that partnership, not including the 321 units held by the
Exchange. P-M-T Limited Partnership provides electronic trading
services for the Exchange and owns GLOBEX [Registered Trademark
Symbol] servicemark.

. Approval by the Commodity Futures Trading Commission of changes to our
rules to reflect the demutualization. These approvals will be sought
after the special meeting of members. These changes generally relate
to the changes in our structure resulting from the conversion to a
stock corporation and the fact that our existing rules will be
reflected in the charter, by-laws and rules of New CME.

Our Business

Founded in 1898, the Exchange provides facilities so that our members may
trade futures and options on futures contracts. These facilities include
physical floor trading facilities where our members may come together to trade
in a process known as "open outcry" and, through P-M-T Limited Partnership,
electronic trading facilities known as GLOBEX2. Members are able to trade
futures and options on futures contracts based upon interest rates, stock
indices, foreign currencies, agricultural commodities and other underlying
instruments and risk-based activities. We also match, clear, settle and
guarantee all transactions executed on the Exchange through the CME Clearing
House, and we engage in extensive regulatory, compliance, market surveillance
and financial supervision activities designed to ensure market integrity and
provide financial safeguards for users of our markets. Our offices are located
at 30 South Wacker Drive, Chicago, Illinois 60606, and our telephone number is
(312) 930-1000.

Absence of Appraisal or Dissenters' Rights

Members who object to the demutualization will have no appraisal or
dissenters' rights under applicable law. Appraisal or dissenters' rights, if
available, would allow a member who voted against the proposal and followed a
prescribed statutory process, to receive a cash payment equal to the fair value
of the member's membership interest in the Exchange. If the demutualization
transaction is completed, your membership interest will be converted into stock
of New CME.

7
<PAGE>

Selected Consolidated Financial Information

Selected consolidated financial data is set forth below. The income
statement and balance sheet data are taken from the audited consolidated
financial statements of the Exchange. The results of prior periods are not
necessarily indicative of future results. This data should be read in
conjunction with the audited consolidated financial statements of the Exchange
and related notes, and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included toward the end of this document.

<TABLE>
<CAPTION>
Selected Consolidated Financial Data
(amounts in thousands)

As of or for the
Year Ended December 31,
-------------------------------------------------------
1999 1998 1997 1996 1995
--------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Total revenues $208,488 $195,216 $177,644 $164,212 $164,459
Operating expenses 201,844 181,023 158,586 151,803 149,689
Other income (1) -- -- -- 15,717 --
Limited partners' interest in earnings
of P-M-T Limited Partnership 2,126 2,849 -- -- --
Net income 2,663 7,029 8,667 15,068 8,631

Balance Sheet Data:
Total assets 301,703 293,205 348,732 243,754 199,733
Current assets 176,728 203,301 270,081 161,272 114,395
Current liabilities 109,953 110,670 180,210 83,584 57,780
Long-term obligations and limited
partners' interest in P-M-T 11,150 14,747 8,968 9,539 7,845
Members' equity 168,663 166,897 159,554 150,631 134,108

Other Data:
Total trading volume (round turn trades) 200,737 226,619 200,742 177,042 181,806
GLOBEX trading volume 16,135 9,744 4,388 2,018 1,326
Open interest at period-end 6,412 7,282 6,479 5,361 5,254
</TABLE>

(1) Consists of a 1996 return of contributions and interest from the CME
Trust resulting from an agreement reached with the Internal Revenue
Service over the deductibility of contributions made by the Exchange.

8
<PAGE>

RISK FACTORS

Upon demutualization your existing membership interest will be converted
into shares of New CME. Although New CME will succeed to our existing business,
demutualization will change our business model from a membership-owned non-stock
organization to an investor-owned stock corporation. We expect that this change
in form will have a significant impact on us and on the risks of owning us. You
should carefully consider the following risk factors, together with the other
information in this document, before casting your vote or executing your proxy.

Risks Related to Demutualization

. We have always operated as a not-for-profit enterprise and have no operating
history as a for-profit enterprise.

We have no operating history as a for-profit corporation upon which to
evaluate our ability to operate as a for-profit entity. For this reason, we
will be subject to risks, expenses and difficulties associated with changing
and implementing our business model that are not typically encountered by
established for-profit companies.

. There is little experience upon which to draw among U.S. futures exchanges
operating as for-profit enterprises.

The major U.S. futures exchanges have operated historically as mutual,
membership organizations. There is little history or experience of U.S.
futures exchanges with for-profit operations upon which we can draw to guide
our operations or business strategy.

. Our new managers and staff may not be successful in running a for-profit
entity.

Our future success depends, in significant part, on our new chief executive
officer and on his ability to utilize new and existing management and staff in
the context of a for-profit corporation. Our success also depends on their
ability to successfully operate an exchange and, in particular, an exchange
that is transitioning to a for-profit structure. We can provide no assurance
that our CEO, other members of management, and our employees, will be
successful in running a for-profit entity. The new CEO may desire or need to
recruit additional management or staff. We can provide no assurance that we
can successfully recruit these persons.

. Our board's role will be changing over a long transition period which may
delay operational changes needed to operate as a for-profit enterprise.

Our board has historically been involved actively in the day-to-day
functioning of our business. Following the demutualization, management of New
CME will assume greater responsibility for operations and the board will
assume a lesser role. The long transition period could slow changes in
operations and procedures needed to operate a for-profit enterprise.

. The change in the board election process may reduce the direct influence of
our

9
<PAGE>

members on the action of our board.

As non-members acquire Class A shares of New CME, the influence of members
on the actions of our board may be reduced. Holders of Class B shares will be
entitled to elect 6 of 19 directors. Although they are entitled to vote with
holders of Class A shares in the election of the remaining directors, the
voting power associated with the Class B shares will represent only about 10%
of the overall vote available to be cast for those directors. Members of the
Exchange will own 100% of the Class A shares following the demutualization;
however, subsequent sales of Class A shares by their holders, as well as
subsequent issuances and sales by New CME, will cause that percentage to fall.

. Other changes in our operating structure may also diminish the influence of
members.

We are currently served by a large number of member-dominated committees.
Our professional staff provides support to these committees but members
generally retain decision-making authority. This structure will change because
of demutualization. Many of these committees will be eliminated or converted
into advisory bodies. The membership of some committees may also change. Our
professional staff will be given greater decision-making responsibilities.
Management will generally make decisions designed to enhance stockholder
value, which may lead to decisions or outcomes with which members disagree.
These changes may make us less attractive to our current members and clearing
members and encourage them to conduct their business at, or seek membership
in, another exchange. A loss or material diminishment of member trading
activity could negatively impact liquidity and trading volumes in our
products. A loss or material reduction in the number of our clearing member
firms and the capital they provide to guarantee their trades and the trades of
their customers could diminish the strength and attractiveness of our Clearing
House and our markets.

. The absence of a prior public market limits our ability to predict the level
of public interest, if any, in our shares.

Prior to demutualization, there will be no public holders of capital stock
of New CME. There is no current market for that capital stock. Further,
because we are not offering any shares to outside investors, we have not
undertaken the traditional marketing activities associated with bringing a
company to the public markets. We have no current plans to list our shares on
a stock exchange. We do not know whether third parties will find our shares to
be attractive or whether firms will be interested in making a market in our
stock. Consequently, we cannot assure you that a trading market will develop
or, if it develops, how strong it may be.

. We can give no assurance that an orderly market in our common stock will
develop.

We have adopted transfer restrictions for the Class A shares, which will
gradually expire over a fifteen-month period following the demutualization, in
order to foster the development of an orderly market in our common stock. We
cannot guarantee that these restrictions will achieve their intended purpose.

If our stockholders sell a large number of Class A shares upon the
expiration of some or

10
<PAGE>

all of the transfer restrictions, the market prices for our common stock could
decline significantly. Additionally, the transfer restrictions that we have
adopted will not restrict a sale to a single purchaser of Class A shares in
conjunction with a simultaneous sale of the related Class B share, in part, to
allow a clearing member firm to liquidate the full value of a member's
interest in New CME if that member is in a deficit position. Any forced sales
of Class A or B shares during the time in which an orderly market is being
developed could negatively impact the market price for the shares.

. The market prices for our shares may fluctuate widely and trade at prices
below the recent price of the membership that the shares replace.

The market price of Class A and B shares received by you in the
demutualization may fluctuate widely. Factors causing these fluctuations will
include our perceived prospects, and the prospects of the financial industry
and exchanges in general, differences between our actual financial and
operating results and those expected by investors and analysts, and changes in
analysts' recommendations or projections. In addition, changes in general
economic or market conditions and broad market fluctuations may influence the
market prices for our stock. As a result, Class A and B shares may trade at
prices significantly below the price of the membership for which they were
exchanged. The value of Class B shares is likely to be driven primarily by the
perceived value, and the demand for, the related trading privileges.

. The issuance of additional shares may dilute the market value of the shares we
issue to you.

New CME will have authorized but unissued Class A shares that may be issued
at the discretion of New CME's Board. If we issue a large number of Class A
shares in connection with future acquisitions or otherwise, which fail to
increase our overall value, your equity could be diluted and the market price
of your shares could decline significantly. The board of New CME will consider
the potential dilutive effects of any subsequent issuance of Class A shares in
relation to the value generated or expected to be generated in connection with
their issuance.

. Decisions made by management or the board of New CME, or changes in the
business or operations of New CME, may negatively impact Class B stockholders
or affect Class A and B stockholders differently.

The conversion to a stockholder owned for-profit corporation will require
management to make decisions and take actions designed to maximize profits and
stockholder value. While holders of Class B shares will have protections with
respect to Core Rights that may limit management's decision-making authority,
management will nonetheless acquire substantial decision-making responsibility
compared to Existing CME. It is possible that decisions or changes which
benefit the value of Class A shares will negatively impact the value of Class
B shares or, conversely, that decisions or changes which benefit the value of
Class B shares will negatively impact the value of Class A shares.

. Class B stockholders will have a right to approve changes to Core Rights and
will be entitled to elect six directors. The market price of the Class A
shares may be adversely

11
<PAGE>

affected by the exercise of these rights.

Class B stockholders will have the ability to preserve their trading rights
by means of special approval rights. In addition, holders of series B-1, B-2
and B-3 shares will be entitled to elect 6 of 19 directors, even though those
holders only represent approximately 10% of the overall equity interest. Those
directors will also participate in the nomination of additional directors and
the election of a chairman. These provisions could be used to block changes
that management might want to make to enhance stockholder value, including the
value of Class A shares.

. Delaware law may protect decisions of New CME's board that have a different
effect on Class A and B stockholders.

Delaware law generally provides that a board of directors owes an equal
duty to all stockholders, regardless of class or series and does not have
separate or additional duties to either group of stockholders, subject to
applicable provisions set forth in a company's charter. With respect to
decisions not involving the Core Rights of Class B stockholders, you may not
be able to challenge decisions that have an adverse effect on the value of
your Class A or B shares if our Board acts in a disinterested, informed manner
with respect to these decisions, in good faith and in the belief that it is
acting in the best interests of our stockholders.

. Effects of antitakeover provisions could enable the board of directors to
prevent or delay a change of control of New CME and adversely affect market
value.

We have inserted antitakeover provisions into the charter and by-laws of
New CME. These provisions are described under the subheading "Other Charter
Provisions" under "Description of Capital Stock of New CME." These provisions,
along with provisions of Delaware law, could, together or separately:

. discourage potential acquisition proposals;
. delay or prevent a change in control; and
. limit the price that investors might be willing to pay in the future for
shares of our common stock.

As a result, these provisions could limit the price some investors might be
willing to pay in the future for Class A and B shares.

. Not paying dividends can have an adverse effect on our stock price.

The payment and amount of dividends, if any, may have an adverse effect on
the market value of our shares. We do not anticipate paying dividends on our
shares in the foreseeable future.

Risks Related to Our Business

. The business model we have adopted - the simultaneous operation of pit-based,
open outcry trading and electronic trading systems - may produce less liquid
markets than

12
<PAGE>

pure electronic trading markets of competitors and adversely affect our
business.

We have elected in the demutualization to preserve both open outcry and
electronic trading and have included provisions in our charter documents to
protect open outcry trading. If both trading methods continue, liquidity on
each may be less than the liquidity on a competitive unified trading
platform.

. Our business may be adversely affected if maintaining pit-based and electronic
trading systems results in higher costs or otherwise impairs efficiency.

It may be expensive to continue operating two trading systems for the same
product. Substantial expenses and delays may be caused by efforts to create
trading links between the separate trading platforms. Any loss of efficiency
or increase in time to market of new or improved products could be detrimental
to our business plans in a highly competitive market.

. Our trading volumes could be adversely affected if our customers prefer
conducting business on a mutual exchange.

The success of our business depends, in part, on our ability to maintain
and increase our trading volume by maintaining and expanding our product
offering and our customer base. Our success also depends on our ability to
offer competitive prices and services in an increasingly price sensitive
business. We cannot assure you that we will be able to continue to expand our
product lines, or that we will be able to retain our current customers. We
also cannot assure you that we will not lose customers to low-cost competitors
with comparable or potentially superior products. If we fail to expand our
product line or lose current customers, our ability to realize our financial
objectives will be adversely affected.

. Despite demutualization, we will face intense competition from other
companies.

The financial services industry is highly competitive. Many of our
competitors and potential competitors are more established and have greater
financial resources than we do. We expect that competition will intensify in
the future. Many of our competitors also have greater marketing capabilities
and technological and personnel resources. These factors may enable them to
develop similar products, to provide better transaction costs and execution,
and to carry out their business strategies faster.

. The number and quality of companies providing electronic transaction services
in competition with us may increase significantly.

Our current and prospective competitors are numerous and include securities
exchanges, futures exchanges, market data and information vendors, electronic
communications networks, crossing systems and similar entities, consortia of
large customers and some of our clearing member firms, and interdealer
brokerage firms. Two other significant U.S. futures exchanges are in the
process of demutualizing, which may intensify competition for electronic
transaction services.

Securities exchanges are planning to expand into derivative transaction
services. The existing option exchanges may expand their electronic
transaction services. A new electronic

13
<PAGE>

option exchange has been licensed by the SEC.

We may also face competition from computer software companies, and media
and technology companies. The number of businesses providing Internet-related
financial services is rapidly growing, and other companies have entered into
or are forming joint ventures or consortia to provide services similar to
those provided by us.

. We may not effectively manage our growth.

We expect to grow our business. This growth may place a significant strain
on our management, personnel, systems and resources. We must continue to
improve our operational and financial systems and managerial controls and
procedures, and we will need to continue to expand, train and manage our
technology workforce. We must also maintain close coordination among our
technology, compliance, accounting, finance, marketing and sales
organizations. We cannot assure you that we will manage our growth
effectively, and failure to do so could have a material adverse effect on our
business, financial condition and operating results.

. We cannot predict our future capital needs or our ability to secure
additional financing.

We anticipate, based on management's experience and current industry
trends, that our existing cash resources will be sufficient to meet our
anticipated working capital and capital expenditure requirements for at least
the next twelve months. However, we may need to raise additional funds to:

. support more rapid growth;
. develop new or enhanced services and products;
. respond to competitive pressures;
. acquire or develop complementary technologies; and
. respond to unanticipated requirements.

We cannot assure you that we will be able to obtain additional financing
on acceptable terms.

Risks Related to Regulation and Litigation

. We may not be able to maintain our self regulatory responsibilities.

Some financial services regulators have publicly stated their concerns
about the ability of a financial exchange, organized as a for-profit
corporation, to discharge adequately its self-regulatory responsibilities. We
believe our regulatory programs and capabilities contribute significantly to
our brand name and reputation. Although we believe that we will retain these
responsibilities, we cannot assure you that we will not be required to modify
or restructure our regulatory functions in order to address these concerns. If
we are required to rely on a third party to perform regulatory and oversight
functions, we may incur substantial expenses and suffer severe harm to our
reputation if the regulatory services are inadequate.

14
<PAGE>

. Litigation risks are significant to financial service providers.

Many aspects of our business involve substantial risks of liability.
Dissatisfied customers frequently make claims regarding quality of trade
execution, improperly settled trades, mismanagement or even fraud against
their service providers. We may become subject to these claims as the result
of failures or malfunctions of systems and services provided by us. We could
incur significant legal expenses defending claims, even those without merit.
Although the Commodity Exchange Act ("CEA") and our Commodities Futures
Trading Commission ("CFTC")-approved disclaimer and limitation of liability
rules offer us some protections, an adverse resolution of any lawsuits or
claims against us could have a material adverse effect on our reputation,
business, financial condition and operating results.

In addition, we may also become subject to legal proceedings and claims as
a result of the demutualization transactions.

INFORMATION REGARDING SPECIAL MEETING

Person Making the Solicitation

The proxy solicitation represented by this document is being made on behalf
of the board of directors of the Exchange.

Time and Place of Special Meeting

The special meeting will be held on __________, April __, 2000 at _____
p.m., Central Standard Time, at 30 South Wacker Drive, Chicago, Illinois 60606.

Eligibility to Vote

You are eligible to vote at the special meeting only if you owned a
membership in the Exchange at the close of business on ___________, 2000, which
is the record date for the special meeting.

Available Votes; Quorum Required for Meeting

On the record date for the special meeting, we had 625 CME memberships, 813
IMM memberships, 1,287 IOM memberships, 253 GEM memberships and 2,140 GEM
fractional memberships. Under our rules, CME members will have six votes for
each CME membership owned, IMM members will have two votes for each IMM
membership owned, IOM members will have one vote for each IOM membership owned,
GEM members will have one-sixth vote for each full GEM membership owned, and
owners of GEM fractional membership interests will have one-sixtieth vote for
each GEM fractional membership interest owned. The presence in person or by
proxy of members holding a majority of the votes entitled to be cast on the
demutualization proposal shall constitute a quorum for the consideration of the
proposal at the meeting.

Manner of Voting

15
<PAGE>

You may vote on the demutualization proposal by attending, in person or by
proxy, the special meeting and registering your vote. You may also complete the
enclosed proxy to register your vote on the proposal. You may revoke your proxy
at any time before it is voted at the meeting. You may revoke it in any of three
ways:

. By sending written notice to Ms. Ann Cresce, Acting Director, CME
Membership Department, 30 South Wacker Drive, Chicago, Illinois 60606;

. By signing a later dated proxy; or

. By attending the meeting and voting in person.

Attendance at the meeting will not automatically revoke your proxy. All
membership interests represented by properly executed and unrevoked proxies
received in the accompanying form in time for the meeting will be voted at the
meeting or at any adjournment of the meeting.

You may vote for, against or abstain on the demutualization proposal,
although an abstention has the legal effect of voting against the proposal. To
vote using the enclosed proxy, you should indicate your vote on the
demutualization proposal by checking FOR, AGAINST or ABSTAIN. A proxy received
without an indication of the manner in which it is to be voted will be voted FOR
approval of the demutualization proposal. A ballot which has more than one box
marked will not be valid and will not be regarded as a vote cast. You must sign
and date your proxy, and return it in the postage-paid envelope enclosed with
this mailing. You can also mail or deliver your completed proxy to Ms. Ann
Cresce, Acting Director, CME Membership Department, 30 South Wacker Drive,
Chicago, Illinois 60606. Your proxy must be received prior to the start of the
meeting in order to be counted.

To obtain a replacement ballot, please call Ms. Ann Cresce, Acting
Director, CME Membership Department, at (312) 930-3488, between the hours of
7:00 a.m. and 5:00 p.m., Central Standard Time.

Required Vote

The proposal will require the affirmative vote of at least two-thirds of
the votes present and voted either in person or by proxy for approval.

Directors and officers of the Exchange hold memberships entitling them to
cast an aggregate of 143.63 votes on the proposal, representing 2.13% of the
total membership votes that may be cast.

Board Recommendation

Your board unanimously recommends that you vote FOR the demutualization.

Methods of Solicitation of Proxies; Costs

The cost of soliciting proxies will be borne by the Exchange. In addition
to solicitation

16
<PAGE>

by mail, our directors, officers and employees may solicit proxies in person or
by telephone.

DEMUTUALIZATION PROPOSAL

Your board of directors unanimously believes that it is in the best
interests of the Exchange and its members to change its corporate structure from
a member-owned not-for-profit corporation to a stockholder-owned for-profit
corporation.

This belief is founded on the results of a year-long process in which
demutualization was examined. Last year, the board adopted a five-point plan to
improve the operation of the Exchange -- including an element regarding
demutualization. Since that time, the Strategic Planning Committee of the board
has studied the structure of possible transactions to effect the conversion to a
for-profit corporation and considered a number of the issues posed by those
transactions. Based upon those studies and considerations, the Strategic
Planning Committee developed and recommended to the board a plan to effect the
demutualization. This plan was then unanimously approved by the board.

It is intended that the demutualization transaction will not have any
adverse federal income tax consequences to our members. We have applied for a
ruling from the Internal Revenue Service to confirm these intentions, and the
completion of the demutualization transaction is conditioned, among other
conditions, upon the receipt of this ruling. No gain or loss will be recognized
by the Exchange for Federal income tax purposes as a result of the
demutualization.

Reasons for Demutualization

The financial and risk management markets in which we operate are
experiencing significant and rapid changes. These changes are largely due to
advances in technology, a relaxation of regulatory barriers and resultant cost
efficiencies. Computer and telecommunications systems today can efficiently and
economically bring buyers and sellers together in ways that present new
challenges to the traditional exchange model of centralized physical auction
markets. The Internet and proprietary networks are changing investor behavior
and revolutionizing how investors interface with financial markets. Other
technological innovations are reducing the costs and barriers to entry for
alternative exchange-type systems.

The traditional exchange model is undergoing a significant transformation
with the emergence of electronic trading technologies. Technological
innovations and reduced regulatory burdens in the global financial markets have
lowered barriers to entry, have created new competitors, and are encouraging
traditional exchanges to modernize their operations. In order to achieve the
necessary economies of scale and remain competitive in a low-price/high-volume
environment, consolidation among exchanges and financial intermediaries is
likely to continue. With respect to exchanges, large market users are expected
to continue to seek more efficient trading, processing and clearing facilities.
Although these users currently justify membership in multiple exchanges and
clearing organizations, they are likely to concentrate their business activity
in those exchanges and clearing organizations that offer standardized systems, a
full spectrum of financial products that can be traded and cleared through a
single entity, and low operating costs and capital efficiencies for member
intermediaries.

17
<PAGE>

Notwithstanding these changes and increased competitive activity, the board
believes that Existing CME is well-positioned in today's marketplace to preserve
and enhance our position. The Board also believes, however, that we will be
better able to respond to this competition if we are reorganized as a
commercially-operated enterprise with a true oversight board and a team of
professional business managers. These managers will leverage the substantial
existing assets and strengths of Existing CME into new business strategies
designed to maximize stockholder returns.

Objectives of Demutualization. We have identified five major objectives to
be achieved by demutualization:

. Improved Governance and Managerial Structure

The traditional distinctions between our activities and the activities of
our members and clearing members are becoming increasingly blurred. On the
one hand, members and clearing members decide our affairs; while on the other
hand, some of them compete directly with us by developing off-exchange
products and business and by joining alternative market initiatives. Our
board believes that demutualization will enable management to reduce the
impact of these conflicts and to increase our enterprise value for the
benefit of our equity owners.

Increasingly, our competitors are for-profit companies operating with a
singular purpose to maximize stockholder value. Our board believes that
demutualization will create a governance and management structure that is
more agile and swift in its ability to respond to competition. Management of
the demutualized entity will be free to make decisions regarding listing
contracts electronically if they will be more successful in that forum,
changing clearing and transaction fees when appropriate, or expanding our
existing product and service offerings.

. Improved Financial Decision-Making Model

Our board believes that changing to a for-profit model will result in
improved financial decision-making to enhance stockholder value. For example,
management of the demutualized entity will judge investments and expenditures
on, among other reasons, the basis of stockholder return. Commercial
decision-making will diminish political member influences. Commercial pricing
of services and a profit-making objective will ensure that resources are
allocated to those business initiatives and ventures that enhance, or have
the potential to enhance, stockholder value. Our ability to obtain financing
at favorable rates will depend on whether lenders believe we are investing
prudently.

. Create a Catalyst for Pursuing New Business Strategies

Continuing financial innovation and demand for new risk management and
derivative products are fueling global growth in exchange-traded and over-
the-counter products. To capitalize on this potential, we may need to attract
outside investment, further expand our current technology platforms, and
broaden our product and service offerings.

. Unlock Members' Equity Values

18
<PAGE>

Our owners are a heterogeneous group with different economic interests.
During the last several years, and prior to the recent increases in seat
prices and lease rates, many of our retired owners experienced substantial
declines in their seat values and, hence, income from leasing. These owners
are generally less interested in member opportunity on the floor and more
interested in maintaining their asset values and deriving income from their
assets. In this sense, many of these owners already have begun to look more
like traditional stockholders than exchange members. Demutualization will
unlock the equity value in a membership and allow our management to provide
stockholder returns to these members.

Many of our members are interested in selling only a portion of their
interest in the Exchange. Under the existing structure, these members have
been unable to do so because they cannot sell less than an entire membership
or seat. Demutualization will allow members to sell only a portion of their
interest in New CME (i.e., all of their Class B shares or all or a portion of
their Class A shares).

. Provide a Signal and a Currency for Working with Strategic Partners

Our board believes that technology firms, as well as firms interested in
acquiring an equity stake in us, will have a strong preference for working
with a demutualized corporation, rather than a member-owned mutual
organization. The board believes that we will benefit from entering into
strategic alliances with partners or investors who can provide technology and
capital resources. Demutualization and conversion of memberships into shares
will create a valuable currency for working with these partners, facilitating
our ability to enter into these transactions in the future.

Factors Considered in Arriving at Allocation Methodology. The board
approved the allocation of equity, as represented by the Class A shares and the
equity component of the Class B shares, in connection with its approval of the
demutualization. This approval was based upon the recommendation delivered by
the Strategic Planning Committee as well as the board's own consideration of
possible allocation scenarios.

Both the Strategic Planning Committee and the board considered various
allocation methods in arriving at their decision. In these considerations, the
directors took into account historical membership prices, trading volume and
open interest information regarding products traded by the membership divisions,
and relative contributions by the membership divisions. The board believed that
setting an allocation based entirely on seat prices was not entirely fair
inasmuch as those prices reflected the value of trading rights which were being
captured, at least to some degree, in the Class B shares. Other factors,
including trading volume, governance and relative voting power, did not
necessarily reflect the relative contribution that the various membership
divisions had made, or could in the future make, to the Exchange. Ultimately,
the board found the mechanism for the allocation of equity in the P-M-T Limited
Partnership, followed in 1987 in connection with the organization of that
partnership, to be a useful precedent to the allocation of equity in the
demutualization.

Description of Demutualization Transaction

The proposed demutualization transaction will be effected through a two-
step merger

19
<PAGE>

which is illustrated below:

First Step: Illinois to Delaware. In the first step, Existing CME will
merge with and into a recently formed, membership Delaware nonstock corporation
for the purpose of reincorporating us in Delaware. No substantive change will
occur in the members' current rights as a result of the merger, except for
changes that result from being incorporated as a membership corporation in
Delaware as opposed to Illinois. Under Illinois law, an Illinois not-for-profit
corporation cannot merge directly into a for-profit corporation; however, a
merger with a Delaware not-for-profit corporation is permissible.

This merger will be effected under an agreement and plan of merger between
Existing CME and the nonstock corporation, which is named "CME Transitory Co."
Under this merger agreement, each membership interest in Existing CME will be
converted into an equivalent membership interest in CME Transitory Co. The
completion of the merger is subject to several conditions, which are described
below under "Conditions to Effectiveness." A copy of the merger agreement is
attached to this document as Exhibit B.

CME Transitory Co. was formed by the Exchange for the sole purpose of
effecting the demutualization transaction. It has no present assets or any
business operations, other than activities associated with preparing for the
demutualization transaction. Existing CME is its sole present member, and that
membership interest will be cancelled upon the effectiveness of the merger.
Your board of directors has approved this first step merger. CME Transitory
Co.'s board of directors and Existing CME, as its sole member, have also
approved this merger.

The merger agreement grants the board the authority to amend its provisions
as long as those changes do not materially and adversely affect the members. It
is not expected that this authority will be used; however, it may be used if
minor changes are required as a condition to receiving a favorable ruling from
the Internal Revenue Service.

Second Step: Delaware Nonstock to Delaware Stock Corporation. In the
second step, CME Transitory Co. will merge with and into a recently formed, for-
profit Delaware stock corporation. There will be changes in the rights of
members as a result of this merger, which are described below under the
subheading "Differences in Ownership Rights."

This merger will be effected under an agreement and plan of merger between
CME Transitory Co. and New CME. Under this merger agreement, the membership
interests in CME Transitory Co. will be converted into shares of the capital
stock of New CME as described in the following section. This merger is
conditioned upon the completion of the first step merger of our existing
corporation into CME Transitory Co. A copy of this merger agreement is filed as
an exhibit to the registration statement that we filed with the SEC.

20
<PAGE>

New CME was formed by Existing CME solely for the purpose of effecting the
demutualization transaction. It has no present assets or any business
operations, other than activities associated with preparing for the
demutualization transaction. CME Transitory Co. is its sole present
stockholder, and that stock interest will be cancelled upon the effectiveness of
the merger. CME Transitory Co.'s Board of Directors and Existing CME, as its
sole member, have approved this second step merger. New CME's Board of
Directors and CME Transitory Co., as its sole stockholder, have also approved
this merger.

Conversion of Membership Interests into Shares

As a result of the consummation of the mergers described above, membership
interests in Existing CME will be converted into shares of the capital stock of
New CME. Specifically, each membership interest in Existing CME will be
converted into shares of a series of Class B common stock and, in the cases of
the CME, IMM and IOM membership interests, shares of Class A common stock, as
indicated below:

<TABLE>
<CAPTION>
Number of Shares to Be Received Per Membership Interest (or Fraction)
Class B Shares
Membership Division Class A Shares Number Series
- -------------------- -------------- ------ ------
<S> <C> <C> <C>
CME 16,200 1 B-1
IMM 10,800 1 B-2
IOM 5,400 1 B-3
GEM 1 B-4
GEM Fractions 1 B-5
</TABLE>

The principal purpose of the Class B shares is to confer the trading privileges
associated with the membership interests in Existing CME. Those shares will
also have traditional equity rights. The Class A shares will represent solely
equity rights. A description of the rights of the various series of Class B
shares and the Class A shares is set forth below under "Description of Capital
Stock of New CME."

The following tables illustrate the relative equity that will be received
by an Exchange member in respect of each membership division in the
demutualization. As discussed below, several series of Class B shares will have
the right to elect one or more members of the board, and all of the Class B
shares have the right to vote, as a single class or group, on changes to Core
Rights. These special voting rights are not illustrated in the following tables.

21
<PAGE>

Distribution to Individual Members

<TABLE>
<CAPTION>
Total Equity
per Membership
Membership Class A Class B Equivalent Class A Shares (expressed in equivalent
Division Shares Series Represented by Class B Shares Class A shares)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CME 16,200 B-1 1,800 18,000
IMM 10,800 B-2 1,200 12,000
IOM 5,400 B-3 600 6,000
GEM B-4 100 100
GEM Fractions B-5 10 10
</TABLE>

Distribution of Relative Equity by Membership Division

Total Equity Percentage
Equivalent Class A (expressed in of Equity
Membership Number of Class A Class B Shares Represented equivalent Class Distributed
Division Memberships Shares Series by Class B Shares A shares) to Members
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CME 625 10,125,000 B-1 1,125,000 11,250,000 39.1%
IMM 813 8,780,400 B-2 975,600 9,756,000 33.9%
IOM 1,287 6,949,800 B-3 772,200 7,722,000 26.8%
GEM* 253 B-4 25,300 25,300 0.2%
GEM Fractions* 2,140 B-5 21,400 21,400
----- ---------- --------- ---------- -----
Total 5,118 25,855,200 2,919,500 28,774,700 100%
===== ========== ========= ========== =====
</TABLE>

* Based on full and fractional GEM memberships as of December 31, 1999. The
conversion of additional GEM fractions into full GEM membership interests
prior to the effectiveness of the demutualization will reduce the number of
series B-5 shares issued and increase the number of series B-4 shares actually
issued.

Rights of Class B Common Stock

Each series of Class B shares will carry traditional equity rights and also
will confer the trading rights of the associated membership division. Holders
of shares of each series of Class B common stock will have special voting
rights, consisting of the right (of B-1, B-2 and B-3 stockholders) to elect a
total of six members of the board of directors of New CME and the right to
approve actions that affect Core Rights. Holders of Class B shares will also
have the right to vote with holders of Class A shares in the election of the
remaining members of the board of directors of New CME, as well as on other
matters for which a vote of stockholders is required. These concepts are
explained below under the subheading "Description of Additional Provisions of
Class B Common Stock" under "Description of Capital Stock of New CME."

Election of Board of Directors

Board Size. The size of our board, and the manner in which directors are
elected, will be changed in the demutualization. Initially, New CME's board
will consist of 39 directors; and the existing directors of the Exchange will
continue as directors of New CME. The size of New CME's board will be reduced
in two steps: first by nine members at the December 2000 annual meeting of
stockholders; and second by eleven members at the December 2001 annual meeting
of stockholders. These reductions will be effected by electing fewer directors
that the number of directors whose terms expire.

Board Selection. We also have changed the manner in which directors will
be elected to

22
<PAGE>

the board. Under New CME's charter and by-laws, members of the board will be
nominated and elected as follows:

Number of
Directors Candidates Nominated By Directors Elected By
- ------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
13 Board Nominating Committee, elected by the board Holders of Class A and B shares, voting
together

3 Series B-1 Nominating Committee, elected by holders Holders of series B-1 shares
of series B-1 shares

2 Series B-2 Nominating Committee, elected by holders Holders of series B-2 shares
of series B-2 shares

1 Series B-3 Nominating Committee, elected by holders Holders of series B-3 shares
of series B-3 shares
</TABLE>

All directors will serve for two-year terms. Terms have been staggered so that
approximately one-half of the directors will be elected each year. The
following table indicates the number of directors to be elected at the annual
stockholders meeting each year, and who has the right to vote on their election:

<TABLE>
<CAPTION>
Number of Directors to be Elected
At Annual Stockholders Meeting
- -------------------------------------------------------------------------
Even Years Odd Years
Directors To Be Elected By (Starting (Starting
December 2000) December 2001)
- -------------------------------------------------------------------------
<S> <C> <C>

Holders of Class A and Class B 6 7
shares, voting together
Holders of series B-1 shares 1 2
Holders of series B-2 shares 1 1
Holders of series B-3 shares 1
Total 9 10
</TABLE>

Board Nominations. A nominating committee, composed of members of New
CME's board, will nominate the slate of candidates for the thirteen directors to
be elected by the holders of the Class A and Class B shares, voting together.
This committee will be responsible for assessing the qualifications of
candidates as well as ensuring that regulatory requirements with respect to the
composition of New CME's board are met. Candidates nominated by this committee
could include New CME's President and CEO, other executive staff members,
representatives from the futures commission merchants community, and public
directors from outside the industry as required by regulations of the CFTC.

Consistent with our current practice, the series B-1, B-2 and B-3 holders
will have the right to elect members of nominating committees for their
respective series, which would be responsible for nominating candidates for
election by their series. Each committee will be responsible for assessing the
qualifications of candidates to serve as directors to be elected by that series.
In accordance with our current practice, New CME's charter requires that
director-candidates for election by a series of Class B shares own, or be
recognized under its rules as a permitted transferee (other than temporary
lease-type transfers) of, at least one share of that

23
<PAGE>

series. For purposes of the elections to be held in December 2000, the members
of the series B-1, B-2 and B-3 nominating committees will be the members of the
present corresponding CME, IMM and IOM nominating committees of Existing CME.

Differences in Ownership Rights

The demutualization will cause changes in your ownership rights. Some of
these differences arise from differences that exist between the corporate law
governing Illinois not-for-profit corporations and Delaware stock corporations.
The remainder of the differences result from changes that we have made in
drafting the charter and by-laws for New CME. These differences are described
in the following table:

New CME Existing CME
------------------------------------------ ------------------------------------------
<S> <C> <C>
Dividends Stockholders may receive dividend Members are not allowed to receive
distributions based on current or dividends based on earnings.
accumulated earnings.
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Authorized Capital Charter authorizes issuance of up to (i) Charter and by-laws authorize the
100,000,000 shares of Class A common issuance of (i) 625 CME memberships,
stock, (ii) 5,332 shares of Class B (ii) 813 IMM memberships, (iii) 1,287
common stock in five series and (iii) IOM memberships and (iv) 467 GEM
10,000,000 shares of preferred stock. memberships.
- -------------------------------------------------------------------------------------------------------------------

Transfer Restrictions Class B share transfers will be subject Membership transfer subject to compliance
to compliance with rules, which will be with rules, which require purchasers of
essentially identical to the process membership interests to apply for
applicable to the transfer of membership membership. Applicants must be adults of
interests in Existing CME. good moral character, reputation and
business integrity and have adequate
Class A share transfers will be subject financial resources and credit.
to restrictions during the first 15
months following the demutualization.
See "Transfer Restrictions" under
"Description of Capital Stock of New CME."
- -------------------------------------------------------------------------------------------------------------------
Voting:

Directors Holders of Class B shares will have the Members have the right to elect an
right to elect an aggregate of 6 aggregate of 25 directors as follows:
directors as follows:

Associated Membership Number of
Membership Number of Division Directors
Series Division Directors ------------------------------------------
------ ---------- ------------- <S> <C>
<S> <C> <C> CME 12
B-1 CME 3 IMM 8
B-2 IMM 2 IOM 4
B-3 IOM 1 GEM 1

Class B stockholders in each series Members in a division have the right to
entitled to elect a director will have elect individuals to a nominating
the right to elect individuals to a committee, which slates candidates for
nominating committee, which slates election by members of that division.
candidates for election by stockholders
of that series.
</TABLE>

24
<PAGE>

------------------------------------------ ------------------------------------------
New CME Existing CME
------------------------------------------ ------------------------------------------
<S> <C> <C>
The Chairman is empowered to appoint up
Holders of Class A and B shares will have to 12 directors, who must be approved by
the right to vote in the election of the the Board.
remaining 13 directors, who will be
nominated by the Nominating Committee of
the board of New CME.
- -------------------------------------------------------------------------------------------------------------------
Rule Changes Charter and by-laws do not pick-up the Members have the right, in what is called
"referendum" process. Class B a "referendum," to initiate rule changes,
stockholders will be given the right including adopting new rules and amending
under the charter to approve changes to or repealing existing rules of the
(i) products permitted to be traded by Exchange. If the board does not approve
each series, (ii) floor access rights and a member-initiated proposal, members have
privileges, including commitment to the right, in essence, to override that
maintain open outcry trading, (iii) the action by vote - provided at least
authorized and issued shares of each one-half of the votes eligible to be cast
series and (iv) eligibility to hold on the matter are cast and it is approved
shares of a series. See "Description of by a majority of the votes cast.
Additional Provisions of Class B Common Weighted voting by membership division is
Stock" under "Description of Capital required on matters related to voting,
Stock of New CME." Voting will be on a board or executive committee
weighted basis, with series B-1 holders representation, trading rights, rights
(CME) having 6 votes per share, series upon dissolution or any other issue for
B-2 holders (IMM) having 2 votes per which the board determines weighted
share, series B-3 holders (IOM) having 1 voting to be appropriate. Under weighted
vote per share, series B-4 holders (GEM) voting, CME members have 6 votes per
having 1/6th vote per share, and series membership, IMM members have 2 votes per
B-5 holders (GEM fractions) having 1/60th membership, IOM members have 1 vote per
vote per share. membership, GEM members have 1/6th vote
per membership, and holders of GEM
fractions have 1/60th vote per faction.
- -------------------------------------------------------------------------------------------------------------------
Extraordinary Approval of a majority of the outstanding Approval of two-thirds of votes present
Transactions shares will be required to authorize and voting is required to authorize
charter amendments, mergers, sales of all charter amendments, mergers, sales of all
of the corporate assets or a dissolution. of the corporate assets or a dissolution.
- -------------------------------------------------------------------------------------------------------------------
Class/Series Holders of a class or series of stock No comparable statutory provision.
Voting will have the right by statute to vote as
a separate class or series on charter
amendments that would adversely affect
their rights granted by the charter.
- -------------------------------------------------------------------------------------------------------------------
Dissenters' Rights In transactions involving a merger or No dissenters' rights.
sale of all of the assets, stockholders
will have the right to dissent and, by
following a statutory procedure, receive
a cash payment equal to the appraised
fair value of their shares.
- -------------------------------------------------------------------------------------------------------------------
Liquidation Rights Liquidating distributions will be made to Liquidating distributions are based on
stockholders based on the number of Class aggregate amounts originally paid-in for
A shares they hold or are considered to memberships.
hold. The charter treats each series of
Class B shares as
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

25
<PAGE>

------------------------------------------ ------------------------------------------
New CME Existing CME
------------------------------------------ ------------------------------------------
<S> <C> <C>
representing a specified number of
Class A shares. See "Description of
Common Stock" under "Description of
Capital Stock of New CME."
- -------------------------------------------------------------------------------------------------------------------
Board of Directors 19 members (after December 2001). 39 members.
- -------------------------------------------------------------------------------------------------------------------
Ability to Limit Personal Allowed. Charter will contain provision Not allowed.
Liability of Directors adopting the maximum permitted limitation.
- -------------------------------------------------------------------------------------------------------------------
Antitakeover Provisions Charter will contain antitakeover None
provisions. See "Other Charter
Provisions" under "Description of Capital
Stock of New CME."
-------------------------------------------------------------------------------------
</TABLE>

Required Regulatory Approvals

Many of the terms of the demutualization transaction relating to Board
composition and elections, membership privileges and voting rights, and trading
rights and access, will either require new rules or amendments to existing
rules, or will be required to comply with provisions of the Commodity Exchange
Act or the regulations issued by the CFTC. We intend to make any necessary
submissions to the CFTC following member approval of the demutualization
proposal.

In addition, the registration statement that New CME filed with the SEC,
which contains this document, must be declared effective by the SEC.

Amendment or Termination

Our board may amend any of the terms of the first step merger agreement at
any time before or after its approval by our members, but not after the time
that the merger of the Exchange into CME Transitory Co. has been effected. No
amendment may, in the sole judgment of the board, materially and adversely
affect the rights of our members. The second step merger agreement may be
similarly amended.

The merger agreements may be terminated, and the demutualization
transaction abandoned, at any time before or after our members have approved the
demutualization transaction, by action of our board if it determines that
consummation of the transactions provided for in the merger agreements would,
for any reason, be inadvisable or not in the best interests of the Exchange or
its members. However, the board may not terminate the second step merger
agreement between CME Transitory Co. and New CME unless the first step merger
agreement between the Exchange and CME Transitory Co. is also terminated.

Conditions to Effectiveness of the Demutualization Transactions

Consummation of the first step merger of Existing CME into CME Transitory
Co. is subject to the following conditions:

. Approval of the demutualization transaction by our members

26
<PAGE>

The first step merger must be approved by our members by the affirmative
vote of at least two-thirds of the votes present and voted, either in
person or by proxy.

. The Class A limited partners in P-M-T Limited Partnership shall have
approved the sale of all of the assets and business of that partnership
to New CME

An offer by New CME to purchase all of the assets and business of P-M-T
Limited Partnership for cash shall have been approved by the holders of
two-thirds of the 4,786 outstanding P-M-T Class A limited partnership
units, excluding the 321 units held by the Exchange. The purchase will
be consummated concurrently with the consummation of the demutualization
transaction.

. Receipt of a favorable ruling from the Internal Revenue Service

We have asked the Internal Revenue Service to confirm that our proposed
demutualization transaction will not cause our members to recognize a
gain or loss upon the conversion of their membership interests into
Class A and Class B shares. The ruling request was filed December 30,
1999. We do not expect to receive that ruling until several months after
the special meeting.

. Receipt of regulatory approvals

We will need to receive the approval of the CFTC to rule changes that we
need to make to recognize the change in our structure that will occur as
a part of the demutualization. These changes relate to the fact that our
existing rules will be reflected in New CME's charter, by-laws and rules
and that membership interests will be represented by shares of stock.

Effectiveness of the Demutualization Transactions

After the conditions described above have been satisfied, we will cause the
necessary documents to be filed with the Secretaries of State of Illinois and
Delaware in order to effect the first step merger of the Exchange into CME
Transitory Co., whereupon it will become effective. Promptly following that
effectiveness, we will cause the necessary documents to be filed with the
Delaware Secretary of State in order to cause the merger of CME Transitory Co.
into New CME. Upon the effectiveness of that filing, the demutualization will
have been effected and members will become stockholders of New CME.

Federal Income Tax Consequences

One of the conditions to the closing of the demutualization transaction is
our receipt of a private letter ruling from the Internal Revenue Service
generally to the effect that, for federal income tax purposes, no gain or loss
will be recognized by a member on the exchange of his or her membership interest
in the Exchange for Class A common stock and Class B common stock or for Class B
common stock only. Assuming this nonrecognition treatment, the members would
have the following additional federal income tax consequences:

27
<PAGE>

. The aggregate basis of the shares of New CME received by a member in
exchange for a membership interest will equal the basis of the
membership interest. In the case of a member who receives both Class A
common stock and Class B common stock, that basis will be allocated in
proportion to the fair market value of each on the date of the mergers.

. The holding period of the Class A common stock and Class B common stock
received by a member in exchange for a membership interest will include
the period for which the membership interest has been held, provided
that the membership interest is held as a capital asset on the date of
the exchange.

No gain or loss will be recognized by the Exchange as a result of the
transfer of its assets to New CME and the assumption by New CME of the
liabilities of the Exchange.

We filed a request for the foregoing ruling with the Internal Revenue
Service on December 30, 1999. Because of the novelty of the demutualization
transactions, it is unclear at this time whether the Internal Revenue Service
will issue a favorable ruling or, if the Internal Revenue Service is willing to
issue a ruling, when the ruling will be received. Any such ruling would
generally be binding on the Internal Revenue Service. Although an Internal
Revenue Service ruling can be revoked or modified retroactively under some
extraordinary circumstances, we are not aware of any such circumstances that
would cause the Internal Revenue Service to revoke or modify any such ruling
with respect to the demutualization transactions.

Because of the complexity of the tax laws, and because the tax consequences
of the demutualization to you may be affected by matters not discussed herein,
you are urged to consult your own tax advisor with respect to your own
particular circumstances and with respect to the specific tax consequences of
the demutualization to you, including the applicability and effect of state,
local and foreign tax laws and any proposed changes in applicable tax laws.

UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma condensed consolidated financial
statements give effect to (i) the proposed acquisition of the limited partners'
interest in P-M-T Limited Partnership and (ii) the issuance of 25,855,200 shares
of Class A common stock and 5,118 shares of Class B common stock in connection
with the proposed demutualization and conversion of membership interests as
described elsewhere in this document as if they had occurred as of December 31,
1999, for purposes of the unaudited pro forma consolidated balance sheet, and as
of the beginning of the year for purposes of the unaudited pro forma
consolidated statement of income for the year ended December 31, 1999.

The unaudited pro forma information reflects the acquisition of the limited
partners' interest in P-M-T Limited Partnership through a cash payment equal to
the carrying value of the limited partners' interest, which amounted to
$3,018,000 at December 31, 1999. This acquisition will be effected through the
purchase of the assets and business of P-M-T Limited Partnership at fair market
value on the date of the transaction. Because the purchase price, market value
and

28
<PAGE>

carrying value are approximately the same, there will be no goodwill or
other purchase accounting adjustments resulting from this transaction. P-M-T
Limited Partnership, for which the Exchange has acted as the sole general
partner since its inception, will be liquidated, with proceeds distributed to
its partners, after the proposed transaction has been completed. As of December
31, 1999, there were 4,786 Class A limited partnership units and 90 Class B
limited partnership units outstanding in P-M-T. As of that date, the Exchange
held 321 Class A units and 34 Class B units, representing 6.7% and 37.7%,
respectively, of the outstanding units of those classes.

The unaudited pro forma information also reflects the issuance of
25,855,200 Class A shares and 5,118 Class B shares in exchange for previously
existing membership interests. No cash will be paid or received. The Class B
shares are considered the equivalent of 2,919,500 Class A shares for purposes of
calculating pro forma earnings per share.

The unaudited pro forma condensed consolidated financial statements are
based on available information and on assumptions management believes are
reasonable and that reflect the effects of the transactions described above.
These unaudited pro forma condensed consolidated financial statements are
provided for informational purposes only and should not be construed to be
indicative of the Exchange's consolidated financial position or results of
operations had these transactions been consummated on the dates assumed and do
not in any way represent a projection or forecast of the Exchange's consolidated
financial position or results of operations for any future date or period. The
unaudited pro forma condensed consolidated financial statements should be read
in conjunction with the audited consolidated financial statements of the
Exchange, together with the related notes and report of independent public
accountants, and with the information set forth under "Management's Discussion
and Analysis of Results of Operations and Financial Condition" and "Business."

29
<PAGE>

CHICAGO MERCANTILE EXCHANGE
Unaudited Pro Forma Condensed Consolidated Balance Sheet
December 31, 1999

<TABLE>
<CAPTION>
Pro Forma After
--------------------------
Acquisition Issuance of
of Interest Class A and
Historical in P-M-T B Shares
---------- ----------- -----------
(dollars in thousands)
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 14,249 $ 11,231 $ 11,231
Investments 60,156 60,156 60,156
Accounts receivable and prepaid expenses 29,189 29,189 29,189
Cash performance bonds and security deposits 73,134 73,134 73,134
-------- -------- --------
Total current assets 176,728 173,710 173,710
Property, net of accumulated depreciation and amortization 93,531 93,531 93,531
Other assets 31,444 31,444 31,444
-------- -------- --------
Total Assets $301,703 $298,685 $298,685
======== ======== ========
Liabilities and Equity
Current liabilities:
Accounts payable $ 15,569 $ 15,569 $ 15,569
Other current liabilities 21,250 21,250 21,250
Cash performance bonds and security deposits 73,134 73,134 73,134
-------- -------- --------
Total current liabilities 109,953 109,953 109,953
Limited Partners' interest in P-M-T Limited Partnership 3,018 - -
Other liabilities 20,069 20,069 20,069
-------- -------- --------
Total liabilities 133,040 130,022 130,022
Members' and Stockholders' equity:
Preferred stock, $.01 par value, -
10,000,000 shares authorized, none issued and outstanding
Class A common stock, $.01 par value,
100,000,000 shares authorized,
25,855,200 shares issued and outstanding 259
Class B common stock, $.01 par value,
5,332 shares authorized, 5,118 shares issued and
outstanding -
Additional paid-in capital 43,346
Retained earnings 125,421 125,421 125,421
Proceeds from issuance of memberships 43,605 43,605 -
Accumulated unrealized losses on securities (363) (363) (363)
-------- --------
Total members' equity $168,663 $168,663 -
-------- -------- --------
Total stockholders' equity $168,663
--------
Total Liabilities and Equity $301,703 $298,605 $298,605
======== ======== ========
</TABLE>
The accompanying introduction is an integral part of this
Unaudited Pro Forma Condensed Consolidated Balance Sheet.
CHICAGO MERCANTILE EXCHANGE

30
<PAGE>

Unaudited Pro Forma Condensed Statement of Operations
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Pro Forma After
-----------------------------
Acquisition Issuance of
of Interest Class A and
Historical in P-M-T B Shares
---------- ----------- -----------
(amounts in thousands, except per share amount)
<S> <C> <C> <C>
Revenues:
Clearing fees $138,526 $138,526 $138,526
Quotation data fees 43,005 43,005 43,005
Communication fees 8,165 8,165 8,165
Investment income 9,091 9,038 9,038
Other operating revenue 9,701 9,701 9,701
-------- -------- --------
Total revenues 208,488 208,435 208,435
-------- -------- --------
Expenses:
Salaries and benefits 80,957 80,957 80,957
Occupancy 17,773 17,773 17,773
Professional fees, outside services and licenses 28,319 28,319 28,319
Communications and computer and software maintenance 28,443 28,443 28,443
Depreciation and amortization 25,274 25,274 25,274
Public relations and promotion 7,702 7,702 7,702
Other operating expense 13,376 13,376 13,376
-------- -------- --------
Total expenses 201,844 201,844 201,844
-------- -------- --------
Income before limited partners' interest in P-M-T and
provision for income taxes 6,644 6,591 6,591
Limited partners' interest in earnings of P-M-T (2,126) -- --
Provision for income taxes (1,855) (2,684) (2,684)
-------- -------- --------
Net income $ 2,663 $ 3,907 $ 3,907
======== ======== ========
Net income per share $ 0.14
========
Shares used in the calculation of net income per share 28,775
========

</TABLE>
The accompanying introduction is an integral part of this
Unaudited Pro Forma Condensed Consolidated Statement of Operations.

31
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Exchange as of
December 31, 1999 (i) on an historical basis, (ii) on a pro forma basis giving
effect to the proposed acquisition of the limited partners' interest in P-M-T
Limited Partnership, and (iii) on a pro forma basis as adjusted to give effect
to the issuance by New CME of 25,855,200 Class A shares and 5,118 Class B shares
in connection with the demutualization transactions. The table should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations," the consolidated financial statements and related
notes of the Exchange included elsewhere in this document and "Unaudited Pro
Forma Condensed Consolidated Financial Statements."

<TABLE>
<CAPTION>
As of December 31, 1999
---------------------------------------------------
Pro Forma After
--------------------------------
Acquisition Issuance of
of Interest in Class A and
Historical P-M-T B Shares
---------- -------------- -----------
(in thousands)
<S> <C> <C> <C>
Limited partners' interest in P-M-T $ 3,018 $ -- $ --
Capitalized lease obligations 8,132 8,132 8,132
Other long-term debt -- -- --
-------- -------- --------
Total limited partners' interest and long-term debt 11,150 8,132 8,132
-------- -------- --------
Equity:
Preferred stock, $.01 par value,
10,000,000 shares authorized, none issued and outstanding --
Class A common stock, $.01 par value,
100,000,000 shares authorized,
25,855,200 shares issued and outstanding 259
Class B common stock, $.01 par value,
5,332 shares authorized, 5,118 shares issued and
outstanding --
Additional paid-in capital 43,346
Retained earnings 125,421 125,421 125,421
Proceeds from issuance of memberships 43,605 43,605 --
Accumulated unrealized losses on securities (363) (363) (363)
-------- --------
Total members' equity 168,663 168,663 --
-------- -------- --------
Total stockholders' equity 168,663
--------
Total Capitalization $179,813 $176,795 $176,795
======== ======== ========
</TABLE>

32
<PAGE>

DESCRIPTION OF CAPITAL STOCK OF NEW CME

The authorized capital stock of New CME will consist of 100,000,000 shares
of Class A common stock, $.01 par value, 5,332 shares of Class B common stock,
$.01 par value and 10,000,000 shares of preferred stock, $.01 par value. The
shares of Class A common stock and Class B common stock issued in connection
with the demutualization will be fully paid and non-assessable.

Description of Common Stock

Dividend Rights. Dividends on shares of common stock may be paid only if
holders of Class A and B shares receive dividends. If, and when, the board
declares any dividends on the outstanding shares of common stock, it is expected
that an amount per Class A share will be declared and paid. A holder of a Class
B share will be entitled to receive an amount equal to that amount per Class A
share multiplied by the number of shares of Class A stock which the holder's
Class B share represents, as shown in the table under "Description of Additional
Provisions of Class B Common Stock" below. For example, if a dividend of $.25
per Class A share is declared, a holder of a Series B-2 share, which represents
1,200 Class A shares, would be entitled to receive $300.

Voting. Holders of Class A and B shares will have the right to vote in the
election of 13 directors to New CME's 19-member board of directors. See
"Election of Directors" under Demutualization Proposal" above for additional
information. Holders of common stock do not have the right to cumulate votes in
the election of directors. Under cumulative voting, a holder would have a number
of votes equal to the votes to which his or her shares are entitled, multiplied
by the number of directors to be elected, and may cast those votes for a single
nominee or allocate them among several nominees. The nominees receiving the
greatest number of votes would, under cumulative voting, be elected to fill the
available positions. A New CME common stockholder may not allocate his or her
aggregate votes among candidates but may vote only all or none. The nominees
receiving a plurality of the votes cast at a meeting at which a quorum is
present shall be elected to the board.

With the exception of the matters discussed below under "Description of
Additional Provisions of Class B Common Stock," holders of common stock will
vote together on all matters for which a vote of common stockholders is
required. In these votes, a holder of Class A shares has one vote per share and
a holder of Class B shares has a number of votes equal to the number of Class A
shares represented by his or her share.

No Conversion, Preemptive or Subscription Rights. Holders of common stock
have no conversion, preemptive or subscription rights.

Liquidation Rights. Upon liquidation of New CME and subject to the rights
of any outstanding series of preferred stock, holders of common stock are
entitled to receive a distribution of the remaining assets. The amount to be
distributed per Class A share will be determined by dividing the aggregate
amount available for distribution to common stockholders by the total of the
number of outstanding Class A shares plus the number of Class A shares
represented by the outstanding Class B shares. The amount to be distributed per
Class B share will be determined by multiplying the amount to be distributed per
Class A share by the number

33
<PAGE>

of Class A shares represented by that Class B share.

Class A Equivalence of Class B Shares. Each Class B share represents a
specified number of Class A shares for purposes of determining its rights to
vote for directors to be elected by both the Class A and Class B stockholders,
to vote on matters submitted to a vote by both the Class A and Class B
stockholders, to receive dividends or to receive liquidating distributions.
These numbers, which are shown in the table below under "Description of
Additional Provisions of Class B Common Stock," are set forth in the charter.
The charter provides for an adjustment of these numbers in the event of a stock
split or stock dividend affecting the number of outstanding Class A shares. For
example, a 2 - for - 1 split of the outstanding Class A shares, which would have
the effect of doubling the number of outstanding Class A shares, would cause a
doubling of the number of Class A shares represented by each series of Class B
shares. In addition, an adjustment is provided if New CME issues shares of Class
A common stock (including options and rights for, and securities convertible
into, shares of Class A common stock) at a price below their fair market value
at the time of issuance or grant. No adjustment is provided in respect of
specified issuances or grants, such as the issuance of shares of Class A common
stock upon any conversion of the series B-5 shares, any dividend on the Class B
shares payable in shares of Class A common stock, or shares issuable to
employees, officers, directors or consultants to New CME.

Description of Additional Provisions of Class B Common Stock

The authorized shares of Class B common stock will be divided into five
series, having the following characteristics:

Equivalent Class
Number of Votes Per A Shares
Maximum Number Number of Directors Share on "Core Represented by
Series of Shares Trading Privileges Series Can Elect Rights" Class B Shares
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
B-1 625 CME 3 6 1,800
B-2 813 IMM 2 2 1,200
B-3 1,287 IOM 1 1 600
B-4 467 GEM 0 1/6 100
B-5 2,140 GEM Fractions 0 1/60 10
</TABLE>

Trading Privileges. Each series of Class B shares will have the trading
privileges currently encompassed in the existing membership interest associated
with that series. New CME's rules will provide as follows:

. Floor Access. A holder of a series of Class B shares who meets New
CME's membership and eligibility criteria will be entitled to appear
upon the floor of New CME and to act as a floor broker and/or trader for
the contracts assigned to that series. The current product allocation
rules applicable to a particular membership division will be associated
with the corresponding series of Class B shares.

. Electronic Trading Rights. A holder of a series of Class B shares who
meets New CME's membership and eligibility criteria will have the right
to trade electronically through the GLOBEX2 system. This right is
restricted, when accessing GLOBEX2

34
<PAGE>

terminals from the trading floors, to trading only contracts assigned to
that series. Otherwise, the holder may trade any product listed on the
GLOBEX2 system.

. Use and Leasing of Trading Privileges. The trading privileges
associated with a Class B share may be used by the owner of the Class B
share or may be leased out to another person who satisfies the
membership and eligibility requirements imposed by New CME. These
requirements are expected to be substantially the same as the
requirements set forth in our current rules.

. Clearing fees. New CME will continue to differentiate fees on cleared
trades based on the trader for whom the trades are being cleared. In
recognition of the importance of the liquidity provided by holders of
Class B shares, New CME will continue to charge a lower clearing fee on
Exchange products for trades made for their own accounts by a holder of
a Class B share or by a lessee of the trading privileges of a Class B
share. New CME will not charge a higher clearing fee for any trade
executed in the open outcry environment than charged for the execution
of the same trade in another trading environment. New CME's management
may lower clearing fees or provide other incentives with respect to
trades of other persons, including persons considered to be especially
important as providers of market liquidity.

. Clearing Memberships. The right to be a clearing member will require an
ownership interest in New CME equivalent to the requirements under our
current rules.

In addition, New CME's charter sets forth a commitment to maintain open outcry
floor trading for a particular traded product as long as the open outcry market
is "liquid." The commitment requires New CME to maintain a facility for
conducting business, for disseminating price information, and for clearing and
delivery, and to provide reasonable financial support (consistent with 1999
budget levels) for technology, marketing and research for open outcry markets.
An open outcry market will be deemed liquid for these purposes if it meets any
of the following tests on a quarterly basis:

. if a comparable exchange-traded product exists, the New CME open
outcry market has maintained at least 30 percent of the average daily
volume of the comparable product (including, for calculation
purposes, volume from Exchange-For-Physicals transactions in the open
outcry market); or

. if a comparable exchange-traded product exists and New CME's product
trades exclusively by open outcry, New CME's open outcry market has
maintained at least 30 percent of the open interest of the comparable
product; or

. if no comparable exchange-traded product exists, New CME's open
outcry market has maintained at least 40 percent of the average
quarterly volume in that market in 1999 (including, for calculation
purposes, volume from Exchange-For-Physicals transactions in the open
outcry market); or

. if no comparable exchange-traded product exists and New CME's product
trades exclusively by open outcry, New CME's open outcry market has
maintained at least 40 percent of the average open interest in that
market in 1999.

35
<PAGE>

If a market is deemed illiquid as a result of a failure to meet any of the
foregoing tests, management of New CME will make commercial decisions consistent
with the best interests of the stockholders.

Voting for Directors. Holders of series B-1, B-2 and B-3 shares will have
the right to elect the number of directors set forth in the table on page 34.
See "Election of Directors" under "Demutualization Proposal" for additional
information regarding the size of the board and the process for selecting and
electing candidates to the board.

Voting on Core Rights. Holders of Class B shares will have the right to
approve changes to specified "rights" associated with the trading privileges
conferred by those shares. These "Core Rights" consist of:

. the allocation of products which a holder of a series of Class B shares
is permitted to trade on New CME's exchange facilities;

. the trading floor access rights and privileges which a holder of a
series of Class B shares has, including the circumstances under which
New CME can determine that an existing open outcry-traded product will
no longer be traded by means of open outcry;

. the number of authorized and issued shares of any series of Class B
shares (other than the issuance of series B-4 shares upon the conversion
of series B-5 shares); and

. the eligibility requirements to hold shares of a series of Class B
shares or to exercise the associated trading rights or privileges.

As indicated in the table, votes on changes to Core Rights are weighted by
series. The approval of a majority of the votes cast by the holders of Class B
shares is required in order to approve any changes to Core Rights. Holders of
Class A shares do not have the right to vote on changes to Core Rights.

Under Delaware law, changes to the number of authorized shares of a series
also will require the approval of the holders of a majority of the outstanding
shares of that series. Otherwise, changes may be effected upon the approval of a
majority of the votes cast by the holders of Class B shares. Due to the weighted
voting, this statement means that a change to Core Rights may be effected by the
approval of the holders of the series B-1 shares even though the holders of the
other series voted against the change. This result is consistent with the result
that would be obtained under the Exchange's existing rules and procedures.

Shares Not Convertible in Class A Shares. Class B shares are not
convertible into Class A shares except to the limited extent otherwise provided
with respect to series B-5 shares.

Conversion Rights of Series B-5 Shares. Series B-5 shares will be
convertible at the option of their holder, at any time on or before November 3,
2000, into whole shares of series B-4 stock at the ratio of ten series B-5
shares for each series B-4 share. These shares also are subject to mandatory
conversion into Class A shares at the close of business on November 3, 2000, if
not previously converted into whole shares of series B-4 stock. In any mandatory
conversion, one series B-5 share is converted into ten Class A shares.

36
<PAGE>

Preferred Stock

New CME will be authorized to issue up to 10,000,000 shares of preferred
stock. The charter authorizes the board to issue these shares in one or more
series, to establish from time to time the number of shares to be included in
each series, to fix the rights, preferences and privileges of the shares of each
wholly unissued series and any of its qualifications, limitations or
restrictions. The board may increase or decrease the number of shares of any
series, but not below the number of shares of that series then outstanding,
without any further vote or action by the stockholders of New CME. The board may
authorize the issuance of preferred stock with voting or conversion rights that
could adversely affect the voting power or other rights of the holders of Class
A shares and Class B shares. We have no current plans to issue any shares of
preferred stock.

Transfer Restrictions

Class B and Class A shares will be subject to transfer restrictions
following the completion of the demutualization transaction. Class B shares will
be subject to the same transfer process as applies to your current membership
interest. Under that process, any adult of good moral character, reputation and
business integrity, with adequate financial resources and credit to assume the
responsibilities and privileges of membership, is eligible for election to
membership in the Exchange. Our Membership Committee reviews applicants and
conducts proceedings to determine whether candidates meet our membership
criteria. Consistent with our present practice, a purchaser of Class B shares
will be required to agree to be bound by the rules and regulations adopted by
the board with respect to the shares.

Class A shares will be subject to transfer restrictions, which will fall
away over time. For the first six months following completion of the
demutualization transaction, those shares may only be transferred with the
associated Class B shares. Each three months thereafter, a portion of the Class
A shares (in 25% increments) will become transferable. After fifteen months, the
Class A shares would not be subject to these transfer restrictions.

Other Charter Provisions

New CME's charter and by-laws will, upon consummation of the
demutualization transactions, include a number of antitakeover provisions that
may have the effect of encouraging persons considering unsolicited tender offers
or other unilateral takeover proposals to negotiate with New CME's board of
directors rather than pursue non-negotiated takeover attempts. These provisions
include:

Classified Board of Directors; Removal for Cause; Filling Vacancies. New
CME's charter will provide for a board of directors divided into two classes,
with one class to be elected each year to serve for a two-year term. The terms
of the initial classes of directors will terminate on the date of the annual
meetings of stockholders in December 2000 and 2001. As a result, at least two
annual meetings of stockholders may be required for the stockholders to change a
majority of the board. Directors elected by Class A and Class B stockholders may
be removed for cause only by the affirmative vote of the holders of not less
than two-thirds of the outstanding votes entitled to vote in the election.
Vacancies resulting from that removal or any other reason shall be filled by the
board. Directors elected by the Class B stockholders may be removed for

37
<PAGE>

cause only by the affirmative vote of the holders of two-thirds of the shares
entitled to vote in the election of the director to be removed. Vacancies
resulting from that removal or any other reason shall be filled by the board of
directors from the candidates who ran in the previous election for the
directorship and received the next highest number of votes for election. The
classification of directors and the inability of stockholders to remove
directors without cause and to fill vacancies on the board will make it more
difficult to change the composition of the board, but will promote a continuity
of existing management.

Advance Notice Requirements. New CME's by-laws will establish advance
notice procedures with regard to stockholder proposals relating to the
nomination of candidates for election as directors or new business to be brought
before meetings of stockholders. These procedures provide that notice of
stockholder proposals must be timely given in writing to the Secretary of New
CME prior to the meeting at which the action is to be taken. Generally, to be
timely, notice must be received at the principal executive offices of New CME
not less than 90 days nor more than 120 days prior to the first anniversary date
of the annual meeting for the preceding year. The notice must contain the
information required by the by-laws, including information regarding the
proposal and the proponent.

Special Meetings of Stockholders. The charter and by-laws deny
stockholders the right to call a special meeting of stockholders. The charter
and by-laws provide that special meetings of the stockholders may be called only
by the Chairman of the Board or by a majority of the board of directors.

No Written Consent of Stockholders. The charter requires all stockholder
actions to be taken by a vote of the stockholders at an annual or special
meeting, and does not permit the stockholders to act by written consent, without
a meeting.

Amendment of By-Laws and Charter. The charter generally requires the
approval of not less than two-thirds of the voting power of all outstanding
shares of capital stock entitled to vote to amend any by-laws by stockholder
action or the charter provisions described in this section. Provisions in the
by-laws regarding the trading rights and privileges available to the Class B
stockholders may only be amended with the approval of the Class B stockholders
as described above under the subheading "Description of Additional Provisions of
Class B Common Stock." Those provisions will make it more difficult to dilute
the antitakeover effects of our by-laws and our charter.

Stockholder Rights Provisions. The charter authorizes the board of
directors to create and issue rights entitling their holders to purchase shares
of New CME's stock or other securities. Those rights might be used to affect the
ability of a third party to initiate a transaction designed to takeover New CME.
The board is considering the adoption of a plan that would create these rights.
These plans typically provide for dividend distributions of rights to holders of
common stock that is, or subsequently becomes, outstanding. The rights entitle
their holders to purchase a specified fraction of a newly-issued share of a
series of stock (typically preferred stock) at a specified exercise price. The
rights become exercisable, and transferable apart from the common stock, upon
the earlier to occur of (i) the date that a person or group (an "Acquiring
Person") acquires beneficial ownership of at least a specified percentage
(possibly 15%) of New CME's common stock or (ii) the commencement of, or
announcement of an intent to begin, a tender offer or exchange offer for a
similar specified percentage of New CME's common stock. If a person becomes an
Acquiring Person and the rights are not redeemed, each right would entitle its

38
<PAGE>

holder to receive, upon payment of the exercise price, that number of shares of
common stock of the issuing entity which have a market value typically equal to
twice the exercise price. If the issuer of the rights is acquired by an
Acquiring Person in a merger or other business combination, or fifty percent or
more of its assets or earning power are transferred to a third party, each right
would entitle its holder to receive, upon payment of the exercise price, common
stock of the Acquiring Person or third party with a market value equal to twice
the exercise price. The rights are typically redeemable by the issuing company
at a nominal price at any time, but not after a specified limited period
following the existence of an Acquiring Person. The potential economic dilution
inherent in the rights is intended to cause potential acquirers to approach and
negotiate with the board so that, assuming a satisfactory transaction is
negotiated, the rights will be redeemed. The rights would have an expiration
date. The actual terms of any rights plan adopted by the board may vary from the
foregoing description and would be forwarded to stockholders following any plan
adoption.

To the extent that the adoption of a rights plan would make more difficult
or discourage a proposed takeover of New CME, its adoption would increase the
likelihood that the then incumbent directors and management of New CME would
retain their positions. However, a rights plan, in combination with the existing
provisions of New CME's charter, should provide meaningful assurance that the
board, if confronted by a surprise proposal from a third party, will have
sufficient time to review the proposal, as well as appropriate alternatives to
it, and thereby will be in a more favorable position to protect the best
interest of New CME and its stockholders.

A rights plan is intended to encourage persons seeking to acquire control
of the Company to engage in arms-length negotiations with the board and New
CME's management. However, a rights plan, if adopted, might also have the effect
of discouraging a person from making a tender offer (even at a premium over the
then prevailing market price) for shares of New CME's common stock or otherwise
attempting to obtain control, even though an attempt could be beneficial to New
CME and its stockholders.

Transfer Agent

New CME will serve as transfer agent for Class B shares. New CME expects to
select a third party to serve as transfer agent and registrar for the Class A
shares.

MANAGEMENT

Directors and Executive Officers

The Exchange's Board of Directors currently consists of thirty-nine
persons. There is presently one vacancy. With the exceptions of Leo Melamed and
James J. McNulty, directors serve two-year terms, which are staggered so
approximately one-half of the board is elected at each annual meeting. Mr.
Melamed, who is our Chairman Emeritus and Senior Policy Advisor, serves as a
permanent, non-voting member of the Exchange's board. Mr. McNulty, who is our
President and Chief Executive Officer, serves as a non-voting member of our
board under the Exchange's rules.

The Exchange's directors are elected in one of two ways. Twenty-five
directors are elected by the members as follows: 12 directors are elected by the
CME members from

39
<PAGE>

candidates nominated by the CME Nominating Committee; 8 directors are elected by
the IMM members from candidates nominated by the IMM Nominating Committee; 4
directors are elected by the IOM members from candidates nominated by the IOM
Nominating Committee; and one member is elected by the GEM members from
candidates nominated by the GEM Nominating Committee. The members of these
nominating committees are elected by the respective CME, IMM, IOM and GEM
members. Twelve directors are elected by the members of the board who were
elected by the Exchange's members, from persons appointed by the Chairman of the
Board. As noted, Messrs. Melamed and McNulty round-out the remaining members of
the board.

Following the effectiveness of the demutualization transactions, our Board
will consist of the same people who were directors immediately before the
demutualization. At the annual meeting of stockholders in 2000, the size of our
board will be reduced by nine members; and at the annual meeting in 2001, the
size of our board will be further reduced by eleven members. Thereafter, the
size of the board will be nineteen. See "Election of Directors" under
"Demutualization Proposal" for more information.

Set forth below is information about our current board of directors and
executive officers.

<TABLE>
<CAPTION>
Name Age Positions Held Term Ends
---- --- -------------- ---------
<S> <C> <C> <C>
Scott Gordon 47 Chairman of the Board and Director 12/01
Terrence A. Duffy 41 Vice Chairman of the Board and Director 12/00
James E. Oliff 51 Second Vice Chairman of the Board and Director 12/00
Martin J. Gepsman 47 Secretary of the Board and Director 12/01
Thomas A. Kloet 41 Treasurer and Director 12/01
Leo Melamed 67 Chairman Emeritus, Senior Policy Advisor and Non-Voting *
Member of the Board
John F. Sandner 58 Special Policy Advisor and Director 12/00
James J. McNulty 48 President and Chief Executive Officer and Non-Voting Member **
of the Board
H. Jack Bouroudjian 38 Director 12/01
Timothy R. Brennan 58 Director 12/01
Leslie Henner Burns 44 Director 12/01
Jeffrey R. Carter 37 Director 12/00
E. Gerald Corrigan 58 Director ***
Rahm Emanuel 40 Director 12/00
Yra G. Harris 46 Director 12/00
Robert L. Haworth 52 Director 12/00
Bruce F. Johnson 57 Director 12/01
</TABLE>

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

* Mr. Melamed currently serves as a non-voting member of the board. Mr.
Melamed will continue as a non-voting member of the board of New CME until
the annual meeting in December 2001.

** Mr. McNulty is a non-voting member of the board as long as he is President
and Chief Executive Officer of the Exchange. Mr. McNulty will continue as a
non-voting member of the board of New CME until the annual meeting in
December 2001.

*** A director appointed by the Chairman of the Board. Each of the indicated
persons was appointed for a term ending on the later of December 1999 or
the date on which his successor is appointed by the Chairman of the Board
and elected to office by the board.

40
<PAGE>

<TABLE>
<CAPTION>
Name Age Positions Held Term Ends
---- --- -------------- ---------
<S> <C> <C> <C>
Gary M. Katler 53 Director 12/00
Paul Kimball 48 Director 12/00
John W. Lacey 61 Director ***
Merton H. Miller 76 Director ***
William P. Miller II 44 Director 12/00
Laurence E. Mollner 58 Director ***
Patrick J. Mulchrone 42 Director 12/01
John D. Newhouse 54 Director 12/01
Ward Parkinson 54 Director ***
Mark G. Papadopoulos 27 Director 12/01
Robert J. Prosi 52 Director 12/01
David M. Pryde 50 Director 12/00
Irwin Rosen 61 Director 12/00
William G. Salatich, Jr. 48 Director 12/00
Verne O. Sedlacek 45 Director 12/00
Leon C. Shender 45 Director 12/00
William R. Shepard 53 Director 12/00
Howard J. Siegel 43 Director 12/01
Paul Simon 71 Director 12/00
David I. Silverman 40 Director 12/00
Jeffrey L. Silverman 53 Director 12/01

Gerald D. Beyer 52 Executive Vice President and Chief Operating Officer
Craig S. Donohue 38 Senior Vice President and General Counsel
Phupinder Gill 39 President, Clearing House Division
David G. Gomach 41 Senior Vice President and Chief Financial Officer
William W. Jenks 47 Executive Vice President, Management Information Systems
Donald D. Serpico 54 Executive Vice President, Operations
Carol B. Sexton 60 Executive Vice President, Corporate Relations
</TABLE>

Scott Gordon has been Chairman of our board since 1988 and an IMM director
since 1982. He also served as Vice Chairman from 1995 to 1997 and our Secretary
in from 1984-85 and 1999-94. Mr. Gordon has been President and Chief Operating
Officer of Tokyo-Mitsubishi Futures (USA), Inc., a CME clearing member firm
wholly owned by the Bank of Tokyo-Mitsubishi, Ltd., since 1999, having
previously served as its Executive Vice President and Director. Mr. Gordon also
serves on the CFTC's Global Markets Advisory Committee and the Advisory
Committee to the Illinois Institute of Technology Center for the Study of Law
and Financial Markets. He is a director of the National Futures Association and
of the Futures Industry Institute. A member of the Exchange for more than
twenty-two years, Mr. Gordon has one IMM membership in a trust.

41
<PAGE>

Terrence A. Duffy has been Vice Chairman of our board since 1998 and a CME
Director since 1995. He has been President of TDA Trading, Inc. for the past
five years and an independent floor broker and trader since 1981. A member of
the Exchange for more than seventeen years, Mr. Duffy owns one CME membership
and one GEM membership interest.

James E. Oliff has been Second Vice Chairman of our board since 1998 and an
IMM Director since 1996. Mr. Oliff previously served on the Board from 1985 to
1992, and as Second Vice Chairman from 1989 to 1992 and Secretary in 1996. He
has been Executive Director of International Futures and Options Associates and
President of FILO Corp, a floor brokerage business, since 1982, and he is a
visiting lecturer in Financial Market Ethics at the Lemberg School of
International Finance and Economics at Brandeis University in Waltham,
Massachusetts. Mr. Oliff serves on the board of directors of Matla Group
Holdings. A member of the Exchange for more than twenty-two years, Mr. Oliff
owns one IMM membership interest.

Martin J. Gepsman has been Secretary of our board since 1998 and an IOM
Director since 1994. He has been an independent floor broker and trader since
1985 and a member of the Exchange for more than fifteen years. Mr. Gepsman owns
one IOM membership and six fractional GEM membership interests.

Thomas A. Kloet has been our Treasurer since 1999 and an IMM Director since
January 1996. He also served as our Treasurer in 1997 and in December 1998. Mr.
Kloet has been Senior Managing Director of ABN AMRO Incorporated and Senior Vice
President ABN AMRO Bank, N.V. since 1997. From 1990 to 1997, he was the Chief
Operating Officer, Chief Financial Officer and Corporate Secretary of Credit
Agricole Futures, Inc. and was Chief Financial Officer and Secretary of Segesper
Capital Markets, Inc., the parent of Credit Agricole Futures, Inc. He also
serves as Director of ABN AMRO Futures (UK), Ltd. and of ABN AMRO Futures
Singapore Ltd. He is a certified public accountant and a member of both the
American Institute of Certified Public Accountants and the Illinois CPA Society.
Mr. Kloet is also a member of the Board of Governors of Elmhurst Memorial
Hospital and Trustee of the Elmhurst Memorial Health System. A member of the
Exchange for more than eleven years, Mr. Kloet owns one IMM membership and has
voting/investment power over one IMM membership in the name of ABN AMRO Bank,
N.V.

Leo Melamed is our Chairman Emeritus and Senior Policy Advisor. Mr. Melamed
is currently appointed as a permanent non-voting member of the Board, but was
previously elected and appointed for twenty-six years. He is a founding member
of and was Chairman of the International Monetary Market, was Special Counsel to
the board from 1977 until 1991, and was Special Counsel and Chairman of the
Exchange's Executive Committee from 1985 until 1991. Mr. Melamed previously
served as Chairman of the Exchange for four years and has been a member of the
Exchange for more than forty-five years. For more than five years, he has been
Chairman and CEO of Sakura Dellsher, Inc., one of our clearing member firms. Mr.
Melamed owns one CME membership, one IMM membership, two IOM membership and six
fractional GEM membership interests.

John F. Sandner has been the Special Policy Advisor since January 1998 and
a CME Director since 1977. Mr. Sandner previously served as Chairman of the
Exchange for thirteen years and was appointed chairman of GLOBEX in 1993. He has
been President and CEO of RB&H Financial Services L.P., a futures commission
merchant and one of our clearing member

42
<PAGE>

firms, for more than five years. A member of the Exchange for more than twenty-
seven years, Mr. Sandner owns three CME membership, two IMM membership, four IOM
membership and fourteen fractional GEM membership interests. He also has voting
power over two IOM membership interests.

James J. McNulty became our President and Chief Executive Officer on
February 7, 2000, having previously served as Managing Director and Co-Head of
the Corporate Analysis and Structuring Team in the Corporate Finance Division at
Warburg Dillon Read, an investment banking firm, for over the past five years.

H. Jack Bouroudjian has been an elected IOM Director since 1996. He has
been Senior Vice President of Equity Futures with Commerz Futures since 1999.
Prior to that time, he was Vice President of Equity Futures with Nikko
Securities from 1997 until 1990 and with Credit Agricole Futures, Inc. from 1995
until 1997. A member of the Exchange for more than twelve years, Mr. Bouroudjian
owns one IOM membership.

Timothy R. Brennan has been a CME Director since 1990. He has been a floor
broker and trader since 1974 and Vice President of RB&H Financial Services,
L.P., one of our clearing member firms, for more than five years. A member of
the Exchange for more than twenty-four years, Mr. Brennan owns one CME
membership, one IOM membership and two fractional GEM membership interests.

Leslie Henner Burns has been a CME Director since January 2000. She has
been a self-employed floor trader since 1978 and was President of Leslie A.
Henner, Inc., a floor brokerage business, from 1981 until 1999. A member of the
Exchange for more than twenty-two years, Ms. Burns owns one CME membership and
two fractional GEM membership interests.

Jeffrey R. Carter has been a CME Director since 1999. He has been a Market
Maker-Local Trader since 1988. A member of the Exchange for more than ten years,
Mr. Carter owns one CME membership and one IOM membership interest in a self-
directed IRA.

E. Gerald Corrigan has been a director since October 1998. He has been
Managing Director at Goldman, Sachs & Co., an investment banking firm, for more
than five years. He has also served as co-chairman of its Risk Committee and
Global Compliance and Controls Committee. Prior to his employment by Goldman,
Sachs & Co., he was President and Chief Executive Officer of the Federal Reserve
Bank of New York and a member of the Federal Open Market Committee.

Rahm Emanuel has been a director since May 1999. He has been Managing
Director of Wasserstein Perella & Co., Inc., an investment banking firm since
January 1999. Prior to March 1998, he was Senior Advisor to the President for
Policy and Strategy in the Clinton Administration and Executive Assistant to the
Chief of Staff. Mr. Emanuel also serves as a director of RxDrugstore.

Yra G. Harris has been an IMM Director since 1997. He has been a self-
employed floor trader since 1977. A member of the Exchange for more than twenty-
two years, Mr. Harris owns two IMM memberships and one IOM membership interest,
and he has sole voting power over one IMM membership for which he does not
disclaim beneficial ownership.

43
<PAGE>

Robert L. Haworth has been a CME Director since 1998. He served as our
Treasurer in 1998 and was Vice President of the CME Audit Department in 1979.
Mr. Haworth has been a self-employed floor trader since 1979. He is a certified
public accountant and a member of both the American Institute of Certified
Public Accountants and the Illinois CPA Society. A member of the Exchange for
more than twenty years, Mr. Haworth owns one CME membership and one GEM
membership interest.

Bruce F. Johnson has been a CME Director since 1998. He has been President
and part owner of Packers Trading Company, a futures commission merchant and
former clearing member firm, for over the past five years. A member of the
Exchange for more than twenty-nine years, Mr. Johnson owns one CME membership
and one GEM membership.

Gary M. Katler has been an IOM Director since 1993. He has been Senior Vice
President of ING Barings Futures and Options Inc. since 1994. Mr. Katler has
voting power over one IOM membership and one GEM membership interest, both of
which are owned by his employer and of which he disclaims beneficial interest.

Paul Kimball has been a director since February 1999. He has been Managing
Director and Global Co-Head of the Foreign Exchange Department of Morgan Stanley
Dean Witter, an investment banking firm, for over the past five years. Mr.
Kimball is also Chairman of the Foreign Exchange Committee, an industry
oversight group that advises the Federal Reserve Bank of New York on issues
related to foreign exchange markets.

John W. Lacey has been a director since February 1998. He has been a
Partner in the Lacey Ranches, a family cow-calf operation, the Margarita Cattle
Company in Santa Margarita, California, and the Centennial Livestock. Mr. Lacey
is also Director of the National Cattlemen's Beef Association and Chairman of
the California Beef Council and past president of the California Cattlemen's
Association and the National Cattlemen's Association. He serves on the Advisory
Council of the College of Agriculture at California Polytechnic and is its
immediate past chairman.

Merton H. Miller has been a director since January 1990. He has been the
Robert R. McCormick Distinguished Service Professor of Finance Emeritus at the
Graduate School of Business, University of Chicago for more than five years.
Professor Miller is also Director of Dimensional Fund Advisors, located in Santa
Monica, California. Professor Miller was awarded the Nobel Memorial Prize in
Economic Science in 1990 for his work in the area of corporate finance.

William P. Miller II has been a director since February 1999. He has been
Senior Vice President and Independent Risk Oversight Officer for the Common Fund
Group, an investment management firm for educational institutions, since
September 1996. Prior to that, he was Director, Trading Operations and Asset Mix
Management with General Motors Investment Management Corporation. He is also a
director of the Association for Financial Professionals and of the Investment
Risk Institute, and Chairman, Executive Committee, End Users of Derivatives
Council.

Laurence E. Mollner has been a director since February 1991. He has been
President of Mariah Investment Company, a futures, equities and real estate
investment firm, since 1998. He was President of Carr Futures from August 1997
through January 1998 and was responsible for

44
<PAGE>

the sale and transition of the Institutional Futures Division of Dean Witter
Reynolds Inc. to Carr Futures. Prior to that, he was Executive Vice President
for Dean Witter Reynolds Inc., Director of its Futures Markets Division, and a
member of the Board of Directors of Dean Witter International Limited in London.
He joined Dean Witter Reynolds Inc. in 1979. Mr. Mollner is the former Chairman
of the Futures Industry Association, and he currently serves as a director of
both the Futures Industry Association and National Futures Association.

Patrick J. Mulchrone has been an IMM Director since 1998. He was previously
a director from 1991 to 1996, and served as our Second Vice Chairman from 1993
to 1996. Mr. Mulchrone has been owner of P.J. Mulchrone Co. and a floor broker
and trader since 1979. A member of the Exchange for more than twenty years, Mr.
Mulchrone owns one CME membership, one IMM membership, one IOM membership and
one GEM membership interest.

John D. Newhouse has been an IMM Director since 1996 and was previously a
director from 1987 to 1988. He has been a floor broker and trader since 1974 and
President of Euro Spread Brokers, a broker association filling orders in
Eurodollars, since 1980. A member of the Exchange for more than twenty-five
years, Mr. Newhouse owns three IMM membership, one IOM membership and four
fractional GEM membership interests.

Ward Parkinson has been a director since February 1998. He is Founder of
Micron Technology, a manufacturer of computer and memory chips, and he was its
Chairman and Chief Executive Officer from 1978 to 1986 and Vice Chairman until
1989. He has been consulting in the electronics field for more than five years.
Mr. Parkinson has also been a partner in and director of PYCO, which invests in
commercial real estate, and a board member of Parkinson-Yanke Real Estate and
Parkinson-Nelson Real Estate for over the past five years. Mr. Parkinson serves
on the board of Ovonyx, sign-me-up.com and Odessy Computers.

Mark G. Papadopoulos has been a GEM Director since January 2000. He was
Vice Chairman of the Mexican Peso Futures Pit Committee, a position with the
CME, from 1998-1999, and has been an independent floor trader since 1996. Prior
to that, he was an Arbitrage Clerk with several independent floor trades from
1994 to 1996. A member of the Exchange for more than three years, Mr.
Papadopoulos owns two GEM membership interests.

Robert J. Prosi has been a CME Director since January 1998. He has been
First Vice President, Salomon Smith Barney Inc., an investment banking firm, for
more than five years. Mr. Prosi is also a member of the Chicago Council on
Foreign Relations. A member of the Exchange for more than twenty-three years,
Mr. Prosi owns one CME membership and one IOM membership interest, and he has
voting/investment power over one IOM membership interest for which he has not
disclaimed beneficial interest.

David M. Pryde has been a director since February 1997. He has been
Managing Director at J. P. Morgan & Co. Inc., an investment banking firm, with
global responsibility for its futures and options business. Prior to assuming
his current role, he was Head of Global Commodities for Morgan Guaranty Trust
Company. He is currently a member of the Executive Committee of the Futures
Industry Association and the National Futures Association. Mr. Pryde was
formerly Vice Chairman of the Commodity Exchange Inc. in New York and was a
member of the Executive Committee of its Board of Governors. Mr. Pryde has
voting/investment power over one CME membership, three IMM membership, nine IOM
membership and seventeen GEM fractional membership interests owned by various
J. P. Morgan Futures Inc. employees and

45
<PAGE>

for which he has not disclaimed beneficial interest.

Irwin Rosen has been a CME Director since January 1997. He is an attorney,
and has represented clients before the CME tribunal, for more than five years
and has been an independent floor broker and trader since 1970. A member of the
Exchange for more than twenty-nine years, Mr. Rosen owns one CME membership, one
IOM membership and one fractional GEM membership interest all held in trust.

William G. Salatich, Jr. has been a CME Director January 1997. He has been
an independent floor broker and trader since 1970. A member of the Exchange for
more than twenty-four years, Mr. Salatich owns one CME membership and two
fractional GEM membership interests.

Verne O. Sedlacek has been a director since February 1997. He has been
President and Chief Operating Officer of John W. Henry & Company, Inc., a
commodity trading advisor, and member of its Investment Policy Committee; and
President and Director of Westport Capital Management Corporation and Global
Capital Management Limited, both investment management firms since 1998. Prior
to that, he was the Executive Vice President and Chief Financial Officer of the
Harvard Management Company, Inc., a wholly owned subsidiary of Harvard
University, since 1983. He is a member of the Global Markets Advisory Committee
of the Commodity Futures Trading Commission and a member of the Board of
Trustees of Commonfund Capital, Inc. Mr. Sedlacek is a director of the Futures
Industry Association and is a certified public accountant.

Leon C. Shender has been an IOM Director since January 1999. He has been a
floor trader since 1976. A member of the Exchange for more than twenty-three
years, Mr. Shender owns one IOM membership.

William R. Shepard has been an IMM Director since January 1997. He is the
founder of and has been President of Shepard International, Inc., a futures
commission merchant, for more than five years. A member of the Exchange for more
than twenty-six years, Mr. Shepard owns one CME membership, one IMM membership,
one IOM membership and five fractional GEM membership interests.

Howard J. Siegel has been a CME Director since January 2000. He has been a
floor trader since 1977. A member of the Exchange for more than twenty-two
years, Mr. Siegel owns one CME membership, one IOM membership and three
fractional GEM membership interests.

Paul Simon has been a director since February 1997. He has been a Professor
at Southern Illinois University since 1997. He also serves on the board of Penn-
American Insurance Co. Mr. Simon was a U.S. Senator from Illinois from 1984
through 1997. Prior to that, he was a U.S. Congressman.

David I. Silverman has been an IMM Director since 1995 and was previously a
director from 1990 to 1991. He was chairman of GFX Corporation, a subsidiary of
the Exchange, from 1997 until 2000. He has been an independent trader since
1982. A member of the Exchange for more than seventeen years, Mr. Silverman owns
one IMM membership interest.

Jeffrey L. Silverman has been a CME Director since 1994 and was our
Secretary in 1995.

46
<PAGE>

He has been a floor trader since 1979. A member of the Exchange for more than
twenty years, Mr. Silverman owns one CME membership and two fractional GEM
membership interests, and his wife owns one CME membership and one fractional
GEM membership interest.

Gerald D. Beyer has been our Executive Vice President and Chief Operating
Officer since February 1997 and prior to that he was our Chief Administrative
Officer from 1994 to 1997. He has also served as our Chief Financial Officer,
Senior Vice President - Legal and Regulatory Affairs, Senior Vice President -
Clearing House, Vice President - Legal, and In House Counsel.

Craig S. Donohue has been our Senior Vice President and General Counsel
since October 1998. Prior to that he was Vice President, Market Regulation from
1997 to 1998 and Vice President and Associate General Counsel from 1995 to 1997.

Phupinder Gill has been our President, Clearing House Division since July
1998, having previously served as its Senior Vice President since May 1997 and
its Vice President since May 1994. Mr. Gill has held numerous other positions
with the Exchange since 1988.

David G. Gomach has been our Senior Vice President and Chief Financial
Officer since January 1998, having previously served as Vice President,
Administration and Finance since December 1996. He is a certified public
accountant.

William W. Jenks has been our Executive Vice President, Management
Information Systems since May 1998, having previously served as our Senior Vice
President and Chief Information Officer from July 1997. For more than five years
prior to that, he was employed by Space Systems/LORAL, where he was a Vice
President.

Donald D. Serpico has been our Executive Vice President, Operations since
July 1994, having previously served as our Senior Vice President, Operations
from 1988, Senior Vice President of the Clearing House from 1987, and Vice
President of Management Information Systems from 1985.

Carol B. Sexton has been our Executive Vice President, Corporate Relations
since December 1995, having previously served in the position of Senior Vice
President, Corporate Relations in January 1994.

Director Compensation

Each director of New CME will receive an annual directors fee of $20,000,
plus a meeting attendance fee of $1,000 for each regular meeting of the board
that they attend, excluding special administrative meetings. Directors also
receive reimbursement of expenses for travel to board meetings.

The Chairman of the Board receives an annual stipend of $350,000, plus
reimbursement of other board-related expenses. The four additional board
officers each receive an annual stipend of $50,000 and a meeting attendance fee
of $1,000 for each regular meeting of the board that they attend, plus
reimbursement of other board-related expenses. The Chairman Emeritus and Senior
Policy Advisor, and the Special Policy Advisor, each receive an annual stipend
of $200,000, plus reimbursement of other board-

47
<PAGE>

related expenses.

Committees of the Board of Directors

New CME's board of directors will have an Executive Committee, an Audit
Committee, a Compensation Committee and a Nominating Committee. It is expected
that members of these committees will be elected by New CME's board following
the effectiveness of the demutualization transactions. These committees will
have the following functions:

Executive Committee. This committee has and may exercise the authority of
the board of directors, when the board is not in session, except in cases where
action of the entire board is required by the charter, the by-laws or applicable
law.

Audit Committee. New CME will have an Audit Committee, composed of
directors who are not employees, which will review the results and scope of the
audit and other services provided by our independent auditors as well as our
accounting and internal control procedures and policies.

Compensation Committee. New CME will have a Compensation Committee
composed of directors who are not employees. It will oversee the compensation
and benefits of New CME's management and employees.

Nominating Committee. This committee will review the qualifications of
potential candidates and will propose nominees for the thirteen positions on the
board of directors that are nominated by the board. This committee will be
comprised of five directors selected by the board. The board will strive to have
a Nominating Committee that reflects the diversity of the board. It is expected
that seven of the thirteen positions to be filled by the Nominating Committee
will be filled with candidates who satisfy the public participation regulatory
requirements to which the Exchange is subject. This committee will consider
nominees recommended by stockholders if the recommendations are submitted in
writing, accompanied by a description of the proposed nominee's qualifications
and other relevant biographical information and evidence of the consent of the
proposed nominee. The recommendations should be addressed to the Nominating
Committee, in care of the Corporate Secretary. Under New CME's by-laws,
nominations may not be made at the annual meeting.

Limitation of Liability and Indemnification Matters

New CME's charter limits the liability of directors to the maximum extent
permitted by Delaware law. Delaware law provides that directors of a corporation
will not be personally liable for monetary damages for breach of their fiduciary
duties as directors, except liability for:

. any breach of their duty of loyalty to the corporation or its
stockholders;

. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;

. unlawful payments of dividends or unlawful stock repurchases or
redemptions; or

48
<PAGE>

. any transaction from which the director derived an improper personal
benefit.

This limitation of liability does not apply to liabilities arising under the
federal securities laws and does not affect the availability of equitable
remedies (i.e., injunctive relief or rescission).

New CME's charter and by-laws provide that it shall indemnify its directors
and executive officers and may indemnify its other officers and employees and
other agents to the fullest extent permitted by law. We believe that
indemnification under the provisions of the by-laws covers at least negligence
and gross negligence on the part of the indemnified parties. The by-laws also
permit New CME to secure insurance on behalf of any officer, director, employee
or other agent for any liability arising out of his or her actions in that
capacity, regardless of whether the by-laws would permit indemnification.

Executive Compensation

The following table sets forth information relating to the compensation
paid to, accrued or earned by our chief executive officers and each of the next
four most highly compensated executive officers for services rendered during the
year ended December 31, 1999.

Summary Compensation Table

- ------------------------------------------------------------------------------------------------------------
Annual Compensation
----------------------------------------------
Other Annual All Other
Name and Principal Position Salary Bonus Compensation Compensation (3)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
T. Eric Kilcollin (1) $143,000 $ 0 $ 0 $1,063,890
President and Chief Executive
Officer (CEO)

Scott Gordon (2) 0 0 350,000 0
Chairman of the Board of
Directors (CEO)

Fred D. Arditti 522,500 260,000 0 140,599
Senior Executive Vice President,
Planning & Development

Gerald D. Beyer 522,500 210,000 0 132,796
Executive Vice President and
Chief Operating Officer

Phupinder S. Gill 400,000 160,000 0 80,914
President, Clearing House Division

William W. Jenks 270,000 120,000 0 65,111
Executive Vice President,
Management Information Systems
- -----------------------------------------------------------------------------------------------------------
</TABLE>

49
<PAGE>

(1) Mr. Kilcollin served as President through March 1999. In addition to his
salary for the first three months of 1999 and the contributions made on his
behalf to the qualified benefit plans outlined in note (3) below, Mr.
Kilcollin received a cash payment at the date of his departure in the
amount of $1,047,130. This table excludes amounts paid to Mr. Kilcollin
under our qualified and non-qualified benefit plans relating to services
performed in prior years.

(2) Mr. Gordon served as Chairman of the Board of Directors during 1999 and
received a stipend in the amount of $350,000 for these services. He has
served as our chief executive officer during the remainder of 1999
following the departure of Mr. Kilcollin.

(3) The following table shows the amount of each category of "all other
compensation" earned by each of the named individuals, in addition to the
payment described in note (1) above:

401(k) Matching Pension Supplemental SERP*
Contribution Contribution Plan Contribution Total
---------------- --------------- ---------------- --------------- ----------
<S> <C> <C> <C> <C> <C>
Mr. Kilcollin (1) $3,960 $12,800 $ 0 $ 0 $ 16,760
Mr. Gordon 0 0 0 0 0
Mr. Arditti 4,800 14,400 62,599 58,800 140,599
Mr. Beyer 4,800 12,800 56,623 58,573 132,796
Mr. Gill 4,800 8,000 25,705 42,409 80,914
Mr. Jenks 4,800 11,200 18,693 30,418 65,111
- ----------------------------
</TABLE>

* Supplemental Executive Retirement Plan. See description below.

Employee Benefit Plans

Omnibus Stock Plan. New CME has adopted an Omnibus Stock Plan under which
stock based awards may be made to employees of New CME. An aggregate of
2,600,000 Class A shares has been reserved for awards under the plan. Other than
the award made during 2000 to Mr. McNulty, described below under "Employment-
Related Agreements," no awards have been made to date under the plan.

The plan authorizes the making or grant of the following types of awards
singly, in combination, or in tandem: (i) stock options, which may be either
"incentive stock options" (within the meaning of Section 422 of the Internal
Revenue Code) or non-qualified stock options; (ii) stock appreciation rights,
which allow the recipient to receive a payment equal to the appreciation in
market value of a stated number of Class A shares; (iii) stock awards, which may
be restricted or unrestricted; and (iv) other stock based awards.

The plan will be administered by the Compensation Committee of New CME's
board. The Compensation Committee has the authority to interpret the plan, to
select employees of New CME to receive awards under the plan, and to determine
the form, amount and other terms and conditions of the awards. The committee
also has the power to modify or waive restrictions on awards, to amend awards
and to grant extensions and accelerate awards. No member of the Compensation
Committee is eligible to participate in the plan because committee members may
not include employees.

401(k) Plan. The Exchange sponsors a 401(k)-type plan known as the "Tax
Efficient Savings Plan," which is a defined contribution retirement plan
intended to qualify under Section 401 of the Internal Revenue Code. Employees
are eligible to participate in this plan from the first day of employment. The
Plan permits additional contributions at the discretion of the

50
<PAGE>

Exchange.

The following table describes the employee and employer contributions
permitted under the plan, and the vesting of those contributions:

<TABLE>
<CAPTION>
Employee Contributions Employer Contributions
--------------------------- ---------------------------------------------
<S> <C> <C>
Amount 1-15% of base pay* Matching amount up to 3% of base pay
Additional amount up to 2% of base pay based
upon specified increases in trading volume

Vesting 100% 100% at end of second plan year following year
in which contributions made; 100% after five years
of eligible service
</TABLE>
- ----------------

*Subject to plan limits and statutory annual limit.

The following chart demonstrates how vesting in the non-trading volume matching
contributions occurs with respect to a hypothetical employee who was hired on
August 1, 1995:

Vesting in Matching Contributions
---------------------------------

Year Contribution Date the Contribution
Is Made Becomes Vested
- ------------------- ---------------------
<S> <C>

1995 December 31, 1997
1996 December 31, 1998
1997 December 31, 1999
1998 August 1, 2000
1999 August 1, 2000
2000 August 1, 2000
</TABLE>

Also, an employee becomes 100% vested in the CME matching contributions if they
reach age 65 or become disabled or die before they complete five years of CME
service.

Pension Plan. We also maintain a non-contributory defined benefit cash
balance pension plan for eligible employees. To be eligible, an employee must
have completed a continuous 12-month period of employment with us and have
reached the age of 21. Effective January 15, 1995, the pension plan was amended
to provide for an age-based contribution to a cash balance account, and to
include cash bonuses in the definition of considered earnings. Participant cash
balance accounts receive an interest credit at the one-year U.S. Treasury Bill
rate. Our policy is to fund currently required pension costs. Participants
become vested in their accounts after five years of service. The following is
the schedule of the employer contributions based on age:

Age %
------------ ----
under age 30 3%
age 30 - 34 4%
age 35 - 39 5%
age 40 - 44 6%
age 45 - 49 7%

51
<PAGE>

age 50 - 54 8%
over age 54 9%

The individuals named below have projected annual retirement benefits,
based on current accumulated balances, an annual interest credit rate of 6% and
future service to age 65 at current salary levels as follows: Mr. Kilcollin,
none; Mr. Gordon, none; Mr. Arditti, $10,600; Mr. Beyer, $51,500; Mr. Gill,
$92,600; and Mr. Jenks, $43,600.

Non-Qualified Plans. The Exchange maintains the following non-qualified
plans which are not subject to the Employee Retirement Income Security Act of
1974 under which participants may make assumed investment choices with respect
to amounts contributed on their behalf. Although not required to do so, the
Exchange invests the contributions in assets which mirror the assumed investment
choices. The balances in these plans are subject to the claims of general
creditors of the Exchange.

. Deferred Compensation Plan - The Exchange maintains a deferred
compensation plan under which eligible officers and board members may
contribute a percentage of their compensation and defer income taxes
thereon until the time of distribution.

. Supplemental Plan - The Exchange maintains a non-qualified supplemental
plan to provide benefits for officers who have been impacted by
statutory limits under the provisions of the qualified 401(k) and
pension plans.

. Supplemental Executive Retirement Plan ("SERP") - The Exchange maintains
a non-qualified, defined contribution plan for senior officers. Under
the plan, the Exchange contributes an amount equal to 8% of salary and
bonus of eligible employees annually. Post 1996 contributions are
subject to a vesting schedule under which each annual contribution
begins to vest after three years and is fully vested after five years.

Employment-Related Agreements

Mr. McNulty

The Exchange has entered into an employment agreement with James J. McNulty
to serve as its President and Chief Executive Officer through December 31, 2003,
subject to renewal by mutual agreement of the parties. Under the agreement, Mr.
McNulty will receive an annual base salary of $1 million. He is also entitled to
an annual incentive bonus based upon the achievement of goals set by the board
of directors, which bonus may not exceed the lesser of $1.5 million or, after
demutualization, 10 percent of New CME's net income. The agreement provides for
reimbursement of business expenses, perquisites, and legal fees associated with
the negotiation of the employment agreement. Mr. McNulty will be eligible to
participate in other benefit plans available generally to senior officers of the
CME. As partial compensation for actual compensation, benefits and programs that
Mr. McNulty was, or was reasonably expected to become, entitled to receive from
his previous employer, he received a lump-sum payment of $2 million.

Mr. McNulty has also been granted a non-transferable non-qualified stock
option, which is designed to reward him for increasing the value of New CME. If
the total value of the

52
<PAGE>

Exchange increases, exercise of the option would entitle him to receive
essentially 2.5% of the increase above the starting valuation and 2.5% of the
increase, if any, in excess of 150% of the starting valuation. If the
demutualization is completed, the option would entitle him to purchase from New
CME two "baskets" of New CME stock. Each basket is composed of up to 2.5% of the
outstanding shares of New CME, although New CME may elect to issue solely shares
of Class A common stock upon any exercise. The baskets have aggregate exercise
prices of 2.5% and 3.75%, respectively, of the value of the Exchange on the date
of commencement of Mr. McNulty's employment. The option will expire in ten
years. It may be exercised only if the demutualization transaction is completed,
and then only as to the portion of the option that has vested. The option vests
40 percent after the first year and 20 percent in each of the succeeding three
years, subject to acceleration in the event of Mr. McNulty's termination without
cause or forfeiture in the event of his termination for cause. The option
remains exercisable in full for its remaining term following (i) a termination
by the Exchange of the employment agreement without cause or due to Mr.
McNulty's disability, (ii) a termination of the employment agreement by Mr.
McNulty where the Exchange has in effect terminated his employment by moving the
Exchange outside metropolitan Chicago, demoting him, significantly reducing his
responsibilities or failing to pay him the agreed compensation and benefits
under the agreement or (iii) upon the expiration of the original term of the
employment agreement. Any vested portion of the option is exercisable for a
period of 180 days following a termination by Mr. McNulty of the employment
agreement. Upon exercise of the option, New CME may distribute, in lieu of each
class of shares of New CME, cash and/or shares of Class A stock.

The agreement provides that it may be terminated by the Exchange due to Mr.
McNulty's death or disability, or for cause on thirty days written notice or
without cause on ninety days written notice. In addition, the agreement allows
Mr. McNulty to terminate it at anytime after one year upon ninety days written
notice. He may also terminate the agreement for "good reason" if the Exchange's
principal place of business is relocated outside of the Chicago metropolitan
area, the Exchange fails, after notice, to pay the agreed-upon compensation or
benefits or the Exchange fails, after notice, to rectify a situation in which he
is, in effect, terminated due to a demotion or a significant reduction of his
responsibilities. The agreement provides that, in the event of a termination
without cause by the Exchange, Mr. McNulty shall be entitled to receive his base
salary for the remainder of the original term plus one-third of the maximum
annual incentive bonus. The agreement also provides that, in the event that Mr.
McNulty terminates his employment after its first year on less than ninety days
written notice, other than following one of the matters previously described as
"good reason", the Exchange may recover from him a sum equal to his annual base
salary, computed daily, for each day his notice of termination is less than
ninety days. If Mr. McNulty's employment is terminated because of his death or
disability, he or his beneficiary will continue to receive the base salary for
six months following that termination. In the event of his death, his option
will vest and be paid in cash. The Exchange intends to purchase key man life
insurance to assist in funding payments that would be required in the event of
Mr. McNulty's death.

In the event the demutualization is not completed by December 31, 2000,
either the Exchange or Mr. McNulty may terminate the agreement, subject to
conditions, prior to January 31, 2001. In that case, Mr. McNulty shall continue
to receive his annual base salary plus one-third of the maximum annual incentive
bonus for the remainder of the original term of the agreement unless he becomes
employed by a competitor to the Exchange. In addition, his option shall be
forfeited.

53
<PAGE>

The agreement also provides that, if within two years of a "change in
control" of the Exchange, Mr. McNulty is terminated by the Exchange or he
terminates the agreement as a result of the occurrence of one of the matters
described previously as "good reason," he shall be entitled to two times his
base salary plus one and one-third times the maximum incentive bonus for which
he would have been eligible, provided that the severance payments do not exceed
$8 million. The payment would be subject to reduction to the extent that it
would otherwise result in the payment of tax under Section 4999 of the Internal
Revenue Code. Any unvested portion of his option would immediately vest and
become exercisable for a one or three year period, depending upon whether the
option securities are registered under the Securities Exchange Act of 1934.

Messrs. Arditti, Beyer, Gill and Jenks

The Exchange has employment agreements with each of Messrs. Arditti, Beyer,
Gill and Jenks regarding their employment as executives of the Exchange. Each
agreement is for an initial period of approximately two years, with the
agreement of Mr. Serpico ending June 30, 2000, the agreement with Mr. Gill
ending August 31, 2001, the agreement with Mr. Beyer ending April 12, 2001 and
the agreement with Mr. Arditti ending June 30, 2001. Unless the agreement is
renewed by the parties, it ceases to apply following its expiration even if the
covered individual remains employed by the Exchange.

The agreements provide that annual increases to an Executive's base salary
are to be determined by the Exchange in accordance with its compensation
policies and practices. The executives are also entitled to participate in a
discretionary bonus program and in other benefit plans available generally to
Exchange employees and officers.

The agreements may be terminated by the Exchange in the event of the
executive's death or disability and may also be terminated for cause. They may
be terminated by the executive at any time and for any reason on at least sixty
days written notice. In the event of a merger, sale, reorganization or other
change in control of the Exchange, the agreements would be binding upon and
inure to the benefit of any successor of the Exchange. In the event of a
termination of an executive's employment for cause, the executive is entitled to
any accrued, but unused, vacation pay.

An executive's obligations under his employment agreement are suspended in
the event that he becomes disabled and receives benefits under the Exchange's
long-term disability insurance program, subject to reinstatement if he returns
to his original position. If the executive returns to work in a different
position or does not return to work at all upon the conclusion of his
disability, the employment agreement will be terminated. If employment is
terminated due to death or disability, an executive's legal representatives or
the executive will receive his base salary for a period of six months following
the termination.

Mr. Kilcollin

The Exchange had an employment agreement with T. Eric Kilcollin to serve as
its President and Chief Executive Officer from February 1, 1997 through March
31, 2000; however, Mr. Kilcollin resigned effective March 19, 1999. The
agreement provided for an initial base salary of $550,000, with increases at the
Exchange's sole discretion. Under the agreement, he was eligible for a
performance bonus and to participate in the Exchange's staff bonus program.

54
<PAGE>

He was also entitled to an annual enhanced pension benefit in an amount equal to
ten percent of his base salary for the calendar year plus a gross-up payment to
negate the effect of the additional taxes incurred because of the benefit. Under
the agreement, he was entitled to reimbursement for various perquisites, an
annual lump sum payment of $12,500 for professional services and participation
in other benefit plans available generally to Exchange employees and officers.

Under Mr. Kilcollin's separation agreement, the Exchange paid to Mr.
Kilcollin $591,982.96, representing his annual base salary and vacation benefits
through the original term of his employment agreement. He also received
$155,555, representing reimbursement of costs of perquisites and of professional
services he was expected to incur through March 31, 2000 and of amounts owed to
him as the enhanced pension benefit, plus an additional bonus of $200,000. The
Exchange also agreed to reimburse him, through March 31, 2000, for costs
incurred to obtain health, dental, vision, life and accidental death and
dismemberment insurance.

Mr. Kilcollin's interests under the retirement and deferred compensation
plans in which he participated became fully vested as of his resignation date.
In all other respects, his rights and the Exchange's obligations pursuant to the
plans are determined by the terms of those plans. Mr. Kilcollin was paid a
single lump sum for amounts payable to him under the Exchange's Senior
Management Supplemental Deferred Savings Plan and the Supplemental Executive
Retirement Plan. In addition, he was paid $96,189.10, which represents the
present value, after a gross-up for income taxes, of the benefits he would have
received pursuant to the Pension Plan for Employees of the Chicago Mercantile
Exchange, the Exchange's Tax Efficient Savings Plan and the Exchange's
Supplemental Deferred Savings Plan had he remained employed with the Exchange
through the term of his agreement.

Beneficial Ownership of Management

The following table lists the shares of capital stock of New CME that will
be beneficially owned following the demutualization by each of the directors,
each of the executive officers named in the Summary Compensation Table on page
__ and the Exchange's directors and executive officers as a group. The
information is based on the beneficial ownership by those persons of Exchange
membership interests as of December 31, 1999. There was no person known to the
Exchange to be the beneficial owner of more than five percent of the membership
interests of the Exchange as of December 31, 1999.

Total Equity
Expressed in
Name of Beneficial Class A Percent of Class B Shares Percent of Equivalent Class Percent of
Owner1 Shares Class Number Series Class A shares2 Total Equity
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
M. Scott Gordon 10,800 * 1 B-23 * 12,000 *
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------------------
* Less than one percent.

1 The address for all persons listed in the table is Chicago Mercantile
Exchange, 30 South Wacker Drive, Chicago, Illinois 60606.

2 Class A equivalent shares are based on the number of Class A shares and the
number of Class A shares that each series of Class B shares owned is
considered to represent. See "Description of Common Stock" under
"Description of Capital Stock of New CME."

3 Share will be held in a trust over which Mr. Gordon will have investment
and voting power.

55
<PAGE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Total Equity
Expressed in
Name of Beneficial Class A Percent of Class B Shares Percent of Equivalent Class Percent of
Owner1 Shares Class Number Series Class A shares2 Total Equity
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Terrence A. Duffy 16,200 * 1 B-1 * 18,100 *
1 B-4
- ----------------------------------------------------------------------------------------------------------------------------------
James E. Oliff 10,800 * 1 B-2 * 12,000 *
- ----------------------------------------------------------------------------------------------------------------------------------
Thomas A. Kloet 21,600 * 2 B-24 * 24,000 *
- ----------------------------------------------------------------------------------------------------------------------------------
Martin J. Gepsman 5,400 * 1 B-3 * 6,060 *
6 B-5
- ----------------------------------------------------------------------------------------------------------------------------------
Leo Melamed 37,800 * 1 B-15 * 42,060 *
1 B-2
2 B-3
6 B-5
- ----------------------------------------------------------------------------------------------------------------------------------
John F. Sandner 102,600 * 3 B-1 * 113,010 *
2 B-2
6 B-36
14 B-5
- ----------------------------------------------------------------------------------------------------------------------------------
H. Jack Bouroudjian 5,400 * 1 B-3 * 6,000 *
- ----------------------------------------------------------------------------------------------------------------------------------
Timothy R. Brennan 21,600 * 1 B-1 * 24,020 *
1 B-3
2 B-5
- ----------------------------------------------------------------------------------------------------------------------------------
Jeffrey R. Carter 21,600 * 1 B-1 * 24,000 *
1 B-3
- ----------------------------------------------------------------------------------------------------------------------------------
E. Gerald Corrigan 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Rahm Emanuel 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Yra G. Harris 27,000 * 3 B-27 * 30,000 *
1 B-3
- ----------------------------------------------------------------------------------------------------------------------------------
Robert L. Haworth 16,200 * 1 B-1 * 18,100 *
1 B-4
- ----------------------------------------------------------------------------------------------------------------------------------
Leslie Henner Burns 21,600 * 2 B-1 * 24,020 *
2 B-5
- ----------------------------------------------------------------------------------------------------------------------------------
Bruce F. Johnson 16,200 * 1 B-1 * 18,100 *
1 B-4
- ----------------------------------------------------------------------------------------------------------------------------------
Gary M. Katler 5,400 * 1 B-38 * 6,100
1 B-4
- ----------------------------------------------------------------------------------------------------------------------------------
Paul Kimball 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
John Lacey 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Merton Miller 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
William Miller 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Laurence E. Mollner 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Patrick J. Mulchrone 32,400 * 1 B-1 * 36,100 *
1 B-2
1 B-3
1 B-4
- ----------------------------------------------------------------------------------------------------------------------------------
John D. Newhouse 37,800 * 3 B-2 * 42,040 *
1 B-3
4 B-5
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------------

4 Includes one series B-2 share held by ABN AMRO BANK, N.V., over which Mr.
Kloet will have voting power.

5 Mr. Melamed will have voting and investment power over the indicated
shares, which are owned by Sakura Dellsher, Inc.

6 Mr. Sandner will have voting and investment power over two series B-3
shares held by RB&H Financial Services L.P.

7 Mr. Harris will have sole voting power over one series B-2 share.

8 Mr. Katler will have voting power over one series B-3 share.

56
<PAGE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Total Equity
Expressed in
Name of Beneficial Class A Percent of Class B Shares Percent of Equivalent Class Percent of
Owner1 Shares Class Number Series Class A shares2 Total Equity
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ward Parkinson 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Mark G. Papadopoulos 0 2 B-4 * 200 *
- ----------------------------------------------------------------------------------------------------------------------------------
Robert J. Prosi 27,000 * 1 B-1 * 30,000 *
2 B-39
- ----------------------------------------------------------------------------------------------------------------------------------
David M. Pryde 97,200 * 1 B-110 * 108,000
3 B-2
9 B-3
17 B-5
- ----------------------------------------------------------------------------------------------------------------------------------
Irwin Rosen 21,600 * 1 B-1 * 24,010 *
1 B-3
1 B-5
- ----------------------------------------------------------------------------------------------------------------------------------
William G. Salatich, Jr. 16,200 * 1 B-1 * 18,020 *
2 B-5
- ----------------------------------------------------------------------------------------------------------------------------------
Verne Sedlacek 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Leon C. Shender 5,400 * 1 B-3 * 6,000 *
- ----------------------------------------------------------------------------------------------------------------------------------
William R. Shepard 32,400 * 1 B-1 * 36,050 *
1 B-2
1 B-3
5 B-5
- ----------------------------------------------------------------------------------------------------------------------------------
Howard J. Siegel 21,600 * 1 B-1 * 24,030 *
1 B-3
3 B-5
- ----------------------------------------------------------------------------------------------------------------------------------
David I. Silverman 10,800 * 1 B-2 * 12,000 *
- ----------------------------------------------------------------------------------------------------------------------------------
Jeffrey L. Silverman 16,200 * 1 B-1 * 18,020 *
2 B-5
- ----------------------------------------------------------------------------------------------------------------------------------
Paul Simon 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Fred D. Arditti 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Gerald D. Beyer 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Craig S. Donohue 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Phupinder Gill 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
David G. Gomach 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
William W. Jenks 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Donald D. Serpico 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Carol B. Sexton 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Directors and Executive
Officers as a group 507,600 564,980 1.96
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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

9 Mr. Prosi will have voting power over one series B-3 share.

10 Mr. Pryde will have voting power over each of the series B-1, B-2, B-3 and
B-5 shares, which will be owned by several employees of his employer, J. P.
Morgan Futures, Inc.

* Less than one percent.

57
<PAGE>

BUSINESS

Founded in 1898, the Exchange is one of the world's leading exchanges for
the trading of futures and options on futures contracts, with total volume in
1999 of approximately 201 million contracts. The underlying value of the
commodities involved in transactions (often referred to as the "notional
value"), a comprehensive measure of economic activity, was approximately $138
trillion in 1999--exceeding that of any other derivatives exchange in the world.
According to industry data, we ranked third worldwide among major futures
exchanges in volume of contracts traded in 1999. That data also showed that we
ranked second in terms of open interest -- representing the number of futures
contracts and options positions outstanding at the close of trading. From our
origins as a small agricultural market, we have evolved into a major financial
center offering a diverse range of contracts based on interest rates, equity
indices, foreign currencies, agricultural commodities and other underlying
instruments and risk-based activities.

We operate markets for the trading of commodity and financial futures
contracts, as well as options on futures contracts. These contracts have been
developed through our extensive research and development efforts and through
relationships that we have developed with market participants and other
financial institutions. We operate traditional open outcry auction markets where
members trade among themselves for their own account and the account of their
customers in a room known as a pit. We also operate an electronic trading
system --now known as our GLOBEX2 system -- and were one of the first major
futures exchanges in the world to develop an electronic system. We also match,
clear, settle and guarantee all transactions executed on the Exchange through
the CME Clearing House, and we engage in extensive regulatory, compliance,
market surveillance and financial supervision activities designed to ensure
market integrity and provide financial safeguards for users of our markets. Our
traditional open outcry and electronic trade execution services provide "price
discovery" and trade matching services that offer market participants complete
price transparency, anonymity and immediacy. Our Clearing House provides market
participants with clearing, settlement, risk management and guarantee services
that provide near immediate transaction finality, resulting in the mitigation of
counterparty credit risk. We also market and distribute valuable real-time and
historical market data generated from trading activity in our markets to users
of our products and related cash and derivative markets.

Market participants include many of the world's largest banks and
investment firms. These participants use our products for hedging, risk
management, asset allocation, and speculation. Other market users include
financial institutions, such as public and private pension funds, mutual funds,
hedge funds and other managed funds, insurance companies, corporations,
commercial banks, professional independent traders, and retail customers. Our
users can be broadly categorized as hedgers or speculators--depending on whether
they transfer risk or accept risk. Hedgers are market participants who want to
transfer price risk in an underlying commodity (e.g., cattle) or financial
instrument (e.g., cash foreign currency or an interest rate swap agreement).
Speculators, on the other hand, accept price risk and attempt to make profits
through buying and selling futures contracts by anticipating price changes. A
speculator has no interest in making or taking delivery of the underlying
commodity. Our members serve as liquidity providers for our markets and as
financial intermediaries for customers who use our products.

We have developed innovative and cost-effective products, execution and
order routing systems, and clearing systems that have led to substantial volume
and to the benefit of our

58
<PAGE>

members and customers. As indicated in the chart below, volume in our products
remains strong and substantially greater today than volume prior to 1994,
despite recent fluctuations in volume. Fluctuations in interest rate volatility,
declines in currency volatility, growth in equity trading, and the business
cycle of the U.S. economy have led to the fluctuations in our volume.

[Graphic: Bar graph entitled and showing "CME ANNUAL VOLUME OF CONTRACTS
TRADED 1990 - 1999". Below the horizontal axis each year for which trading
volume is measured is written in chronological order from left to right. The
vertical axis indicates the number of contracts traded, in millions, beginning
with zero and increasing, in intervals of 50, up to 250. The lower portion of
each bar is darkly shaded to the extent of the futures contracts traded and the
upper portion is lightly shaded to the extent of the options contracts traded.
Inset in a small square to the right of the graph is a legend containing a
lightly shaded box to the immediate left of the word "Options" and immediately
below which is a darkly shaded box to the immediate left of the word "Futures".
Futures contracts were traded at a rate of approximately 84 million in 1990, 87
million in 1991, 107 million in 1992, 116 million in 1993, 176 million in 1994,
160 million in 1995, 141 million in 1996, 160 million in 1997, 184 million in
1998 and 168 million in 1999. Options contracts were traded at the rate of
approximately 18 million in 1990, 21 million in 1991, 27 million in 1992, 30
million in 1993, 50 million in 1994, 43 million in 1995, 35 million in 1996, 41
million in 1997, 43 million in 1998 and 33 million in 1999.]

Presently, derivatives markets are experiencing significant and rapid
changes due to advances in technology, relaxation of regulatory barriers for
some competitors, and resultant cost efficiencies. Computer and
telecommunications systems today can efficiently and economically bring buyers
and sellers together, presenting new challenges to centralized open outcry
auction markets. These changes are lowering barriers to entry and creating a
lower cost business model, forcing traditional exchanges to streamline their
operations and reduce costs. Large market users, and the threat of competition,
will force exchanges to seek more efficient trading, processing and clearing
facilities. We have responded to these challenges, and positioned the Exchange
to preserve and enhance our current business, by implementing technology to
streamline our trade execution and clearing facilities, by refining our existing
products and developing innovative new products to satisfy customer demands, and
by continually enhancing the ability of our independent traders to provide
liquidity in our markets.

In order to continue to enhance our ability to compete in this dynamic
marketplace, our organizational strategy is to convert the Exchange to a
demutualized for-profit corporation. We intend to improve our governance and
managerial structure by reducing our board size and focusing the role of the
Board on traditional oversight activities. We will reduce significantly the
number and responsibility of existing committees and will enhance and expand the
responsibility and authority of our management and professional staff. The
demutualization will also reduce members' petition and referenda rights, except
for the approval rights reserved to Class B stockholders with respect to Core
Rights. We believe that demutualization will better enable us to strengthen,
expand and defend our core business.

Our core business consists of four main areas: development of risk
management products; operating execution facilities for those products;
providing clearing and settlement services; and collecting and selling market
data. Revenues from the first three business areas referred to in the preceding
sentence are derived from bundled clearing and transaction fees, which
represented 66% of total 1999 revenues. Revenue from the dissemination of
market quote data represented

59
<PAGE>

21% of total 1999 revenue.

Products

The range and diversity of the products that may be traded on the
Exchange's facilities is a significant contributor to our success. These
products include futures contracts and options on futures contracts based upon
interest rates, stock indices, foreign currencies, agricultural commodities and
other underlying instruments and risk-based activities. We also offer exchange-
for-physical transaction ("EFP") markets. These transactions involve
simultaneous transactions in the futures and cash commodity markets in which one
party can establish or liquidate a futures position in one of our products and
the other party sells or purchases the underlying cash commodity. We have a
research division and a marketing division to support market participants and
foster the trading and development of current and future products. Our research
and marketing staff meet regularly with market users, members and clearing
members to determine whether our current products, facilities and services meet
these participants' needs and whether modifications or enhancements are
necessary. Our research and marketing staff also develop new product ideas in
consultation with market users and other financial institutions. The charts
below depict the distribution of trading volumes and clearing fee revenues
across our four major product sectors.

[Graphic: Pie chart entitled "1999 CME TRADE VOLUME SUMMARY" and
representing the trading volume in each of the CME's four major product sectors
as a percentage of the total trading volume. The entire chart represents and is
subtitled "(100% = 201 million contracts". Trading volume percentages are:
Interest Rate Products - 60%, Equity Index Products - 24%, Currency Products -
12% and Agricultural Products - 4%.]

[Graphic: Pie chart entitled "1999 CLEARING FEE REVENUE" and representing
the sources of clearing fee revenue as a percentage of total clearing fee
revenue. The chart represents and is subtitled "(100% = $138.5 MILLION)", with
revenue distributed as follows: Interest Rate Products - 36%, Currency
Products - 32%, Equity Index Products - 27% and Agricultural Products -
5%.]

Interest Rate Products. Our interest rate product line includes our
Eurodollar futures and options contracts. Eurodollar futures and option
contracts are a short term interest rate product and constitute one of the most
successful products in our industry. The notional value of outstanding
Eurodollar futures contracts typically exceeds $2.5 trillion on any given day.
We also trade contracts based upon other short-term U.S. and foreign interest
rates, such as one-month LIBOR, which stands for London Interbank Offered Rate,
contracts and Euroyen. Eurodollars are U.S. dollars on deposit in commercial
banks outside of the United States. The Eurodollar market has burgeoned over
the past thirty years into a major international capital market as the dollar
has become a world reserve currency. Eurodollar deposits play a major role in
the international capital markets. The interbank market for immediate (spot)
and forward delivery of offshore dollars is deep and liquid, giving banks the
ability to fund dollar loans to foreign importers without incurring currency
exchange risks. Our market users are generally banks and other financial
institutions that face interest rate risks from their lending and borrowing
activities or their activities as dealers in OTC interest rate swaps and
structured derivative products. Many swap dealers use our Eurodollar and other
interest rate contracts to hedge and/or arbitrage their money market swaps and
to convert a floating interest rate exposure to a fixed rate exposure. A
significant number of our clearing member firms are affiliates of

60
<PAGE>

major domestic and international banks who utilize our interest rate markets for
their proprietary trading activities. Asset managers also use our interest rate
products to lengthen the effective maturity of short-term investment assets by
buying futures contracts, or shorten the effective maturity by selling futures.
Our contracts are an attractive alternative when physical restructuring of a
portfolio is not possible or when futures transaction costs are less than the
cash market transaction costs.

Market users take advantage of the flexibility and liquidity of the
Eurodollar products we trade, which span forty-four contract months covering ten
years of short-term interest rate risk. Further, by trading multiple contract
months, market users can hedge and speculate on long-term interest rate
movements. We have introduced innovative product extensions--Eurodollar Bundles
and Packs--in order to facilitate these trading strategies. Eurodollar Bundles
allow traders to simultaneously buy or sell a pre-packaged 1-, 2-, 3-, 4-, 5-,
7- or 10-year "strip" of individual contracts in a single transaction, rather
than constructing the same positions with individual contracts. Similarly,
Eurodollar Packs allow traders to simultaneously purchase or sell a consecutive
series of four Eurodollar futures. To further benefit market users, we have
implemented a series of product enhancements in recent years. We introduced
quarter-tick (smaller price increment) trading for "front-month expiring"
(contracts closest to expiration) Eurodollar and LIBOR futures and options
contracts and we expanded half-tick trading through the twentieth quarterly
Eurodollar expiration. We also implemented all-or-none trading in the quarterly
expirations of Eurodollar futures, and in Eurodollar options contracts,
permitting transactions to be executed in full, at the size and price specified.
All of these changes have reduced costs and enhanced efficiency for market
participants.

As depicted in the chart below, our interest rate product trading volumes
have fluctuated over the last five years. These fluctuations reflect primarily
changes in central bank monetary policies and changing levels of interest rate
volatility during these periods, rather than successful competition from other
exchanges or increased use of alternative products or markets by market users.
Presently, many banks that use Eurodollar futures have adopted internal systems
that allow separate divisions within the bank to offset their positions as
alternative to using our markets. Despite these activities, volume in these
products continues to remain strong, and they constitute a significant part of
our business.

[Graphic: Bar graph representing and entitled "VOLUME OF INTEREST RATE
CONTRACTS TRADED 1994 - 1999". Below the horizontal axis each year for which
interest rate trading volume is measured is listed in chronological order from
left to right. The vertical axis indicates the number of interest rate
contracts traded, in millions, beginning with zero and increasing, in intervals
of 50, to 150. The lower portion of each bar is darkly shaded to the extent of
the futures contracts traded and the top portion of each bar is lightly shaded
to the extent of options contracts traded. Inset in a small square to the right
of the graph is a legend containing a lightly shaded box to the immediate left
of the word "Options" and immediately below which is a darkly shaded box to the
immediate left of the word "Futures". Futures contracts were traded at the rate
of approximately 119 million in 1994, 110 million in 1995, 91 million in 1996,
103 million in 1997, 112 million in 1998 and 95 million in 1999. Options
contracts were traded at the rate of approximately 20 million in 1994, 21
million in 1995, 22 million in 1996, 25 million in 1997, 33 million in 1998 and
25 million in 1999.]

61
<PAGE>

Stock Index Products. We offer trading in futures and options contracts
based upon the S&P 500(R) and Nasdaq 100(R) stock indices, as well as other
domestic and foreign small, medium and large cap indices. Over 90% of our volume
in stock index products is in products based on the S&P 500 Index, to which we
have an exclusive contract. Standard & Poor's Corporation designed and maintains
the S&P 500 Index to be an accurate proxy for a diversified equity portfolio
representing a broad cross-section of the U.S. equity market. The index is based
upon the stock prices of five hundred large-capitalization companies. In 1999,
the total notional value of S&P 500 futures contracts traded was $9.7 trillion
compared to the $8.9 trillion value of stocks traded on the New York Stock
Exchange. The Nasdaq 100 Index, also known as the "technology index," is based
on the one-hundred largest non-financial stocks listed on the Nasdaq stock
market. These products give market users the ability to hedge their equity
portfolios, to gain exposure efficiently to U.S. and foreign equity markets
without the execution and capital costs of implementing their trading strategy
in the underlying cash markets, to take advantage of spread opportunities
between different sectors of the market, to enhance the return or yield on an
underlying portfolio of stocks or commodities, and to diversify a portfolio.
Market users include public and private pension funds, investment companies,
mutual funds, insurance companies and other financial services companies that
benchmark their investment performance to different segments of the equity
markets.

As depicted in the chart below, our equity index product trading volumes
have increased substantially in the last two years. In addition, we currently
have about a 90% market share in all U.S. listed stock index futures and options
on futures. Our dominance in this market reflects the liquidity that our
members provide, as well as the fact that the S&P 500 Index is the U.S.
financial standard for benchmarking stock market returns. In addition to the
overall strength of the U.S. equity markets, our equity index volume growth in
1998 and 1999 is attributable to a one-half reduction in the size of our S&P 500
futures contract in November 1997, making the contract more attractive to
smaller institutions. To benefit market users of our equity index products, we
have introduced flexible term options on our equity index futures. These
options allow users to more precisely tailor expiration dates, strike prices,
the exercise style, and various other features of our standardized options
contracts, in order to meet their needs and complement their trading strategies.

[Graphic: Bar graph entitled "VOLUME OF EQUITY INDEX CONTRACTS TRADED
1994 - 1999" and representing the number of futures and options contracts on
various stock indices traded on the CME. Below the horizontal axis each year
measured is listed in chronological order from left to right. The vertical axis
indicates the number of contracts traded, in millions, beginning with zero and
increasing, in intervals of 10, to 50. The lower portion of each bar is darkly
shaded to the extent of the futures contracts traded and the top portion is
lightly shaded to the extent of the options contracts traded. Inset in a small
square to the right of the graph is a legend containing a lightly shaded box to
the immediate left of the word "Options" and immediately below which is a darkly
shaded box to the immediate left of the word "Futures". Futures equity index
contracts were traded at the rate of approximately 20 million in 1994, 21
million in 1995, 22 million in 1996, 25 million in 1997, 39 million in 1998 and
43 million in 1999. Options equity index contracts were traded at the rate of
approximately 5 million in 1994, 6 million in 1995, 5 million in 1996, 5 million
in 1997, 5 million in 1998 and 5 million in 1999.]

62
<PAGE>

We have had a licensing arrangement with Standard & Poor's Corporation
since 1980 that gives us the exclusive right to trade futures and options on
futures contracts on specified S&P stock indices, including the S&P 500. In
1997, we extended this arrangement until 2008, ensuring the continued success
and expansion of this market. Our Nasdaq 100 license agreement will also
continue until 2005.

In 1997, we launched our highly successful E-Mini S&P 500 futures and
options contracts and, in 1999, we launched our E-Mini Nasdaq 100 futures
contracts. These contracts, which are traded both by electronic trading on
GLOBEX2 and open outcry pit trading, are one-fifth the size of our principal S&P
500 and Nasdaq 100 futures contracts, and are designed to appeal to our growing
retail and small institutional customer segment. The method of execution for
these E-Mini products is determined by the size of the order. Smaller orders
utilize complete electronic order entry, routing and trade matching via GLOBEX2.
Larger orders are executed by open outcry on the trading floor via our
innovative all-or-none facility. This facility allows pit transactions to be
executed in full, at the size and price specified. Since their introduction,
trading volumes in these products have grown rapidly. As the chart below
indicates, quarterly volume in our E-Mini S&P 500 futures and options contracts
recently exceeded three million contracts. The strong growth pattern is
indicative of the strength of the U.S. equity markets, as well as the increasing
prevalence of sophisticated retail customers interested in Internet access and
day trading. We expect continued growth in our existing E-Mini markets and to
develop E-Mini versions of some of our other products that will attract retail
customers and small institutions.

[Graphic: Bar graph entitled "E-MINI S&P QUARTERLY VOLUME Q4 1997 - Q4
1999" and representing the quarterly trading volume of E-Mini S&P 500 futures
and options contracts from the fourth quarter of 1997 through the fourth quarter
of 1999. Below the horizontal axis each quarter measured is listed in
chronological order from left to right. The vertical axis indicates the number
of contracts traded, in millions, beginning with zero and increasing, in
intervals of 0.5, to 3.5. E-Mini contracts were traded at the rate of
approximately 0.6 million in the fourth quarter of 1997, 0.7 million in the
first quarter of 1998, 0.8 million in the second quarter of 1998, 1.3 million in
the third quarter of 1998, 1.4 million in the fourth quarter of 1998, 2.0
million in the first quarter of 1999, 2.5 million in the second quarter of 1999,
3.0 million in the third quarter of 1999 and 3.2 million in the fourth quarter
of 1999.]

Currency Products. Since developing financial futures for currencies in
1972, we have built a strong presence in foreign currency trading, providing
traders, investors and risk managers with tools to hedge their risk from foreign
exchange market movements. Average daily turnover in the interbank foreign
exchange market exceeds $1 trillion, making this market the world's largest.
The interbank foreign currency market is dominated by large banks and
multinational corporations. The Exchange provides an attractive alternative to
this market by offering foreign currency futures and futures options contracts
so that large and small investors alike can have equal access to the world of
foreign exchange. We offer futures and options on futures contracts on the
world's major currencies, including, among others, the Euro, Deutsche mark,
Japanese yen, British pound, Canadian dollar, French franc, Swiss franc, Mexican
peso, and Australian dollar. Users of these markets are institutions such as
banks, hedge funds, commodity trading advisors and corporations with foreign
currency exposures, and retail customers who speculate for profit on foreign
currency price movements. To benefit market users and compete effectively with
the interbank foreign currency market, we have introduced all-or-none trading
whereby larger currency futures orders are filled in their entirety at a single

63
<PAGE>

price, without the possibility of partial fills. Additionally, foreign currency
all-or-none transactions can occur outside the bid/ask or daily high/low for
regular futures contracts, and market participants can receive competitive
quotes from multiple market makers.

As indicated in the charts below, our foreign currency futures and options
product trading volumes have declined significantly in the last five years,
while our foreign currency EFP transaction volumes have increased. The decline
in our futures and options trading volumes reflect several different trends:
bank consolidations and increased use of internal netting mechanisms by our bank
customers, reduced volatility in cash foreign currency markets, and the
introduction of the Euro and subsequent phasing out of major European
currencies. We also face significant competition in this product sector from the
interbank foreign currency market, which offers comparable and highly liquid
cash and forward rate agreement trading facilities in these foreign currencies.
Despite declines in our foreign currency futures and options trading volumes,
however, the growth in foreign currency EFP transactions and EFP fees have
stabilized revenues from our currency products.

[Graphic: Bar graph entitled "VOLUME OF CURRENCY CONTRACTS TRADED 1994 -
1999" and representing the trading volume of foreign currency options and
futures contracts. Below the horizontal axis each year measured is listed in
chronological order from left to right. The vertical axis indicates the number
of contracts traded, in millions, beginning with zero and increasing, in
intervals of 10, to 50. The lower portion of each bar is darkly shaded to the
extent of the futures contracts traded and the top portion is lightly shaded to
the extent of the options contracts traded. Inset in a small square to the right
of the graph is a legend containing a lightly shaded box to the immediate left
of the word "Options" and immediately below which is a darkly shaded box to the
immediate left of the word "Futures". Futures contracts were traded at the rate
of approximately 30 million in 1994, 23 million in 1995, 21 million in 1996, 25
million in 1997, 25 million in 1998 and 22 million in 1999. Options contracts
were traded at the rate of approximately 12 million in 1994, 10 million in 1995,
7 million in 1996, 5 million in 1997, 4 million in 1998 and 2 million in 1999.]

[Graphic: Bar graph entitled "CURRENCY EFP AND FUTURES/OPTIONS PIT TRADING
VOLUME 1994 - 1999" and representing trading volume in foreign currency
transactions via pit trading and over the Exchange-for-Physicals (EFP) market.
Below the horizontal axis each year measured is listed in chronological order
from left to right. The vertical axis indicates the number of contracts traded,
in millions, beginning with zero and increasing, in intervals of 10, to 50. The
lower portion of each bar is darkly shaded to the extent of the pit trading
volume and the top portion is lightly shaded to the extent of the EFP trading
volume. Inset in a small square to the right of the graph is a legend containing
a lightly shaded box to the immediate left of the initials "EFP" and immediately
below which is a small darkly shaded box to the immediate left of the word
"Pit". Pit trading volume was approximately 37 million in 1994, 29 million in
1995, 25 million in 1996, 24 million in 1997, 27 million in 1998 and 23 million
in 1999. EFP trading volume was approximately 4 million in 1994, 3 million in
1995, 4 million in 1996, 6 million in 1997, 7 million in 1998 and 7 million in
1999.]

Additionally, we have launched new E-Mini currency products based on the
Euro and the Japanese Yen that we are targeting toward the developing electronic
retail customer base opened up by the prevalence of on-line Internet trading of
equities, and by our developing franchise in E-Mini equity products.

64
<PAGE>

Agricultural Products. Agricultural products were the core from which we
started at the turn of the last century. The Exchange has maintained a strong
franchise in our agricultural products, including contracts based on cattle,
hogs, pork bellies, dairy products, and other agricultural commodities. Our
market users include agricultural producers of commodities, food processors, and
retail customers. Extensive revisions to existing contracts and the development
of new products have led to stable volume and modest growth in this product
sector in recent years. Our agricultural product trading volumes are depicted in
the chart below. We believe that continuing consolidation and restructuring in
the agricultural sector, and the reduction or elimination of government
subsidies, could provide growth in our agricultural markets as large producers
and processors adopt formal hedging and risk management programs.

[Graphic: Bar graph representing and entitled "VOLUME OF AGRICULTURAL
CONTRACTS TRADED 1994 - 1999". Below the horizontal axis each year measured is
listed in chronological order from left to right. The vertical axis indicates
the number of contracts traded, in millions, beginning with zero and increasing,
in intervals of 2, to 10. The lower portion of each bar is darkly shaded to the
extent of the futures contracts traded and the top portion is lightly shaded to
the extent of the options contracts traded. Inset in a small square to the right
of the graph is a legend containing a lightly shaded box to the immediate left
of the word "Options" and immediately below which is a darkly shaded box to the
immediate left of the word "Futures". Futures contracts were traded at the rate
of approximately 6.4 million in 1994, 6.3 million in 1995, 7.7 million in 1996,
7.7 million in 1997, 7.9 million in 1998 and 7.5 million in 1999. Options
contracts were traded at the rate of approximately 1.0 million in 1994, 0.9
million in 1995, 1.0 million in 1996, 1.0 million in 1997, 1.1 million in 1998
and 1.0 million in 1999.]

Other Products. We offer several interest rate, currency and index
contracts based upon the emerging markets of the world, providing tools for
managing the risk associated with emerging market financial flows, investments
and foreign exchange transactions. We also developed the first exchange-traded
credit and temperature-related weather derivatives contracts. We believe these
contracts will create new risk management opportunities for credit institutions
and insurance companies that face risks in their lending and insurance
activities. The CME Quarterly Bankruptcy Index, the world's first exchange-
listed consumer credit derivatives contract, is designed to allow credit card
companies and other lenders in the $1.4 trillion consumer credit market to hedge
risk associated with the escalating number of U.S. bankruptcy filings in recent
years. Our Heating Degree Day and Cooling Degree Day futures and options on
futures are designed to help businesses protect their revenues during times of
depressed demand or excessive costs because of unexpected or unfavorable weather
conditions. Weather affects an estimated 20 percent of the $9 trillion U.S.
economy, and the over-the-counter market in managing weather-related risk has
grown significantly over the past few years.

Execution Facilities

We operate two trade execution facilities--open outcry trading pits and
GLOBEX2. Both offer our users secure and reliable facilities, immediacy of trade
execution, anonymity, and price transparency. Both the trading pits and GLOBEX2
are state-of-the-art trading environments supported by substantial
infrastructure and technology for order routing, trade reporting, market data
dissemination, and market surveillance and regulation.

65
<PAGE>

Open Outcry Trading. Open outcry trading occurs in individual pits on our
two trading floors and represent ninety-two percent of our total volume in 1999.
The pits are the centralized meeting place for floor brokers and independent
traders to trade contracts. Orders for market participants not on the floor are
relayed to brokers for execution in the pits. The trading floors, covering
70,000 square feet, have tiered booths surrounding the pits from which clearing
member firm personnel can communicate with customers regarding current market
activity and prices and receive orders either electronically or by telephone. In
addition, our trading floors display current market information and news on
wallboards hung above the pits.

GLOBEX2 Electronic Trading. Our original GLOBEX System, which we jointly
developed in partnership with Reuters, was introduced in 1992. GLOBEX2, the
second generation system we introduced in 1998, is based on the Nouveau Systeme
de Cotation developed and licensed to us by our GLOBEX2 partner, ParisBourse.
GLOBEX2 maintains an electronic, centralized order book and trade execution
algorithm for futures and futures options contracts and allows users to directly
enter orders into the order book. Initially, these systems were used to offer
our products to market users after the close of our regular daytime trading
sessions. Today, however, we trade some of our most successful products
virtually around the clock on our GLOBEX2 system, including our E-Mini S&P 500
futures and options contracts, E-Mini Nasdaq 100 futures, E-Mini Euro FX futures
and E-Mini Japanese Yen futures. In 1999, in response to customer interest, we
initiated simultaneous "side-by-side" electronic and open outcry trading in our
most successful contracts--Eurodollar futures and options--expanding market
users' alternatives for trade execution facilities. Most recently, we have
initiated trading exclusively on our GLOBEX2 system, in some foreign currency
cross-rate contracts, and in innovative new credit and weather derivatives
products. Eight percent of our 1999 volume was traded on GLOBEX2 and, as
indicated in the table below, our yearly GLOBEX2 volume has grown rapidly.
GLOBEX2 trading volume has increased from 210,000 contracts in 1992, when the
original system was launched, to more than sixteen million contracts in 1999.
Through 1998, GLOBEX2 volume doubled every year since 1996.

[Graphic: Bar graph entitled "GLOBEX VOLUME 1992 - 1999" and representing
the number of contracts traded over the GLOBEX System and its 1998 replacement
the GLOBEX2 System. Below the horizontal axis each year measured is listed in
chronological order from left to right. The vertical axis indicates the number
of contracts traded over these Systems, in millions, beginning with 0 and
increasing, in intervals of 5, to 20. System volume was approximately 0.2
million in 1992, 1.0 million in 1993, 1.0 million in 1994, 1.3 million in 1995,
2.0 million in 1996, 4.4 million in 1997, 9.7 million in 1998 and 16.1 million
in 1999.]

GLOBEX2 users include clearing member firms, locals, market makers,
commodity trading advisors and individuals that have been issued electronic
trading hours permits. In response to the rapid growth in electronic trading of
financial instruments, we are significantly expanding the functionality,
capacity and distribution of GLOBEX2. The flexibility of the open architecture
design of GLOBEX2 allows us to add new products to the system and to easily and
quickly increase processing throughput.

Technology Supporting our Execution Facilities. We have enhanced our open
outcry and electronic markets with automation and cost efficiencies that will
help us retain our competitive advantage of instant liquidity for market users.
In order to streamline the trading operations of our members and link our
existing order routing technology, we have developed an application programming
interface, CME FIX API(TM), designed to route orders efficiently from

<PAGE>

independent software vendors' and clearing member firms' order management
systems to our trading floors and to GLOBEX2.

As indicated in the diagram below, orders are sent from the end user or
member's trading application, through our secure network, and then delivered to
CUBS(TM), TOPS Route(TM) or GLOBEX2. These systems then execute in the case of
GLOBEX2 or, in the case of CUBS and TOPS Route, route the order to the trading
floor for execution and return the fill information back to the member or end
user. CUBS enables our floor brokers standing in the pits to electronically
receive orders and report fills to the order originator by providing an
electronic direct link between a clearing member firm's order desk and a filling
broker. TOPS Route, our electronic order entry, routing, and fill reporting
system, expedites the flow of orders permitting clearing member firms and their
customers to electronically route orders directly to our trading floors. TOPS
Route also generates fill reports and transmits trade records to member firms'
back office systems. TOPS Route can be accessed from a dedicated TOPS Route
terminal or through a firm's proprietary system connected via the CME FIX API.
GalaxC(TM), introduced in 1999, is our proprietary wireless handheld unit that
offers our local floor traders the ability to enter limit orders and execute
against orders resting on GLOBEX2, and to execute trades in the cash foreign
currency markets. Our development of links between open outcry, electronic
trading and electronic order routing will provide market users with greater
access to the liquidity and execution facilities we provide.

[Graphic: Flow-chart representing and entitled "CME's Trading and Order
Routing Systems". Each symbol in the chart is shaded and a symbol's label is
inscribed in that symbol. Atop the chart, a two-headed arrow runs between a
rectangle labeled "Internet Access" and a rectangle below it labeled "Retail-
Ordering Clearing Firms". From the bottom left of the latter rectangle, a two-
headed arrow runs to the top left of an oval labeled "FIX API Access". From the
top right of that oval a two-headed arrow in the shape of two stair steps leads
to a rectangle labeled "Clearing Firm". From the top of that rectangle, a two-
headed arrow connects it to a rectangle labeled "Public Customer" and from its
right face a two-headed arrow connects it to a rectangle labeled "Proprietary
Trading Desk". From the bottom right of the "FIX API Access" oval, a two-headed
arrow in the shape of a backward "L" leads to the right face of a square labeled
"GLOBEX2". A two-headed arrow connects the top center of the "GLOBEX2" square to
the bottom center of a rectangle labeled "GLOBEX Terminal". From the upper right
face of the "GLOBEX2" square, a two-headed arrow runs diagonally upward to a
rectangle labeled "TOPS ROUTE Order Routing System". An arrow runs from the
right face of that rectangle to the words "Other Exchanges", a two-headed arrow
runs from its top face to a rectangle labeled "TOPS Terminal" and a two-headed
arrow runs from its left face to the "FIX API Access" oval. From the bottom of
the "FIX API Access" oval a two-headed arrow in the shape of an "L" runs to the
left angle point of a hexagon labeled "CUBS II Amker Station". This hexagon is
connected by two chevrons, pointing left and running from its bottom face, to
the top face of a hexagon labeled "GalaxC Wireless Handheld". A two-headed arrow
in the shape of an "L" runs from the bottom face of the "GLOBEX2" square to left
angle point of the "GalaxC" hexagon. That hexagon is connected by two parallel
lines running from its right angle point and lower right face to a hexagon
labeled "Telephone Lines". Two chevrons, pointing to the right run from the
latter hexagon's top face to the bottom face of a fourth hexagon labeled "Ticket
Printing & Trade". Two parallel lines connect this fourth hexagon at its left
angle point and lower left face to the "CUBS II" hexagon. Each hexagon is the
same size. Written beneath the bottom two hexagons is "Open Outcry Trading". A
two-headed arrow in the shape of a single stair step runs upward and to the
right from the top of the "Ticket Printing & Trade" hexagon to the "TOPS

67
<PAGE>

ROUTE" rectangle.]

We are also expanding global access, virtually twenty-four hours a day, to
our trading, clearing and risk management facilities. Recognizing the growth in
electronic trading and our ability to expand our product reach around the globe,
we have nearly doubled the number of dedicated GLOBEX2 terminals in use. In
addition to the thousands of order routing terminals that interface with our
GLOBEX2 trading environment, we have over 1,200 GLOBEX2 execution terminals in
the United States and throughout the world: 855 in the U.S. (not including over
300 on our two trading floors) and 54 terminals internationally (Europe, Asia,
Bermuda). In addition, many firms and customers route orders to GLOBEX2 via the
Internet, further extending electronic access to our markets. Our ten largest
retail-oriented clearing members have full Internet order routing capabilities,
including the ability to execute trades, check account balances, and gain on-
line access to quotes and charts.

In addition to technology, we offer market users other trade execution
efficiencies. For example, in 1992, we introduced the Average Price System(TM)
(APS), which enables clearing member firms to compute and confirm average prices
when multiple prices are received on the execution of an order or series of
orders during a single trading day. APS was developed to address the difficulty
account managers have when an order representing multiple accounts is executed
at different prices. These account managers sometimes prefer to use alternative
dealer markets where a single price execution is available--although sometimes
at less favorable prices. APS provides our market users with the operational
flexibility they need, while also providing the transparent, competitive and
efficient pricing that we provide in our markets.

Clearing

The CME Clearing House clears, settles, nets and guarantees performance of
all matched transactions in our contracts. Unlike most other exchanges, the
Exchange owns and operates the Clearing House, enabling the Exchange to achieve
the closest possible coordination between its clearing functions and its other
main business areas of risk management, new product initiatives, customer
service and competitive issues. At each settlement cycle, the Clearing House
"marks-to-market" all open positions by calling for payments from clearing
members whose positions have lost value, and by paying clearing members whose
positions have gained value. The Clearing House marks all open positions to
market at least twice a day - more often if market volatility warrants. The
diagram below illustrates the daily mark-to-market and settlement activities of
Clearing House.

[Graphic: Flow-chart titled and representing "CME Clearing House
Activities". Each symbol in the chart is shaded and a symbol's label is
inscribed in that symbol. Atop the chart, two octagons are aligned horizontally,
with a horizontal arrow pointing from the right face of the octagon labeled
"LONG POSITION" to the left face of the octagon labeled "SHORT POSITION". A
single arrow points from the bottom face of each octagon to one of two ovals,
each oval being aligned horizontally and centered beneath each octagon. Each
oval is labeled "CLEARING FIRM MEMBER". An arrow bent as if signifying the time
five o'clock, points from the bottom right portion of the left oval to the top
of a large circle labeled "CLEARING HOUSE Match Trade Guarantee Trade Collect
margins and settlement variations". Inserted into the vertical portion of the
arrow line is an unshaded circle containing the number "2". Immediately above
the arrowhead and sloping downward to the right is written "TRADE

68
<PAGE>

DATA". Halfway embedded in the top center of the large circle is a much smaller
unshaded circle containing the number "3". A two-headed arrow bent as if
signifying the time five o'clock, leads from the bottom center of the left oval
to the top of the large circle. Inserted after the bend into the arrow line and
just above the arrowhead is an unshaded circle containing the number "4". An
arrow leads from the lower left face of the left oval and turns vertically
downward to abut the top of a rectangle labeled "SETTLEMENT BANK Makes payment
from clearing firm to clearing house and safekeeps margin assets". An arrow
leads upward from the top left of the rectangle and turning horizontally to the
right where its arrowhead abuts the upper left face of the left oval. An arrow
in the shape of an "L" leads from the left face of the large circle to the
rectangle. An unshaded circle containing the number "4" is inserted into the
horizontal segment of the arrow line. An arrow in the shape of an "L" runs from
the bottom of the rectangle to the large circle. An unshaded circle containing
the number "5" is inserted into the perpendicular portion of the arrow line.
Written below the horizontal portion of the arrow line is "CONFIRMS PAYMENT". An
arrow bent as if signifying the time seven o'clock, points from the bottom left
face of the right oval to the top of the large circle. Inserted into the
vertical segment of the arrow line is an unshaded circle containing the
number"2". Above the arrowhead and sloping downward and to the left is written
"TRADE DATA". A two-headed arrow bent as if signifying the time seven o'clock,
leads from the bottom center of the left oval to the top of the large circle.
Inserted after the bend in the arrow line and just above the arrowhead is an
unshaded circle containing the number "4". A horizontal line leaves from the
lower right face of the right oval, turns vertically downward where its
arrowhead touches the top of a second rectangle labeled "SETTLEMENT BANK Makes
payment from clearing firm to clearing house and safekeeps margin assets". An
arrow in the shape of a backward "L" leads from the right face of the large
circle to the rectangle. An unshaded circle containing the number "4" is
inserted into the horizontal segment of the arrow line. An arrow in the shape of
a backward "L" runs from the bottom of the box to the large circle. An unshaded
circle containing the number "5" is inserted into the vertical segment of the
arrowline. Written below the horizontal segment of the arrow line is "CONFIRMS
PAYMENT". An arrow leads upward from the top right face of the box, turns
horizontally to the left and abuts the upper right face of the right oval. An
arrow leads from the lower right face of the oval, turns vertically downward and
abuts the rectangle.]

Our ability to conduct a minimum of two daily settlement cycles helps
protect the financial integrity of the Clearing House, our clearing member
firms, and market participants. This ability enables the Clearing House to
identify more quickly any clearing firms that may not be able to satisfy the
financial obligations resulting from changes in the prices of their open
contracts before those financial obligations become exceptionally large and
jeopardize the ability of the Clearing House to insure performance on their open
positions. The CME Clearing House has a perfect record for performance on its
obligations, and no clearing member firm has ever failed to perform on its
obligations to the CME Clearing House. On an average day, we act as custodian
for approximately $20 billion in performance bond assets, and we move an average
of $990 million of settlement variation funds through our clearing system. As
indicated below, our Clearing House guarantees the performance of our contracts
with approximately $64 billion in available assets.

CME Clearing House Available Assets as of December 31, 1999
(in billions)

<TABLE>
<S> <C>
Aggregate Performance Bond Deposits by Clearing Member $18.9
</TABLE>

69
<PAGE>

Firms
Market Value of Pledged Memberships 0.1
CME Surplus Funds 0.1
Security Deposits of Clearing Members 0.4
Common Bond of Clearing Members 44.8
-----
Total $64.3

The CME Clearing House guarantee of performance is a significant attraction
of our markets: our market users do not need to evaluate the credit of each
potential counterparty or limit themselves only to a selected set of
counterparties. This increases the potential liquidity available for each trade
and reduces the costs of using our markets. Additionally, the substitution of
the CME Clearing House as the counterparty to every transaction allows our
market users to establish a position with one party, and then to offset the
position with another party. This contract netting process provides our market
users with significant flexibility in establishing and adjusting positions.

In order to ensure performance, we establish and monitor financial
requirements for our clearing members and set minimum performance bond levels
for our traded products. The CME Clearing House holds performance bond
collateral to cover the largest reasonable losses between marks-to-market. It
typically seeks to cover at least ninety-five percent of all daily price changes
in each product. The Clearing House uses its proprietary SPAN(R) system, which
targets performance bonds to risks, to simulate the gains and losses of complex
portfolios. We utilize risk management and financial surveillance programs.
These programs are designed to prevent the accumulation of losses, ensure the
availability of sufficient resources to cover future obligations, promptly
detect financial and operational weaknesses, and allow swift and appropriate
action to be taken to rectify any financial problems.

In the unlikely event of a clearing member payment default, we would apply
the following assets of the clearing member to cover the member's payment
obligation:

. security deposit,
. performance bonds, and
. any other available assets, which could include proceeds from the sale
of any memberships owned by or assigned to the clearing member.

If the payment default remains unsatisfied, then the following assets would be
applied to address the deficit:

. surplus funds of the Exchange
. security deposits of other clearing members, and
. funds collected through the assessment of a common bond against all
other clearing member firms.

The Exchange also maintains an unsecured, confirmed $350 million line of credit
agreement with a consortium of banks in order to ensure adequate liquidity to
deal with a clearing member payment default. This line of credit may also be
utilized if there is a temporary problem with the domestic payments system that
would delay payments of settlement variation between the

70
<PAGE>

Clearing House and clearing members.

The Clearing House also manages final settlement on all CME contracts,
including cash settlement, physical delivery of selected commodities, and option
exercise and assignment. Although more than ninety-five percent of all futures
contracts are liquidated before the expiration of a contract, the remainder must
be delivered according to detailed specifications. The Clearing House acts as
the delivery agent for all contracts. This ensures that timely delivery of the
exact quality and quantity specified in a contract is made by the seller, and
that full and timely payment is made by the buyer.

Our objective is to offer the highest possible risk management services and
financial safeguards to our clearing member firms while providing maximum
capital efficiencies to users of our markets. In 1999, we enhanced our
financial safeguards by increasing our security deposit pool from $125 million
to $305 million. We also introduced net margining in proprietary accounts,
thereby reducing capital costs for our clearing member firms by an estimated
$900 million a day. We implemented risk-based capital requirements to match
more closely the capital requirements of our clearing member firms to the actual
risks borne by those firms.

In order to achieve further capital efficiencies for our clearing member
firms, we have also established our Interest Earning Facility(TM), two money
market funds managed by a third party investment manager, to allow clearing
member firms to enhance the yields that they receive on their performance bond
collateral deposits with the Clearing House. We currently have approximately $1
billion in balances in these funds, which are benchmarked against the ninety-day
U.S. Treasury Bill average yield. Because initial and maintenance performance
bonds, as well as profits in some of our contracts, are denominated in various
foreign currencies, the Clearing House offers the Moneychanger(TM) Service to
its clearing member firms. This service provides traders with access to
overnight funds in various foreign currencies at competitive bid/ask spreads
free of charge for the transfer of funds to satisfy the terms of a futures
contract.

To support our objective to provide firms with high quality clearing
services, we have developed in conjunction with the New York Mercantile Exchange
a state-of-the-art clearing system, Clearing 21(R), which processes reported
trades and positions on a real-time basis, providing users with instantaneous
information on trades, positions, money and risk exposure. Clearing 21 supports
futures and options products, securities, and cash instruments, as well as
complex new product types including combinations, options on combinations,
options on options, swaps, repurchase and reverse repurchase agreements, and
other instruments. Through Clearing 21 workstations, our clearing member firms
can electronically manage their positions, exercise options, enter transactions
related to foreign currency deliveries, manage collateral posted to meet
performance bond requirements, and access all of our other on-line applications.
Together with the GLOBEX2, we offer straight through electronic processing of
transactions in which an order is electronically routed, matched, cleared, and
made available to the clearing firm's back office systems for further
processing.

The Clearing House's highly sophisticated SPAN system has now been adopted
by over thirty other exchanges and clearing organizations worldwide. SPAN
simulates the effects of changing market conditions on a complex portfolio and
uses standard options pricing models to

71
<PAGE>

determine a portfolio's overall risk. SPAN then generates a performance bond
requirement that covers the largest reasonable overnight loss.

We have led the derivatives industry in establishing cross-margining
agreements with other leading clearing houses that reduce capital costs for
clearing member firms and users of our markets. The cross-margining agreements
permits an individual clearing house to recognize a clearing firm's open
positions at other clearing houses that produce risk offsets and to lower
capital requirements.. We have implemented, or are in the process of
implementing, cross-margining arrangements with The Options Clearing
Corporation, Commodity Clearing Corporation, the Board of Trade Clearing
Corporation, the London Clearing House, the Singapore Exchange Derivatives
Clearing and Clearnet.

The CME Clearing House has the operational capacity and organizational
expertise to extend its services flexibly and efficiently to a range of
potential new products and also to other exchanges and trading platforms.

Market Data

Our markets generate valuable information regarding prices and trading
activity in our products. We sell our "market data," which includes bids,
offers, trades, and trade size to banks, broker-dealers, public and private
pension funds, investment companies, mutual funds, insurance companies,
individual investors, and other financial services companies or organizations
that use our markets or monitor general economic conditions. Revenue from
market data represents approximately 21% of our revenue during 1999, and has
grown at an annual rate of 5.6% over the last five years. In general, the price
information is sent via dedicated networks to 115 worldwide quote vendors who
consolidate our market data and information with that from other exchanges and
third party data and news services and resell the consolidated data and
information to their subscribers. These quote vendors distribute our market
data through dedicated networks, the Internet, and through wireless handheld
devices. We currently have over 36,000 subscribers of our real time market data
who display the data on over 175,000 screens. The market data supplied by the
Exchange is central to trading activity in our products and to trading activity
in related cash and derivatives markets The dissemination of real time data
generates revenue and supports our customer bases with timely market
information.

We believe that the evolution of technology and the financial services
industry will change the existing distribution channels, sales methods and
pricing structure for market data. These changes might adversely impact our sale
of market data. Increases in the volume of electronic trading, the use of the
Internet as a distribution mechanism, and increases in the use of our products
by individual retail investors will all impact the sale of our market data. We
have created marketing programs to stimulate usage of our market data, and we
have begun to enter into new business relationships with companies that develop
value-added computer-based applications that use our market data to provide
specific insights into the dynamics of trading activity in our listed contracts.

International Alliances

We are expanding our network of international alliances and partnerships
with other exchanges in order to offer our products to customers on a global
basis and to access the existing distribution capabilities of some of our
partners' electronic trading systems. We have established

72
<PAGE>

the GLOBEX Alliance with the derivatives markets operated by ParisBourse in
France, The Singapore Exchange Derivatives Trading Limited, the Bolsa de
Mercadorias y Futuros in Brazil, and the Montreal Exchange. We have also entered
into a partnership with the London International Financial Futures & Options
Exchange and its clearing partner, the London Clearing House. Through these
alliances, partnerships and relationships, we intend to offer our customers
capital efficiencies by cross-margining mutually agreed upon highly correlated
products; trading efficiencies by interconnecting our trading platforms and
networks of each exchange and by harmonizing trading rules and interfaces.
Additionally, when mutually beneficial, we will share in the cost of the
development of technology. We seek to expand these alliances to include other
foreign and domestic markets.

Marketing Programs and Advertising

Our marketing programs target both institutional and retail customers. Our
marketing programs for institutional customers aim to inform highly
sophisticated traders, portfolio managers, corporate treasurers and other market
professionals about novel uses of our products, such as new hedging and risk
management strategies. We also strive to educate these users about changes in
product design, margin requirements and new clearing services. Our marketing
typically involves the development of personal relationships with professional
traders who actively use our markets. We participate in all major domestic and
international trade shows and seminars regarding futures and options and other
derivatives products. In addition, we sponsor educational workshops and
marketing events designed to educate market users about our new products.
Through these relationships and programs, we ascertain the needs of our customer
base and we use information from them to drive our product development and
product maintenance efforts.

We advertise our products and our brand name to increase our trading
volumes. Our advertising strategy is twofold: to maintain awareness and
familiarity among our institutional target customers and to generate awareness
among our growing retail audience. Our primary method of communication is with
print media, using both monthly trade magazines and daily business publications.
We are also committing media dollars to Internet advertising given the growth of
the medium and the synergies with our electronically traded products.

Competition

We face a variety of competitors and competing marketplaces and products.
We compete by offering market participants efficient, cost-effective and liquid
marketplaces for trade execution through both open outcry and electronic trading
platforms, broadly disseminated and transparent market and quotation data, a
financially secure clearing system, access to market making, superior product
design, and state-of-the-art technology. Additionally, we are continually
enhancing our products and providing additional efficiencies to our customers.
For example, to address competitive threats to our Eurodollar market, we have
implemented trading in half-tick and quarter-tick increments; we have introduced
mid-curve options and Eurodollar packs and bundles, and we have changed the
final settlement procedures for these contracts to meet the needs of our
customers. Additionally, we offer Eurodollar participants both open outcry and
electronic trading platforms to choose from for trade execution. We believe we
are well prepared to meet potential competition, and we are committed to
maintaining the technology, services, market integrity and liquidity that make
us an industry leader.

73
<PAGE>

Over-the-counter markets for interest rate and currency swaps, for cash
currencies, and for other bilaterally negotiated derivative products compete
with our products. However many of the participants in the over-the-counter
markets use our products to hedge the risk they acquire in the over-the-counter
markets. These over-the-counter markets depend heavily upon bilateral credit
support; therefore, they tend to be dominated by large financial institutions
with very high credit ratings. As a result, participation in these markets by
some market participants and financial institutions with lesser credit ratings
is sometimes limited or more expensive. The mutualization of risk offered by
our Clearing House guarantee, and the mitigation of counterparty credit risk,
allows us to service a broader segment of customers in these financial markets.

In addition to competition from other exchanges that offer comparable
derivative products, we also face competition from other financial exchanges,
from electronic trading systems, from consortia of end users and futures
commission merchants, and from technology firms. Other financial exchanges have
trading platforms and financial market expertise that may lead them to consider
listing copies of our non-equity products. These potential competitors would
still need to obtain the regulatory approval, establish market liquidity, and
develop derivative product clearing services.

Electronic trading firms that currently specialize in the trading of equity
securities have electronic trade execution and routing systems that can be used
to trade products that compete with our products. Typically, while these firms
have advanced electronic and Internet technology, significant capitalization,
and competitive pricing, they lack the overall market liquidity, distribution,
neutrality and market integrity offered by our electronic and open outcry
trading platforms. They also lack the financial security and guarantees offered
by our Clearing House. In many cases these electronic trading systems do not
have the regulatory systems and approvals to trade products that compete
directly with ours.

Consortia owned by member firms and large market participants also may
become our competitors, particularly with respect to our Eurodollar futures and
options contracts. For instance, BrokerTec Global LLC, a proposed electronic
inter-dealer fixed income broker, has announced its intention to develop or
acquire a facility for electronic trading of U.S Treasury securities, Euro-
denominated sovereign debt and other fixed income securities and futures related
products. All of the members of BrokerTec Global LLC are either clearing member
firms of the Exchange or affiliates of our clearing member firms, and are
significant participants in the Eurodollar market. Similarly, Electronic
Brokerage System, a partnership of major market-making banks, has an electronic
trading system for currencies and short-term forward rate agreements that are
very similar to our Eurodollar futures contract.

Technology companies, market data and information vendors, and front end
software vendors also represent potential competitors because, as purveyors of
market data, these firms typically have substantial distribution. As technology
firms, they also have access to trading engines that can be connected to their
data and information networks. Additionally, technology and software firms that
develop trading systems, hardware and networks but who are otherwise outside of
the financial services industry may be attracted to enter our markets.

Our Members

74
<PAGE>

We are presently owned by our members who have purchased seats on the
Exchange. Members and individuals who have leased seats from members can
execute trades for their own accounts or for the accounts of customers of
clearing member firms. The trades of members and lessees of memberships for
their own accounts qualify for lower fees in recognition of the market liquidity
that their trading activity provides. Members and lessees also benefit from
market information advantages that may accrue from their proximity to trading
activity on the trading floors and from access to the GLOBEX2 order book.
Memberships are purchased from existing members at prevailing market prices.
There are four types of memberships: CME, IMM, IOM and GEM, each with different
trading privileges and voting rights. All membership applicants are subjected
to a thorough review process and must be approved.

Members can buy or sell memberships through mechanisms maintained by the
Exchange.

High/Low Sale Prices of Memberships
(in thousands)

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
GEM
CME IMM IOM GEM Fraction
- -----------------------------------------------------------------------------------------------------------------
Year Qtr. High Low High Low High Low High Low High Low
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1 $480.0 $459.0 $400.0 $390.0 $275.0 $255.0 $45.0 $38.0 $4.3 $3.5
- -----------------------------------------------------------------------------------------------------------------
2 410.0 390.0 335.0 210.0 245.0 135.0 30.0 21.5 3.6 1.5
- -----------------------------------------------------------------------------------------------------------------
3 333.0 251.0 242.5 180.0 151.0 110.0 28.0 15.0 2.3 1.5
- -----------------------------------------------------------------------------------------------------------------
4 325.0 276.5 208.0 181.5 140.0 115.0 18.0 15.0 2.0 1.5
- -----------------------------------------------------------------------------------------------------------------
1999 1 340.0 310.0 275.0 217.5 205.0 127.0 18.0 18.0 1.9 1.6
- -----------------------------------------------------------------------------------------------------------------
2 345.0 320.0 250.0 222.0 190.0 173.0 18.5 15.0 1.9 1.6
- -----------------------------------------------------------------------------------------------------------------
3 480.0 345.0 330.0 240.0 225.0 191.0 16.0 12.5 1.7 1.4
- -----------------------------------------------------------------------------------------------------------------
4 550.0 450.0 400.0 320.0 248.0 220.0 22.0 17.0 2.7 1.6
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Exchange records.

Individual Members

Our Membership Committee reviews applicants and conducts proceedings to
determine whether candidates meet our membership criteria. Additionally,
registration or a temporary license to act as either a floor broker or a floor
trader must be granted by the National Futures Association before an individual
can begin trading on the Exchange's trading floors. All members must be
guaranteed or qualified to trade by a clearing member before they may personally
execute a transaction on the Exchange. With respect to GLOBEX2, qualified
members may obtain a terminal to trade for their own accounts and participate in
the P-M-T Limited Partnership, the owner of the GLOBEX2 system, as Class A
Limited Partners.

CME Division. The Chicago Mercantile Exchange division membership entitles
the holder to execute trades in all futures and options contracts listed on the
Exchange. There are 625 CME division memberships.

IMM Division. The International Monetary Market ("IMM") division
membership entitles the holder to execute trades in all currency and interest
rate futures and options contracts, as well as the contracts assigned to the IOM
and GEM divisions (defined below). There are 813

75
<PAGE>

IMM division memberships.

IOM Division. Membership in the Index and Option Market ("IOM") division
entitles the holder to execute trades in all stock index futures contracts,
random length lumber futures contracts, all options contracts, and all contracts
assigned to the GEM division. There are 1,287 IOM division memberships.

GEM Division. The Growth and Emerging Markets ("GEM") division membership
entitles holders to execute trades in all growth and emerging market currency,
stock index and interest rate products that are assigned to that division by the
board. When the GEM division was created in 1995, each member of the Exchange's
other three divisions received a fractional GEM membership, and 50 memberships
were sold to eligible third parties. GEM fractions may be sold and combined to
create, together with the 50 full memberships that were sold to third parties, a
total of 467 full memberships.

Clearing Members

An Exchange clearing member firm must satisfy our legal and financial
requirements, as well as the requirements imposed by the CFTC. Nearly all of
our clearing members are registered futures commission merchants. Clearing
membership entitles the firm to execute orders on the Exchange and to clear
resulting positions through the Exchange Clearing House. We have seventy
clearing members.

The right to be a clearing member in New CME will require an ownership
interest equivalent to current requirements. Exchange rules require that each
Exchange clearing member must own or have assigned to it at least two CME
memberships, at least two IMM memberships and at least two IOM memberships.
Additionally, due to a rule change that occurred in May 1987, a clearing member
which was an IMM Class A clearing member on or prior to May 6, 1987, was allowed
to own or have assigned to it at least one CME membership, three IMM
memberships, and two IOM memberships. Twenty-two clearing firms were
grandfathered under this rule, which was amended so that clearing members would
no longer be divided into two different classes. The goal of the change was to
consolidate clearing members into one group for uniformity and simplicity.
Finally, after November 3, 2000, each clearing member must have at least one GEM
membership assigned to it. The rules also require that at least one CME, one
IMM, one IOM and one GEM membership assigned to the clearing member must be
owned by the clearing member or an officer, principal or partner with an
acceptable proprietary interest.

Upon completion of the demutualization transaction, each clearing member
will be required to satisfy the above-described criteria by owning Class A
shares and Class B shares in an amount reflecting the total shares allocated to
such clearing member in respect to the memberships held by it for purposes of
meeting those requirements. New CME management may choose to alter these
ownership interest requirements.

Other Business Relationships And Subsidiaries

P-M-T Limited Partnership. P-M-T Limited Partnership is an Illinois
limited partnership and a partially-owned subsidiary of the Exchange. It was
formed in 1988 to initiate the development of the GLOBEX system. P-M-T owns all
rights to electronic trading of the

76
<PAGE>

Exchange's products. It has entered into contractual arrangements with the
Exchange for the provision of services in connection with the operation of the
system and the provision of related support services. The Exchange charges P-M-T
for these services. The Exchange is the sole general partner of P-M-T. In
addition, P-M-T has 1,695 owners of its Class A limited partnership interest and
57 owners of its Class B limited partnership interests. The following table
indicates the number of units held by the Exchange and by members:

Number of Units Held By
--------------------------------------------
Limited Exchange Members
Partner Number --------------------------------------------
Class of Units Number Percentage Number Percentage
-------------------------------------------------------------------
A 4,786 321 6.7% 4,465 93.3%
B 90 34 37.7 56 62.3

Class A limited partnership interests are held by CME, IOM and IMM members.
Class B limited partnership interests are held by clearing member firms.

GFX Corporation. GFX Corporation is a wholly-owned subsidiary of the
Exchange. It was established by the Exchange for the purpose of maintaining and
creating liquidity in our foreign currency futures contracts. Experienced
foreign currency traders employed by GFX buy and sell our foreign currency
futures contracts using our GLOBEX2 system. Offsetting arbitrage transactions
using futures contracts or spot foreign currency transactions with approved
counterparties in the interbank market are used to limit risk. GFX does not
seek to profit from its trading and seeks to minimize risk. GFX's net trading
gains amounted to $2.4 million in 1999, $4.8 million in 1998 and $2.2 million in
1997.

CME Trust. The Chicago Mercantile Exchange Trust was established to
provide financial assistance, on a discretionary basis, to customers of any
clearing member that becomes insolvent. The Trust, the first of its kind for
any exchange, contains $42.7 million in assets. The trustees of the fund, who
are also members of the Exchange's Board of Directors, have discretion to use
the fund to satisfy customer losses in the event a clearing member fails or is
in such severe financial condition that it cannot meet a customer's obligations
provided that those customers' losses are related to transactions in Exchange
contracts. Neither the Exchange nor its members have any residual interest in
the assets of the Trust.

Intellectual Property

We regard substantial elements of our brand name, marketing elements and
logos, products, market data, software, and technology as proprietary, and we
attempt to protect these elements by relying on trademark, service mark,
copyright and trade secret laws, restrictions on disclosure and other methods.
For example, with respect to trademarks, we have registered marks in more than
twenty countries. Additionally, by way of example, we actively utilize trade
secret laws to protect our market data. We will continue to use these and other
methods of intellectual property protection in the future as appropriate.

Employees

As of December 1, 1999, we had 1,054 full-time equivalent employees. We
consider our relations with our employees to be good. We have never had a work
stoppage, and none of our employees are represented by a collective bargaining
agreement. However, since 1982, we have had an understanding with the
International Union of Operating Engineers, Local 399, AFL-CIO,

77
<PAGE>

relating to building engineers at the headquarters building. At present, there
are seven employees to whom this understanding applies.

Facilities

The Exchange's principal executive offices are located at 30 South Wacker
Drive, Chicago Illinois 60606. Our telephone number is (312) 930-1000. Our
trading floor operations are also located there. We occupy approximately 430,000
square feet of office space under a lease that expires in 2003 and 70,000 square
feet of trading floor space under a lease with the CME Trust. The trading arena
has state-of-the-art wallboard price display systems, order-routing and
communications systems. On November 1, 1998, we entered into a first extension
of our lease with the CME Trust, and we have an option on three additional
extensions which will secure the availability of our trading facility until
October 2026. We maintain backup facilities for electronic systems in separate
office towers at 10 and 30 South Wacker Drive, Chicago, Illinois. We also
maintain remote offices in leased office space in Washington D.C., London,
England and Tokyo, Japan. We believe that our facilities are adequate for our
current operations and that additional space can be obtained if needed.

Legal Proceedings

From time to time, we are involved in legal proceedings and litigation
arising in the ordinary course of business. As of the date of this prospectus,
except as described below, we are not a party to any litigation or other legal
proceeding that, in our opinion, could have a material adverse effect on our
business, operating results or financial condition. While the ultimate results
of these proceedings against the Exchange cannot be predicted with certainty,
management of the Exchange believes that the resolution of these matters will
not have a material adverse effect on its consolidated financial position or
results of operations.

In May 1999, Victor Niederhoffer, Niederhoffer Investments, Inc., and
several commodities pools controlled by Victor Niederhoffer filed a complaint
against the Exchange and a number of unidentified employees, officials and
members in federal district court in Chicago, under the Commodity Exchange Act.
(Niederhoffer Intermarket Fund, L.P., et al. v. Chicago Mercantile Exchange, No.
99 C 3223 (N.D. Ill.)) The complaint charges that the Exchange failed to
enforce its rules relating to the establishment of settlement prices on
specified dates and that as a consequence Niederhoffer, the pools, and their
futures commission merchant suffered damages of at least $105 million. Based on
extensive pre-complaint investigation, discovery conducted to date, and advice
from legal counsel, we believe that the lawsuit is without merit and that the
plaintiffs are unlikely to prevail.

On May 5, 1999, the Exchange, the Chicago Board of Trade, the New York
Mercantile Exchange, and Cantor Fitzgerald, L.P., were sued by Electronic
Trading Systems, Inc. in the United States District Court for the Northern
District of Texas (Dallas Division) for alleged infringement of Wagner United
States patent 4,903,201, entitled "Automated Futures Trade Exchange." The
patent relates to a system and method for implementing an electronic, computer-
automated futures exchange. Defense of the Exchange has been undertaken by
attorneys for EuroNext, the licensor of our trading system and a subsidiary of
ParisBourse, pursuant to an indemnification agreement. EuroNext has reserved
its rights under that agreement in the event that any modifications to the
licensed system made by us result in liability. Counsel

78
<PAGE>

for EuroNext have advised us that they do not believe that our licensed system
infringes the patent. Regardless of the outcome of the proceeding, we believe
that the indemnification agreement and the probability that a license will be
available preclude any material effect on the Exchange.

Regulation

Regulation of the U.S. Futures Industry

Futures and options contracts, which are traded on futures exchanges, are
subject to regulation by the CFTC under the CEA. Futures exchanges in the
United States and elsewhere are subject to extensive regulation. Clearinghouses
affiliated with futures exchanges are similarly regulated. Our business
activities fall within the scope of this law and these regulations. We are a
designated contract market licensed by the CFTC.

As a matter of public policy, regulatory bodies in the United States and
the rest of the world are charged with safeguarding the integrity of futures
markets and with protecting the interests of investors participating in those
markets and in the cash markets underlying futures contracts. The Exchange
maintains broad powers to ensure that free and open markets exist for the
trading of futures and options contracts. In addition to its trading
regulations, the Exchange has the power to take immediate action in dealing with
an abrupt change in factors influencing futures markets in order to ensure
orderly trading. In the United States, the CFTC is the federal agency
responsible for the administration of the CEA.

The CEA and CFTC rules govern most aspects of our operations and impose
many affirmative obligations that can be costly and burdensome. Our ability to
continue operating depends on continued compliance with the CEA and CFTC rules
and regulations. Our ability to list new contracts is dependent on that
compliance. If we fail to comply, the CFTC may conduct administrative
proceedings which can result in censure, fine, the issuance of cease-and-desist
orders or the suspension of our designation as a contract market.

Changes in Existing Laws and Rules

Additional legislation or regulation, or changes in existing laws and rules
or their interpretation, may directly affect our mode of operation and our
profitability. The CFTC has recently adopted regulations that will reduce the
cost and burdens of listing new contracts for trading. Proposals for changes to
the CEA that have been suggested by other regulators might be less favorable to
our business. The regulations under which we have operated since 1974 may be
changed in a manner that will permit unregulated competitors and competitors in
other regulated industries to duplicate our markets and trade our products.

The CEA requires all futures contracts to be executed on an exchange that
has been approved by the CFTC. The exchange trading requirement has been
modified by CFTC regulations to permit privately negotiated swap contracts to be
transacted in the over-the-counter market. At the end of 1998, according to
data from the Bank for International Settlements, the total estimated notional
amount of outstanding over-the-counter derivative contracts was $80 trillion
compared to $13.5 trillion for exchange-traded futures and options contracts.
The CFTC

79
<PAGE>

exemption under which the over-the-counter derivative market operates precludes
the over-the-counter market from using exchange-like electronic transaction
systems and clearing. These limitations on the exemptions granted to the over-
the-counter market have been called into question by a recent report of the
President's Working Group on Financial Markets ("PWG"). The PWG is made up of
the Treasury Secretary, and the Chairmen of the SEC, the CFTC and the Board of
Governors of the Federal Reserve System.

The PWG advocates a complete exemption from the CEA for some principal-to-
principal derivative exchanges that provide trade execution services comparable
to those performed by the Exchange. The customers who may access those exchanges
are also significant customers of regulated exchanges such as ours. The PWG has
not recommended equivalent treatment for the existing electronic markets
operated by regulated exchanges. The PWG also recommends legislation that will
permit CFTC regulated clearing organizations to clear futures, options on
futures contracts, and OTC derivatives that are not securities or securities
options. In contrast, the PWG recommends permitting banks and SEC regulated
clearing organizations to clear financial derivative contracts, as well as
equities, government securities, repurchase and reverse repurchase agreements,
and other instruments. Finally, the PWG recommends permitting banks and broker-
dealers, and their affiliates, to operate currency futures markets for retail
customers without being subject to regulation under the CEA.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-4 with respect to the common stock offered in this document.
This document, which constitutes a part of the registration statement, does not
contain all the information in the registration statement or the exhibits and
schedules that are part of the registration statement. For further information
with respect to New CME and its common stock, please see the registration
statement and the exhibits and schedules that are part of the registration
statement. You may read and copy this document and any subsequent documents we
file at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information about
the Public Reference Room. Our SEC filings are also available to the public from
the SEC's Web site at http://www.sec.gov.

Because of the offering, we will become subject to the information
requirements of the Securities Exchange Act. We will fulfill our obligations
with respect to those requirements by filing periodic reports, proxy statements
and other information with the SEC. Those reports, proxy statements and
information may be inspected and copied at the Public Reference Room referred to
above. We intend to furnish holders of our common stock with annual reports that
include annual consolidated financial statements audited by an independent
certified public accounting firm and quarterly reports for the first three
quarters of each fiscal year containing unaudited interim financial information.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following discussion should be read in conjunction with our
consolidated financial statements appearing elsewhere in this document.

80
<PAGE>

Historical Overview

We are currently a not-for-profit company and have operated in a manner
consistent with that structure. During the 1980's, we held the position as the
world's second largest derivatives exchange with volume growing from 25 million
contracts in 1981 to in excess of 100 million in 1989. Revenues increased
steadily over that period and, with a relatively fixed cost structure, profits
added to a growing working capital position. In addition, members' equity grew
from $17.0 million in 1980 to $89.0 million at the end of 1990. We continued to
expand our open outcry markets, and in 1994 volume exceeded 200 million
contracts traded. In 1993, we internally financed the construction of a second
37,000 square foot trading floor and began developing Clearing 21. During the
1990's, we continued to reinvest profits in product development and promotion
that gave customers new hedging and trading instruments and expanded our product
offering. In addition, we positioned ourselves for the future by adding to our
working capital position, making ongoing investments in electronic trading and
expanding strategic alliances.

The competitive landscape changed in the 1990's with increased competition
from the over-the-counter market and the emergence of new electronic exchanges.
Working capital at the end of 1998 was $92.6 million. During 1999, we made
significant investments in technology infrastructure, trading floor technology
and performance upgrades to GLOBEX2. We financed these strategic initiatives, in
part, through working capital, which declined to $66.8 million at December 31,
1999.

The chart below and related overview is based on financial results for the
year ended December 31, 1999. Management believes they present a fair
representation of our sources of revenue and expense categories.

[Graphic: Pie chart entitled "1999 REVENUE SOURCES" and displaying each
revenue source as a percentage of gross revenue for the year ended December 31,
1999. The entire chart represents and is subtitled "(100% = $208.5 MILLION)".
Revenues are broken down as follows: Clearing Fees and Transaction Fees - 66% or
$138.5, Quotation Data - 21% or $43.0, Investment Income - 4% or $9.1,
Communications - 4% or $8.2 and Other - 5% or $9.7.]

Clearing fees, transaction fees and quotation data fees account for 87%
percent of total revenues. Investment income, communications charges to our
members and clearing member firms and other operating revenue comprise the
remaining 13% of revenues.

Clearing and transaction fees include GLOBEX2 fees and other volume related
fees, and account for 66% of our revenues. Revenue from clearing fees is very
sensitive to volume and changes in product mix which drives the average rate per
trade. During 1999, the average rate per trade was 69c and is a function of the
following factors:

. Product mix (1999 volume: futures 80%, options 16%, EFPs 4%)
. Account ownership status (member, lessee, customer, etc.)
. Product (licensed, non-licensed, E-Mini, etc.)
. Trading venue (open outcry, GLOBEX2)

81
<PAGE>

[Graphic: Line graph entitled "Average rate per trade (round-turn)" and
representing the average clearing fee per trade cleared by the CME. Below the
horizontal axis each year measured is listed in chronological order from left to
right, beginning with 1994 and ending with 1999. The vertical axis indicates the
average fee per trade in cents, beginning with $0.50 and increasing, in
intervals of $0.05, to $0.70. A continuous line graph connects the average
clearing fee per trade for each particular year. The average rate per trade was
$0.55 in 1994, $0.61 in 1995, $0.62 in 1996, $0.58 in 1997, $0.55 in 1998 and
$0.69 in 1999.]

The fluctuation in the rate per trade over the six year period is due to
several factors. Fee reduction programs and product promotion fee waivers put
downward pressure on the average rate per trade. Conversely, increases in the
EFP surcharge and the relative growth in GLOBEX2 volume have increased the
average rate per trade. Specifically, 8c of the increase in the rate per trade
from 1998 to 1999 is related to the end of the fee reduction program that was in
place during 1998, while approximately 3c is attributable to the rapid growth in
GLOBEX2 volume in 1999.

Pricing decisions for clearing fees are based on two primary factors.
First, based on the competitive environment, we may raise or lower fees to
address the business threat. Second, and somewhat related to the first, during
times of excess profit, the Board may take action to reduce fees to build
customer loyalty and increase pricing pressure on the competition. In 1998, we
implemented a fee reduction initiative which resulted in a $16.9 million
reduction in clearing fees and an additional $1.0 million waiver of lessee
brokerage fees. In addition to the 1998 fee reduction program, in 1997 we
reduced fees from August 1 through December 31. Fees were raised again in 1998,
but not back to the original rates that were in effect prior to August 1, 1997.
The graph below illustrates the effect of fee reduction programs on clearing
revenue.

[Graphic: Bar graph entitled and representing "CLEARING FEES 1994 -1999".
Below the horizontal axis each year measured is listed in chronological order
from left to right. The vertical axis indicates the fees that were received and
that would have been received had not some discount or fee waiver been in
effect, in millions, beginning with zero and increasing, at intervals of 50, to
200. The lower portion of each bar is darkly shaded to the extent of the actual
fees received. To the extent any fee reductions or waivers apply, the bars are
shaded medium and lightly, respectively. Inset in a small square to the right of
the graph is a legend containing a lightly shaded box to the immediate left of
the word "Waiver", immediately below which is a slightly darker box to the
immediate left of the words "Reduction in Rate", and immediately below which is
a darkly shaded box to the immediate left of the word "Actual". Actual clearing
fees were approximately $114 million in 1994, $111 million in 1995, $109 million
in 1996, $117 million in 1997, $125 million in 1998 and $139 million in 1999.
Fee waivers during the period amounted to approximately $12 million in 1994 and
$18 million in 1998. Fee reductions during the period amounted to approximately
$11 million in 1997, $13 million in 1998 and $10 million in 1999.]

The second largest source of revenue, amounting to 21% of total revenue in
1999, is quotation data fees from the sale of market data. We have contractual
relations with over 100 vendors who act as value-added resellers. The vendors
disseminate the data to over 36,000 subscribers and remit the exchange data fee
to us. Revenue growth in this key area has increased at a compounded annual rate
of 6.5% over the past ten years. The number

82
<PAGE>

of subscribers, the revenue driver, has increased at a similar pace.

Other revenues, which make up 13% of total revenues, are derived from
telecommunications services provided to members, investment income and from
various services provided to members.

[Graphic: Pie chart entitled "1999 EXPENSES BY CATEGORY" and displaying
each expense category as a percentage of total expenses for the year ended
December 31, 1999. The entire chart represents and is subtitled "(100% = $201.8
MILLION)". Expenses are broken down as follows: Salaries & Benefits - 40%,
Professional Fees & Outside Services - 14%, Communications & Computer
Maintenance - 14%, Depreciation & Amortization - 13%, Occupancy - 8%, Public
Relations & Promotion- 4% and Other - 7%.]

Our operating expenses have increased significantly since 1997 primarily
due to increased staffing and expenditures for technology projects. For 1999,
salaries and benefits accounted for 40% of our expenses as both the trading
floor and the systems development and maintenance areas required large
investments in human capital. The next largest category, professional fees and
outside services, represents 14% of total expenses in 1999 and is primarily
related to information technology consultants that are working on strategic
initiatives. Also included in this category are legal fees and license fees. The
communications and computer maintenance category accounts for 14% of our
expenses and includes expenses to support the GLOBEX2 network, computer
equipment and software and the cost to maintain the trading floors and tenant
phone systems which are administered by our Telecommunications Department. The
telecommunications revenue approximately offsets the related expense. Occupancy
related to staff offices, trading floors and remote offices represent 8% of the
expenses in 1999. Depreciation and amortization account for 13% of total
expenses. Together, occupancy and depreciation and amortization make up our
fixed costs and account for 21% of the budget. The last two categories, other
operating expenses and marketing and promotion, account for only 11% of our
expenses.

In general, the results of operations reflect our not-for-profit membership
structure. Only a very small percentage of our expenses are variable, thus,
revenues from volume increases flow directly to operating income. Since we do
not distribute earnings, we increase spending on discretionary items and reduce
fees as a way of providing value to our members and improving the competitive
position of the Exchange.

Results of Operations

1999 Compared to 1998

Revenues of $208.5 million for the year ended December 31, 1999, increased
$13.3 million compared to the prior year. Clearing fees and GLOBEX2 transaction
fees were $138.5 million in 1999, representing an increase of $14.0 million over
1998. This increase is attributable primarily to the effect of a program which
reduced clearing fees approximately $17.9 million in the fourth quarter of 1998,
offset by an 11% decrease in volume from 226.6 million contracts traded in 1998
to 200.7 million contracts traded in 1999. There was no similar fee reduction
program during 1999. The decrease in volume was primarily due to reduced
volatility, continued consolidation of institutional customers and a slowdown in
business as customers prepared for

83
<PAGE>

Y2K. Low inflation, stable economic conditions, and the absence of world
financial crises, such as the Asian financial crisis which added to our interest
rate product volume in 1998, contributed to reduced volatility and decreased
volume in interest rate products. Revenue from quotation data fees in 1999 was
$43.0 million, an increase of $3.0 million compared to 1998, resulting from an
increase in the number of subscribers. Investment income decreased $1.0 million
due to a decrease in average invested balances. Other revenues decreased $2.6
million as a result of a reduction in trading revenues from our GFX subsidiary
and a lower level of member fines. These reductions were partially offset by
$1.7 million in revenues from GLOBEX2 terminal charges for which there were no
similar charges in 1998.

Operating expenses in 1999 were $201.8 million, an increase of $20.8
million over 1998. Expenses increased as a result of technology advancements in
the areas of GLOBEX2, trade order processing systems, hand-held trading devices,
infrastructure improvements, and the support of both open outcry and electronic
trading systems. Salaries and benefits increased $8.6 million in 1999 to $81.0
million, reflecting additional technology staff and merit increases. Occupancy
expense decreased $1.9 million in 1999 due primarily to a reduction in rent
expense for the trading floor resulting from our exercise of an option to extend
the term of the lease. Professional fees, outside services and license fees
amounted to $28.3 million in 1999 and include significant expenditures for
GLOBEX2, Year 2000 compliance, trading floor systems, recruiting, legal services
and S&P license fees. These expenses increased $0.3 million compared to 1998,
and are net of capitalized software development costs as described in the
following paragraph. Communications and computer and software maintenance
expenses increased $5.7 million in 1999 primarily due to the expansion of the
GLOBEX2 electronic trading network. Depreciation and amortization expense
increased $7.3 million in 1999 as a result of computer equipment additions and
the amortization of capitalized software development costs. Public relations and
promotion expenses decreased $1.9 million compared to 1998, reflecting a
reduction in advertising and new product promotions. Other operating expenses
increased $2.7 million in 1999 to $13.4 million due to increases in equipment
lease interest, travel, board stipends, department supplies, staff training, and
state and local sales and use taxes.

We adopted Statement of Position 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" ("SOP 98-1") effective
January 1, 1999, and accordingly, commenced capitalizing certain costs of
developing internal use software which would otherwise have been expensed under
our previous accounting policy. Costs capitalized during 1999 amounted to $15.3
million, and consist primarily of staff salaries and outside consulting costs.
Amortization of capitalized software development costs in 1999 amounted to $0.9
million.

Income from continuing operations, before a deduction for limited partners'
interest in the earnings of P-M-T Limited Partnership and a provision for income
taxes, was $6.6 million in 1999, representing a decrease of $7.5 million
compared to 1998. The limited partners' interest in the earnings of P-M-T was
$2.1 million in 1999, $0.7 million less than 1998 as a result of a $1.0 million
decrease in operating income of the partnership.

The provision for income taxes decreased in 1999 to $1.9 million compared
to $4.3 million in 1998 as a result of lower pre-tax income in 1999. The
increase in our effective income tax rate from 38% in 1998 to 41% in 1999 was
primarily due to greater nondeductible expenses, including costs associated with
our pending demutualization transaction.

84
<PAGE>

Net income for the year ended December 31, 1999, was $2.7 million compared
to $7.0 million for the year ended December 31, 1998.

1998 Compared to 1997

Revenues for the year ended December 31, 1998, were $195.2 million compared
to $177.6 million for 1997. Clearing fees and GLOBEX2 transaction fees increased
to $124.6 million from $116.9 million in 1997 primarily due to a 13% increase in
volume from 200.7 million contracts traded in 1997 to 226.6 million contracts
traded in 1998. Trading volume on GLOBEX2, included above, increased 122% to 9.7
million contracts traded in 1998. The revenue impact of this increased volume
was partially offset by a $16.9 million fee reduction program and an additional
$1.0 million waiver of lessee brokerage during the fourth quarter of 1998.
Quotation data fees increased to $40.1 million in 1998 from $37.7 million in
1997 as a result of an increase in subscribers and devices in service.
Communication fees of $8.1 million increased $0.2 million, or 3%, over 1997.
Investment income increased $1.9 million to $10.1 million in 1998 due to an
increase in the average invested balance which more than offset the impact of
declining interest rates. Other operating revenue increased to $12.3 million
from $6.9 million primarily due to an increase in GFX trading revenues and
systems consulting fees we received for enhancements to the CLEARING 21(R)
system.

Total expenses in 1998 were $181.0 million compared to $158.6 million in
1997. The increase was due primarily to new strategic initiatives, electronic
trading and other technology projects and enhancements. Salaries and benefits
increased $5.5 million to $72.4 million in 1998 due primarily to increases in
salaries and bonuses compared to the prior year. Professional fees, outside
services and license fees of $28.0 million were $11.1 million greater than in
1997 primarily due to expenses associated with the strategic planning process
and increased spending on GLOBEX2, Year 2000 compliance and trading floor
technology. Expenses for communications and computer equipment increased $5.5
million due, in large part, to communications cost related to the GLOBEX2
network.

Income from continuing operations, before a deduction for limited partners'
interest in the earnings of PMT and a provision for income taxes, was $14.2
million in 1998, a decrease of $4.9 million compared to the $19.1 million
recorded in 1997. The primary reason for the decrease was the clearing fee
reduction program and waiver of lessee brokerage for the period October 12,
1998, through December 18, 1998. The limited partners' interest in the earnings
of P-M-T was $2.8 million for 1998 compared to zero in 1997. Under the terms of
the partnership agreement, the CME, as general partner, absorbed P-M-T's entire
1997 loss of $0.9 million.

The provision for income taxes on income from continuing operations, at an
effective tax rate of 38%, was $4.3 million in 1998 compared to $7.0 million for
the same period in 1997. The loss from discontinued operations during the year
ended December 31, 1997, consists of operating losses and the write-off of
certain assets of the CME Depository Trust Company, which ceased operation in
September 1997. No further adjustments were required in 1998. CME Depository
Trust Company had been developing collateral management services for the over-
the-counter derivatives market. It had not reported any revenue, and the
Exchange determined that additional developmental efforts were not warranted.
Net income was $7.0 million for the year ended December 31, 1998, compared to
$8.7 million for the year ended December 31, 1997.

Financial Position

85
<PAGE>

Total assets increased to $301.7 million at December 31, 1999, from $293.2
million at December 31, 1998. Current assets decreased to $176.7 million at
December 31, 1999, from $203.3 million at December 31, 1998, due primarily to a
decrease of $27.6 million in investment securities. Property, net of accumulated
depreciation, increased to $93.5 million at the end of 1999 compared to $71.3
million at the end of 1998 primarily due to purchases of computer equipment to
support technology and electronic trading both on and off the trading floor.
Other assets increased to $31.4 million from $18.6 million at the end of 1998
due primarily to an increase of $14.4 million in capitalized software
development costs net of accumulated amortization, an increase in computer
software of $1.3 million, and an increase of $1.6 million in securities held in
connection with deferred compensation plans partially offset by a $4.5 million
decrease in net deferred tax assets. At December 31, 1999, we held cash, cash
equivalents and investment securities of $74.4 million, had working capital of
$66.8 million and had a current ratio of 1.6-to-1. This compares to cash, cash
equivalents and investment securities of $102.6 million, working capital of
$92.6 and a 1.8-to-1 current ratio at December 31, 1998.

Total liabilities increased to $133.0 million at December 31, 1999, from
$126.3 million at December 31, 1998. Current liabilities decreased to $110.0
million at December 31, 1999, from $110.7 million at December 31, 1998. A
decrease in accounts payable in 1999 was largely offset by an increase in the
current portion of long-term debt and an increase in cash performance bonds and
security deposits. The limited partners' interest in PMT Limited Partnership
increased to $3.0 million at December 31, 1999, compared to $0.9 million a year
earlier due to 1999 net income of this consolidated partnership in the amount of
$2.6 million. Long-term debt consists of the long-term portion of capitalized
lease obligations and increased to $8.1 million at December 31, 1999, from $5.0
million at December 31, 1998. Other liabilities increased to $11.9 million at
December 31, 1999, from $9.8 million at December 31, 1998, due primarily to a
$1.6 million increase in deferred compensation liabilities. Members' equity was
$168.7 million at December 31, 1999, and $166.9 million at December 31, 1998.

Liquidity and Capital Resources

For the year ended December 31, 1999, net cash provided from operating
activities was $13.3 million, a decrease of $12.1 million from $25.5 million in
1998. This decrease was primarily due to an increase in capitalized software
development costs in 1999. For the year ended December 31, 1998, net cash
provided from operating activities was $25.5 million, a decrease of $0.6 million
from $26.1 million in 1997.

For the year ended December 31, 1999, net cash used in investing activities
decreased to $11.3 million from $19.9 million in 1998. Purchases of computer
equipment and other property increased $18.7 million in 1999 compared to 1998.
This increase was more than offset by an increase of $27.3 million in net sales
of investment securities in 1999 compared to 1998. For the year ended December
31, 1998, net cash used in investing activities decreased to $19.9 million from
$24.6 million in 1997 due primarily to reduced net investment purchases in 1998.

Net cash used in financing activities consisted of $2.7 in payments on
capital lease obligations in the year ended December 31, 1999, and a cash
distribution to P-M-T limited partners in the amount of $2.0 million during the
year ended December 31, 1998.

For the year ended December 31, 1999, interest payments amounted to $0.7
million and

86
<PAGE>

consisted primarily of interest paid on capital lease obligations. New capital
lease additions increased $1.8 million to $7.9 million in 1999 from $6.1 million
during 1998.

The Exchange is a designated contract market for futures and options on
futures, and clears and guarantees the settlement of all futures and options
contracts traded in our markets. The Clearing House maintains an unsecured
committed line of credit with a consortium of banks in the amount of $350
million to provide liquidity and capacity to pay settlement variation to all
clearing members even if a clearing member fails to meet its financial
obligations to the Clearing House. This line of credit is renewed annually and
has never been utilized.

We expect that the principal use of funds in the foreseeable future will be
to fund operations, capital expenditures and working capital, and anticipate
that existing cash and investment balances will be sufficient to meet our needs
for at least the next year.

Market Risk

Interest Rate Risk

Interest income from investment securities, temporary cash investments and
cash performance bonds and security deposits amounted to approximately $7.9
million in 1999. Realized and unrealized gains (losses) on our investment
portfolio amounted to approximately $(1.4) million, $0.6 million and $0.6
million in 1999, 1998 and 1997, respectively. An increase (decrease) in market
interest rates would have a corresponding increase (decrease) on interest income
from temporary cash investments, cash performance bonds and security deposits,
variable rate investment securities and new purchases of investment securities.
An increase (decrease) in market interest rates would also result in an opposite
increase (decrease) in the fair value of investment securities held. At December
31, 1999, our investment portfolio consisted primarily of U.S. government agency
and state and municipal securities, including approximately $8.4 million in
variable rate securities. Contractual maturities and interest coupon rates for
fixed rate investment securities at December 31, 1999 were as follows (dollars
in thousands):

<TABLE>
<CAPTION>
Weighted
Principal Average
Year Amount Interest Rate
---- --------- -------------
<S> <C> <C>
2000 $ 5,689 5.3%
2001 22,220 6.1%
2002 7,911 6.4%
2003 6,000 5.2%
2004 9,300 6.0%
------- ---
Total $51,120 5.9%
------- ---
</TABLE>

Derivative Trading Risk

Through our GFX trading subsidiary, we engage in the purchase and sale of
CME foreign currency futures contracts to promote liquidity in our markets, and
enter into offsetting arbitrage transactions using futures contracts or spot
foreign currency transactions to limit market risk. Net position limits are
established for each trader and currently amount to $6 million in aggregate
notional value. At December 31, 1999, we held futures positions with a notional
value

87
<PAGE>

of approximately $4 million, offset by a similar amount of spot foreign currency
positions resulting in a zero net position. All positions are marked to market
through a charge or credit to income on a daily basis. Net trading gains
amounted to $2.4 million, $4.8 million and $2.2 million in 1999, 1998 and 1997,
respectively.

Accounting Standards

In June, 1998, Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities" was issued. This
statement requires that all derivative instruments be recorded in the statement
of financial position at fair value. This statement is effective for all fiscal
years commencing after June 15, 2000. We currently report all derivative
transactions at fair market value, with changes in fair value recognized in our
statement of income, and this practice will not be affected by SFAS No. 133.

EXPERTS

Our consolidated financial statements as of December 31, 1999 and 1998, and
for each of the three years in the period ended December 31, 1999, are included
in this document together with Arthur Andersen LLP's audit report on these
financial statements. Arthur Andersen LLP issued their report as independent
public accountants and as experts in auditing and accounting.

VALIDITY OF SECURITIES

The validity of the shares of Class A and Class B common stock to be issued
in connection with the demutualization transactions will be passed upon for New
CME by Sidley & Austin, Chicago, Illinois.

88
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants.................................. F-2

Consolidated Balance Sheets as of December 31, 1999 and December 31, 1998. F-3

Consolidated Statements of Income for the Years Ended December 31, 1999,
1998 and 1997 ........................................................... F-4

Consolidated Statements of Members' Equity and Comprehensive Income for
the Years Ended December 31, 1999, 1998 and 1997......................... F-5

Consolidated Statements of Cash Flows for the Years Ended December 31,
1999, 1998 and 1997...................................................... F-6

Notes to Consolidated Financial Statements................................ F-7
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Members of the Chicago Mercantile Exchange:

We have audited the accompanying consolidated balance sheets of the Chicago
Mercantile Exchange (an Illinois not-for-profit corporation) and subsidiaries
as of December 31, 1999 and 1998, and the related consolidated statements of
income, members' equity and comprehensive income and cash flows for each of the
years in the three-year period ended December 31, 1999. These financial
statements are the responsibility of the Exchange's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Chicago Mercantile
Exchange and subsidiaries as of December 31, 1999 and 1998, and the results of
their operations and cash flows for each of the years in the three-year period
ended December 31, 1999, in conformity with generally accepted accounting
principles.

Arthur Andersen, LLP

Chicago, Illinois
February 2, 2000

F-2
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
At December 31,
-----------------
ASSETS 1999 1998
------ -------- --------
(dollars in
thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents.................................. $ 14,249 $ 14,841
Investments (Note 2)....................................... 60,156 87,730
Accounts receivable........................................ 26,534 27,338
Prepaid expenses........................................... 2,655 1,589
Cash performance bonds and security deposits (Note 3)...... 73,134 71,803
-------- --------
Total current assets..................................... 176,728 203,301
Property, net of accumulated depreciation and amortization
(Note 4).................................................... 93,531 71,266
Other assets (Notes 2, 5 and 7).............................. 31,444 18,638
-------- --------
Total assets............................................. $301,703 $293,205
======== ========
<CAPTION>
LIABILITIES AND MEMBERS' EQUITY
-------------------------------
<S> <C> <C>
Current Liabilities:
Accounts payable........................................... $ 15,569 $ 19,070
Other current liabilities (Note 8)......................... 21,250 19,797
Cash performance bonds and security deposits (Note 3)...... 73,134 71,803
-------- --------
Total current liabilities................................ 109,953 110,670
Limited Partners' interest in net assets of PMT Limited
Partnership (Note 6)........................................ 3,018 891
Long-term debt (Notes 10 and 11)............................. 8,132 4,969
Other liabilities (Note 9)................................... 11,937 9,778
-------- --------
Total liabilities........................................ 133,040 126,308
Members' equity.............................................. 168,663 166,897
-------- --------
Total liabilities and members' equity.................... $301,703 $293,205
======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1999 1998 1997
-------- -------- --------
(dollars in thousands)
<S> <C> <C> <C>
Revenues
Clearing and transaction fees.................. $138,526 $124,575 $116,917
Quotation data fees............................ 43,005 40,079 37,719
Communication fees............................. 8,165 8,128 7,885
Investment income.............................. 9,091 10,117 8,178
Other operating revenue........................ 9,701 12,317 6,945
-------- -------- --------
Total revenues............................... 208,488 195,216 177,644
-------- -------- --------
Expenses
Salaries and benefits (Note 9)................. 80,957 72,385 66,873
Occupancy...................................... 17,773 19,702 19,779
Professional fees, outside services and
licenses...................................... 28,319 28,038 16,913
Communications and computer and software
maintenance................................... 28,443 22,731 17,197
Depreciation and amortization.................. 25,274 17,943 16,689
Public relations and promotion................. 7,702 9,586 11,175
Other operating expense........................ 13,376 10,638 9,960
-------- -------- --------
Total expenses............................... 201,844 181,023 158,586
-------- -------- --------
Income from continuing operations before limited
partners' interest in PMT and income taxes...... 6,644 14,193 19,058
Limited partners' interest in earnings of PMT
Limited Partnership (Note 6).................... (2,126) (2,849) --
Provision for income taxes (Note 7).............. (1,855) (4,315) (6,963)
-------- -------- --------
Income from continuing operations................ 2,663 7,029 12,095
Loss from discontinued operations, net of income
tax benefit of $2,285 (Note 16)................. -- -- (3,428)
-------- -------- --------
Net income................................... $ 2,663 $ 7,029 $ 8,667
======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY AND COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
Total Proceeds from Unrealized
Members' Retained Issuance of Securities
Equity Earnings Memberships Gains (losses)
-------- -------- ------------- --------------
(dollars in thousands)
<S> <C> <C> <C> <C>
Balance, December 31, 1996..... $150,631 $107,062 $43,605 $ (36)
Comprehensive income:
Net income................... 8,667 8,667
Unrealized net gain on
securities,
net of tax of $171.......... 256 256
--------
Total comprehensive income. 8,923
-------- -------- ------- -----
Balance, December 31, 1997..... 159,554 115,729 43,605 220
Comprehensive income:
Net income................... 7,029 7,029
Unrealized net gain on
securities,
net of tax of $209.......... 314 314
--------
Total comprehensive income. 7,343
-------- -------- ------- -----
Balance, December 31, 1998..... 166,897 122,758 43,605 534
Comprehensive income:
Net income................... 2,663 2,663
Unrealized net loss on
securities,
net of tax benefit of $597.. (897) (897)
--------
Total comprehensive income. 1,766
-------- -------- ------- -----
Balance, December 31, 1999..... $168,663 $125,421 $43,605 $(363)
======== ======== ======= =====
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------
1999 1998 1997
------- ------- --------
(dollars in thousands)
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net income....................................... $ 2,663 $ 7,029 $ 8,667
Adjustments to reconcile net income to net cash
provided by operating activities:
Limited partners' interest in earnings of PMT
Partnership................................. 2,126 2,849 --
Deferred income tax provision................ 5,087 (1,311) (3,127)
Depreciation and amortization................ 25,274 17,943 16,689
Gain on sale of investments.................. (135) (57) (196)
Loss on disposal of fixed assets............. 7 125 98
Decrease (increase) in accounts receivable... 804 (8,367) (533)
Decrease (increase) in prepaid expenses...... (1,066) (907) 127
Decrease (increase) in other assets.......... (19,412) (859) 1,910
Decrease (increase) in net assets of
discontinued operations..................... -- -- 3,363
Increase (decrease) in accounts payable...... (3,501) 2,524 4,090
Increase (decrease) in other current
liabilities................................. (661) 5,628 (3,650)
Increase (decrease) in other liabilities..... 2,160 896 (1,367)
------- ------- --------
Net cash provided by operating activities.. 13,346 25,493 26,071
------- ------- --------
Cash Flows from Investing Activities
Purchases of property, net....................... (37,480) (18,817) (14,346)
Purchases of investments......................... (41,938) (99,332) (139,865)
Proceeds from sales and maturities of
investments..................................... 68,144 98,284 129,623
------- ------- --------
Net cash used in investing activities...... (11,274) (19,865) (24,588)
------- ------- --------
Cash Flows from Financing Activities...............
Payments on long-term debt....................... (2,664) -- --
Distribution to limited partners of PMT Limited
Partnership..................................... -- (1,957) --
------- ------- --------
Net cash used in financing activities...... (2,664) (1,957) --
------- ------- --------
Net increase (decrease) in cash and cash
equivalents....................................... (592) 3,671 1,483
Cash and cash equivalents, beginning of year....... 14,841 11,170 9,687
------- ------- --------
Cash and cash equivalents, end of year............. $14,249 $14,841 $ 11,170
======= ======= ========
Supplemental Disclosure of Cash Flow Information
Interest paid.................................... $ 705 $ 2 $ 26
======= ======= ========
Income taxes paid (refunded)..................... $ (265) $ 9,042 $ 8,317
======= ======= ========
Leased asset additions and related obligations... $ 7,940 $ 6,118 $ --
======= ======= ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies:

Description of Business

The Chicago Mercantile Exchange (the "CME") is a member-owned corporation
organized under Illinois not-for-profit law. It is subject to federal and state
corporate income tax and files a consolidated income tax return. The CME is a
designated contract market for the trading of futures and options on futures
contracts. Trades are executed through both open outcry and electronic trading
systems. Through its in-house clearing division, the CME clears, settles, nets
and guarantees performance of all matched transactions in its products. As an
Illinois not-for-profit corporation, the CME may not pay dividends to its
members.

Basis of Presentation

The consolidated financial statements include the accounts of the Chicago
Mercantile Exchange and its controlled subsidiaries, which include the PMT
Limited Partnership and GFX Corporation (collectively, the "Exchange").
Included as discontinued operations are the accounts of the CME Depository
Trust Co. ("CME-DTC") whose operations ceased in 1997 (See Note 16). All
intercompany transactions and accounts have been eliminated in consolidation.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with maturities of
three months or less when purchased.

Investments

Investment securities have generally been classified as available for sale
and are carried at fair value with unrealized gains and losses reported net of
tax as a component of members' equity and comprehensive income. Interest on
investment securities is recognized as income when earned and includes accreted
discount less amortized premium.

Additional securities held in connection with non-qualified deferred
compensation plans have been classified as trading securities. These securities
are included in other assets in the accompanying consolidated balance sheets at
fair value, and unrealized gains and losses are reflected in investment income.

Performance Bonds and Security Deposits

Performance bonds and security deposits held by the Exchange for the account
of clearing members may be in the form of cash or securities. Cash performance
bonds and security deposits are reflected in the accompanying consolidated
balance sheets. Cash received may be invested and any interest received accrues
to the Exchange. Securities consist primarily of short-term U.S. Treasury
securities and are not reflected in the accompanying consolidated balance
sheets. These securities are held in safekeeping, and interest and gain or loss
on such securities accrues to the clearing member.

Property

Property is stated at cost less accumulated depreciation and amortization.
Depreciation on furniture, fixtures and equipment is provided on the straight-
line method over the estimated useful lives of the assets, generally three to
seven years. Leasehold improvements are amortized over the lesser of their
estimated useful lives or the remaining term of the applicable leases.
Maintenance and repair items are charged to expense as incurred; renewals and
betterments are capitalized.

F-7
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Software Development Costs

During 1998 and prior years, the Exchange expensed all internal and external
costs associated with the development of software for internal use. In March
1998, the American Institute of Certified Public Accountants issued Statement
of Position 98-1, "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use" ("SOP 98-1"). This pronouncement identifies the
characteristics of internal use software and provides guidance on new cost
recognition principles. SOP 98-1 is effective for financial statements for
fiscal years beginning after December 15, 1998. The Exchange adopted SOP 98-1
effective January 1, 1999, and accordingly, commenced capitalizing certain
costs of developing internal use software, which would otherwise have been
expensed under its previous accounting policy. Capitalized costs are generally
amortized over three years, commencing with the completion of the project.

Fair Value of Financial Instruments

SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires disclosure of the fair value of financial instruments. The carrying
values of financial instruments included in assets and liabilities in the
accompanying consolidated balance sheets are reasonable estimates of their fair
values.

Impairment of Assets

The Exchange reviews its long-lived assets and intangible assets for
impairment whenever events or changes in circumstances indicate that the
carrying amounts may not be recoverable. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the assets exceeds the fair value of the assets.

Clearing and Transaction Fees

Clearing and transaction fees include per contract charges for trade
execution and clearing and GLOBEX2 electronic system fees. Fees are charged at
various rates based on the product traded and the account owner's Exchange
membership. Rates have been adjusted or waived periodically.

Quotation Data Fees

Quotation revenue represents fees charged for the dissemination of market
information.

Income Taxes

Deferred income taxes are determined in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes,"
and arise from temporary differences between amounts reported for income tax
and financial statement purposes.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to the 1998 and 1997 consolidated
financial statements to conform to the presentation in 1999. In addition, the
Exchange adopted a new balance sheet presentation for performance bonds and
security deposits as described above, and the accompanying balance sheets
reflect this new presentation. The Exchange previously included performance
bonds and security deposits received from its clearing members in the form of
securities as both an asset and a liability in its consolidated balance sheets.

F-8
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

2. Investment Securities

Investment securities included in current assets have been classified as
available for sale. The amortized cost and fair value of these investment
securities at December 31, 1999 and 1998, were as follows (dollars in
thousands):

<TABLE>
<CAPTION>
1999 1998
----------------- -----------------
Amortized Fair Amortized Fair
Cost Value Cost Value
--------- ------- --------- -------
<S> <C> <C> <C> <C>
U.S. Treasury......................... $ 64 $ 64 $ 3,127 $ 3,127
U.S. Government agency................ 16,563 16,191 23,073 23,308
State and municipal................... 44,135 43,901 60,641 61,295
------- ------- ------- -------
Total investment securities....... $60,762 $60,156 $86,841 $87,730
======= ======= ======= =======
</TABLE>

Unrealized gains (losses) on investment securities classified as available
for sale, included in the accompanying consolidated statement of changes in
members' equity, are reported as a component of comprehensive income. The
amortized cost and fair value of these investment securities at December 31,
1999, by contractual maturity, were as follows (dollars in thousands):

<TABLE>
<CAPTION>
Amortized Fair
Cost Value
--------- -------
<S> <C> <C>
Maturity of one year or less........................... $ 5,678 $ 5,662
Maturity between one and five years.................... 46,684 46,094
Maturity greater than five years....................... 8,400 8,400
------- -------
Total.............................................. $60,762 $60,156
======= =======
</TABLE>

Trading securities held in connection with non-qualified deferred
compensation plans are included in other assets and amounted to approximately
$6.9 million at December 31, 1999, and $5.3 million at December 31, 1998.
Investment income includes unrealized gains relating to trading securities of
$469,000, $407,000 and $285,000 for the years ended December 31, 1999, 1998 and
1997, respectively.

3. Performance Bonds and Security Deposits

The Exchange is a designated contract market for futures and options on
futures, and clears and guarantees the settlement of all futures and options
contracts traded in its markets. In its guarantor role, the Exchange has
precisely equal and offsetting claims to and from clearing members on opposite
sides of each contract. The CME bears counterparty credit risk in the event
that future market movements create conditions which could lead to clearing
members failing to meet their obligations to the Exchange. The CME reduces its
exposure through a risk management program which includes rigorous initial and
ongoing financial standards for clearing membership, initial and maintenance
performance bond requirements and mandatory security deposits. In addition, the
Exchange maintains an unsecured committed line of credit with a consortium of
banks (Note 12) in the amount of $350 million to provide liquidity and capacity
to pay settlement variation to all clearing members even if a clearing member
may have failed to meet its financial obligations to the CME, or in the event
of a temporary problem with the domestic payments system that would delay
payments of settlement variation between the Exchange and its clearing members.

The Exchange is required under the Commodity Exchange Act to segregate cash
and securities deposited by clearing members on behalf of their customers. In
addition, Exchange rules require a segregation of all funds deposited by
clearing members from operating funds.

F-9
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Clearing members, at their option, may instruct the Exchange to invest cash
on deposit for performance bond purposes, in a portfolio of securities in the
Exchange's Interest Earning Facility ("IEF"). The IEF was organized in 1997 as
two limited liability companies, and interest earned, net of expenses, is
passed on to participating member firms. IEF principal is guaranteed by the
Exchange. The IEF investment portfolio is managed by one of the Exchange's
approved settlement banks, and eligible investments include U.S. Treasury bills
and notes, U.S. Treasury strips, and reverse repurchase agreements. Repurchase
agreements are also permitted. The maximum average portfolio maturity is 90
days, and the maximum maturity for an individual security is 13 months. IEF
principal amounted to approximately $762 million and $634 million at December
31, 1999 and 1998, respectively. Management believes that the market risk
exposure relating to its guarantee is not material to the financial statements
taken as a whole. The Exchange earned fees under the IEF program in the amount
of $932,000, $428,000 and $96,000 during 1999, 1998 and 1997, respectively.

Each clearing member is required to deposit and maintain specified margin in
the form of cash, U.S. Government securities or bank letters of credit. These
performance bonds are available to meet only the financial obligations of that
clearing member to the Exchange. All obligations and non-cash margin deposits
are marked to market on a daily basis, and haircuts are applied for margin and
risk management purposes. Under an agreement with the CME and the Board of
Trade Clearing Corporation ("BOTCC"), firms that are clearing members of both
the CME and BOTCC may place required performance bonds in one common bank
account and designate the portion allocable to each clearing organization.

The Exchange and the Options Clearing Corporation ("OCC") have a cross-
margin arrangement whereby a common clearing member may maintain a cross-margin
account in which the clearing member's positions in certain futures and options
on futures are combined with certain OCC cleared option positions for purposes
of calculating performance bond requirements. The performance bond deposits are
held jointly by the Exchange and the OCC.

Each clearing member is also required to deposit and maintain specified
security deposits in the form of cash or securities. In the event that
performance bonds and security deposits of a defaulting clearing member are
inadequate to fulfill that clearing member's outstanding financial obligation,
the entire security deposit fund is available to cover potential losses after
first utilizing surplus operating funds of the Exchange.

Cash and securities held as performance bonds and security deposits at
December 31 were as follows (dollars in thousands):

<TABLE>
<CAPTION>
1999 1998
------------------- -------------------
Securities Securities
and and
Cash IEF Funds Cash IEF Funds
------- ----------- ------- -----------
<S> <C> <C> <C> <C>
Performance bonds................ $68,738 $17,841,859 $67,192 $15,469,446
Security deposits................ 4,396 351,897 4,611 184,737
Cross-margin securities, held
jointly with OCC................ -- 1,056,709 -- 576,873
------- ----------- ------- -----------
Total........................ $73,134 $19,250,465 $71,803 $16,231,056
======= =========== ======= ===========
</TABLE>

In addition, irrevocable letters of credit, which are not included in the
accompanying consolidated balance sheets, held at December 31 were as follows
(dollars in thousands):

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Performance bonds.................................. $1,000,350 $1,078,650
Cross-margin accounts.............................. 77,010 4,110
---------- ----------
Total letters of credit........................ $1,077,360 $1,082,760
========== ==========
</TABLE>

F-10
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

4. Property

A summary of the property accounts as of December 31 is presented below
(dollars in thousands):

<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Furniture, fixtures and equipment..................... $140,836 $101,022
Leasehold improvements................................ 83,461 77,855
-------- --------
Total property........................................ 224,297 178,877
Less accumulated depreciation and amortization........ (130,766) (107,611)
-------- --------
Net property.......................................... $ 93,531 $ 71,266
======== ========
</TABLE>

5. Other assets

Other assets consisted of the following at December 31 (dollars in
thousands):

<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
Software development costs.............................. $15,326 $ --
Less accumulated amortization......................... (935) --
Software................................................ 9,300 6,812
Less accumulated amortization......................... (5,469) (4,286)
Deferred compensation assets............................ 6,934 5,345
Net deferred tax asset.................................. 5,868 10,357
Other................................................... 420 410
------- -------
Total................................................... $31,444 $18,638
======= =======
</TABLE>

6. P-M-T Limited Partnership

The Exchange is the general partner and members and clearing members of the
Exchange are limited partners of the PMT Limited Partnership ("PMT"), an
Illinois limited partnership. PMT was formed in 1987 to initiate the
development of the GLOBEX(R) global electronic trading system ("GLOBEX"). From
May 1, 1996, through November 1998, GLOBEX was operated by Reuter Futures
Services Inc. ("Reuters") under an agreement with participating exchanges (the
Exchange and MATIF, a French futures exchange). The system previously operated
by Reuters was replaced by a new system, called GLOBEX\\2\\, which is operated
by the Exchange and uses electronic trading software licensed from
ParisBourseSBFSA. The Exchange charges PMT for services provided. PMT reported
net income (loss) of $2,578,000, $3,536,000 and $(872,000) in 1999, 1998 and
1997, respectively, and made an income distribution of $2,393,000 in 1998.
Losses in excess of limited partner capital account balances are allocated to
the Exchange as general partner. As a result, PMT's entire 1997 loss was
absorbed by the CME.

F-11
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

7. Income Taxes

The provision for income taxes from continuing operations is comprised of
the following (dollars in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Current:
Federal...................................... $(2,721) $ 4,613 $ 8,274
State........................................ (511) 1,013 1,816
------- ------- -------
Total...................................... (3,232) 5,626 10,090
------- ------- -------
Deferred:
Federal...................................... 4,166 (1,075) (2,564)
State........................................ 921 (236) (563)
------- ------- -------
Total...................................... 5,087 (1,311) (3,127)
------- ------- -------
Total continuing operations.................... 1,855 4,315 6,963
Total discontinued operations.................. -- -- (2,285)
------- ------- -------
Total provision for income taxes........... $ 1,855 $ 4,315 $ 4,678
======= ======= =======
</TABLE>

Reconciliation of the statutory U.S. federal income tax rate to the
effective tax rate on income from continuing operations is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
----- ---- ----
<S> <C> <C> <C>
Statutory U.S. federal tax rate........................ 35.0% 35.0% 35.0%
State taxes, net of federal benefit.................... 5.9 3.8 4.3
Tax exempt interest income............................. (15.0) (6.6) (2.8)
Non deductible expenses................................ 21.1 3.7 2.1
Other, net............................................. (5.9) 2.1 (2.1)
----- ---- ----
Effective tax rate..................................... 41.1% 38.0% 36.5%
===== ==== ====
</TABLE>

At December 31, the components of deferred tax assets (liabilities) were as
follows (dollars in thousands):

<TABLE>
<CAPTION>
1999 1998
------ -------
<S> <C> <C>
Deferred tax assets:
Depreciation and amortization.......................... $6,085 $ 5,813
Deferred compensation.................................. 2,452 2,167
Accrued expenses....................................... 2,929 2,828
Unrealized losses on securities........................ 242 --
------ -------
Subtotal............................................. 11,708 10,808
Valuation allowance.................................. -- --
------ -------
Deferred tax assets.................................. 11,708 10,808
------ -------
Deferred tax liabilities:
Software development costs............................. (5,709) --
Unrealized gains on securities......................... -- (356)
Other.................................................. (131) (95)
------ -------
Deferred tax liabilities............................... (5,840) (451)
------ -------
Net deferred tax asset................................... $5,868 $10,357
====== =======
</TABLE>

F-12
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

8. Other Current Liabilities

Other current liabilities include accrued salaries and benefits of $13.0
million and $12.7 million at December 31, 1999 and 1998, respectively. Also
included in other current liabilities is the current portion of long-term debt
which totaled $3.3 million at December 31, 1999, and $1.1 million at December
31, 1998.

9. Employee Benefit Plans

Pension Plan

The Exchange maintains a noncontributory defined benefit cash balance
pension plan ("Plan") for eligible employees. Employees who have completed a
continuous 12-month period of employment and have reached the age of 21 are
eligible to participate. The Plan provides for an age-based contribution to the
cash balance account and includes cash bonuses in the definition of considered
earnings. Participant cash balance accounts receive an interest credit at the
one-year U.S. Treasury Bill rate. Participants become vested in their accounts
after five years. The Exchange's policy is to currently fund required pension
costs.

A reconciliation of beginning and ending balances of the benefit obligation
and fair value of Plan assets, the funded status of the Plan, certain actuarial
assumptions and the components of pension cost are indicated below (dollars in
thousands):

<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
Change in benefit obligation
Benefit obligation at beginning of year.............. $11,826 $10,646
Service cost......................................... 2,052 1,774
Interest cost........................................ 988 850
Actuarial loss (gain)................................ (303) 401
Benefits paid........................................ (1,095) (1,845)
------- -------
Benefit obligation at end of year.................. $13,468 $11,826
======= =======
Change in plan assets
Fair value of plan assets at beginning of year....... $13,522 $11,742
Actual return on plan assets......................... 1,741 1,530
Employer contribution................................ 1,000 2,095
Benefits paid........................................ (1,095) (1,845)
------- -------
Fair value of plan assets at end of year........... $15,168 $13,522
======= =======
Funded status at December 31
Plan assets in excess of benefit obligation.......... $ 1,700 $ 1,696
Unrecognized transition asset........................ (335) (410)
Unrecognized prior service cost (credit)............. (227) (278)
Unrecognized net actuarial gain...................... (3,082) (1,962)
------- -------
Accrued benefit cost............................... $(1,944) $ (954)
======= =======
</TABLE>

F-13
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Actuarial assumptions as of December 31
Discount rate................................... 7.75% 6.75% 7.25%
Rate of compensation increase................... 5.00% 5.00% 5.00%
Expected return on plan assets.................. 8.00% 8.00% 8.00%
Components of pension cost
Service cost.................................... $2,052 $1,774 $1,943
Interest cost................................... 988 850 810
Expected return on plan assets.................. (925) (803) (800)
Amortization of prior service cost.............. (51) (51) (51)
Amortization of transition asset................ (74) (74) (74)
Recognized net actuarial gain................... -- -- (25)
------ ------ ------
Net pension cost.............................. $1,990 $1,696 $1,803
====== ====== ======
</TABLE>

Savings Plan

The Exchange maintains a savings plan pursuant to Section 401(k) of the
Internal Revenue Code whereby all employees are participants and have the
option to contribute to the Plan. The Exchange matches employee contributions
up to 3% of the employee's base salary and makes an additional contribution of
up to 2% of salary based on annual trading volume. Total expense for the
savings plan amounted to $1,264,000, $1,762,000 and $1,682,000 in 1999, 1998
and 1997, respectively.

Non-Qualified Plans

The Exchange maintains the following non-qualified plans under which
participants may make assumed investment choices with respect to amounts
contributed on their behalf. Although not required to do so, the Exchange
invests such contributions in assets which mirror the assumed investment
choices. The balances in these plans are subject to the claims of general
creditors of the Exchange, and amounted to approximately $6.9 million and $5.3
million at December 31, 1999 and 1998, respectively.

Supplemental Plan--The Exchange maintains a non-qualified supplemental
plan to provide benefits for certain officers who have been impacted by
statutory limits under the provisions of the qualified pension and savings
plans. Total expense for the supplemental plan amounted to $319,000,
$260,000 and $230,000 in 1999, 1998 and 1997, respectively.

Deferred Compensation Plan--The Exchange maintains a deferred
compensation plan under which eligible officers and board members may
contribute a percentage of their compensation and defer income taxes
thereon until the time of distribution.

Supplemental Executive Retirement Plan--The Exchange maintains a non-
qualified, defined contribution plan for senior officers. Under the plan,
the Exchange contributes an amount equal to 8% of salary and bonus of
eligible employees annually. Post 1996 contributions are subject to a
vesting schedule under which each annual contribution begins to vest after
three years and is fully vested after five years. Total expense for the
plan amounted to $461,000, $213,000 and $186,000 in 1999, 1998 and 1997,
respectively.

10. Lease Commitments

The Exchange has commitments under operating and capital leases for certain
facilities and equipment. Lease commitments for office space expire in the year
2003, with annual minimum rentals of approximately $7.9 million. The Exchange
leases trading facilities from the Chicago Mercantile Exchange Trust through
October 2005, with annual minimum rentals of approximately $1.3 million, and
has an option to extend the term of the lease thereafter. Total rental expense
was approximately $15.1 million in 1999, $18.0 million in 1998 and $18.9
million in 1997.

F-14
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Future minimum obligations under lease commitments in effect at December 31,
1999, were as follows (dollars in thousands):

<TABLE>
<CAPTION>
Capitalized Operating
Leases Leases
----------- ---------
<S> <C> <C>
2000................................................ $ 4,037 $10,097
2001................................................ 3,856 10,008
2002................................................ 3,021 9,737
2003................................................ 2,051 9,110
2004................................................ -- 1,557
Thereafter.......................................... -- 1,124
------- -------
Total minimum lease payments.................... 12,965 41,633
Less sublease commitments........................... -- (1,256)
Less amount representing interest................... (1,571) --
------- -------
Total........................................... $11,394 $40,377
======= =======
</TABLE>

11. Long-Term Debt

Long-term debt consists of the long-term portion of capitalized lease
obligations.

12. Credit Facility

At December 31, 1999 and 1998, the Exchange had an unsecured committed line
of credit with a consortium of banks in the amount of $350 million. Interest on
amounts borrowed is calculated at the then-prevailing prime rate. The facility,
which originated in 1988 and has never been used, may be utilized if there is a
temporary problem with the domestic payments system that would delay payments
of settlement variation between the Exchange and its clearing members, or in
the event of a clearing member default. Commitment fees for this facility were
$516,000, $570,000 and $494,000 for the years ended December 31, 1999, 1998 and
1997, respectively.

13. Contingencies

At December 31, 1999, the Exchange was contingently liable on irrevocable
letters of credit totaling $33 million in connection with its mutual offset
agreement with the Singapore Exchange Derivatives Trading Ltd. (formerly SIMEX)
and $2.5 million in connection with activities of GFX Corporation. The Exchange
is a defendant in, and is threatened with, various legal proceedings arising
from its regular business activities. While the ultimate results of such
proceedings against the Exchange cannot be predicted with certainty, management
of the Exchange believes that the resolution of these matters will not have a
material adverse effect on its consolidated financial position or results of
operations.

14. GFX Derivative Transactions

GFX Corporation engages in the purchase and sale of CME foreign currency
futures contracts. GFX posts bids and offers in these products on the
GLOBEX\\2\\ electronic trading system in order to maintain a market and promote
liquidity in the CME's currency futures products. It limits risk from these
transactions through offsetting arbitrage transactions using futures contracts
or spot foreign currency transactions with approved counterparties in the
interbank market. Formal trading limits have been established. Futures
transactions are cleared by an independent clearing member. Any residual open
positions are marked to market on a daily basis, and all realized and
unrealized gains (losses) are included in other revenue in the accompanying
consolidated statements of income. Net trading gains amounted to $2,392,000 in
1999, $4,786,000 in 1998 and $2,173,000 in 1997.

F-15
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

15. Segment Reporting

The Exchange has three reportable operating segments: the Chicago Mercantile
Exchange ("CME", a designated contract market and clearing house), GFX
Corporation ("GFX", a wholly owned trading subsidiary), and PMT Limited
Partnership ("PMT", a limited partnership which operates the GLOBEX\\2\\
electronic trading system). A summary by business segment follows (dollars in
thousands):

<TABLE>
<CAPTION>
CME GFX PMT Eliminations Total
-------- ------ ------- ------------ --------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1999
Total revenues from external
customers................... $178,792 $2,392 $18,213 $ -- $199,397
Intersegment revenues........ 15,173 1,190 -- (16,363) --
Investment income............ 8,750 310 31 -- 9,091
Depreciation and
amortization................ 25,141 133 -- -- 25,274
Operating profit (loss)...... 4,236 (675) 2,578 505 6,644
Total assets................. 298,385 7,990 3,761 (8,433) 301,703
Capital expenditures......... 37,438 42 -- -- 37,480
Year Ended December 31, 1998
Total revenues from external
customers................... $170,136 $4,786 $10,177 $ -- $185,099
Intersegment revenues........ 5,441 -- -- (5,441) --
Investment income............ 9,803 314 -- -- 10,117
Depreciation and
amortization................ 17,849 94 15 (15) 17,943
Operating profit (loss)...... 10,218 1,620 3,570 (1,215) 14,193
Total assets................. 292,298 8,663 1,803 (9,559) 293,205
Capital expenditures......... 18,809 8 -- -- 18,817
Year Ended December 31, 1997
Total revenues from external
customers................... $161,746 $2,173 $ 5,547 $ -- $169,466
Intersegment revenues........ 3,542 -- -- (3,542) --
Investment income............ 7,860 318 -- -- 8,178
Depreciation and
amortization................ 16,031 595 66 (3) 16,689
Operating profit (loss)...... 19,930 1 (872) (1) 19,058
Total assets................. 328,436 6,856 1,409 (7,970) 328,731
Capital expenditures......... 14,320 26 -- -- 14,346
</TABLE>

16. Discontinued Operations

In September 1997, the operations of CME-DTC were discontinued. Accordingly,
the results of its operations and its net assets are included in the
consolidated financial statements as discontinued operations. Certain costs
associated with the start-up of CME-DTC were capitalized and were being
amortized over a thirty-six month period. Remaining deferred charges and
capitalized software license fees of approximately $1.8 million were written-
off in 1997.

<TABLE>
<CAPTION>
1997
----------
(dollars
in
thousands)
<S> <C>
Revenues of discontinued operations............................ $ --
Expenses of discontinued operations............................ (3,856)
Income tax benefit............................................. 1,542
-------
Loss from operations........................................... (2,314)
Loss from discontinuance, net of income tax benefit of $743.... (1,114)
-------
Total loss from discontinued operations........................ $(3,428)
=======
</TABLE>

F-16
<PAGE>

CHICAGO MERCANTILE EXCHANGE AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

17. Demutualization Plan

On October 27, 1999, the Board of Directors approved a plan for
demutualization of the Chicago Mercantile Exchange whereby the Exchange would
be converted from an Illinois not-for-profit corporation into a Delaware for-
profit corporation. Under this plan, membership interests in the Exchange would
be converted into shares of Class B common stock, and in the cases of the CME,
IMM and IOM membership interests, shares of Class A common stock. Class B
shares would be issued in several series, each of which would contain the
traditional features of common stock and would confer the trading privileges
associated with the membership interest that was converted into such shares.
Class A shares would represent traditional common stock. Completion of the
demutualization transaction is subject to the affirmative vote of at least two-
thirds of membership votes present and voting, receipt of a favorable ruling
from the Internal Revenue Service regarding the federal income tax consequences
of the contemplated transactions, completion of the cash purchase by the
Exchange of the assets and business of PMT Limited Partnership (which requires
the approval of the holders of two-thirds of the Class A partnership units of
the Partnership), and approval by the Commodity Futures Trading Commission of
certain changes to Exchange rules to reflect the demutualization.

18. Subsequent Event

During January 2000, the Exchange entered into an employment agreement with
James J. McNulty to serve as its President and Chief Executive Officer from
February 7, 2000, through December 31, 2003. Mr. McNulty was granted an option
to purchase up to 2.5% of the stock of the Exchange at a price equal to 2.5% of
the aggregate value of the Exchange memberships, as defined, and an option to
purchase up to an additional 2.5% of the stock of the Exchange at a price equal
to 3.75% of the aggregate value of the Exchange memberships. These options vest
40% after one year and an additional 20% after each of the succeeding three
years, and are exercisable for a period of ten years. In the event that the
Exchange does not demutualize, Mr. McNulty will be entitled to a cash payment
based on the increase in the value of Exchange memberships on the exercise date
over the value of Exchange memberships on the grant date in an amount similar
to that described above.

F-17
<PAGE>
EXHIBIT A

CERTIFICATE OF INCORPORATION

Chicago Mercantile Exchange Inc.

ARTICLE ONE: The name of the corporation is CHICAGO MERCANTILE EXCHANGE
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 and incorporated
under the General Corporation Law of the State of Delaware.

ARTICLE FOUR: The total number of shares of all classes of capital stock
which the corporation is authorized to issue is 110,005,332 shares which shall
be divided into three classes as follows:

10,000,000 shares of Preferred Stock having a par value of $0.01 per
share (the "Preferred Stock"),

100,000,000 shares of Class A Common Stock having a par value of $0.01
per share (the "Class A Common Stock"), and

5,332 shares of Class B Common Stock having a par value of $0.01 per
share (the "Class B Common Stock").

The term "Common Stock" shall mean both 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.

A-1
<PAGE>

Shares of Preferred Stock may be issued in one or more series at such time
or times, and for such consideration or considerations, as the Board of
Directors shall determine. The Board of Directors is hereby authorized to fix,
state and establish, in the resolution or resolutions providing for the issuance
of any wholly unissued series of Preferred Stock, the relative powers, rights,
designations, preferences, qualifications, limitations and restrictions of such
series in relation to any other series of Preferred Stock at the time
outstanding. The Board of Directors is also expressly authorized to fix the
number of shares of each such series, but not below the number of shares thereof
then outstanding. The authority of the Board of Directors with respect to each
series of Preferred Stock shall include (without limitation) the determination
of the following:

(a) the dividend rate on the shares of such series, whether dividends
shall be cumulative, and, if so, from which date or dates, and the rights
of priority, if any, with respect to the payment of dividends on the shares
of such series relative to other series of Preferred Stock or classes of
stock;

(b) whether the shares of such series shall have voting rights (other
than the voting rights provided by law) and, if so, the terms and extent of
such voting rights;

(c) whether the shares of such series shall have conversion
privileges, and, if so, the terms and conditions of such conversion,
including provision for adjustment of the conversion rate upon the
occurrence of such events as the Board of Directors may prescribe;

(d) whether the shares of such series shall be subject to redemption
by the corporation or at the request of the holder(s) thereof, and, if so,
the terms and conditions of any such redemption;

(e) the rights of the shares of such series in the event of voluntary
or involuntary liquidation, dissolution or winding up of the corporation,
and the rights of priority, if any, with respect to the distribution of
assets on the shares of such series relative to other series of Preferred
Stock or classes of stock; and

(f) any other preferences, privileges and powers, and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions of such series, as the Board of Directors may
deem advisable and as shall not be inconsistent with the provisions of this
Certificate of Incorporation, as the same may be amended from time to time.

Division B
Common Stock

Subdivision 1: General Provisions

A-2
<PAGE>

(1) Definitions. In addition to the terms defined elsewhere, the
following terms shall have the respective meanings set forth below:

"Additional Common Shares" shall mean all shares of Class A
Common Stock issued (or, pursuant to Section 6(b), deemed to be
issued) by the corporation after the Effectiveness Date, other than
shares of Class A Common Stock issued or issuable at any time:

(A) to officers, directors and employees of, and consultants
to, the corporation;

(B) as a dividend or distribution on shares of the Class B
Common Stock;

(D) by way of dividend or other distribution on Common Stock
excluded from the definition of Additional Common Shares by the
foregoing clauses (A), (B), (C) or this clause (D).

"Applicable Equivalent Amount" means (i) with respect to shares
of Class A Common Stock, one, (ii) with respect to shares of Series B-
1 Stock, 1,800 (as adjusted from time to time in accordance with the
provisions of Section 6 of this Division), (iii) with respect to
shares of Series B-2 Stock, 1,200 (as adjusted from time to time in
accordance with the provisions of Section 6 of this Division), (iv)
with respect to shares of Series B-3 Stock, 600 (as adjusted from time
to time in accordance with the provisions of Section 6 of this
Division), (v) with respect to shares of Series B-4 Stock, 100 (as
adjusted from time to time in accordance with the provisions of
Section 6 of this Division), and (vi) with respect to shares of Series
B-5 Stock, 10 (as adjusted from time to time in accordance with the
provisions of Section 6 of this Division). For purposes of Section 6,
the term "Applicable Equivalent Amount" shall not include clause (i)
of the preceding sentence, since no adjustment is to be made under
that Section in respect of the Applicable Equivalent Amount for shares
of Class A Common Stock.

"Commitment to Maintain Floor Trading" shall mean the
corporation's obligation, (i) as long as an open outcry market is
"liquid," 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)
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 the foregoing, an open

A-3
<PAGE>

outcry market will be deemed "liquid" if it meets any of the following
tests on a quarterly basis:

(1) if a comparable exchange-traded product exists, the open
outcry market has maintained at least 30 percent of the average
daily volume of such comparable product (including for
calculation purposes, volume from Exchange-For-Physicals
transactions in such open outcry market); or

(2) if a comparable exchange-traded product exists and the
product trades exclusively by open outcry, the open outcry market
has maintained at least 30 percent of the open interest of such
comparable product; or

(3) if no comparable exchange-traded product exists, the
open outcry market has maintained at least 40 percent of the
average quarterly volume in that market as maintained by Chicago
Mercantile Exchange, an Illinois not-for-profit corporation, in
1999 (including, for calculation purposes, volume from Exchange-
For-Physicals transactions in such open outcry market); or

(4) if no comparable exchange-traded product exists and the
product trades exclusively by open outcry, the open outcry market
has maintained at least 40 percent of the average open interest
in that market as maintained by Chicago Mercantile Exchange, an
Illinois not-for-profit corporation, in 1999.

"Convertible Securities" shall mean any evidences of
indebtedness, shares or other securities convertible into or
exchangeable for shares of Class A Common Stock.

"Core Rights" shall mean:

(1) the divisional product allocation rules applicable to
each series of Class B Common Stock as set forth in the rules of
the corporation;

(2) the trading floor access rights and privileges granted
to each series of Class B Common Stock, including the Commitment
to Maintain Floor Trading;

(3) the number of authorized and issued shares of any series
of Class B Common Stock; or

(4) eligibility requirements for an individual or entity to
hold shares of any series of Class B Common Stock or to exercise
any of the

A-4
<PAGE>

trading rights or privileges inherent in any series of Class B
Common Stock.

"Effectiveness Date" means the date of the effectiveness of the
merger of CME Transitory Co. into and with the corporation as
contemplated by that certain agreement and plan of merger dated as of
March 1, 2000 between CME Transitory Co. and the corporation. Such
date of effectiveness shall be evidenced by or in a certificate of
merger filed with the Secretary of State of Delaware regarding such
merger.

"Fair Market Value" means (i) if shares of Class A Common Stock
are traded on a national securities exchange, the last sales or the
average of the bid and asked prices (if no sale has taken place), as
reported in the principal consolidated transaction reporting system
with respect to such exchange, (ii) if shares of Class A Common Stock
are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers Automated
Quotation System or such other system then in use, or (iii) if neither
clause (i) or (ii) apply, as determined in good faith by the Board of
Directors.

"Options" shall mean rights, options or warrants to subscribe
for, purchase or otherwise acquire either shares of Class A Common
Stock or Convertible Securities.

"Share Equivalent Basis" means that (i) with respect to
participation in dividends, other distributions or liquidating
distributions, a stockholder's participation therein is determined
based upon the number of Class A Common Stock share equivalents that
such stockholder's shares represent in relation to the total number of
Class A Common Stock share equivalents that all stockholders' shares
represent, and (ii) with respect to voting, a stockholder's aggregate
votes available to be cast is determined based on the number of Class
A Common Stock share equivalents that such stockholder's shares
represent (with each whole share equivalent representing one vote and
each fractional share equivalent representing an equivalent fractional
vote). The number of Class A Common Stock share equivalents of a share
of Class A Common Stock, Series B-1 Stock, Series B-2 Stock, Series B-
3 Stock, Series B-4 Stock and Series B-5 Stock shall equal the
Applicable Equivalent Amount for such stock.

(2) 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. Such amounts as are available to the holders of Common
Stock for distribution shall be distributed to such holders on a Share
Equivalent Basis.

A-5
<PAGE>

Subdivision 2: Class A Common Stock

The rights, preferences and privileges, and qualifications, limitations and
restrictions granted to and imposed on the shares of Class A Common Stock of the
corporation shall be as set forth in Subdivision 1 and this Subdivision 2 of
this Division B.

(1) Dividend Rights. Subject to any preferential or participatory
rights of holders of any shares of Preferred Stock, the holders of shares
of Class A Common Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of any assets of the corporation
legally available therefor, such dividends as may be declared from time to
time by the Board of Directors on shares of the outstanding Common Stock of
the corporation, participating with the holders of the outstanding shares
of the Class B Common Stock on a Share Equivalent Basis.

(2) Voting Rights. Each holder of shares of Class A Common Stock shall
have the right to one vote for each share held on each matter for which the
vote of the holders of the Class A Common Stock shall be required or
considered to be necessary. Each holder of Class A Common Stock shall have
the right, voting with the holders of the Class B Common Stock on a Share
Equivalent Basis, to vote in the election of the Equity Directors (as
defined below).

(3) Transfer Restrictions. Shares of Class A Common Stock shall be
subject to the following transfer restrictions during the indicated period:

(a) During the period commencing on the Effectiveness Date and
ending on the date occurring 180 days thereafter (inclusive), shares
of Class A Common Stock may only be transferred, sold or otherwise
disposed together with the associated shares of Class B Common Stock
(i.e., 16,200 shares of Class A Common Stock may be transferred with
one share of Series B-1 Stock, 10,800 shares of Class A Common Stock
may be transferred with one share of Series B-2 Stock, and 5,400
shares of Class A Common Stock may be transferred with one share of
Series B-3 Stock).

(b) During the period commencing on the 181st day after the
Effectiveness Date and ending on the date occurring 270 days after the
Effectiveness Date, up to twenty-five percent (25%) of the shares of
Class A Common Stock received by a holder on the Effectiveness Date or
thereafter acquired may be transferred, sold or otherwise disposed. In
addition, such holder may transfer, sell or otherwise dispose of such
holder's Class A Common Stock as described in clause (a) of this
Section 3.

(c) During the period commencing on the 271st day after the
Effectiveness Date and ending on the date occurring 360 days after the
Effectiveness Date, up to fifty percent (50%) of the shares of Class A
Common Stock received by a holder on the Effectiveness Date or
thereafter acquired may be transferred, sold or otherwise disposed. In
addition, such holder may transfer,

A-6
<PAGE>

sell or otherwise dispose of such holder's Class A Common Stock as
described in clause (a) of this Section 3.

(d) During the period commencing on the 361st day after the
Effectiveness Date and ending on the date occurring 450 days after the
Effectiveness Date, up to seventy-five percent (75%) of the shares of
Class A Common Stock received by a holder on the Effectiveness Date or
thereafter acquired may be transferred, sold or otherwise disposed. In
addition, such holder may transfer, sell or otherwise dispose of such
holder's Class A Common Stock as described in clause (a) of this
Section 3.

(e) On and after the 451st day after the Effectiveness Date,
there shall be no restrictions applicable to the Class A Common Stock
under this Section 3.

Subdivision 3: Class B Common Stock

The rights, preferences and privileges, and qualifications, limitations and
restrictions granted to and imposed on the shares of Class B Common Stock of the
corporation shall be as set forth in Subdivision 1 and this Subdivision 3 of
this Division B.

(1) Designation and Number of Shares Constituting Series. Shares of
the Class B Common Stock shall be issued in four series having the
designations and consisting of the number of shares set forth below:

625 shares designated as "Class B Common Stock, Series B-1" (the
"Series B-1 Stock"),

813 shares designated as "Class B Common Stock, Series B-2" (the
"Series B-2 Stock"),

1,287 shares designated as "Class B Common Stock, Series B-3"
(the "Series B-3 Stock"),

467 shares designated as "Class B Common Stock, Series B-4" (the
"Series B-4 Stock") and

2,140 shares designated as "Class B Common Stock, Series B-5"
(the "Series B-5 Stock").

(2) Trading Rights.

(a) Series B-1 Stock. The holders of shares of the Series B-1
Stock shall have the trading rights, including trading floor access
rights and privileges, set forth in the corporation's by-laws and
rules for its Chicago Mercantile Exchange Division Members.

A-7
<PAGE>

(b) Series B-2 Stock. The holders of shares of the Series B-2
Stock shall have the trading rights, including trading floor access
rights and privileges, set forth in the corporation's by-laws and
rules for its International Monetary Market Division Members.

(c) Series B-3 Stock. The holders of shares of the Series B-3
Stock shall have the trading rights, including trading floor access
rights and privileges, set forth in the corporation's by-laws and
rules for its Index and Option Market Division Members.

(d) Series B-4 Stock. The holders of shares of the Series B-4
Stock shall have the trading rights, including trading floor access
rights and privileges, set forth in the corporation's by-laws and
rules for its Growth and Emerging Markets Division Members.

(e) Series B-5 Stock. The holders of shares of the Series B-5
Stock shall have the trading rights, including trading floor access
rights and privileges, set forth in the corporation's by-laws and
rules for holders of fractional interests in its Growth and Emerging
Markets Division.

(3) Dividend Rights. Subject to any preferential or participatory
rights of holders of any shares of Preferred Stock, the holders of shares
of Class B Common Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of any assets of the corporation
legally available therefor, such dividends as may be declared from time to
time by the Board of Directors on shares of the outstanding Common Stock of
the corporation, participating with the holders of the outstanding shares
of the Class A Common Stock on a Share Equivalent Basis.

(4) Voting Rights. Holders of shares of Class B Common Stock
shall have the following voting rights:

(a) Election of Directors.

(i) Class B Directors. Holders of shares of Series B-1 Stock
shall have the sole right to elect the Series B-1 Directors (as
defined below), and each holder of Series B-1 Stock shall have
one vote per share held in any such election. Holders of shares
of Series B-2 Stock shall have the sole right to elect the Series
B-2 Directors (as defined below), and each holder of Series B-2
Stock shall have one vote per share held in any such election.
Holders of shares of Series B-3 Stock shall have the sole right
to elect the Series B-3 Director (as defined below), and each
holder of Series B-3 Stock shall have one vote per share held in
any such election.

(ii) Equity Directors. Each holder of Class B Common Stock
shall have the right, voting with the holders of the Class A
Common Stock

A-8
<PAGE>

on a Share Equivalent Basis, to vote in the election of the
Equity Directors.

(b) Core Rights. Any change, amendment or modification of the
Core Rights 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 Series B-1 Stock shall be entitled to six votes for each
share of Series B-1 Stock held, holders of Series B-2 Stock shall be
entitled to two votes for each share of Series B-2 Stock held, holders
of Series B-3 Stock shall be entitled to one vote for each share of
Series B-3 Stock held, holders of Series B-4 Stock shall be entitled
to one-sixth vote for each share of Series B-4 Stock held and holders
of Series B-5 Stock shall be entitled to one-sixtieth vote for each
share of Series B-5 Stock held. Any such change, amendment or
modification must receive a majority of the aggregate votes cast by
the holders of the Class B Common Stock present (in person or by
proxy) and voting in order to be approved.

(c) Other Matters. Holders of shares of Class B Common Stock
shall be entitled to vote on a Share Equivalent Basis on any matters
not described in Sections 4(a) or (b) that require the approval of the
holders of the Class B Common Stock, whether voting together with the
holders of the Class A Common Stock or voting separately as a class.

(5) Transfer Restrictions. Shares of Class B Common Stock may be
transferred at any time, subject to the following restrictions:

(a) No individual or entity may acquire shares of a series of
Class B Common Stock, or receive or exercise rights in respect
thereof, unless such individual or entity (i) satisfies the trading
eligibility requirements specified for such series in the by-laws of
the corporation and in any rules or regulations as the Board of
Directors may provide and (ii) agrees to be bound by any rules or
regulations as the Board of Directors may provide with respect to such
series of Class B Common Stock.

(b) No sale, transfer or hypothecation of any share of any series
of Class B Common Stock or lease of the trading privilege component
thereof shall be valid and binding on the corporation unless and until
(x) the purchaser, lessee or transferee satisfies the trading
eligibility requirements specified for such shares in the by-laws of
the corporation and in any other rules or regulations as the Board of
Directors may provide, and (y) such sale, transfer, hypothecation or
lease has been reported to the corporation.

(c) No person who has sold a share of any series of Class B
Common Stock shall be eligible to purchase another share of the same
series of Class B common stock within six months of the closing of
such sale, except as may be otherwise allowed under rules adopted by
the Board of Directors.

(6) Adjustments to Applicable Equivalent Amounts For Dilutive Issues.

A-9
<PAGE>

(a) No Adjustment Unless Economic Dilution. No adjustment in the
Applicable Equivalent Amount of any series of Class B Common Stock
shall be made in respect of the issuance or deemed issuance of
Additional Common Shares unless the consideration per share for an
Additional Common Share issued or deemed to be issued by the
corporation is less than the Fair Market Value of a share of Class A
Common Stock on the date of such issue or deemed issue.

(b) Deemed Issue of Additional Common Shares.

(1) Options and Convertible Securities. In the event the
corporation, at any time or from time to time after the
Effectiveness Date, shall issue any Options or Convertible
Securities or shall fix a record date for the determination of
holders of any class of securities entitled to receive any such
Options or Convertible Securities, then the maximum number of
shares of Class A Common Stock (as set forth in the instrument
relating thereto without regard to any provisions contained
therein for a subsequent adjustment of such number) issuable upon
the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of
such Convertible Securities, shall be deemed to be Additional
Common Shares (except as otherwise provided in the definition
thereof) issued as of the time of such issue or, in case such a
record date shall have been fixed, as of the close of business on
such record date, provided that in any such case in which
Additional Common Shares are deemed to be issued:

(A) no further adjustment in the Applicable Equivalent
Amounts shall be made upon the subsequent issue of
Convertible Securities or shares of Class A Common Stock
upon the exercise of such Options or conversion or exchange
of such Convertible Securities;

(B) if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for
any increase or decrease in the consideration payable to the
corporation, or in the number of shares of Class A Common
Stock issuable upon the exercise, conversion or exchange
thereof, the Applicable Equivalent Amounts computed upon the
original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments
based thereon, shall, upon any such increase or decrease
becoming effective, be recomputed to reflect such increase
or decrease insofar as it affects such Options or the rights
of conversion or exchange under such Convertible Securities;

A-10
<PAGE>

(C) upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible
Securities which shall not have been exercised, the
Applicable Equivalent Amounts computed upon the original
issue thereof (or upon the occurrence of a record date with
respect thereto), and any subsequent adjustments based
thereon, shall, upon such expiration, be recomputed as if:

(I) in the case of Convertible Securities or
Options for Class A Common Stock, the only Additional
Common Shares issued were shares of Class A Common
Stock, if any, actually issued upon the exercise of
such Options or the conversion or exchange of such
Convertible Securities and the consideration received
therefor was the consideration actually received by the
corporation for the issue of all such Options, whether
or not exercised, plus the consideration actually
received by the corporation upon such exercise, or for
the issue of all such Convertible Securities which were
actually converted or exchanged, plus the additional
consideration, if any, actually received by the
corporation upon such conversion or exchange, and

(II) in the case of Options for Convertible
Securities, the only Convertible Securities issued were
Convertible Securities, if any, actually issued upon
the exercise of such Options, and the consideration
received by the corporation for the Additional Common
Shares deemed to have been issued was the consideration
actually received by the corporation for the issue of
all such Options, whether or not exercised, plus the
consideration actually received by the corporation upon
the issue of the Convertible Securities with respect to
which such Options were actually exercised;

(D) no readjustment pursuant to clause (B) or (C) above
shall have the effect of reducing any Applicable Equivalent
Amount to an amount which is less than the higher of (i) the
such Applicable Equivalent Amount on the original adjustment
date, or (ii) the Applicable Equivalent Amount that would
have resulted from any issuance of Additional Common Shares
between the original adjustment date and such readjustment
for which no adjustment was originally made; and

(E) in the case of any Options, which expire by their
terms not more than 60 days after the date of issue thereof,
no

A-11
<PAGE>

adjustment of the Applicable Equivalent Amount shall be made
until the expiration or exercise of all such Options.

(2) Stock Dividends. In the event the corporation, at any
time or from time to time after the Effectiveness Date, shall
declare or pay any dividend on shares of its capital stock
payable in shares of Class A Common Stock, then and in any such
event, Additional Common Shares (except as otherwise provided in
the definition thereof) shall be deemed to have been issued
immediately after the close of business on the record date for
the determination of holders of any class of securities entitled
to receive such dividend for purposes of adjusting the Applicable
Equivalent Amounts; provided, however, that if such record date
is fixed and such dividend is not fully paid, the only Additional
Common Shares deemed to have been issued will be the number of
shares of Class A Common Stock actually issued in such dividend,
and such shares will be deemed to have been issued as of the
close of business on such record date, and such Applicable
Equivalent Amounts shall be recomputed accordingly.

(c) Adjustment of Applicable Equivalent Amounts Upon Issuance of
Additional Common Shares. In the event the corporation shall issue
Additional Common Shares (including Additional Common Shares deemed to
be issued pursuant to Section 6(b)) without consideration or for a
consideration per share less than the Fair Market Value of a share of
Class A Common Stock in effect immediately prior to such issue, then
and in such event, the Applicable Equivalent Amounts shall be
increased, concurrently with such issue, to amounts (calculated to the
nearest one-tenth of a share) determined by multiplying each
Applicable Equivalent Amount by a fraction, the numerator of which
shall be the number of shares of Class A Common Stock outstanding
immediately prior to such issue plus the number of such Additional
Common Shares so issued and the denominator of which shall be the
number of shares of Class A Common Stock outstanding immediately prior
to such issue plus the number of shares of Class A Common Stock which
the aggregate consideration received by the corporation for the total
number of Additional Common Shares so issued would purchase at such
Fair Market Value; provided that, for the purposes of this subsection
(c), all shares of Class A Common Stock issuable upon exercise of
outstanding Options, and conversion of outstanding Convertible
Securities shall be deemed to be outstanding.

(d) Determination of Consideration. For purposes of this Section,
the consideration received by the corporation for the issue of any
Additional Common Shares shall be computed as follows:

(1) Cash and Property. Such consideration shall:

A-12
<PAGE>

(A) insofar as it consists of cash, be computed at the
aggregate amount of cash received by the corporation
excluding amounts paid or payable for accrued interest or
accrued dividends;

(B) insofar as it consists of property other than cash,
be computed at the fair value thereof at the time of such
issue, as determined in good faith by the Board of
Directors; and

(C) in the event Additional Common Shares are issued
together with other shares or securities or other assets of
the corporation for the consideration so received, be
computed as provided in clauses (A) and (B) above, as
determined in good faith by the Board of Directors.

(2) Options and Convertible Securities. The consideration
per share received by the corporation for Additional Common
Shares deemed to have been issued pursuant to Section 6(b)(1),
relating to Options and Convertible Securities, shall be
determined by dividing:

(A) the total amount, if any, received or receivable by
the corporation as consideration for the issue of such
Options or Convertible Securities, plus the minimum
aggregate amount of additional consideration (as set forth
in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of
such consideration) payable to the corporation upon the
exercise of such Options or the conversion or exchange of
such Convertible Securities, or in the case of Options for
Convertible Securities, the exercise of such options for
Convertible Securities and the conversion or exchange of
such Convertible Securities, by

(B) the maximum number of shares of Class A Common
Stock (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange of
such Convertible Securities.

(3) Stock Dividends. Any Additional Common Shares deemed to
have been issued relating to stock dividends shall be deemed to
have been issued for no consideration.

In the event that Additional Common Shares are proposed to be issued
in connection with an acquisition or other transaction subject to
certain conditions precedent, such that there will be a delay between
the execution of the associated agreement and the consummation of the
acquisition or transaction and the

A-13
<PAGE>

issuance of the Additional Common Shares, the value of the
consideration to be received per share shall be compared to the Fair
Market Value of a share of Class A Common Stock as of the date of
execution of the associated agreement for the purposed of calculating
any adjustments under this Section 6.

(e) Adjustments for Subdivisions, Combinations or Consolidation
of Common Stock. In the event the outstanding Class A Common Stock
shall be subdivided (by stock split or otherwise) into a greater
number of shares of Class A Common Stock, the Applicable Equivalent
Amounts then in effect shall, concurrently with the effectiveness of
such subdivision, be proportionately increased. In the event the
outstanding Class A Common Stock shall be combined or consolidated (by
reclassification or otherwise) into a lesser number of shares of Class
A Common Stock, the Applicable Equivalent Amounts then in effect
shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately decreased.

(f) No Impairment. The corporation will not, by amendment of this
Certificate of Incorporation or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or
performed under this Section by the corporation but will at all times
in good faith assist in the carrying out of all the provisions of this
Section.

(7) Conversion Rights of Series B-5.

(a) Conversion. Subject to and upon compliance with the
provisions of this Section 7, each holder of any shares of Series B-5
Stock shall have the right at such holder's option, at any time or
from time to time prior to the close of business in Chicago, Illinois
on November 3, 2000, to convert such shares of Series B-5 Stock into
fully paid and nonassessable shares of Series B-4 Stock at the ratio
of ten shares of Series B-5 Stock for each share of Series B-4 Stock
to be received in conversion. Shares of Series B-5 Stock may be
converted into Series B-4 Stock only in integral multiples of ten. No
fractional shares of Series B-4 Stock will be issued upon conversion.

(b) Mechanics of Conversion. A holder of shares of Series B-5
Stock may exercise the conversion right specified in Section 7(a) as
to such holder's shares by surrendering to the corporation or any
transfer agent of the corporation the certificate or certificates for
the shares to be converted, accompanied by written notice stating that
the holder elects to convert all of the shares represented thereby.
Conversion shall be deemed to have been effected on the date when
delivery of such written notice and share certificates is made, and
such date is referred to herein as the Conversion Date. As promptly as
practicable after the Conversion Date, the corporation shall issue and
deliver to or upon the written order of such holder a certificate or
certificates for the number of full shares of

A-14
<PAGE>

Series B-4 Stock to which such holder is entitled as a result of the
exercise of such conversion right. The person in whose name the
certificate or certificates for Series B-4 Stock are to be issued
shall be deemed to have become a holder of record of such Series B-4
Stock on the applicable Conversion Date. After the initial issuance of
shares of Series B-4 Stock on the Effectiveness Date pursuant to the
agreement and plan of merger dated as of March 1, 2000 between CME
Transitory Co. and the corporation, shares of Series B-4 Stock may
only be issued upon the conversion pursuant to this Section 7 of
shares of Series B-5 Stock.

(c) Automatic Conversion. Each share of Series B-5 Stock shall
automatically be converted into ten shares of Class A Common Stock on
November 4, 2000.

(d) Status of Converted Shares. Shares of Series B-5 Stock that
are converted into shares of Series B-4 Stock or shares of Class A
Common Stock shall not be reissued.

ARTICLE FIVE: (A) The initial Board of Directors shall consist of thirty-
nine members. The terms of eighteen of the directors shall expire at the annual
meeting of the stockholders held in December 2000, and the terms of the
remaining twenty-one directors shall expire at the annual meeting of the
stockholders held in December 2001.

(B) At the annual meeting of stockholders held in December 2000, the size
of the Board of Directors shall be reduced to thirty members and nine directors
shall be elected to serve two-year terms as follows:

(1) Six directors shall be elected by the holders of Common Stock
voting together as a single class on a Share Equivalent Basis from a Board-
nominated slate of candidates nominated in accordance with the nominating
provisions as provided in the corporation's bylaws;

(2) One director shall be elected by the holders of Series B-1 Stock;

(3) One director shall be elected by the holders of Series B-2 Stock;
and

(4) One director shall be elected by the holders of Series B-3 Stock.

(C) At the annual meeting of stockholders held in December 2001, the size
of the Board of Directors shall be reduced to nineteen members and ten directors
shall be elected to serve two-year terms as follows:

(1) Seven directors shall be elected by the holders of Common Stock
voting together as a single class on a Share Equivalent Basis from a Board-
nominated slate of candidates nominated in accordance with the nominating
provisions provided in the corporation's bylaws.

(2) Two directors shall be elected by the holders of Series B-1 Stock;
and

A-15
<PAGE>

(3) One director shall be elected by the holders of Series B-2 Stock.

The directors elected as provided in Sections (B)(1) and (C)(1) are referred to
as the "Equity Directors;" the directors elected as provided in Sections (B)(2)
and (C)(2) are referred to as the "Series B-1 Directors;" the directors elected
as provided in Sections (B)(3) and (C)(3) are referred to as the "Series B-2
Directors;" and the director elected as provided in Section (B)(4) is referred
to as the "Series B-3 Director." The Equity Directors shall include persons
fulfilling the requirements of any regulatory authority having jurisdiction over
the corporation.

(D) At each succeeding annual meeting of stockholders, the successors of
the Series B-1 Directors, the Series B-2 Directors, any Series B-3 Director and
the Equity Directors whose terms expire at that meeting shall be elected by the
holders of the Series B-1 Stock, the Series B-2 Stock, the Series B-3 Stock, and
the Common Stock voting as a single class on a Share Equivalent Basis,
respectively. The directors so elected shall be elected for a term expiring at
the annual meeting of stockholders held in the second year following the year of
their election, and until their successors are duly elected and qualified and
have accepted office, subject to death, resignation or removal from office. Any
vacancy occurring in a directorship may be filled by the Board of Directors;
provided, however, that any vacancy occurring with respect to a Series B-1
Director, a Series B-2 Director or a Series B-3 Director shall be filled from
the candidates who lost for such position from the most recent election, with
the candidates being selected to fill such vacancy in the order of the aggregate
number of votes received in such previous election. Any persons so elected shall
serve for the remaining term of his or her predecessor in office.

(E) No person shall be eligible for election as a Series B-1 Director, a
Series B-2 Director or a Series B-3 Director unless he or she shall own, or be
recognized under rules adopted by the Board of Directors as a permitted
transferee (other than temporary lease-type transfers) of, at least one share of
the series of Class B Common Stock entitled to elect such director.

(F) Any director may be removed from office at any time, but only for cause
and only by the affirmative vote of the holders of at least two-thirds of the
voting power of the shares entitled to elect such person as a director under
this Article.

ARTICLE SIX: The Board of Directors is hereby authorized to create and
issue, whether or not in connection with the issuance and sale of any of its
stock or other securities or property, rights entitling the holders thereof to
purchase from the corporation shares of Preferred Stock, Class A Common Stock or
securities of any other corporation. The times at which and the terms upon which
such rights are to be issued will be determined by the Board of Directors and
set forth in the contracts or instruments that evidence such rights. The
authority of the Board of Directors with respect to such rights shall include,
without limitation, determination of the following:

(A) The initial purchase price per share or other unit of the stock or
other securities or property to be purchased upon exercise of such rights;

A-16
<PAGE>

(B) Provisions relating to the times at which and the circumstances
under which such rights may be exercised or sold or otherwise transferred,
either together with or separately from, any other stock or other
securities of the corporation;

(C) Provisions which adjust the number or exercise price of such
rights or amount or nature of the stock or other securities or property
receivable upon exercise of such rights in the event of a combination,
split or recapitalization of any stock of the corporation, a change in
ownership of the corporation's stock or other securities or a
reorganization, merger, consolidation, sale of assets or other occurrence
relating to the corporation or any stock of the corporation, and provisions
restricting the ability of the corporation to enter into any such
transaction absent an assumption by the other party or parties thereto of
the obligations of the corporation under such rights;

(D) Provisions which deny the holder of a specified percentage of the
outstanding stock or other securities of the corporation the right to
exercise such rights and/or cause the rights held by such holder to become
void;

(E) Provisions which permit the corporation to redeem or to exchange
such rights; and

(F) The appointment of a rights agent with respect to such rights.

ARTICLE SEVEN: (A) In furtherance of and not in limitation of the powers
conferred by law, the Board of Directors is expressly authorized and empowered
to adopt, amend, or repeal the bylaws of the corporation, provided, however,
that the bylaws may also be altered, amended, or repealed by the affirmative
vote of the holders of two-thirds of the voting power of the then outstanding
Common Stock, voting together as a single class on a Share Equivalent Basis.

(B) Unless and except to the extent that the by-laws of the corporation
shall so require, the election of directors of the corporation need not be by
written ballot.

ARTICLE EIGHT: No stockholder shall have any preemptive right to subscribe
to an additional issue of any class or series of the corporation's capital stock
or to any securities of the corporation convertible into such stock.

ARTICLE NINE: Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of at least two-thirds of
the voting power of the then outstanding Common Stock, voting together as a
single class on a Share Equivalent Basis, shall be required to amend, repeal, or
adopt any provisions inconsistent with paragraph (F) of Article Five or Articles
Six, Nine, Ten, Eleven, Twelve, Thirteen or Fourteen of this Certificate of
Incorporation.

ARTICLE TEN: No director of the corporation shall be personally liable to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General Corporation Law of the
State of Delaware, or (iv) for any transaction from which the director derived
an improper

A-17
<PAGE>

personal benefit. Any amendment or repeal of this Article by the stockholders
shall not adversely affect any right or protection of a director of the
corporation existing hereunder in respect of any act or omission occurring prior
to such amendment or repeal.

ARTICLE ELEVEN: The corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented, have the power to indemnify any and all persons
whom it shall have the power to indemnify under said Section from and against
any and all expenses, liabilities or other matters referred to in or covered by
said Section, and the power provided for herein shall not be deemed exclusive of
any other right to which those indemnified may be entitled under any bylaw,
agreement, or vote of stockholders, disinterested directors or otherwise, both
as to action in his or her official capacity and as to action in another
capacity while holding such office.

ARTICLE TWELVE: In furtherance and not in limitation of the powers
conferred by law or in this Certificate of Incorporation, the Board of Directors
(and any committee of the Board of Directors) is expressly authorized, to the
extent permitted by law, to take such action or actions as the Board of
Directors or such committee may determine to be reasonably necessary or
desirable to (A) encourage any individual, limited partnership, general
partnership, corporation or other firm or entity (a "person") to enter into
negotiations with the Board of Directors and management of the corporation with
respect to any transaction which may result in a change in control of the
corporation which is proposed or initiated by such person or (B) contest or
oppose any such transaction which the Board of Directors or such committee
determines to be unfair, abusive or otherwise undesirable with respect to the
corporation and its business, assets or properties or the stockholders of the
corporation, including, without limitation, the adoption of such plans or the
issuance of such rights, options, capital stock, notes, debentures or other
evidences of indebtedness or other securities of the corporation, which rights,
options, capital stock, notes, debentures or other evidences of indebtedness and
other securities (i) may be exchangeable for or convertible into cash or other
securities on such terms and conditions as may be determined by the Board of
Directors or such committee and (ii) may provide for the treatment of any holder
or class of holders thereof designated by the Board of Directors or any such
committee in respect of the terms, conditions, provisions and rights of such
securities which is different from, and unequal to, the terms, conditions,
provisions and rights applicable to all other holders thereof.

ARTICLE THIRTEEN: No action required to, or which may, be taken at an
annual or special meeting of stockholders of the corporation may be taken
without a meeting, and the power of the stockholders of the corporation to act
by written consent, whether pursuant to Section 228 of the General Corporation
Law or otherwise, is specifically denied.

ARTICLE FOURTEEN: Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by this Certificate of
Incorporation, may be called by the Chairman of the Board, in his discretion,
and shall be called by the Chairman of the Board or the Secretary at the request
in writing of a majority of the directors then holding office. Any such written
request shall state the purpose or purposes of the proposed meeting.

A-18
<PAGE>

EXHIBIT B

AGREEMENT AND PLAN OF MERGER
of
Chicago Mercantile Exchange and CME Transitory Co.

THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and entered
into as of March 1, 2000, between Chicago Mercantile Exchange, an Illinois not-
for-profit corporation ("CME"), and CME Transitory Co., a Delaware nonstock
corporation ("Transitory" or "Surviving Corporation"), said corporations
hereinafter sometimes referred to jointly as the "Constituent Corporations";

WITNESSETH:

WHEREAS, CME is a not-for-profit corporation duly organized and
existing under the Illinois Act, having as its registered agent Craig S.
Donohue;

WHEREAS, Transitory is a nonstock corporation duly organized and
existing under the Delaware General Corporation Law, having as its registered
agent The Corporation Trust Company;

WHEREAS, the Constituent Corporations propose, pursuant to the
applicable provisions of the Illinois General Not For Profit Corporation Act and
the Delaware General Corporation Law, for CME to merge with and into Transitory,
which shall be the Surviving Corporation in consideration for which Members of
CME will receive Membership Interests in Transitory (the "Merger");

WHEREAS, all rights and privileges that Members of CME derive from
their Membership Interests shall be and remain as they exist immediately prior
to the Effective Date of this Agreement, preserved in the rights and privileges
of the Membership Interests in Transitory received by Members of CME in the
Merger; and

WHEREAS, the respective Boards of Directors of the Constituent
Corporations have determined that it is advisable that CME be merged with and
into Transitory and have approved such Merger on the terms and conditions
hereinafter set forth in accordance with the applicable provisions of law
permitting such Merger;

NOW, THEREFORE, in consideration of the foregoing and of the
agreements, covenants and provisions hereinafter set forth, the parties hereto,
intending to be legally bound, do hereby agree as follows:

ARTICLE I
DEFINITIONS

In addition to the words defined elsewhere in this Agreement, the
following words have the following respective meanings, and such definitions
shall be equally applicable to both the singular and plural forms of any of the
words herein defined:

B-1
<PAGE>

"Consent" means any consent, license, permit, waiver,
approval, authorization or other action of, by or with respect to, or
registration, declaration or filing with, any court, Governmental
Authority or Person.

"DGCL" means the General Corporation Law of the State of
Delaware, as amended.

"Effective Date" means the date on which the Merger becomes
effective as provided by the applicable provisions of the Illinois Act
and the DGCL.

"Governmental Approval" means any Consent of, with or to any
Governmental Authority, including the expiration of any waiting or
other time period required to pass before governmental consent or
acquiescence may be assumed or relied on.

"Governmental Authority" means any court or governmental
authority, department, commission, board, bureau, agency or
instrumentality, domestic or foreign, any tribunal or arbitrators of
competent jurisdiction and any self-regulatory organization.

"Illinois Act" means the Illinois' General Not For Profit
Corporation Act of 1986, as amended.

"Member" means the owner of a Membership Interest, or any
portion thereof, in a Constituent Corporation. An owner of two or more
Membership Interests, or portions thereof, in a single Constituent
Corporation shall be deemed to be a separate Member with respect to
each individual Membership Interest owned.

"Membership Interest" means, with respect to a Constituent
Corporation, all the rights or interests of a Member in such
Constituent Corporation, including, but not limited to, any floor
access and electronic trading rights, any right to vote, any rights
with regard to earnings, surplus or assets of such Constituent
Corporation, and any other rights in liquidation, merger,
reorganization or conversion of such Constituent Corporation.

"Person" means an individual, corporation, joint venture,
partnership, association, trust, trustee, unincorporated entity,
organization or government or any department or agency thereof. A
Person who owns a Membership Interest in more than one capacity shall
be deemed to be a separate Person in each such capacity.

"SEC" means the Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended.

B-2
<PAGE>

ARTICLE II
MERGER

Section 2.1 Effect of the Merger. Subject to the terms of this
Agreement, and as more fully set forth and supplemented by the other provisions
herein, upon the Effective Date and pursuant to the Merger:

(a) CME will merge with and into Transitory, the separate
existence of CME shall cease, except to the extent provided by the laws
of the State of Illinois in the case of a corporation after its merger
into another corporation, and Transitory shall be the Surviving
Corporation.

(b) Each Membership Interest in CME shall be converted into a
Membership Interest in Transitory pursuant to and in accordance with
this Agreement.

(c) The Surviving Corporation shall possess all the rights,
privileges, immunities, powers and franchises, of a public or private
nature, of each of the Constituent Corporations, and all property,
real, personal and mixed, all debts due on whatever account, including
subscriptions to membership interests and all other choses in action,
and all and every other interest, of or belonging to or due to each of
the Constituent Corporations, shall be taken and deemed to be
transferred to and vested in the Surviving Corporation without further
act or deed; and the title to all real estate, or any interest therein,
vested in either of the Constituent Corporations shall not revert or be
in any way impaired by reason of the Merger.

(d) The Surviving Corporation shall be responsible and liable
for all of the liabilities and obligations of each of the Constituent
Corporations, and any claim existing or action or proceeding pending by
or against either of the Constituent Corporations may be prosecuted to
judgment as if the Merger had not taken place, or the Surviving
Corporation may be substituted in its place, and neither the rights of
creditors nor any liens upon the property of either of the Constituent
Corporations shall be impaired by the Merger.

(e) (i) The respective assets of CME and Transitory shall be
taken up or continued on the books of the Surviving Corporation in the
amounts at which such assets shall have been carried on their
respective books immediately prior the Effective Date; and (ii) the
respective liabilities and reserves of CME and Transitory shall be
taken up or continued on the books of the Surviving Corporation in the
amounts at which such liabilities and reserves shall have been carried
on their respective books immediately prior to the Effective Date.

(f) All corporate acts, plans, policies, agreements,
arrangements, approvals and authorizations of CME, its Members, Board
of Directors and committees thereof, officers and agents, which were
valid and effective immediately prior to the Effective Date shall be
taken for all purposes as the acts, plans, policies, agreements,
arrangements, approvals and authorizations of the Surviving Corporation
and shall be as effective and binding thereon as the same were with
respect to CME.

B-3
<PAGE>

Section 2.2 Charter and By-Laws. The Certificate of Incorporation and
By-laws of Transitory as in effect on the Effective Date shall be and constitute
the Certificate of Incorporation and By-Laws of the Surviving Corporation until
the same shall be altered, amended or changed in accordance with their
respective terms and applicable law.

Section 2.3 Directors and Officers. The directors and officers of CME
prior to the Effective Date shall serve as the directors and officers of the
Surviving Corporation on and after the Effective Date, until new directors and
officers have been duly elected and qualified pursuant to the Certificate of
Incorporation and By-laws of the Surviving Corporation, or until their earlier
resignation, removal or replacement.

Section 2.4 Employees and Agents. The employees and agents of CME shall
become the employees and agents of the Surviving Corporation and shall continue
to be entitled to the same rights and benefits which they enjoyed as employees
and agents of CME.

ARTICLE III
CONVERSION OF MEMBERSHIP INTERESTS

Section 3.1 Conversion of Membership Interests. On the Effective Date,
and without any further action by CME or Transitory, all the Membership
Interests in CME shall be converted into Membership Interests in Transitory. The
Membership Interests in CME shall be converted in accordance with the following:

(a) Each individual Chicago Mercantile Exchange division
Membership Interest in CME shall be converted into one Chicago
Mercantile Exchange division Membership Interest in Transitory.

(b) Each individual International Monetary Market division
Membership Interest in CME shall be converted into one International
Monetary Market division Membership Interest in Transitory.

(c) Each individual Index and Option Market division
Membership Interest in CME shall be converted into one Index and Option
Market division Membership Interest in Transitory.

(d) Each individual Growth and Emerging Markets division
Membership Interest in CME shall be converted into one Growth and
Emerging Markets division Membership Interest in Transitory.

(e) Each fractional Growth and Emerging Markets division
Membership Interest in CME shall be converted into an equivalent
fractional Growth and Emerging Markets division Membership Interest in
Transitory.

Each of the Membership Interests in Transitory described in the foregoing
clauses (a) through (e) (inclusive) shall have the rights, preferences and
privileges provided for in the Consolidated Rules of CME for the corresponding
Membership Interests in CME as of the Effective Date.

B-4
<PAGE>

Section 3.2 Further Rules. CME and Transitory are empowered to adopt
further rules and regulations, not inconsistent with the provisions of this
Agreement, regarding the conversion of the Membership Interests in CME into
Membership Interests in Transitory.

ARTICLE IV
COVENANTS

Section 4.1 Further Actions. Each of the Constituent Corporations
agrees to use its reasonable efforts to take, or to cause to be taken, all
actions and to do, or to cause to be done, all things necessary, proper or
advisable to consummate and to make effective the transactions contemplated by
this Agreement, including, but not limited to:

(a) making, or causing to be made, all such filings and
submissions under any applicable law and giving such reasonable
undertakings, as may be necessary to consummate this Agreement and the
transactions contemplated hereby;

(b) using its reasonable efforts to obtain, or causing to be
obtained, all Governmental Approvals and other Consents necessary to be
obtained in order to consummate this Agreement and the transactions
contemplated hereby; and

(c) using its reasonable efforts to take, or cause to be
taken, all other actions, necessary, proper or advisable in order to
fulfill its obligations in respect of this Agreement and the
transactions contemplated hereby.

Each of the parties hereto shall coordinate and cooperate with the
other party in exchanging such information and supplying such reasonable
assistance as may be requested by such other party in connection with the
filings and other actions contemplated by this Section 4.1.

Section 4.2 Service in Illinois. Transitory, as the Surviving
Corporation, agrees that it may be served with process in Illinois in any
proceeding for enforcement of (i) any obligation of CME as well as (ii) any of
its obligations arising from this Merger. Transitory hereby irrevocably appoints
the Secretary of State of Illinois as its agent to accept service of process in
any such suit or other proceedings, and any such process so accepted shall be
mailed by the Secretary of State of Illinois to Chicago Mercantile Exchange
Inc., 30 South Wacker Drive, Chicago, Illinois 60606, attention: General
Counsel.

ARTICLE V
CONDITIONS TO MERGER

Section 5.1 Conditions to Effectiveness. The obligation of each of the
parties hereto to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment on or prior to the Effective Date of the
following conditions:

(a) No Injunctions or Restraints. Consummation of the
transactions contemplated by this Agreement shall not have been
restrained, enjoined or otherwise

B-5
<PAGE>

prohibited by any applicable law, including any order, injunction,
decree or judgment of any court or other Governmental Authority, and no
action or proceeding shall be pending or threatened by any Governmental
Authority on the Effective Date before any court or other Governmental
Authority to restrain, enjoin or otherwise prevent the consummation of
the transactions contemplated hereby or to recover any material damages
or obtain other material relief as a result of such transactions. There
shall not have been promulgated, entered, issued, or determined by any
court or other Governmental Authority to be applicable to this
Agreement any applicable law making illegal the consummation of the
transactions contemplated hereby, and no proceeding with respect to the
application of any such applicable law shall be pending.

(b) Effectiveness of the Registration Statement. The
Registration Statement on Form S-4 filed with the SEC by Chicago
Mercantile Exchange Inc., a Delaware corporation ("New CME"), relating
to its issuance of its common stock (including the proxy statement and
prospectus constituting part thereof, the "Registration Statement")
shall have become and remain effective under the Securities Act. No
stop order suspending the effectiveness of the Registration Statement
shall have been issued by the SEC and no proceedings for that purpose
and no similar proceeding in respect of the Registration Statement
shall have been initiated or threatened by the SEC.

(d) Internal Revenue Service Revenue Ruling. Issuance by the
Internal Revenue Service of a ruling that this Merger and the ultimate
issuance of common stock by New CME qualify for tax-free treatment
under the Internal Revenue Code of 1986, as amended.

(e) P-M-T. The offer by New CME to purchase the assets and
business of P-M-T Limited Partnership, an Illinois limited partnership,
for cash shall have been approved by the holders of two-thirds of the
outstanding P-M-T Class A partnership units (excluding units held by
CME).

ARTICLE VI
AMENDMENT; TERMINATION AND CORRECTIONS

Section 6.1 Amendment of Agreement. At any time prior to the Effective
Date, the parties hereto may agree to amend this Agreement. No such amendment
may, in the sole judgment of the Board of Directors of CME, materially and
adversely affect the rights of the Members of CME.

Section 6.2 Abandonment of Agreement. At any time prior to the
Effective Date, CME may abandon this Agreement by appropriate resolution of its
Board of Directors, notwithstanding prior approval at the Special Meeting. No
Person shall have any rights or claims against either Constituent Corporation or
its respective Board of Directors based on abandonment of this Agreement.

B-6
<PAGE>

Section 6.3 Corrections. The Constituent Corporations may, until the
Effective Date, by an instrument executed by a Chairman, Vice Chairman,
President or any Vice President of each Constituent Corporation, make such
modifications as are appropriate to correct errors, clarify existing items or
make additions to correct manifest omissions in this Agreement.

ARTICLE VII
ADDITIONAL PROVISIONS

Section 7.1 Notices. If CME complies substantially and in good faith
with the requirements of the Illinois Act or the terms of this Agreement with
respect to the giving of any required notice to its Members, its failure in any
case to give such notice to any Person or Persons entitled thereto shall not
impair the validity of the actions and proceedings taken under the Illinois Act
or this Agreement or entitle such Person or Persons to any injunctive or other
equitable relief with respect thereto.

Section 7.2 Severability. To the extent possible, each provision of
this Agreement shall be interpreted in a manner as to be valid, legal and
enforceable. Any determination that any provision of this Agreement or any
application thereof is invalid, illegal or unenforceable in any respect or in
any instance shall be effective only to the extent of such invalidity,
illegality or unenforceablity and shall not effect the validity, legality or
enforceability of any other provision of this Agreement.

Section 7.3 Headings. Article and Section headings contained in this
Agreement are inserted for convenience and reference only, and shall not be
considered in construing or interpreting any of the provisions hereof.

Section 7.4 Entire Agreement. This Agreement supersedes any and all
oral or written agreements heretofore made relating to the subject matter hereof
and constitutes the entire Agreement of the parties relating to the subject
matter hereof.

Section 7.5 Expenses. Transitory, as the Surviving Corporation, shall
pay all expenses of carrying this Merger into effect and accomplishing the
Merger herein provided for.

Section 7.6 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.

Section 7.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware, without
giving effect to any conflicts or choice of law provisions that would make
applicable the substantive laws of any other jurisdiction.

B-7
<PAGE>

IN WITNESS WHEREOF, each of the Constituent Corporations, pursuant to
authority duly given by resolutions adopted by its Board of Directors, has
caused this Agreement to be executed in its name by its duly authorized officer
as of the day and year aforesaid.

CHICAGO MERCANTILE EXCHANGE

By: ________________________________

Name: M. Scott Gordon
Title: Chairman of the Board

CME TRANSITORY CO.

By: ________________________________

Name: M. Scott Gordon
Title: Chairman of the Board

B-8
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers

Section 145 of the Delaware General Corporation Law provides that the Registrant
may, and in some circumstances must, indemnify the directors and officers of the
Registrant against liabilities and expenses incurred by such person by reason of
the fact that such person was serving in such capacity, subject to certain
limitations and conditions set forth in the statute. The Registrant's
Certificate of Incorporation and By-Laws provide that the Registrant will
indemnify its directors and officers, and may indemnify any person serving as
director or officer of another business entity at the Registrant's request, to
the extent permitted by the statute. In addition, the Registrant's Certificate
of Incorporation provides, as permitted by the the Delaware General Corporation
Law, that directors shall not be personally liable for monetary damages for
breach of fiduciary duty as a director, except (i) for breaches of their duty of
loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, and (iv)
for transactions from which a director derived an improper personal benefit.

Item 21. Exhibits and Financial Statement Schedules

(a) Exhibits

The following is a list of Exhibits included as part of this
Registration Statement. The Registrant agrees to furnish
supplementally a copy of any omitted schedule to the Securities and
Exchange Commission upon request.

<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ----------------------
<S> <C>
2.1 Form of Agreement and Plan of Merger dated as of March 1, 2000 between Chicago Mercantile Exchange and CME
Transitory Co. (included as Exhibit B to the Proxy Statement/Prospectus).
2.2 Form of Agreement and Plan of Merger dated as of March 1, 2000 between CME Transitory Co. and the
Registrant
3.1* Certificate of incorporation of the Registrant
3.2 Amended and Restated Certificate of Incorporation (included as Exhibit A to the Proxy Statement/Prospectus)
3.3 By-laws of the Registrant
5.1 Opinion of Sidley & Austin regarding legality of securities being registered
8.1** Opinion of Sidley & Austin regarding tax matters
10.1 Chicago Mercantile Exchange Omnibus Stock Plan, effective February 7, 2000.
10.2* Chicago Mercantile Exchange Senior Management Supplemental Deferred Savings Plan, including First Amendment
thereto dated December 14, 1994, Second Amendment thereto dated December 8, 1998 and Administrative Guidelines
thereto.
10.3* Chicago Mercantile Exchange Directors' Deferred Compensation Plan, including First Amendment thereto dated
December 8, 1998.
10.4* Chicago Mercantile Exchange Supplemental Executive Retirement Plan, including First Amendment thereto dated
December 31, 1996, Second Amendment thereto dated January 14, 1998 and Third Amendment thereto dated December
__, 1998.
10.5* Chicago Mercantile Exchange Supplemental Executive Retirement Trust, including First Amendment thereto dated
September 7, 1993.
10.6* Agreement dated March 21, 1997 between Chicago Mercantile Exchange and T. Eric Kilcollin.
10.7* Separation Agreement and General Release, executed December 31, 1998 between T. Eric Kilcollin and Chicago
Mercantile Exchange.
10.8** Agreement dated February 7, 2000 between Chicago Mercantile Exchange and James J. McNulty.
10.9* Employment Agreement dated October 27, 1998 between Chicago Mercantile Exchange and Frederick Arditti, and
First Amendment thereto dated October 27, 1998 and Second Amendment thereto dated October 27, 1998.
10.10* Employment Agreement dated December 10, 1999 between Chicago Mercantile Exchange and Gerald D. Beyer.
10.11* Employment Agreement, executed September 8, 1999 between Chicago Mercantile Exchange and Phupinder Gill.
10.12* Employment Agreement dated July 17, 1998 between Chicago Mercantile Exchange and William Jenks
10.13 License Agreement, effective as of September 24, 1997 between Standard & Poor's, a Division of The McGraw-Hill
Companies, Inc., and Chicago Mercantile Exchange. (confidential material appearing in this document has been
omitted and filed separately with the Securities and Exchange Commission in accordance with the Securities Act
of 1933, as amended, and 17 C.F.R. 230.406 and 200.80 promulgated thereunder. Omitted information has been
replaced with asterisks.)
10.14* Lease dated as of November 11, 1983 between Chicago Mercantile Exchange Trust (successor to CME Real Estate
Co. of Chicago, Illinois) and Chicago Mercantile Exchange, including amendment thereto dated as of December 6,
1989.
10.15* Lease dated March 31, 1988 between EOP -- 10 & 30 South Wacker, L.L.C., as beneficiary of a land trust dated
October 1, 1997 and known as American National Bank and Trust Company of Chicago Trust No. 123434 (as successor
in interest to American National Bank and Trust Company of Chicago, not individually but solely as trustee
under Trust Agreement dated June 2, 1981 and known as Trust No. 51234) and Chicago Mercantile Exchange relating
to 10 South Wacker Drive, including First Amendment thereto dated as of November 1, 1999.
10.16* Lease dated May 11, 1981 between EOP -- 10 & 30 South Wacker, L.L.C., as beneficiary of a land trust dated
October 1, 1997 and known as American National Bank and Trust Company of Chicago Trust No. 123434-06 (as
successor in interest to American National Bank and Trust Company of Chicago, not individually but solely as
trustee under Trust Agreement dated March 20, 1980 and known as Trust No. 48268) and Chicago Mercantile
Exchange relating to 30 South Wacker Drive, including First Amendment thereto dated as of February 1, 1982,
Second Amendment thereto dated as of April 26, 1982, Third Amendment thereto dated as of June 29, 1982, Fourth
Amendment thereto dated as of July 28, 1982, Fifth Amendment thereto dated as of October 7, 1982, Sixth
Amendment thereto dated as of July 5, 1983, Seventh Amendment thereto dated as of September 19, 1983, Eighth
Amendment thereto dated as of October 17, 1983, Ninth Amendment thereto dated as of December 3, 1984, Tenth
Amendment thereto dated as of March 16, 1987, Eleventh Amendment thereto dated as of January 1, 1999, Twelfth
Amendment thereto dated as of June 30, 1999.
21.1 Subsidiaries of the Registrant
23.1 Consent of Sidley & Austin (included in Exhibit 5.1)
23.2* Consent of Arthur Andersen LLP
24.1* Form of Power of Attorney executed by Directors of Registrant
27.1 Financial Data Schedule
99.1* Form of proxy
</TABLE>
______________________
* Previously filed.
** To be filed by amendment.
<PAGE>

(b) Financial Statement Schedules

None.

Item 22. Undertakings.

The Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933.

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement.

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

(4) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form.

(5) That every prospectus: (i) that is filed pursuant to paragraph
(4) immediately preceding, or (ii) that purports to meet the requirements
of Section 10(a)(3) of the Act and is used in connection with an offering
of securities subject to Rule 415, will be filed as a part of an amendment
to the registration statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such

2
<PAGE>

post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

(6) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.

(7) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 1 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on March 9, 2000.

CHICAGO MERCANTILE EXCHANGE INC.

By: /s/ M. Scott Gordon
-------------------------------------
M. Scott Gordon
Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on this 9th day of March, 2000.

Name Title
---- -----

M. Scott Gordon Chairman of the Board and Director
- ---------------------------
M. Scott Gordon (Chief Executive Officer)

David G. Gomach Senior Vice President and Chief Financial Officer
- ---------------------------
David G. Gomach (Principal Financial Officer)

Raymond C. Repede Vice President and Controller
- ---------------------------
Raymond C. Repede (Principal Accounting Officer)

* Director
- ---------------------------
H. Jack Bouroudjian

* Director
- ---------------------------
Timothy R. Brennan

* Director
- ---------------------------
Leslie Henner Burns

* Director
- ---------------------------
Jeffrey R. Carter

Director
- ---------------------------
E. Gerald Corrigan

* Director
- ---------------------------
Terrence A. Duffy

* Director
- ---------------------------
Rahm Emanuel
4
<PAGE>

* Director
- ---------------------------
Martin J. Gepsman

* Director
- ---------------------------
Yra G. Harris

* Director
- ---------------------------
Robert L. Haworth

* Director
- ---------------------------
Bruce F. Johnson

Director
- ---------------------------
Gary M. Katler

* Director
- ---------------------------
Paul Kimball

* Director
- ---------------------------
Thomas A. Kloet

* Director
- ---------------------------
John W. Lacey

* Director
- ---------------------------
Leo Melamed

* Director
- ---------------------------
Merton H. Miller

* Director
- ---------------------------
William P. Miller II

* Director
- ---------------------------
Laurence E. Mollner

* Director
- ---------------------------
Patrick J. Mulchrone

* Director
- ---------------------------
John D. Newhouse

* Director
- ---------------------------
James E. Oliff

* Director
- ---------------------------
Mark G. Papadopoulos

* Director
- ---------------------------
Ward Parkinson

5
<PAGE>

* Director
- ---------------------------
Robert J. Prosi

Director
- ---------------------------
David M. Pryde

* Director
- ---------------------------
Irwin Rosen

* Director
- ---------------------------
William G. Salatich, Jr.

* Director
- ---------------------------
John F. Sandner

* Director
- ---------------------------
Verne O. Sedlacek

* Director
- ---------------------------
Leon C. Shender

* Director
- ---------------------------
William R. Shepard

* Director
- ---------------------------
Howard J. Siegel

* Director
- ---------------------------
David I. Silverman

* Director
- ---------------------------
Jeffrey L. Silverman

* Director
- ---------------------------
Paul Simon

* By: /s/ Craig S. Donohue
----------------------
Craig S. Donohue
Attorney-in-Fact

<PAGE>

Exhibit 2.2
Chicago Mercantile Exchange Inc.
Registration Statement on Form S-4

AGREEMENT AND PLAN OF MERGER
OF
CME Transitory Co. and Chicago Mercantile Exchange INC.

THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of March 1, 2000, between CME Transitory Co., a Delaware
nonstock corporation ("Transitory"), and Chicago Mercantile Exchange Inc., a
Delaware stock corporation ("CME" or "Surviving Corporation"), said corporations
hereinafter sometimes referred to jointly as the "Constituent Corporations."

WITNESSETH:

WHEREAS, Transitory is a nonstock corporation duly organized and
existing under the Delaware General Corporation Law, having as its registered
agent The Corporation Trust Company;

WHEREAS, CME is a stock corporation duly organized and existing under
the Delaware General Corporation Law, having as its registered agent The
Corporation Trust Company;

WHEREAS, the Constituent Corporations propose, pursuant to the
applicable provisions of the Delaware General Corporation Law, for Transitory to
merge with and into CME in consideration for which the Membership Interests in
Transitory will be converted into shares of the Common Stock of CME (the
"Merger"); and

WHEREAS, the respective Boards of Directors of the Constituent
Corporations have determined that it is advisable that Transitory be merged with
and into CME and have approved such Merger on the terms and conditions
hereinafter set forth in accordance with the applicable provisions of law
permitting such Merger;

NOW, THEREFORE, in consideration of the foregoing and of the
agreements, covenants and provisions hereinafter set forth, the parties hereto,
intending to be legally bound, do hereby agree as follows:

ARTICLE I
DEFINITIONS

In addition to the words defined elsewhere in this Agreement, the following
words have the following respective meanings, and such definitions shall be
equally applicable to both the singular and plural forms of any of the words
herein defined:
<PAGE>

"CME Certificate of Incorporation" means the amended and restated
certificate of incorporation of CME as in effect on the Effective Date.

"Consent" means any consent, license, permit, waiver, approval,
authorization or other action of, by or with respect to, or registration,
declaration or filing with, any court, Governmental Authority or Person.

"DGCL" means the General Corporation Law of the State of Delaware, as
amended.

"Effective Date" means the date on which the Merger becomes effective
as provided by the applicable provisions of the DGCL.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Governmental Approval" means any Consent of, with or to any
Governmental Authority, including the expiration of any waiting or other
time period required to pass before governmental consent or acquiescence
may be assumed or relied on.

"Governmental Authority" means any court or governmental authority,
department, commission, board, bureau, agency or instrumentality, domestic
or foreign, any tribunal or arbitrators of competent jurisdiction and any
self-regulatory organization.

"Member" means the owner of a Membership Interest, or any portion
thereof, in Transitory. An owner of two or more Membership Interests, or
portions thereof, shall be deemed to be a separate Member with respect to
each individual interest owned.

"Membership Division" means a Membership Interest in any one or more
of the following four divisions of Membership Interests in Transitory: (i)
Chicago Mercantile Exchange; (ii) International Monetary Market; (iii)
Index and Options Market; and (iv) Growth and Emerging Markets.

"Membership Interest" means all the rights or interests of each Member
of Transitory, including, but not limited to, any floor access and
electronic trading rights, rights to clearing membership and clearing fees,
any right to vote, any rights with regard to earnings, surplus or assets of
Transitory, and any other rights in liquidation, merger, reorganization or
conversion of Transitory.

"Person" means an individual, corporation, joint venture, partnership,
association, trust, trustee, unincorporated entity, organization or
government or any department or agency thereof. A Person who owns a
Membership Interest in more than one capacity shall be deemed to be a
separate Person in each such capacity.

"SEC" means the Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended.

ARTICLE II

2
<PAGE>

MERGER

Section 2.1 Effect of the Merger. Subject to the terms of this Agreement,
and as more fully set forth and supplemented by other provisions herein, upon
the Effective Date and pursuant to the Merger:

(a) Transitory will merge with and into CME, the separate existence
of Transitory shall cease, except to the extent provided by the laws of the
State of Delaware in the case of a corporation after its merger into
another corporation, and CME shall be the Surviving Corporation.

(b) All Membership Interests in Transitory shall be converted into
shares of the common stock of CME as provided in Section 3.1 of this
Agreement.

(c) The Surviving Corporation shall thereupon and thereafter possess
all the rights, privileges, immunities, powers and franchises, as well of a
public as of a private nature, of each of the Constituent Corporations, and
all property, real, personal and mixed, all debts due on whatever account,
including subscriptions to shares or membership interests and all other
choses in action, and all and every other interest of, or belonging to,
each of the Constituent Corporations shall be taken and deemed to be
transferred to and vested in the Surviving Corporation without further act
or deed; and the title to all real estate, or any interest therein, vested
in either of the Constituent Corporations shall not revert or be in any way
impaired by reason of the Merger.

(d) The Surviving Corporation shall be responsible and liable for all
the liabilities and obligations of each of the Constituent Corporations,
and any claim existing or action or proceeding pending by or against either
of the Constituent Corporations may be prosecuted to judgment as if the
merger had not taken place, or the Surviving Corporation may be substituted
in its place, and neither the rights of creditors nor any liens upon the
property of either of the Constituent Corporations shall be impaired by the
Merger.

(e) (i) The respective assets of Transitory and CME shall be taken up
or continued on the books of the Surviving Corporation in the amounts at
which such assets shall have been carried on their respective books
immediately prior the Effective Date; and (ii) the respective liabilities
and reserves of Transitory and CME shall be taken up or continued on the
books of the Surviving Corporation in the amounts at which such liabilities
and reserves shall have been carried on their respective books immediately
prior to the Effective Date.

(f) All corporate acts, plans, policies, agreements, arrangements,
approvals and authorizations of Transitory, its Members, Board of Directors
and committees thereof, officers and agents, which were valid and effective
immediately prior to the Effective Date shall be taken for all purposes as
the acts, plans, policies, agreements, arrangements, approvals and
authorizations of the Surviving Corporation and shall be as effective and
binding thereon as the same were with respect to Transitory.

3
<PAGE>

Section 2.2 Charter and By-Laws. The CME Certificate of Incorporation
and By-Laws as in effect on the Effective Date shall be and constitute the
certificate of incorporation and by-laws of the Surviving Corporation until the
same shall be altered, amended or changed in accordance with their respective
terms and applicable law.

Section 2.3 Directors and Officers. The directors and officers of
Transitory prior to the Effective Date shall serve as the directors and officers
of the Surviving Corporation on and after the Effective Date, until new
directors and officers have been duly elected and qualified pursuant to the CME
Certificate of Incorporation and CME's By-laws, or until their earlier
resignation, removal or replacement.

Section 2.4 Employees and Agents. The employees and agents of Transitory
shall become the employees and agents of the Surviving Corporation and shall
continue to be entitled to the same rights and benefits which they enjoyed as
employees and agents of Transitory.

ARTICLE III
CONVERSION OF MEMBERSHIP INTERESTS

Section 3.1 Conversion of Membership Interests. On the Effective Date,
and without any further action by Transitory or CME, all Membership Interests in
Transitory shall be converted into common stock of CME in accordance with the
following:

(a) Each individual Chicago Mercantile Exchange division Membership
Interest in Transitory shall be converted into (i) 16,200 fully paid and
nonassessable shares of the Class A Common Stock, $.01 par value of CME and
(ii) one fully paid and nonassessable share of the Class B Common Stock,
Series B-1, $.01 par value of CME.

(b) Each individual International Monetary Market division Membership
Interest in Transitory shall be converted into (i) 10,800 fully paid and
nonassessable shares of the Class A Common Stock, $.01 par value of CME and
(ii) one fully paid and nonassessable share of the Class B Common Stock,
Series B-2, $.01 par value of CME.

(c) Each individual Index and Option Market division Membership
Interest in Transitory shall be converted into (i) 5,400 fully paid and
nonassessable shares of the Class A Common Stock, $.01 par value of CME and
(ii) one fully paid and nonassessable share of the Class B Common Stock,
Series B-3, $.01 par value of CME.

(d) Each full individual Growth and Emerging Markets division
Membership Interest in Transitory shall be converted into one fully paid
and nonassessable share of the Class B Common Stock, Series B-4, $.01 par
value of CME.

(e) Each fractional Growth and Emerging Markets division Membership
Interest in Transitory shall be converted into one fully paid and
nonassessable share of the Class B Common Stock, Series B-1, $.01 par value
of CME.

4
<PAGE>

Section 3.2 Further Rules. Transitory and CME are empowered to adopt
further rules and regulations, not inconsistent with the provisions of this
Agreement, regarding the conversion of Membership Interests in Transitory into
shares of the common stock of CME.

Section 3.3 Authority to Remedy Errors. Subject to the terms of this
Agreement, the Board of Directors of the Surviving Corporation may authorize and
issue additional shares of common stock and take any other action it deems
appropriate to remedy errors or miscalculations made in connection with this
Agreement.

ARTICLE IV
COVENANTS

Section 4.1 Further Actions. Each of the Constituent Corporations agrees
to use its reasonable efforts to take, or to cause to be taken, all actions and
to do, or to cause to be done, all things necessary, proper or advisable to
consummate and to make effective the transactions contemplated by this
Agreement, including, but not limited to:

(a) making, or causing to be made, all such filings and submissions
under any applicable law and giving such reasonable undertakings as may be
necessary to consummate this Agreement and the transactions contemplated
hereby;

(b) using reasonable efforts to obtain, or to cause to be obtained,
all Governmental Approvals and other Consents necessary to be obtained in
order to consummate this Agreement and the transactions contemplated
hereby; and

(c) using its reasonable efforts to take, or to cause to be taken,
all other actions, necessary, proper or advisable in order to fulfill its
obligations in respect of this Agreement and the transactions contemplated
hereby.

Each of the parties hereto will coordinate and cooperate with the other
party in exchanging such information and supplying such reasonable assistance as
may be requested by the other party in connection with the filings and other
actions contemplated by this Section 4.1.

ARTICLE V
CONDITIONS TO MERGER

Section 5.1 Conditions to Effectiveness. The obligation of each of the
parties hereto to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction on or prior to the Effective Date of the
Merger of following conditions:

(a) Consummation of Merger of Chicago Mercantile Exchange into and
with Transitory. The merger of Chicago Mercantile Exchange, an Illinois
not-for-profit corporation ("Existing CME"), into and with Transitory shall
have been consummated as provided in that certain Agreement and Plan of
Merger dated as of March 1, 2000 between Existing CME and Transitory.

5
<PAGE>

(b) No Injunctions or Restraints. Consummation of the transactions
contemplated by this Agreement shall not have been restrained, enjoined or
otherwise prohibited by any applicable law, including any order,
injunction, decree or judgment of any court or other Governmental
Authority, and no action or proceeding shall be pending or threatened by
any Governmental Authority on the Effective Date before any court or other
Governmental Authority to restrain, enjoin or otherwise prevent the
consummation of the transactions contemplated hereby or to recover any
material damages or obtain other material relief as a result of such
transactions. There shall not have been promulgated, entered, issued or
determined by any court or other Governmental Authority to be applicable to
this Agreement any applicable law making illegal the consummation of the
transactions contemplated hereby, and no proceeding with respect to the
application of any such applicable law shall be pending.

(c) Governmental and Regulatory Consents. All filings required to be
made prior to the Effective Date with, and all Consents, approvals, permits
and authorizations required to be obtained prior to the Effective Date from
any Governmental Authority, in connection with the execution and delivery
of this Agreement and the consummation of the transactions contemplated
hereby by the Constituent Corporations, and which, either individually or
in the aggregate, if not obtained would have a material adverse effect on
the business, assets, financial condition or results of operations of the
Surviving Corporation or would prevent consummation of this Agreement, will
have been made or obtained (as the case may be).

(d) Requisite Approvals. This Agreement shall have been approved by
the members or the stockholders, as the case may be, of each Constituent
Corporation, as required by applicable law.

ARTICLE VI
MEMBERSHIP INTERESTS

Section 6.1 Determination of Membership. The owner of a Membership
Interest as of a given date shall be the Person or Persons whose name or names
appear, as of such date, on the records of and as determined in good faith by
Transitory. Such Person or Persons, determined in accordance with the foregoing
sentence, shall conclusively be presumed to be the owner or owners of such
Membership Interest for purposes of this Agreement and Transitory shall not be
required to examine or consider any other facts or circumstances.

Section 6.2 Mailing Address. The mailing address of a Member, determined
in accordance with the foregoing Section, as of any date, for purposes of this
Agreement, shall be the Member's last known address as it appears on the records
of Transitory as of such date.

ARTICLE VII
CORRECTIONS, AMENDMENTS AND TERMINATION

Section 7.1 Corrections. The Constituent Corporations may, until the
Effective Date, by an instrument executed by a Chairman, Vice Chairman,
President or any Vice President of

6
<PAGE>

each Constituent Corporation, make such modifications as are appropriate to
correct errors, clarify existing items or make additions to correct manifest
omissions in this Agreement.

Section 7.2 Amendment of Agreement. At any time prior to the merger of
Existing CME into and with Transitory, the parties hereto may agree to amend
this Agreement. No amendment may, in the sole judgment of the Board of Directors
of Transitory, materially and adversely affect the rights of the Members of
Existing CME.

Section 7.3 Abandonment of Agreement. At any time prior to the merger of
Existing CME into and with Transitory, Transitory may abandon this Agreement by
appropriate resolution of its Board of Directors, notwithstanding prior Member
approval. No Person shall have any rights or claims against either Constituent
Corporation or its respective Board of Directors based on the abandonment of
this Agreement.

ARTICLE VIII
ADDITIONAL PROVISIONS

Section 8.1 Severability. To the extent possible, each provision of this
Agreement shall be interpreted in a manner as to be valid, legal and
enforceable. Any determination that any provision of this Agreement or any
application thereof is invalid, illegal or unenforceable in any respect or in
any instance shall be effective only to the extent of such invalidity,
illegality or unenforceablity and shall not effect the validity, legality or
enforceability of any other provision of this Agreement.

Section 8.2 Headings. Article and Section headings contained in this
Agreement are inserted for convenience and reference only, and shall not be
considered in construing or interpreting any of the provisions hereof.

Section 8.3 Entire Agreement. This Agreement supersedes any and all oral
or written agreements heretofore made relating to the subject matter hereof and
constitutes the entire Agreement of the parties relating to the subject matter
hereof.

Section 8.4 Expenses. CME, as the Surviving Corporation, shall pay all
expenses of carrying the Merger into effect and accomplishing the Merger herein
provided for.

Section 8.5 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument.

Section 8.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware, without
giving effect to any conflicts or choice of law provisions that would make
applicable the substantive laws of any other jurisdiction.

7
<PAGE>

CME TRANSITORY CO.

By:
---------------------------------
Name: Scott Gordon
Title: Chairman of the Board

CHICAGO MERCANTILE EXCHANGE INC.

By:
---------------------------------
Name: Scott Gordon
Title: Chairman of the Board

<PAGE>

Exhibit 3.3
Chicago Mercantile Exchange Inc.
Registration Statement on Form S-4

BY-LAWS
OF
Chicago Mercantile Exchange Inc.

ARTICLE I

Stockholders' Meetings

Section 1.1. Annual Meetings. (a) An annual meeting of stockholders
shall be held in December of each year for the election of Directors at such
date, time and place, either within or without the state of Delaware, as may be
fixed by resolution of the Board of Directors from time to time. In the absence
of any designation as to date, such meeting shall be held on the first Thursday
after the second business Wednesday in December in each year. Subject to
paragraph (b) of this Section 1.1, any other proper business may be transacted
at an annual meeting.

(b) Only such business, other than the election of the Board of
Directors, shall be conducted at an annual meeting of stockholders as shall have
been properly brought before the meeting. For such business to be properly
brought before the meeting, it must be: (i) authorized by the Board of Directors
and specified in the notice, or a supplemental notice, of the meeting, (ii)
otherwise brought before the meeting by or at the direction of the Board of
Directors or the chairman of the meeting, or (iii) otherwise properly brought
before the meeting by a stockholder. For business to be properly brought before
an annual meeting by a stockholder, the stockholder must have given written
notice thereof to the Secretary, delivered or mailed to and received at the
principal executive offices of the Corporation (x) not less than 90 days nor
more than 120 days prior to the meeting, or (y) if less than 100 days notice of
the meeting or prior public disclosure of the date of the meeting is given or
made to stockholders, not later than the close of business on the tenth day
following the day on which the notice of the meeting was mailed or, if earlier,
the day on which such public disclosure was made. A stockholder's notice to the
Secretary shall set forth as to each item of business the stockholder proposes
to bring before the meeting (1) a brief description of such item and the reasons
for conducting such business at the meeting and a representation that the
stockholder intends to appear in person or by proxy at the meeting to introduce
the business specified in the notice, (2) the name and address, as they appear
on the Corporation's records, of the stockholder proposing such business, (3)
the class, and series if any, and number of shares of stock of the Corporation
which are beneficially owned by the stockholder (for purposes of the regulations
under Sections 13 and 14 of the Securities Exchange Act of 1934, as amended),
and (4) any material interest of the stockholder in such business. No business
shall be conducted at any annual meeting except in accordance with the
procedures set forth in this paragraph (b). The

1
<PAGE>

chairman of the meeting at which any business is proposed by a stockholder
shall, if the facts warrant, determine and declare to the meeting that such
business was not properly brought before the meeting in accordance with the
provisions of this paragraph (b), and, in such event, the business not properly
before the meeting shall not be transacted.

Section 1.2. Special Meetings. Special meetings of stockholders for
any purpose or purposes may be called at any time only by the Chairman of the
Board or by a majority of the Board of Directors. The business transacted at a
special meeting of stockholders shall be limited to the purpose or purposes for
which such meeting is called.

Section 1.3. Notice of Meetings. A written notice of each annual or
special meeting of stockholders shall be given stating the place, date and time
of the meeting, and, in the case of a special meeting, the purpose or purposes
for which the meeting is called. Unless otherwise provided by law, the
Certificate of Incorporation or these By-laws, such notice of meeting shall be
given not less than 10 nor more than 60 days before the date of the meeting to
each stockholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be given when deposited in the mail, postage prepaid,
directed to the stockholder at such stockholder's address as it appears on the
records of the Corporation. An affidavit of the Secretary or an Assistant
Secretary or of the transfer agent of the Corporation that the notice has been
given shall, in the absence of fraud, be prima facie evidence of the facts
stated therein.

Section 1.4. Adjournments. Any annual or special meeting of
stockholders may be adjourned from time to time to reconvene at the same or some
other place, and notice need not be given of any such adjourned meeting if the
date, time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting any business may be transacted
which might have been transacted at the original meeting. If the adjournment is
for more than 30 days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the adjourned meeting in
accordance with Section 1.3.

Section 1.5. Quorum. Except as otherwise provided by law, the
Certificate of Incorporation or these By-laws, the presence in person or by
proxy of the holders of stock having not less than one-third of the votes which
could be cast by the holders of all outstanding stock entitled to vote at the
meeting shall constitute a quorum at each meeting of stockholders. In the
absence of a quorum, then either (i) the chairman of the meeting or (ii) the
stockholders may, by the affirmative vote of the holders of stock having a
majority of the votes which could be cast by all such holders, adjourn the
meeting from time to time in the manner provided in Section 1.4 of these By-laws
until a quorum is present. If a quorum is present when a meeting is convened,
the subsequent withdrawal of stockholders, even though less than a quorum
remains, shall not affect the ability of the remaining stockholders lawfully to
transact business.

Section 1.6. Organization. Meetings of stockholders shall be
presided over by the Chairman of the Board, the Vice Chairman of the Board, the
Second Vice Chairman of the Board or the President (in that order), or in their
absence, inability or unwillingness, by a chairman designated by the Board of
Directors, or in the absence of such designation, by a chairman chosen at the
meeting. The Secretary shall act as secretary of the meeting, but in his or

2
<PAGE>

her absence the chairman of the meeting may appoint any person to act as
secretary of the meeting. The chairman of any meeting of the stockholders shall
determine the order of business and the procedure at the meeting, including such
regulation of the manner of voting and the conduct of business.

Section 1.7. Voting. (a) The stockholders entitled to vote at any
meeting of stockholders shall be determined in accordance with the provisions of
Section 1.10 of these By-laws, subject to the provisions of Sections 217 and 218
of the General Corporation Law of Delaware (relating to voting rights of
fiduciaries, pledgors and joint owners of stock and to voting trusts and other
voting agreements).

(b) Except as may be otherwise provided in the Certificate of
Incorporation or in these By-laws, or as may be otherwise required by applicable
law: (i) in all matters other than the election of Directors, the affirmative
vote of the holders of shares representing a majority of the votes present in
person or represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders; (ii) each Director shall be
elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of such
Director; and (iii) where a separate vote by a class or series is required,
other than with respect to the election of Directors, the affirmative vote of
the holders of shares of such class or series representing a majority of the
votes present in person or represented by proxy at the meeting shall be the act
of such class or series.

(c) Voting at meetings of stockholders need not be by written ballot
and need not be conducted by inspectors of election unless so required by
Section 1.9 of these By-laws or so determined by the holders of stock having a
majority of the votes which could be cast by the holders of all outstanding
stock entitled to vote which are present in person or represented by proxy at
such meeting.

(d) Stock of the Corporation belonging to the Corporation, or to
another Corporation a majority of the shares entitled to vote in the election of
Directors of which are held by the Corporation, shall not be voted at any
meeting of stockholders and shall not be counted in the total number of
outstanding shares for the purpose of determining whether a quorum is present.
Nothing in this Section 1.7 shall limit the right of the Corporation to vote
shares of stock of the Corporation held by it in a fiduciary capacity.

Section 1.8. Proxies. (a) Each stockholder entitled to vote at a
meeting of stockholders may authorize another person or persons to act for such
stockholder by proxy filed with the Secretary before or at the time of the
meeting. No such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A stockholder may revoke any proxy which is not irrevocable
by attending the meeting and voting in person or by filing with the Secretary an
instrument in writing revoking the proxy or another duly executed proxy bearing
a later date.

3
<PAGE>

(b) A stockholder may authorize another person or persons to act for
such stockholder as proxy (i) by executing a writing authorizing such person or
persons to act as such, which execution may be accomplished by such stockholder
or such stockholder's authorized officer, Director, partner, employee or agent
(or, if the stock is held in a trust or estate, by a trustee, executor or
administrator thereof) signing such writing or causing his or her signature to
be affixed to such writing by any reasonable means, including, but not limited
to, facsimile signature, or (ii) by transmitting or authorizing the transmission
of a telegram, cablegram or other means of electronic transmission (a
"Transmission") to the person who will be the holder of the proxy or to a proxy
solicitation firm, proxy support service organization or like agent duly
authorized by the person who will be the holder of the proxy to receive such
Transmission; provided that any such Transmission must either set forth or be
submitted with information from which it can be determined that such
Transmission was authorized by such stockholder.

(c) Any inspector or inspectors appointed pursuant to Section 1.9 of
these By-laws shall examine each Transmission to determine whether it is valid.
If no inspector or inspectors are so appointed, the Secretary or such other
person or persons as shall be appointed from time to time by the Board of
Directors shall examine Transmissions to determine if they are valid. If it is
determined a Transmission is valid, the person or persons making that
determination shall specify the information upon which such person or persons
relied. Any copy, facsimile telecommunication or other reliable reproduction of
such a writing or Transmission may be substituted or used in lieu of the
original writing or Transmission for any and all purposes for which the original
writing or Transmission could be used; provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or Transmission.

Section 1.9. Voting Procedures and Inspectors of Elections. (a)
Unless otherwise provided in the Certificate of Incorporation or required by
law, the following provisions of this Section 1.9 shall apply only if and when
the Corporation has a class of voting stock that is (i) listed on a national
securities exchange, (ii) authorized for quotation on an interdealer quotation
system of a registered national securities association or (iii) held of record
by more than 2,000 stockholders.

(b) The Corporation shall, in advance of any meeting of stockholders,
appoint one or more inspectors of election (individually an "inspector," and
collectively the "inspectors") to act at such meeting and make a written report
thereof. The Board of Directors may designate one or more persons as alternate
inspectors to replace any inspector who fails to act. If no inspector or
alternate is able to act at such meeting, the chairman of the meeting shall
appoint one or more inspectors to act at the meeting. Each inspector of
election, before entering upon the discharge of his duties, shall take and sign
an oath to execute faithfully the duties of inspector with strict impartiality
and according to the best of his ability.

(c) The inspectors shall (i) ascertain the number of shares of stock
of the Corporation outstanding and the voting power of each, (ii) determine the
number of shares of stock of the Corporation present in person or by proxy at
such meeting and the validity of proxies and ballots, (iii) count all votes and
ballots, (iv) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the inspectors

4
<PAGE>

and (v) certify their determination of the number of such shares present in
person or by proxy at such meeting and their count of all votes and ballots. The
inspectors may appoint or retain other persons or entities to assist them in the
performance of their duties.

(d) The date and time of the opening and the closing of the polls for
each matter upon which the stockholders will vote at a meeting shall be
announced at such meeting. No ballots, proxies or votes, nor any revocations
thereof or changes thereto, shall be accepted by the inspectors after the
closing of the polls unless the Court of Chancery of the State of Delaware upon
application by any stockholder shall determine otherwise.

(e) In determining the validity and counting of proxies and ballots,
the inspectors shall be limited to an examination of the proxies, any envelopes
submitted with such proxies, any information referred to in paragraphs (b) and
(c) of Section 1.8 of these By-laws, ballots and the regular books and records
of the Corporation, except that the inspectors may consider other reliable
information for the limited purpose of reconciling proxies and ballots submitted
by or on behalf of banks, brokers, their nominees or similar persons which
represent more votes than the holder of a proxy is authorized by a stockholder
of record to cast or more votes than such stockholder holds of record. If the
inspectors consider other reliable information for the limited purpose permitted
herein, the inspectors, at the time they make their certification pursuant to
paragraph (c) of this Section 1.9, shall specify the precise information
considered by them, including the person or persons from whom such information
was obtained, when and the means by which such information was obtained and the
basis for the inspectors' belief that such information is accurate and reliable.

Section 1.10. Fixing Date of Determination of Stockholders of Record.
(a) In order that the Corporation may determine the stockholders entitled (i)
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, (ii) to receive payment of any dividend or other distribution or
allotment of any rights, (iii) to exercise any rights in respect of any change,
conversion or exchange of stock or (iv) to take, receive or participate in any
other action, the Board of Directors may fix a record date, which shall not be
earlier than the date upon which the resolution fixing the record date is
adopted by the Board of Directors and which (1) in the case of a determination
of stockholders entitled to notice of or to vote at any meeting of stockholders
or adjournment thereof, shall, unless otherwise required by law, be not more
than 60 nor less than 10 days before the date of such meeting; (2) in the case
of a determination of stockholders entitled to express consent to corporate
action in writing without a meeting, shall be not more than 10 days after the
date upon which the resolution fixing the record date is adopted by the Board of
Directors; and (3) in the case of any other action, shall be not more than 60
days before such action.

(b) If no record date is fixed, (i) the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; (ii) the record date for
determining stockholders entitled to express consent to corporate action in
writing without a meeting when no prior action of the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is

5
<PAGE>

delivered to the Corporation in accordance with applicable law, or, if prior
action by the Board of Directors is required by law, shall be at the close of
business on the day on which the Board of Directors adopts the resolution taking
such prior action; and (iii) the record date for determining stockholders for
any other purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.

(c) A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting, but the Board of Directors may fix a new record date for the adjourned
meeting.

Section 1.11. List of Stockholders Entitled to Vote. The Secretary
shall prepare, at least 10 days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least 10 days prior to the meeting, either at
a place within the city where the meeting is to be held, which place shall be
specified in the notice of meeting, or, if not so specified, at the place where
the meeting is to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof and may be inspected by
any stockholder who is present. The stock ledger shall be the only evidence as
to who are the stockholders entitled to examine the stock ledger or to vote in
person or by proxy at any meeting of stockholders.

Section 1.12. No Action by Consent of Stockholders. No action
required to be, or which may be, taken at an annual or special meeting of the
Corporation may be taken without a meeting, and the power of the stockholders of
the Corporation to act by written consent, whether pursuant to Section 228 of
the General Corporation Law of Delaware or otherwise, is specifically
prohibited.

ARTICLE II

Board of Directors

Section 2.1. Number; Qualifications. The Board of Directors shall
consist of the number of Directors as provided in the Certificate of
Incorporation, and no person shall serve as a Director unless he or she meets
the requirements, if any, provided in the Certificate of Incorporation for
service on the Board of Directors.

Section 2.2. Election; Resignation; Vacancies. (a) Subject to the
provisions of the Certificate of Incorporation, at each annual meeting of
stockholders, the stockholders shall elect, pursuant to the terms of the
Certificate of Incorporation, the successors to the Directors whose terms expire
at that meeting, and each Director shall hold office until the annual meeting at
which such Director's term expires and the election and qualification of his or
her successor, or until his or her earlier death, resignation or removal. Any
Director may resign at any time by giving written notice to the Chairman of the
Board, if any, the President or the Secretary. Unless

6
<PAGE>

otherwise stated in a notice of resignation, it shall take effect when received
by the officer to whom it is directed, without any need for its acceptance.

(b) Nominees for election as Equity Directors (as defined in the
Certificate of Incorporation) shall be selected by the Nominating Committee.
Nominees for election as Series B-1 Directors, Series B-2 Directors and Series
B-3 Director (as such terms are defined in the Certificate of Incorporation)
shall be selected by the respective Series B Nominating Committees as provided
in Article IV.

(c) A vacancy, howsoever occurring, in a directorship shall be filled
in the manner specified in the Certificate of Incorporation.

Section 2.3. Regular Meetings. Regular meetings of the Board of
Directors may be held without call or notice at such times and at such places,
within or without the state of Delaware, as shall be fixed by resolution of the
Board of Directors.

Section 2.4. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, the
Secretary, or by a majority of the members of the Board of Directors then in
office and may be held at any time, date or place, within or without the State
of Delaware, as the person or persons calling the meeting shall fix. Notice of
the time and place of special meetings shall be delivered personally or by
telephone to each Director or sent by first-class mail or telegram, charges
prepaid, addressed to each Director at that Director's address as it is shown on
the records of the Corporation. If the notice is mailed, it shall be deposited
in the United States mail at least 4 days before the time of the holding of the
meeting. If the notice is delivered personally or by telephone or by telegram,
it shall be delivered personally or by telephone or to the telegraph company at
least 48 hours before the time of the holding of the meeting. Any oral notice
given personally or by telephone may be communicated either to the Director or
to a person at the office of the Director who the person giving the notice has
reason to believe will promptly communicate it to the Director. The notice need
not specify the purpose or the place of the meeting, if the meeting is to be
held at the principal executive office of the Corporation.

Section 2.5 Organization. Meetings of the Board of Directors shall
be presided over by the Chairman of the Board, the Vice Chairman of the Board,
the Second Vice Chairman of the Board or the President (in that order), or in
their absence, inability or unwillingness, by a chairman chosen at the meeting.
The Secretary shall act as secretary of the meeting, but in his or her absence
the chairman of the meeting may appoint any person to act as secretary of the
meeting. A majority of the Directors present at a meeting, whether or not they
constitute a quorum, may adjourn such meeting to any other date, time or place
without notice other than announcement at the meeting.

Section 2.6. Quorum; Vote Required for Action. (a) At all meetings
of the Board of Directors, a majority of the whole Board of Directors shall
constitute a quorum for the transaction of business. Unless the Certificate of
Incorporation or these By-laws otherwise provide, the vote of a majority of the
Directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors. A meeting at which a quorum is initially present may

7
<PAGE>

continue to transact business notwithstanding the withdrawal of Directors, if
any action taken is approved by at least a majority of the required quorum for
that meeting.

(b) If a quorum is not present at any meeting of the Board of
Directors, then the Directors present thereat may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
is present.

(c) Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware, the Certificate of Incorporation or these
By-laws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Directors, or members of a committee of Directors, need be specified in
any written waiver of notice unless so required by the Certificate of
Incorporation or these By-laws.

Section 2.7. Telephonic Meetings. Directors, or any committee of
Directors designated by the Board of Directors, may participate in a meeting of
the Board of Directors or such committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to this
Section 2.8 shall constitute presence in person at such meeting.

Section 2.8. Informal Action by Directors. Unless otherwise
restricted by the Certificate of Incorporation or these By-laws, any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof, may be taken without a meeting if all members of the
Board of Directors or such committee, as the case may be, consent thereto in
writing (which may be in counterparts), and the written consent or consents are
filed with the minutes of proceedings of the Board of Directors or such
committee.

Section 2.9. Reliance Upon Records. Every Director, and every member
of any committee of the Board of Directors, shall, in the performance of his or
her duties, be fully protected in relying in good faith upon the records of the
Corporation and upon such information, opinions, reports or statements presented
to the Corporation by any of its officers or employees, or committees of the
Board of Directors, or by any other person as to matters the Director or member
reasonably believes are within such other person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Corporation, including, but not limited to, such records, information, opinions,
reports or statements as to the value and amount of the assets, liabilities
and/or net profits of the Corporation, or any other facts pertinent to the
existence and amount of surplus or other funds from which dividends might
properly be declared and paid, or with which the Corporation's capital stock
might properly be purchased or redeemed.

Section 2.10. Interested Directors. Whenever the Board considers a
matter in which a board member is likely to have a significant and direct
financial interest, the Board shall

8
<PAGE>

take all necessary steps to ensure that no participating Board member has a
conflict of interest. A Board member shall be excused from the meeting during
the Board's consideration of such matter if: (1) he or she directly or
indirectly owns or controls an account that is likely to be directly and
materially affected by the decision; (2) he or she has substantial financial
interest in a clearing member that may be directly and materially affected by
the Board's decision; or (3) he or she has an interest in the outcome, which a
majority of the Board, present and voting, deems to require his or her
disqualification.

Section 2.11. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority to
fix the compensation of Directors. The Directors shall be paid their reasonable
expenses, if any, of attendance at each meeting of the Board of Directors or a
committee thereof and may be paid a fixed sum for attendance at each such
meeting and an annual retainer or salary for services as a Director or committee
member. No such payment shall preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefor.

Section 2.12. Presumption of Assent. Unless otherwise provided by
the laws of the State of Delaware, a Director who is present at a meeting of the
Board of Directors or of a committee thereof at which action is taken on any
matter shall be presumed to have assented to the action taken unless his or her
dissent shall be entered in the Minutes of such meeting or unless he or she
shall file his or her written dissent to such action with the person acting as
secretary of such meeting before the adjournment thereof or shall forward such
dissent by registered mail to the Secretary immediately after the adjournment of
such meeting. Such right to dissent shall not apply to a Director who voted in
favor of such action.

ARTICLE III

Committees of the Board of Directors

Section 3.1. Committees. The Board of Directors shall have an
Executive Committee, an Audit Committee, a Compensation Committee, a Nominating
Committee and any additional committees it may designate from time to time by
resolution passed by a majority of the whole board, with each committee to
consist of one or more of the Directors of the Corporation.

Section 3.2. Executive Committee. The Executive Committee shall
consist of such number of Directors as may be elected from time to time by the
Board. Whenever the Board is not in session, and subject to the provisions of
applicable law, the Certificate of Incorporation or these By-laws, the Executive
Committee shall have and exercise the authority of the Board in the management
of the Corporation. A majority of the Executive Committee shall constitute a
quorum necessary to transact business.

Section 3.3. Audit Committee. The Audit Committee shall consist of
such number of Directors (none of whom shall be an employee of the Corporation)
as may be elected

9
<PAGE>

from time to time by the Board. The Audit Committee shall review the results and
scope of the audit and all other services provided by the Corporation's
independent auditors, as well as the Corporation's accounting and internal
control procedures and policies. A majority of the Audit Committee shall
constitute a quorum necessary to transact business.

Section 3.4. Compensation Committee. The Compensation Committee
shall consist of such number of Directors (none of whom shall be an employee of
the Corporation) as may be elected from time to time by the Board. The
Compensation Committee shall oversee the compensation and benefits of the
employees and management of the Corporation. A majority of the Compensation
Committee shall constitute a quorum necessary to transact business.

Section 3.5. Nominating Committee. The Nominating Committee shall be
composed of five Directors. The Committee shall review the qualifications of
potential candidates for the Board of Directors (including candidates
recommended by stockholders, provided such recommendation is submitted in
writing and accompanied by a description of the proposed nominee's
qualifications and other relevant biographical information and evidence of the
consent of the proposed nominee) and shall propose nominees for the positions on
the Board of Directors that are nominated by the Board. In making their
nominations, the Nominating Committee and the Board of Directors shall take into
consideration that (i) the Board of Directors should have meaningful
representation of a diversity of interests, including floor brokers, floor
traders, futures commission merchants, producers, consumers, processors,
distributors and merchandisers of commodities traded on the Chicago Mercantile
Exchange, participants in a variety of pits or principal groups of commodities
traded on the Chicago Mercantile Exchange and other market users or
participants; (ii) at least 10 percent of the members of Board of Directors
should be comprised of persons representing farmers, producers, merchants or
exporters of principal commodities traded on the Chicago Mercantile Exchange;
and (iii) at least 20 percent of the members of the Board of Directors should be
comprised of persons who do not possess trading privileges on the Chicago
Mercantile Exchange or are not currently salaried employees of the Corporation,
primarily performing services for the Corporation in a capacity other than
having trading privileges on the Chicago Mercantile Exchange or officers,
principals or employees of a person that possesses trading privileges on the
Chicago Mercantile Exchange. A majority of the Nominating Committee shall
constitute a quorum necessary to transact business.

Section 3.6. Committee Governance. The Board may designate one or
more Directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not such
member or members constitute a quorum, may unanimously appoint another member of
the Board to act at the meeting in the place of any such absent or disqualified
member. Subject to the provisions of law, any such committee, to the extent
provided in the resolution of the Board or in these By-laws, shall have and may
exercise all the powers and authority of the Board in the management of the
business and affairs of the Corporation. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Directors when
required. Each committee may adopt rules for its governance not inconsistent
with the provisions of these By-laws.

10
<PAGE>

ARTICLE IV

Series B Nominating Committees

Section 4.1. Series B Nominating Committees. The holders of shares
of Class B Common Stock, Series B-1; Class B Common Stock, Series B-2; and Class
B Common Stock, Series B-3, shall each elect a nominating committee for their
respective series (each, a "Series B Nominating Committee"). Each Series B
Nominating Committee shall be composed of five members.

Section 4.2. Election. (a) The initial members of the Series B
Nominating Committee for the Class B Common Stock, Series B-1, shall consist of
the members of the CME Nominating Committee of Chicago Mercantile Exchange, an
Illinois not-for-profit corporation (the "Exchange"), in office on the date that
the merger of the Exchange into and with CME Transitory Co., a Delaware nonstock
corporation, becomes effective (the "Effective Date"); the initial members of
the Series B Nominating Committee for the Class B Common Stock, Series B-2,
shall consist of the members of the IMM Nominating Committee of the Exchange in
office on the Effective Date; and the initial members of the Series B Nominating
Committee for the Class B Common Stock, Series B-3, shall consist of the members
of the IOM Nominating Committee of the Exchange in office on the Effective Date.
At each annual meeting of stockholders thereafter, holders of the Class B Common
Stock, Series B-1; Class B Common Stock, Series B-2; and Class B Common Stock,
Series B-3, shall elect the members of their respective Series B Nominating
Committees from candidates selected as provided in Section 4.2(b). Members of
each Series B Nominating Committee shall hold office for a term of one year and
until their successors are duly elected and qualified.

(b) Commencing with the annual meeting held in 2000, each Series B
Nominating Committee shall nominate, by letter directed to the Chairman of the
Board not later than ninety days prior to an annual meeting, candidates for
election to such Committee at such annual meeting. Each Series B Nominating
Committee shall nominate ten candidates. Such nominations shall include, as
part of or in addition to such ten candidates, (i) any candidate who is
nominated by the holders of at least 100 shares of Class B Common Stock, Series
B-1, in the case of the Series B Nominating Committee representing such series,
(ii) any candidate who is nominated by the holders of at least 100 shares of
Class B Common Stock, Series B-2, in the case of the Series B Nominating
Committee representing such series, and (iii) any candidate who is nominated by
the holders of at least 150 shares of Class B Common Stock, Series B-3, in the
case of the Series B Nominating Committee representing such series; provided,
however, in the case of any such nominations, the nomination is submitted in
writing and accompanied by a description of the proposed nominee's
qualifications and other relevant biographical information and evidence of the
consent of the proposed nominee. The five nominees receiving the greatest
number of votes for a particular Series B Nominating Committee shall be elected
to such Committee. In the event of a vacancy, howsoever occurring, in a
committee position, the candidate in the most recent election for such position
who received the next highest number of votes to the last person currently
serving shall be named to fill such vacancy.

11
<PAGE>

Section 4.3. Director Nominations. Each Series B Nominating
Committee shall be responsible for assessing the qualifications of candidates to
serve as Directors to be elected by the particular series. Not less than 90
days but not more than 120 days prior to an annual meeting of stockholders at
which a Series B-1 Director, a Series B-2 Director or a Series B-3 Director is
to be elected, the applicable Series B Nominating Committee(s) shall select
nominees for election to such directorship. Such Series B Nominating
Committee(s) shall select, subject to the provisions of the Certificate of
Incorporation, two nominees for each directorship to be filled by the applicable
series of Class B Common Stock at such meeting. Such nominations shall include,
as part of or in addition to such two nominees, (i) any nominee who is nominated
by the holders of at least 100 shares of Class B Common Stock, Series B-1, in
the case of the Series B Nominating Committee representing such series, (ii) any
nominee who is nominated by the holders of at least 100 shares of Class B Common
Stock, Series B-2, in the case of the Series B Nominating Committee representing
such series, and (iii) any nominee who is nominated by the holders of at least
150 shares of Class B Common Stock, Series B-3, in the case of the Series B
Nominating Committee representing such series; provided, however, in the case of
any such nominations, the nomination is submitted in writing and accompanied by
a description of the proposed nominee's qualifications and other relevant
biographical information and evidence of the consent of the proposed nominee.
All nominees shall meet the requirements, if any, in the Certificate of
Incorporation or in these By-laws for service on the Board of Directors. No
nominee shall be a candidate for more than one directorship. If a nominee
withdraws, dies, becomes incapacitated or disqualified to serve, the applicable
Series B Nominating Committee shall, as quickly as practicable, submit a new
nominee to the Chairman of the Board. Each Series B Nominating Committee shall
submit its nominees in writing to the Chairman of the Board. Such writing shall
set forth as to each nominee for election or re-election as a Director: (1) the
name, age, business address and residence address of such person, (2) the
principal occupation or employment of such person, (3) the class and number of
shares of stock of the Corporation which are owned (or, under the rules of the
Corporation, would be recognized as a permitted transferee), and (4) such
person's written consent to serving as a Director if elected.

ARTICLE V

Officers

Section 5.1. Executive Officers; Election; Qualification; Term of
Office. The Board of Directors shall elect from among its members a Chairman of
the Board, a Vice Chairman of the Board and a Second Vice Chairman of the Board.
The Board of Directors shall also elect a President, a Secretary and a
Treasurer, and may elect one or more Vice Presidents, one or more Assistant
Secretaries and one or more Assistant Treasurers. Any number of offices may be
held by the same person. Each officer shall hold office until his or her
successor is elected and qualified or until his or her earlier death,
resignation or removal.

Section 5.2. Resignation; Removal; Vacancies. Any officer may resign
at any time by giving written notice to the Chairman of the Board, the President
or the Secretary. Unless otherwise stated in a notice of resignation, it shall
take effect when received by the officer to whom it is directed, without any
need for its acceptance. Any resignation is without prejudice

12
<PAGE>

to the rights, if any, of the Corporation under any contract to which the
officer is a party. The Board of Directors may remove any officer with or
without cause at any time by an affirmative vote of the majority of the Board of
Directors, but such removal shall be without prejudice to the contractual
rights, if any, of such officer with the Corporation. A vacancy occurring in any
office of the Corporation may be filled for the unexpired portion of the term
thereof by the Board of Directors at any regular or special meeting.

Section 5.3. Powers and Duties of Executive Officers. The officers
of the Corporation shall have such powers and duties in the management of the
Corporation as may be prescribed by the Board of Directors and, to the extent
not so provided, as generally pertain to their respective offices, subject to
the control of the Board of Directors. The Board of Directors may require any
officer, agent or employee to give security for the faithful performance of his
or her duties.

ARTICLE VI

Provisions Regarding Class B Common Stock

Section 6.1. Eligibility Criteria. Any adult of good moral
character, reputation and business integrity, with adequate financial resources
and credit to assume the responsibilities and privileges of ownership of a share
or shares of Class B Common Stock of any series, is eligible for election to
ownership. A person elected to ownership is presumed to know all the rules and
regulations of the Corporation and agrees to abide by them while an owner.
Notwithstanding a sale or transfer of a share of Class B Common Stock, a person
elected to ownership agrees to be responsible for any violations of the
Corporation's rules and regulations committed by him or her while an owner, and
agrees to have any disputes, which arise while he or she is an owner and which
relate to or arise out of any transaction upon the Chicago Mercantile Exchange
or ownership in the Corporation, resolved in accordance with the rules of the
Corporation.

Section 6.2. Application. An individual desiring to purchase shares
of Class B Common Stock of any series shall file an application with the
Corporation in the form prescribed from time to time by the Board of Directors.
Such application shall: (i) include an agreement by the applicant to take no
recourse against the Corporation in the event that his or her application is
rejected (except as provided in Section 8c of the Commodity Exchange Act); (ii)
set forth all financial arrangements made in connection with the proposed
purchase of the shares; (iii) contain an agreement to abide by the rules and
regulations of the Corporation and all amendments thereto; and (iv) contain an
acceptance of the burdens and risks inherent in an application for share
ownership which may be rejected.

Section 6.3. Trading Rights and Privileges. Holders of shares of
Class B Common Stock, who meet the Corporation's ownership and eligibility
criteria, shall have the following trading privileges as long as the holder owns
the share:

13
<PAGE>

(a) Such holder of a series of shares of Class B Common Stock will be
entitled to appear upon the floor of the Chicago Mercantile Exchange and to
act as a floor broker and/or trader for the contracts assigned to that
series.

(b) Such holder of a series of shares of Class B Common Stock shall
have the right to trade electronically through the GLOBEX2 system. Such
right is restricted, when accessing GLOBEX2 terminals from the trading
floors, to trading only contracts assigned to that series. Otherwise, the
holder may trade any product listed on the GLOBEX2 system.

(c) Consistent with the provisions of Section 6.4, such holder of a
series of shares of Class B Common Stock shall be able to lease out to
another person who satisfies the ownership and eligibility criteria of the
Corporation the trading privileges associated with that share of Class B
Common Stock.

(d) The Corporation shall charge clearing firms a lower clearing fee
for trades made for the account of a holder of a series of shares of Class
B Common Stock, or a lessee of the trading privileges associated with such
shares, with respect to contracts assigned to such holder's series of
shares of Class B Common Stock as of the Effective Date. The Corporation
shall not charge a higher clearing fee for any trade for the account of
such shareholder or lessee executed in the open outcry environment than the
clearing fee for the same trade executed in another trading environment.

Section 6.4 Transfer Restrictions. No holder of shares of Class B
Common Stock shall dispose of any such shares, whether by sale, exchange,
assignment, transfer, gift, devise, bequest, mortgage, pledge, encumbrance or
otherwise, except as may be permitted from time to time by the Board of
Directors.

Section 6.5 Claims Against Stockholder; Application of Proceeds. For
the purposes of this Section, the term "sale" shall include any transfer
permitted under Section 6.4, and the term "seller" shall include firms that are
considered under applicable rules of the Corporation to have ownership
privileges in respect of any shares of Class B Common Stock. When the President
receives notification and confirmation of the sale of a share of Class B Common
Stock (such share being referred to herein as the "Proposed Sale Share"), he or
she shall promptly request the Division of Market Regulation and the Membership
Department to conduct an investigation of claims made pursuant to this Section
against the Proposed Sale Share by the Corporation, other holders of Class B
Common Stock of the Corporation, clearing members or the public, which arise out
of futures transactions on the Chicago Mercantile Exchange. This investigation
shall be completed within 20 days of the date the President receives
notification and confirmation of the sale of said Proposed Sale Share.

All claims against the seller of a Proposed Sale Share shall be
submitted in writing to the Membership Department within 20 days of the posting
of notice of the sale of said Proposed Sale Share.

14
<PAGE>

The proceeds of the sale of a Proposed Sale Share shall be applied to
the following purposes and in the following order of priority:

(i) Payment of all dues, fines, contributions, charges and other
indebtedness due to the Corporation or the CME Gratuity Fund;

(ii) Payment of any indebtedness to the clearing member who last
qualified the selling owner arising out of a pledge of such Proposed Sale
Share as collateral security on such indebtedness, or a deficit which the
President determines to have arisen directly out of futures transactions on
the Chicago Mercantile Exchange;

(iii) Payment of amounts due to holders of Class B Common Stock and
other clearing members on claims filed which the President determines to
have arisen directly out of futures transactions on the Chicago Mercantile
Exchange;

(iv) Payment of amounts due to public customers of the seller, based
on claims filed by such customers or based on reports of the Division of
Market Regulation, which claims are determined by the President to be based
upon misappropriation of customer funds, improperly executed futures
transactions, unpaid credit balances, or other similar matters, directly
related to futures transactions on the Chicago Mercantile Exchange;

(v) No other claims against the proceeds of the sale of a Proposed
Sale Share shall be recognized and administered by the Corporation, but the
creditors of the seller of a Proposed Sale Share not falling in the
foregoing categories may pursue other legal means of securing payment of
their obligations.

The President shall make a final determination of all claims filed in
time or reported by the Division of Market Regulation and the Membership
Department against the proceeds of the sale of a Proposed Sale Share.

Except as provided in the case of a withdrawal from clearing
membership, the President shall make a distribution of such proceeds within 30
days after receiving notification and confirmation of the sale of the Proposed
Sale Share, unless claims to the proceeds are not resolved within that period.
If, however, at such time a disciplinary proceeding under the Corporation's
rules is pending against the seller or, based upon a pending investigation, is
highly probable, or if a legal proceeding, in respect to which the
indemnification provisions of the rules of the Corporation applicable to holders
of Class B Common Stock would operate, is pending, has been announced or is
highly probable, then the President shall retain so much of the proceeds as he
judges will be required to satisfy the seller's obligations until such time as
the pending matter is concluded.

Distribution of proceeds shall be made by the payment of claims in the
categories listed in this Section to the extent the proceeds from the sale are
sufficient to meet those obligations. If the proceeds of the sale of a Proposed
Sale Share are insufficient to pay all amounts determined to be due under the
categories listed in this Section, the proceeds shall be

15
<PAGE>

applied to pay the full amounts determined to be due under subsections (i)
through (iv) (inclusive) in the priority named. If the proceeds are insufficient
to pay the amounts determined to be due under any priority, the claims due under
that priority shall be paid pro rata, and the remaining priorities shall be left
unpaid. In determining the amount of any claim, the President shall first deduct
the fair cash value of any collateral held by that claimant.

The surplus, if any, shall be paid to the person whose Proposed Sale
Share was sold or his legal representative upon the execution of a satisfactory
release. The President's determination and allowance of claims hereunder shall
be final. The death, incompetency, expulsion or suspension of a member shall
not affect the rights of claimants under this Section.

ARTICLE VII

Stock Certificates and Transfers

Section 7.1. Certificates. Every holder of stock shall be entitled
to have a certificate signed by or in the name of the Corporation by its
Chairman of the Board, a Vice Chairman of the Board, its President or a Vice
President, and by its Secretary or an Assistant Secretary, certifying the number
of shares owned by such stockholder in the Corporation. Any of or all the
signatures on the certificate may be facsimile. In case any officer, transfer
agent, or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if such officer, transfer agent or registrar continued
to be such at the date of issue.

Section 7.2. Lost, Stolen or Destroyed Certificates; Issuance of New
Certificates. The Corporation may issue a new certificate for stock in the
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Corporation may require the owner of the lost,
stolen or destroyed certificate, or such stockholder's legal representative, to
indemnify the Corporation and/or to give the Corporation a bond sufficient to
indemnify it against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate.

Section 7.3. Transfers of Stock. Upon surrender to the Corporation
or the transfer agent of the Corporation of a certificate for stock of the
Corporation duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer or, if the relevant stock certificate is
claimed to have been lost, stolen or destroyed, upon compliance with the
provisions of Section 7.2 of these By-laws, and upon payment of applicable taxes
with respect to such transfer, and in compliance with the transfer restrictions
applicable to such shares under the Certificate of Incorporation, these By-laws
or rules of the Corporation and any other applicable transfer restrictions of
which the Corporation shall have notice, the Corporation shall issue a new
certificate or certificates for such stock to the person entitled thereto,
cancel the old certificate and record the transaction upon its books. Transfers
of stock shall be made only on the books of the Corporation by the registered
holder thereof or by such holder's attorney or successor duly authorized as
evidenced by documents filed with the Secretary. Whenever any transfer of stock
shall be made for collateral security, and not absolutely, it shall be so
expressed

16
<PAGE>

in the entry of transfer if, when the certificate or certificates representing
such stock are presented to the Corporation for transfer, both the transferor
and transferee request the Corporation to do so.

Section 7.4. Special Designation on Certificates. The designations,
preferences, and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the Corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the Corporation shall issue to represent
such class or series of stock a statement that the Corporation will furnish
without charge to each stockholder who so requests the powers, designations,
preferences, and the relative, participating, optional or other special rights
of each class of stock, or series thereof, and the qualifications limitations or
restrictions of such preferences and/or rights.

Section 7.5. Stock Transfer Agreements. Subject to the provisions of
the Certificate of Incorporation, the Corporation shall have power to enter into
and perform any agreement with any number of stockholders of any one or more
classes, or series thereof, of stock of the Corporation to restrict the transfer
of such shares owned by such stockholders in any manner not prohibited by the
General Corporation Law of Delaware.

Section 7.6. Registered Stockholders. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends and to vote as such owner, shall be
entitled to hold liable for calls and assessments the person registered on its
books as the owner of shares, and shall not be bound to recognize any equitable
or other claim to or interest in such share or shares on the part of another
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Delaware.

Section 7.7. Other Regulations. The issue, transfer, conversion and
registration of stock certificates shall be governed by such other regulations
as the Board of Directors may establish.

ARTICLE VIII

Notices

Section 8.1. Manner of Notice. Except as otherwise provided by law,
the Certificate of Incorporation or these By-laws, whenever notice is required
to be given to any stockholder, Director or member of any committee of the Board
of Directors, such notice may be given by personal delivery or by depositing it,
in a sealed envelope, in the United States mails, first class, postage prepaid,
addressed, or by transmitting it via telecopier, to such stockholder, Director
or member, either at the address of such stockholder, Director or member as it
appears on the records of the Corporation or, in the case of such a Director or
member, at his or her

17
<PAGE>

business address; and such notice shall be deemed to be given at the time when
it is thus personally delivered, deposited or transmitted, as the case may be.
Such requirement for notice shall also be deemed satisfied, except in the case
of stockholder meetings, if actual notice is received orally or by other writing
by the person entitled thereto as far in advance of the event with respect to
which notice is being given as the minimum notice period required by law or
these By-laws.

Section 8.2. Dispensation with Notice. (a) Whenever notice is
required to be given by law, the Certificate of Incorporation or these By-laws
to any stockholder to whom (i) notice of two consecutive annual meetings of
stockholders, and all notices of meetings of stockholders or (ii) all, and at
least two, payments (if sent by first class mail) of dividends or interest on
securities of the Corporation during a 12-month period, have been mailed
addressed to such stockholder at the address of such stockholder as shown on the
records of the Corporation and have been returned undeliverable, the giving of
such notice to such stockholder shall not be required. Any action or meeting
which shall be taken or held without notice to such stockholder shall have the
same force and effect as if such notice had been duly given. If any such
stockholder shall deliver to the Corporation a written notice setting forth the
then current address of such stockholder, the requirement that notice be given
to such stockholder shall be reinstated.

(b) Whenever notice is required to be given by law, the Certificate of
Incorporation or these By-laws to any person with whom communication is
unlawful, the giving of such notice to such person shall not be required, and
there shall be no duty to apply to any governmental authority or agency for a
license or permit to give such notice to such person. Any action or meeting
which shall be taken or held without notice to any such person with whom
communication is unlawful shall have the same force and effect as if such notice
had been duly given.

Section 8.3. Waiver of Notice. Any written waiver of notice, signed
by the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of any regular or special meeting of the stockholders, Directors, or
members of a committee of Directors need be specified in any written waiver of
notice.

ARTICLE IX

Indemnification

Section 9.1. Right to Indemnification. In addition and subject to
the indemnification provisions contained in the Certificate of Incorporation,
and subject to applicable law, the following Sections of this Article IX shall
apply with respect to any person subject to the indemnification provisions of
the Corporation.

18
<PAGE>

Section 9.2. Prepayment of Expenses. The Corporation may pay or
reimburse the reasonable expenses incurred in defending any proceeding in
advance of its final disposition if the Corporation has received in advance an
undertaking by the person receiving such payment or reimbursement to repay all
amounts advanced if it should be ultimately determined that he or she is not
entitled to be indemnified under this Article IX or otherwise. The Corporation
may require security for any such undertaking.

Section 9.3. Claims. If a claim for indemnification or payment of
expenses under this Article IX is not paid in full within 60 days after a
written claim therefor has been received by the Corporation, the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification or payment of
expenses under applicable law.

Section 9.4. Non-Exclusivity of Rights. The rights conferred on any
person by this Article IX shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, these By-laws, agreement, vote of stockholders or
disinterested Directors or otherwise.

Section 9.5. Other Indemnification. The Corporation's obligation, if
any, to indemnify any person who was or is serving at its request as a Director,
officer, employee, partner or agent of another corporation, partnership, joint
venture or other enterprise shall be reduced by any amount such person may
collect as indemnification from such other corporation, partnership, joint
venture or other enterprise.

Section 9.6. Amendment or Repeal. Any repeal or modification of the
foregoing provisions of this Article IX shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.

ARTICLE X

General

Section 10.1. Form of Records. Any records maintained by the
Corporation in the regular course of its business, including its stock ledger,
books of account, and minute books, may be kept on, or be in the form of,
magnetic tape, diskette, photographs, microphotographs, or any other information
storage device, provided that the records so kept can be converted into clearly
legible form within a reasonable time. The Corporation shall so convert any
records so kept upon the request of any person entitled to inspect the same.

Section 10.2. Execution of Corporate Contracts and Instruments. The
Board of Directors, except as otherwise provided in these By-laws, may authorize
any officer or officers, or agent or agents, to enter into any contract or
execute any instrument in the name of and on behalf of the Corporation; such
authority may be general or confined to specific

19
<PAGE>

instances. Unless so authorized or ratified by the Board of Directors or within
the agency power of an officer, no officer, agent or employee shall have any
power or authority to bind the Corporation by any contract or engagement or to
pledge its credit or to render it liable for any purpose or for any amount.

Section 10.3. Severability. If any provision of these By-laws shall
be held to be invalid, illegal, unenforceable or in conflict with the provisions
of the Corporation's Certificate of Incorporation, then such provision shall
nonetheless be enforced to the maximum extent possible consistent with such
holding and the remaining provisions of these By-laws (including without
limitation, all portions of any section of these By-laws containing any such
provision held to be invalid, illegal, unenforceable or in conflict with the
Certificate of Incorporation, that are not themselves invalid, illegal,
unenforceable or in conflict with the Certificate of Incorporation) shall remain
in full force and effect.

Section 10.4. Construction; Definitions. Unless the context requires
otherwise, the general provisions, rules of construction, and definitions in the
General Corporation Law of Delaware shall govern the construction of these By-
laws. Without limiting the generality of this provision, the singular number
includes the plural, the plural number includes the singular, and the term
"person" includes both a corporation and a natural person.

Section 10.5. Dividends. The Board of Directors, subject to any
restrictions contained in the General Corporation Law of Delaware or the
Certificate of Incorporation, may declare and pay dividends upon the shares of
its capital stock. Dividends may be paid only in cash or in property. The
Board of Directors may set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves for any proper purpose and may
abolish any such reserve. Such purposes shall include, but not be limited to,
equalizing dividends, repairing or maintaining any property of the Corporation,
and meeting contingencies.

Section 10.6 Consolidated Rules of the Chicago Mercantile Exchange.
The affairs and operations of the Corporation in addition to being governed by
the Delaware General Corporation Law, the Certificate of Incorporation and these
By-laws, shall also be governed by the Consolidated Rules of the Chicago
Mercantile Exchange (the "CME Rules"). Where there exists any inconsistency
between the CME Rules and the General Corporation Law of the State of Delaware,
the Certificate of Incorporation or these By-laws, the General Corporation Law
of the State of Delaware, the Certificate of Incorporation or these By-laws
shall govern to the extent of the inconsistency.

<PAGE>

Exhibit 5.1
Chicago Mercantile Exchange Inc.
Registration Statement on Form S-4

Sidley & Austin
Bank One Plaza
10 South Dearborn Street
Chicago, Illinois 60603

March 1, 2000

Chicago Mercantile Exchange Inc.
30 South Wacker Drive
Chicago, Illinois 60606

Re: Registration Statement on Form S-4
Registration No. 333-95561
----------------------------------

Ladies and Gentlemen:

We are acting as special counsel to Chicago Mercantile Exchange Inc.,
a Delaware corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-4 (the "Registration Statement") filed by the
Company with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"). The Registration
Statement relates to the issuance of (i) up to 25,855,200 shares of Class A
Common Stock, $.01 par value (the "Class A Common Stock"), and up to 5,118
shares of five series of Class B Common Stock, $.01 par value (collectively, the
"Merger Shares"), of the Company in connection with the merger (the "Merger") of
CME Transitory Co., a Delaware nonstock corporation ("Transitory"), with and
into the Company pursuant to an Agreement and Plan of Merger dated as of March
1, 2000 (the "Merger Agreement") between the Company and Transitory and (ii) up
to 21,400 shares of Class A Common Stock and up to 214 shares of Class B Common
Stock, Series B-4, $.01 par value (collectively, the "Conversion Shares"),
issuable upon the conversion of the shares of Class B Common Stock, Series B-5,
$.01 par value (the "Series B-5 Stock"), of the Company issued in connection
with the Merger.

In rendering the opinions expressed in this opinion letter, we have
reviewed (a) the Registration Statement and the exhibits thereto, (b) the
Company's Certificate of Incorporation, including the proposed amendment and
restatement thereof in the form attached as Exhibit A to the proxy
statement/prospectus included in the Registration Statement (the "Charter
Restatement"), (c) the Company's By-Laws and (d) such statutes, records and
other documents that we have deemed to be relevant, and we have satisfied
ourselves as to such matters of fact as we have considered relevant and
necessary as a basis for this opinion letter.

Based on the foregoing, we are of the opinion that:

<PAGE>

Chicago Mercantile Exchange Inc.
March 1, 2000
Page 2

(1) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware.

(2) Assuming that a certificate of amendment to the Company's
Certificate of Incorporation setting forth the Charter Restatement is
prepared and filed with the Delaware Secretary of State in accordance with
the Delaware General Corporation Law prior to the Effectiveness of the
Merger, (i) the Merger Shares, when issued upon the effectiveness of the
Merger in accordance with the terms of the Merger Agreement, will be
validly issued, fully paid and nonassessable and (ii) the Conversion
Shares, when issued upon the conversion of the shares of Series B-5 Stock
in accordance with the terms of the Charter Restatement, will be validly
issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion letter with the
Commission as Exhibit 5.1 to the Registration Statement. We also consent to the
reference to our firm under the heading "Validity of Securities" in the
Registration Statement. In giving this consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Commission.

The foregoing opinions are limited to the General Corporation Law of
the State of Delaware and the federal laws of the United States of America. We
do not find it necessary for the purposes of the opinions expressed in this
opinion letter, and accordingly we do not purport to cover herein, the
application of the securities or "Blue Sky" laws of the various states to the
issuance of the Merger Shares or the Conversion Shares.

Very truly yours,

/s/ Sidley & Austin

<PAGE>

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
<PAGE>

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

2
<PAGE>

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

3
<PAGE>

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.

4
<PAGE>

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.

5
<PAGE>

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

6
<PAGE>

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
7
<PAGE>

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
<PAGE>

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:

9
<PAGE>

(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.

10
<PAGE>

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.

11
<PAGE>

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;

(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.

12
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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.

<PAGE>

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, AS AMENDED, AND 17 C.F.R. 230.406 AND 200.80 PROMULGATED
THEREUNDER. OMITTED INFORMATION HAS BEEN REPLACED WITH ASTERISKS.

Exhibit 10.13
Chicago Mercantile Exchange Inc.
Registration Statement on Form S-4

LICENSE AGREEMENT

This License Agreement, effective as of September 24, 1997 (the "Effective
Date"), is made by and between STANDARD & POOR'S, a division of The McGraw-Hill
Companies, Inc. ("S&P"), a New York corporation having an office at 65
Broadway, New York, New York 10006, and the CHICAGO MERCANTILE EXCHANGE ("CME"),
an Illinois not-for-profit corporation having an office at 30 South Wacker
Drive, Chicago, Illinois 60606.

RECITALS:
---------

WHEREAS, S&P compiles, calculates, maintains and owns rights in and to the
various stock indices listed in Appendix 1 to this Agreement and to the
proprietary data contained therein, including the S&P 500/BARRA Growth Index
and the S&P 500/BARRA Value Index which S&P and BARRA, Inc. ("BARRA") together
compile, calculate, maintain and own rights in; and

WHEREAS, S&P uses in commerce and has trade name and trademark rights to
the designations listed in Appendix 2 to this Agreement, including the
designations "S&P 500/BARRA Growth Index" and "S&P 500/BARRA Value Index"
which S&P uses with BARRA's permission; and

WHEREAS, CME wishes to use the S&P Stock Indices and the S&P Marks in
connection with: (1) creating, trading, marketing, clearing and promoting
Futures Contracts and Options on Futures Contracts and activities related
thereto; and (2) making disclosure about such Contracts under applicable laws,
rules and regulations in order to identify that S&P is the source of the S&P
Stock Indices, pursuant to the terms and conditions hereinafter set forth; and

WHEREAS, S&P wishes to license CME to use the S&P Stock Indices and the S&P
Marks for the purposes stated above and has the right (with BARRA's consent) to
license the S&P/BARRA Indices and S&P/BARRA Marks to third parties, such as CME;
and

WHEREAS, CME and S&P have previously entered into five license agreements
(listed in Appendix 3 hereto) that are currently in effect and collectively
provide CME with a license to use the S&P Stock Indices and S&P Marks in
connection with creating, trading, marketing, clearing and promoting Futures
Contracts and Options on Futures Contracts and activities related thereto; and

WHEREAS, CME and S&P wish to consolidate the five license agreements
(listed in Appendix 3 hereto) into this License Agreement and to extend their
terms as provided herein;
<PAGE>

NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, it is agreed as follows:

1. DEFINITIONS. For purposes of this Agreement, the following definitions
shall apply:

(a) "Affected Contract" shall mean a Contract based upon an S&P Index
licensed to CME on an exclusive basis, the trading of which has been affected,
as described in Section 5(c) herein, by a CME listed Contract based on a
Competitive Index.

(b) "Agreement" shall mean this License Agreement.

(c) "CFTC" shall mean the Commodity Futures Trading Commission, as from
time to time constituted or, if at any time after the execution of this
Agreement such Commission is not existing and performing the duties assigned to
it under the Commodity Exchange Act, as amended, then the body performing such
duties at such time.

(d) "CME Substitute Contracts" shall have the meaning ascribed in Section
8 of this Agreement.

(e) "CME Substitute Index" shall have the meaning ascribed in Section 8 of
this Agreement.

(f) "Competitive Contract" shall mean a Contract based upon a Competitive
Index.

(g) "Competitive Index" shall mean the [*] or any index other than an
index for which CME pays S&P a license fee: (1) in which [*] or more of the [*]
are also [*] of an S&P Index that is licensed to CME on an exclusive basis, and
which has [*] to such S&P Index for the [*] period immediately prior to the
Launch Date and each Launch Anniversary Date, as applicable; and (2) the [*] of
which comprise [*] or more of the [*] of an S&P Index that is licensed to CME on
an exclusive basis, and which has [*] to such S&P Index for the [*] period prior
to the Launch Date and each Launch Anniversary Date, as applicable.

(h) "Confidential Information" shall have the meaning ascribed to it in
Section 12(b) of this Agreement.

(i) "Contract" shall mean a Futures or Option Contract.

-2-
<PAGE>

(j) "Futures Contracts" shall mean: (1) all instruments: (A) the trading
of which is within the exclusive jurisdiction of CFTC (assuming for this purpose
that the instruments were traded in the United States regardless of where they
are actually traded), (B) which are regulated by the CFTC as futures contracts
(assuming for this purpose that such instruments were traded in the United
States regardless of where they are actually traded), and (C) which CME has the
authority to trade under its articles, by-laws, and rules; and (2) those
instruments which, as of the Effective Date, meet all of the requirements
specified in clause (1) of this Subsection (j) but subsequent to the Effective
Date fail to meet the requirements of clause (1)(A) of this Subsection (j)
solely because another U.S. regulatory authority (in addition to, or in
substitution of, the CFTC) is given regulatory jurisdiction over such
instruments.

(k) "Indexed Contracts" shall mean Futures and/or Option Contracts which
are indexed to any of the S&P Stock Indices.

(l) "Launch Date" shall mean the first day that a Contract begins trading
on the CME.

(m) "Launch Anniversary Date" shall mean each [*] of a Launch Date.

(n) "Option Contract" shall mean an option to purchase or sell Futures
Contracts.

(o) "Normalized Volume" shall mean the [*] of a Competitive Contract,
[*] the [*] of the Affected Contract, [*] the [*] of the Competitive Contract.
The [*] of each Contract shall mean the [*] of [*] and the [*] of the [*] on the
day immediately preceding the Launch Date for the Competitive Contract.

(p) "S&P/BARRA Agreement" shall mean the license agreement between S&P and
BARRA pertaining to the S&P/BARRA Indices and the S&P/BARRA Marks.

(q) "S&P/BARRA Indices" shall mean the S&P 500/BARRA Growth Index and the
S&P 500/BARRA Value Index.

(r) "S&P/BARRA Marks" shall mean the designations "S&P 500/BARRA Growth
Index" and "S&P 500/BARRA Value Index."

(s) "S&P Marks" shall mean the designations listed in Appendix 2 to this
Agreement.

-3-
<PAGE>

(t) "S&P Stock Indices" shall mean the stock indices listed in Appendix 1
to this Agreement.

(u) "Total Volume" shall mean the total S&P 500 trading volume plus the
Total Normalized Volume (as defined in Appendix 6) in the Competitive Contract.

2. GRANT OF LICENSE.

(a) General. Subject to the terms and conditions of this Agreement, S&P
hereby grants to CME worldwide licenses: (1) to use the S&P Stock Indices solely
in connection with creating, marketing, trading, clearing and promoting Indexed
Contracts; and (2) to use and refer to the S&P Marks in connection with
creating, marketing, trading, clearing and promoting Indexed Contracts and with
making such disclosures about Indexed Contracts as CME deems necessary or
desirable under any applicable federal or state laws, rules or regulations or
under this Agreement in order to indicate the source of the S&P Stock Indices.

(b) Electronic Trading System Rights. The licenses granted to CME by this
Agreement extend to the trading of Indexed Contracts at CME and also on any
electronic trading system on which CME offers its products for trading, but only
to the extent that the Indexed Contracts traded on such electronic trading
system are cleared by CME.

(c) Index Value Dissemination Rights. Subject to the terms and conditions
of this Agreement, S&P further grants to CME a non-exclusive worldwide license
to disseminate the S&P Stock Indices, in real-time, to and through third-party
communications vendors, for information purposes, in connection with creating,
marketing, trading, clearing and promoting Indexed Contracts.

(d) Limited Licenses. CME acknowledges that the S&P Stock Indices (except
for the S&P/BARRA Indices) and the S&P Marks (except for the S&P/BARRA Marks)
are the exclusive property of S&P, that S&P has and retains all proprietary
rights therein (including, but not limited to, trademarks and copyrights), and
that the S&P Stock Indices (except for the S&P/BARRA Indices) and their
compilation and composition and changes therein are in the complete control and
discretion of S&P. CME acknowledges that the S&P/BARRA Indices and the S&P/BARRA
Marks are the exclusive property of S&P and BARRA, that S&P and BARRA have and
retain all proprietary rights therein (including, but not limited to, trademarks
and copyrights) and that the S&P/BARRA Indices and their compilation and
composition and changes therein are in the complete control and discretion of
S&P and BARRA. Except as otherwise specifically provided herein, S&P reserves
all rights to the S&P Stock Indices and the S&P Marks which are not expressly
licensed hereunder and this

-4-
<PAGE>

Agreement shall not be construed to transfer to CME any right to, or interest
in, the S&P Stock Indices or the S&P Marks, or in any copyright, trademark or
proprietary right pertaining thereto.

(e) Licensing of Additional S&P Stock Indices. Unless otherwise agreed
by the parties in writing, this Agreement shall govern any and all licenses to
S&P Stock Indices (whether newly created by S&P or resumed after
discontinuation) and S&P Marks granted by S&P to CME during the term of this
Agreement. Upon the granting by S&P to CME of any such license, Appendix 1 and 2
to this Agreement shall be amended accordingly.

3. EXCLUSIVITY.

(a) Licensed and Listed Contracts. Subject to this Section 3, the license
for any S&P Stock Index that was licensed to CME pursuant to the Prior License
Agreements, and in respect to which CME listed Indexed Contracts for trading
prior to the Effective Date, shall be exclusive for the period commencing on
the Effective Date and ending on December 31, 2008. The license shall continue
on a non-exclusive basis thereafter for the duration of the term of this
Agreement.

(b) Licensed but Unlisted Contracts. The license for any S&P Stock Index
that was licensed to CME pursuant to the Prior License Agreements, but which was
not listed for trading prior to the Effective Date, shall be exclusive for a [*]
period, commencing on the Effective Date and ending on the [*] anniversary of
the Effective Date. However, if CME has applied to the CFTC to commence trading
of Indexed Contracts based upon any such S&P Stock Index and CME had not
previously been permitted by the CFTC to commence trading of such Indexed
Contracts, then the period of exclusivity shall commence on the Effective Date
and shall continue until [*] after the date on which CME receives final CFTC
approval to trade Indexed Contracts based upon any such S&P Stock Index. Upon
the expiration of any period of exclusivity described in this Subsection 3(b),
CME shall have the option, exercisable within thirty (30) days of the date of
such expiration, to extend, for [*] additional [*], the exclusive license for
any such S&P Stock Index by paying S&P [*]. After the [*], if any, that CME
extends the exclusivity of any license pursuant to the foregoing, S&P shall have
the option of making such license non-exclusive by delivering written notice to
CME within thirty (30) days of the expiration of the exclusivity of such
license. In the event S&P delivers CME notice pursuant to the foregoing or CME
does not elect to extend the exclusivity of any license or upon the expiration
of any extension provided for above, whichever occurs first, the license for any
such S&P Stock Index shall become non-exclusive and S&P may thereafter license
such S&P Stock Index to any other party.

Once listed, any such license shall remain exclusive for the remainder of
the term of this Agreement so long as either, in any [*]: (1) a minimum average
trading volume of [*] of such Indexed Contracts per [*] has been achieved; or
(2) in the event that such minimum average is not met, CME determines, in its
sole discretion, to pay S&P the sum of [*] to maintain the exclusivity for such
Indexed Contract for [*], such payment to be made within thirty (30) days after
the end of [*]; provided, however, that the [*] payable by CME to S&P under this
Subsection 3(b) shall be reduced by the total amount of license fees paid by CME
to S&P in that [*] for such Indexed Contract. In the event the relevant license
does not remain exclusive pursuant to the foregoing, the license for the
relevant S&P Stock Index shall become non-exclusive and S&P may thereafter
license such S&P Stock Index to any other party.

-5-
<PAGE>

(c) Contracts Listed for Trading After the Effective Date. The license for
any S&P Stock Index licensed to CME pursuant to Section 2(e) hereof after the
Effective Date, and upon which CME has listed Indexed Contracts for trading
within [*] after the date of the grant of such license, shall be exclusive for
the [*] following CME's listing of such Indexed Contracts. Thereafter, any such
license shall remain exclusive for the remainder of the term of this Agreement
so long as either, in any [*]: (1) a minimum average trading volume of [*] of
such Indexed Contracts per [*] has been achieved; or (2) in the event that such
minimum average is not met, CME determines, in its sole discretion, to pay S&P
the sum of [*] to maintain the exclusivity for such Indexed Contract for [*]
such payment to be made within thirty (30) days after the end of [*]; provided,
however, that the [*] payable by CME to S&P under this Subsection 3(c) shall be
reduced by the total amount of license fees paid by CME to S&P in that [*] for
such Indexed Contract. In the event the relevant license does not remain
exclusive pursuant to the foregoing, the license for the relevant S&P Stock
Index shall become non exclusive and S&P may thereafter license such S&P Stock
Index to any other party.

(d) S&P 500 Exclusivity: In the event CME lists Competitive Contracts
(vis-a-vis the S&P 500) for trading, the [*] period prior to the Launch Date of
such Contracts shall be deemed the "Reference [*]." [*] following such Launch
Date, and [*] on the Launch Anniversary Date it shall be determined whether,
during the preceding [*], there has been a [*] or greater attributable decrease
(as defined herein) in both S&P 500 volume and S&P Market Share (as defined
herein) compared to levels during the Reference [*].

An attributable decrease in S&P 500 volume shall be measured by the lesser
of: (1) the difference between the annual trading, volume in the S&P 500
Contract during the Reference [*] and the trading volume in the S&P 500
Contract during the [*] prior to the relevant Launch Anniversary Date; and (2)
the Normalized Volume in the Competitive Contract during such [*]. "S&P Market
Share" shall be the percentage of Total Volume represented by S&P 500 trading
volume.

-6-

<PAGE>

In the event there has been a [*] or greater attributable decrease in both
S&P 500 trading volume and S&P Market Share, then [*] following the date such
decreases are calculated, the attributable decrease in S&P 500 volume and S&P
Market Share shall be calculated a second time for the [*] immediately prior to
the date of the second calculation.

In the event that after the [*] S&P 500 volume and S&P Market Share remain
below [*] of their levels in the Reference [*], the licenses granted hereunder
for the S&P 500 Index and its associated Marks shall immediately become
non-exclusive and continue for the remainder of the term of this Agreement on a
non-exclusive basis.

In the event the license for the S&P 500 Index becomes non-exclusive
pursuant to this Subsection 3(d), there shall be no further adjustment to the
license fees paid to S&P by CME for Indexed Contracts based on the S&P 500 Index
pursuant to Subsection 5(c), and such license fees shall be the Basic License
Fee described in Subsection 5(a), adjusted, if applicable, pursuant to Section
5(b), for the remainder of the term of this Agreement.

4. RIGHT OF FIRST REFUSAL ON NEW S&P STOCK INDICES.
------------------------------------------------

During the term of this Agreement, CME shall have a right of first refusal
on licenses to base Indexed Contracts on any stock indices not licensed
hereunder as of the Effective Date, and which are developed and compiled [*]
prior to or during the term of this Agreement. Prior to offering any such
license to any other party, S&P must first offer the license on an exclusive
basis to CME. S&P must provide CME with reasonably sufficient information on
which to base its acceptance or rejection of S&P's offer, including, without
limitation, information and data (if available) indicating the amount of assets
benchmarked to such index. CME shall have sixty (60) calendar days thereafter to
accept the offered license, in writing, on mutually agreeable terms, or to
reject the offered license. However, if no agreement with respect to the offered
license is reached between CME and S&P, S&P shall not grant such license to
another party on more favorable terms than were offered to CME.

5. LICENSE FEES.
-------------

(a) Basic License Fee. Except as provided below, and subject to the terms
and conditions of this Agreement, CME shall pay S&P [*] for each trade of an
Indexed Contract (except the S&P MidCap 400, for which the fee shall be [*] per
trade), through October 21, 1997,

-7-
<PAGE>

and [*] per trade of an Indexed Contract after October 21, 1997 and through and
including the date on which this Agreement is terminated or expires pursuant to
the terms hereof.

(b) License Fees If Multiplier is Adjusted. If CME, in its sole discretion,
adjusts the multiplier of the S&P 500 Contract, the basic license fee described
in Section 5(a) will be proportionately adjusted on a prospective basis as of
the date of such change. CME shall provide S&P with at least thirty (30) days
advance written notice of such change, which notice shall specify the adjustment
to S&Ps license fee. [*] thereafter, and for so long as CME trades Contracts
based on the S&P 500 Index having a multiplier of [*] and so long as the S&P 500
Index is licensed to CME on an exclusive basis, CME will compare the fees paid
to S&P during the [*] preceding [*] of the adjustment date, in regard to such
contract, with the average annual fee paid to S&P therefor during the [*] period
prior to the first day that the adjusted contract was listed for trading. If the
total license fee paid to S&P for the S&P 500 Index in such [*] period is less
than the average annual license fee for the S&P 500 Index for such [*] period,
CME shall pay S&P the difference within sixty (60) days of the relevant [*] of
the adjustment date. Notwithstanding the foregoing, under no circumstances shall
CME be required to pay S&P more than [*] per round-turn trade. An example of the
above-described calculation is included in Appendix 5.

CME shall adjust the multiplier of the S&P 500 only in the event that CME
determines, in its sole discretion, that such an adjustment will result in an
increase in revenue to both CME and S&P.

(c) License Fee Adjustments if Contract based on a Competitive Index is
Traded. If, after the Effective Date, CME begins trading Competitive Contracts,
CME shall compensate S&P for any decrease in volume in the Affected Contract
that is not attributable to the normal decrease in trading volume for all
Indexed Contracts. As compensation for any such decrease in volume, S&P shall be
paid the lesser of the following: (1) the loss in volume (defined as the
difference between the average annual volume for the [*] period preceding the
Launch Date of Competitive Contracts and the volume in the Affected Contract
during the [*] period following Affected Contract during that [*] period; or (2)
the Normalized Volume of the Competitive Contract multiplied by the per-trade
license fee paid to S&P for the Affected Contract during that period. The
calculations described in this Subsection 5(c) shall be made, on each Launch
Anniversary Date for the Competitive Contracts, in [*] that Competitive
Contracts are traded, with the [*] period in question recalculated on a rolling
basis. Amounts payable to S&P hereunder shall be paid within sixty (60) days of
the relevant Launch Anniversary Date. An example of this calculation is included
in Appendix 6.

-8-
<PAGE>

In the event CME reduces the Notional Value of the Affected Contract either
prior or subsequent to its listing Competitive Contracts for trading, CME shall
pay to S&P the lesser of the amounts calculated in either Subsection 5(b)
or 5(c) herein.

(d) S&P 500 Mini-Contract. In the event CME, in addition to but not in lieu
of its current S&P 500 Contract, lists for trading Indexed Contracts based on
the S&P 500 Index having a contract multiplier [*], CME shall pay S&P a
per-trade license fee for the [*] equal to the license fee payable hereunder
for the S&P 500 Contract at the time the [*] is listed, multiplied by [*]
minus the percentage reduction in the size of the contract multiplier between
the original S&P Contract and the [*]. Notwithstanding the foregoing, the per-
trade license fee for any [*] contract shall be [*] through October 21, 1997.

(e) Payment Schedule. The license fees payable pursuant to Section 5(a) and
5(d) shall be determined at the end of each month and shall be paid within
fifteen (15) days after the end of each month. Each payment shall be accompanied
by a full accounting of the basis for the calculation of the fee. The amounts
required to be paid pursuant to Sections 5(b) or (c) shall be payable in
accordance with such sections and shall be accompanied by a full accounting of
the basis for the calculation of the payment.

(f) Right to Audit. During the term of this Agreement and for a period of
one (1) year after its termination or expiration. S&P shall have the right,
during normal business hours and upon reasonable notice to CME, to audit on a
confidential basis the relevant books and records of CME to determine that the
license fees, and other amounts payable hereunder, have been accurately
calculated. The costs of such audit shall be borne by S&P unless it determines
that it has been underpaid by five percent (5%) or more; in such case, the costs
of the audit shall be paid by CME.

6. TERM.
-----

The term of this Agreement shall commence as of the Effective Date and
shall continue in full force and effect until December 31, 2013, unless and
until terminated earlier in accordance with Section 7 hereof. Upon the
expiration of this Agreement, the parties shall in good faith attempt to
negotiate a renewal of the Agreement on such terms as are mutually agreeable.

-9-
<PAGE>

7. TERMINATION.
------------

(a) Material Breach. In the case of a breach of any of the material terms
or conditions of this Agreement by either party, the other party may terminate
this Agreement by giving thirty (30) days prior written notice to the non-
breaching party of its intent to terminate, which notice shall specify the
nature of the alleged breach, and such notice shall be effective on the date
specified therein for such termination unless the breaching party shall correct
such breach within the notice period. In addition, at any time during the term
of this Agreement, either party may give the other party ninety (90) days prior
written notice of termination if the terminating party believes in good faith
that material damage or harm is occurring to the reputation or goodwill of the
terminating party by reason of its continued performance hereunder, and such
notice shall be effective on the date specified therein of such termination,
unless the other party shall correct the condition causing such damage or harm
within the notice period.

(b) Discontinuation of an S&P Stock Index. S&P shall have the right in its
sole discretion to cease compilation and publication of any of the S&P Stock
Indices and to terminate the license granted hereunder as to such discontinued
index; provided, however, that S&P shall use its best efforts to give CME at
least one (1) year prior written notice of such discontinuation, and further
provided, however, that all Indexed Contracts based on the discontinued index
which are open and listed for trading on the date such notice of termination was
provided to CME, may nevertheless continue to be traded until such Indexed
Contracts either expire and are no longer listed for trading or until thirty-six
(36) months following the date of such notice of termination, whichever occurs
first. CME's obligations to make any payment to S&P with respect to any Indexed
Contract licensed pursuant to this Agreement and based on the discontinued Index
shall terminate effective on the date on which the license for the discontinued
Index is effectively terminated by S&P.

(c) Failure to Obtain Regulatory Approval. If, within twelve (12) months
after any license has been granted to CME to trade Indexed Contracts based upon
an S&P Stock Index, CME has not obtained contract market designation therefor as
provided for in Section 10 hereof, then, unless the parties otherwise mutually
agree, upon written notice from either CME or S&P to the other party, the
license granted to CME with respect to such S&P Stock Index shall terminate,
along with all rights and obligations of the parties relating thereto. The
foregoing shall not apply, however, unless and until S&P reasonably determines
that the CFTC has determined that a particular S&P Stock Index may legally be
permitted to be used as the basis for trading Indexed Contracts.

-10-
<PAGE>

8. CME SUBSTITUTE INDEX AND CONTRACTS.
-----------------------------------

(a) CME's Rights Upon Discontinuation of an S&P Stock Index. If S&P
discontinues compilation and publication of any S&P Stock Index licensed to CME
under this Agreement. CME shall have the following, rights:

(1) S&P shall, for the purpose of enabling CME, if it chooses, to
compile and make use of its own substitute index ("CME Substitute Index") with
respect to any discontinued S&P Stock Index, provide CME with a continuing non-
exclusive and royalty-free worldwide license to use the list of companies,
shares outstanding and divisors for such discontinued S&P Stock Index as of the
Index Discontinuation Date. S&P shall have no further obligations to CME with
respect to such discontinued S&P Stock Index or any Indexed Contract based upon
such Index after finishing CME with the aforesaid information.

(2) As of the Index Discontinuation Date, CME shall not trade any
Indexed Contracts based upon the discontinued S&P Stock Index except as provided
in Section 7(b) of this Agreement. CME may continue to use the S&P Marks in
connection with the trading of Indexed Contracts previously licensed hereunder
as provided in, and subject to, Section 7(b). Upon receipt of any notice of
index discontinuation by S&P hereunder as provided in Section 7(b), CME may
elect, by written notice to S&P, to redesignate the discontinued S&P Stock Index
as a CME Substitute Index and continue to trade Indexed Contracts ("CME
Substitute Contracts") based upon such CME Substitute Index, except that, from
the date of such notice of election until the Index Discontinuation Date of such
S&P Stock Index, such CME Substitute Index shall be described in a manner to
clearly differentiate it from the discontinued S&P Stock Index. CME shall have
no obligation to make any payment of fees to S&P with respect to the trading of
CME Substitute Contracts. After such election, CME may promote CME Substitute
Contracts based upon the CME Substitute Index provided that the S&P Marks are
not utilized by CME in connection therewith and CME prominently disclaims any
relationship with S&P with respect to the CME Substitute Contracts.

(b) Discontinuation of Trademark Licenses. If CME's license to use any S&P
Stock Index terminates because of the termination or expiration of this
Agreement, or for any reason other than S&P's discontinuation of its compilation
and publication, then CME shall not use the name "Standard & Poor's" or "S&P" or
"BARRA" in connection with the promotion or trading of any additional Indexed
Contracts based on such S&P Stock Index; provided, however, that Indexed
Contracts based on such S&P Stock Index, which are listed for trading on the
date of termination, may be traded using the relevant S&P Marks until expiration
or for 36 months, whichever occurs first. Following such termination, if CME
elects to trade CME Substitute Contracts on a CME Substitute Index, it may make
information references only to such S&P Stock Index, provided that

-11-
<PAGE>

CME disclaims any relationship with S&P in connection therewith. The foregoing
shall nevertheless depend on the fact that S&P shall continue to compile and
publish such S&P Stock Index in which event S&P shall disseminate such Index to
CME in the same fashion as is currently being done, except that CME shall bear
any incremental costs incurred by S&P at any time in providing such service.

9. S&P OBLIGATIONS.
----------------

(a) Regulatory Approvals or Investigations. S&P shall reasonably assist
CME in connection with the preparation of factual materials for presentation
to the CME, or any other governmental entity, in connection with any
application by CME for approval to trade any of the Indexed Contracts licensed
hereunder, or any investigations or hearings regarding any such Indexed
Contracts.

(b) Calculation and Dissemination of Index Values. S&P or its agent shall
compute and, in a manner reasonably satisfactory to CME, disseminate to CME, the
value of each of the S&P Stock Indices at least once every fifteen seconds
during normal trading hours. The foregoing shall be at S&P's expense, except
that S&P shall not be obligated to pay for any hardware, software,
communications or similar expenses associated with the receipt by CME of S&P
Stock Index values. S&P, or its agent, shall provide CME each trading day with
respect to each S&P Stock Index licensed to CME hereunder a special opening
quotation for use in settling Indexed Contracts based on such S&P Stock Index as
well as the percentage of underlying stocks that have opened trading that day in
the primary market or that have resumed trading after a trading halt in the
primary market. Subject to Section 13 hereof, S&P shall use its best efforts:
(1) to ensure the correct and timely calculation and dissemination of the S&P
Stock Indices; (2) maintain a backup to verify the calculation of the S&P Stock
Indices on a continuing basis; (3) take extra precautions to verify the accuracy
of the daily closing, index values; and (4) inform CME each day of the closing
numbers for each of the S&P Stock Indices as soon as practicable after the close
of trading of the underlying stocks.

10. CME's OBLIGATIONS.
------------------

(a) General. CME shall use its best efforts to protect the goodwill and
reputation of S&P and of the S&P Marks in connection with their use under this
Agreement. CME shall maintain high standards of fairness and truthfulness in,
and shall allow S&P, upon its request, to review and approve in advance, all CME
advertisements, brochures, promotional and informational materials relating to
or referring to the S&P Stock Indices or the Indexed Contracts. S&P shall
safeguard the

-12-
<PAGE>

confidentiality of any promotional or informational materials furnished by CME
for S&P's review, as provided for in Section 12(b) hereof.

(b) Compliance with Applicable Laws. CME shall use its best efforts to
comply with the federal commodities laws and the rules thereunder insofar as
those laws and rules relate to the Indexed Contracts licensed hereunder. CME
shall take all necessary steps to ensure that the trading of the Indexed
Contracts is carried out in accordance with high ethical and legal standards.
S&P shall have no obligation or liability in connection therewith. This
provision is intended solely for the benefit of the parties hereto and not for
the benefit of third parties.

(c) CME Rulebook Disclaimers. CME shall use and disseminate the S&P Stock
Indices and the S&P Marks only in compliance with the terms and conditions of
this Agreement to ensure that S&P's rights in the S&P Stock Indices and the S&P
Marks are in no way diminished or jeopardized and CME shall use its best efforts
to ensure that the public is in no way confused or misled as to such rights. CME
shall include Appendix 4 hereto in its rules and take any other action necessary
to ensure that its members trading in the Indexed Contracts are subject to the
provisions of Appendix 4.

(d) Cross-Margining Program. CME will use its best efforts to include the
Indexed Contracts in CME's existing cross-margining program with the Options
Clearing Corporation unless CME reasonably determines in any case that such
cross-margining program is not appropriate.

(e) Regulatory Approvals. CME shall promptly file for and use its best
efforts to obtain and maintain any regulatory approval for the trading of
Indexed Contracts that is required during the term of this Agreement.

(f) CME Warranties. The CME represents and warrants to S&P that (1) the
execution and performance of this Agreement by the CME will not conflict with,
or result in a breach or violation of, any other agreement (written or oral) or
instrument to which CME is party or by which it is bound, and (2) this Agreement
has been duly authorized, executed and delivered by CME and constitutes a valid
and legally binding obligation of CME, enforceable in accordance with its terms.

11. PROTECTION OF VALUE OF LICENSE.
-------------------------------

(a) Trademark Registrations. During the term of this Agreement, S&P shall
use its best efforts to maintain in full force and effect federal registrations
of "Standard & Poor's(R)," "S&P(R)" and "S&P 500(R)." CME shall reasonably
cooperate with S&P, at S&P's expense, in the maintenance of

-13-

<PAGE>

such rights and registrations and shall do such acts and execute such
instruments as are reasonably necessary and appropriate for such purposes.

(b) Unlicensed Use of S&P Stock Indices or S&P Trademarks. In the event S&P
is notified by CME or otherwise becomes aware that any of the S&P Stock Indices
or S&P Marks are to be, or have been, used by a third party without the prior
written consent of S&P, in a manner materially inconsistent with the terms of
the licenses granted to CME hereunder ("Unlicensed User"), and that such use has
or may reasonably be expected to have a material adverse impact upon the
benefits derived by CME from the licenses hereunder, S&P shall have the option
to either (i) use its best efforts to terminate such use, including, without
limitation, by initiating litigation against any such Unlicensed User; or (ii)
permit such Unlicensed User to continue such use, in which case CME shall have
the rights provided below. S&P shall have thirty (30) days after learning of
such uncontested use in which to notify CME of S&P's decision whether to seek to
terminate such use or permit it. If S&P chooses to take action to terminate such
use, CME shall continue to pay the license fees required hereunder, except that
if such use has not been terminated within twenty-four (24) months after the
date of the notice to CME, then CME shall have the rights provided below. S&P
shall, within ten (10) days, give written notice to CME of its decision to cease
such effort to terminate such unlicensed use and of any adverse final decision
with respect to such efforts by any court or other governmental body as to which
there is no further appeal. The costs of any litigation brought under this
Subsection 11(b) shall be borne entirely by S&P, and the conduct of such
litigation shall remain in the sole control of S&P. In the event litigation
initiated pursuant to this Subsection 11(b) is decided adversely to S&P or if
S&P is otherwise unsuccessful in terminating such party's use of the S&P Stock
Indices or the S&P Marks, or if S&P notifies CME that it will not challenge
such unlicensed use, then:

(1) S&P shall have no further liability to CME hereunder on
account of such use and shall not be deemed to have breached any of its
representations, warranties or agreements hereunder. Notwithstanding the
foregoing, while this Agreement remains in effect, S&P shall not enter into any
agreement, written or oral, with any third party, pursuant to which S&P will
receive revenue, derived from the trading of Contracts based on any of the S&P
Marks or S&P Stock Indices licensed hereunder;

(2) CME shall have the right to [*] by this Agreement relating
to the S&P Stock Index or Indices being used by the Unlicensed User, along with
all rights and obligations of the parties thereto, except for [*] provided that
CME gives written notice of such termination to S&P within thirty (30) days of
receiving written notice from S&P that it will not seek to terminate such

-14-
<PAGE>

unlicensed use or that its efforts to terminate such unlicensed use have been
unsuccessful, or at the end of the twenty four (24) month period specified in
Section 11(b); and

(3) if CME does [*] hereby to the S&P Stock Index or Indices being
used by the Unlicensed User as provided in subsection (2) above, CME shall have
the right to [*] to compensate for any loss of revenue to CME and its members as
a result of such unlicensed use. If the parties are unable to reach agreement
[*] within sixty (60) days after the CME's written notice requesting [*] the
matter shall be resolved by binding arbitration through the American Arbitration
Association and subject to its commercial rules. The binding arbitration shall
be conducted by three arbitrators qualified as valuation experts in the field of
intellectual property licenses, one of which shall be selected by S&P, one of
which shall be selected by CME and one of which shall be appointed by the other
two. The arbitration shall be conducted in The Borough of Manhattan, The City of
New York. The parties shall each be responsible for fifty percent (50%) of the
cost of the arbitration, regardless of the outcome thereof.

Notwithstanding the foregoing, nothing herein shall be construed to limit
CME's right to seek to enjoin any unlicensed use of the S&P Marks by an
Unlicensed User in the event S&P does not terminate such use.

12. PROPRIETARY RIGHTS.

(a) Security Measures. CME acknowledges that the S&P Stock Indices,
including the S&P/BARRA Indices, are valuable assets of, and are selected,
coordinated, arranged and prepared solely by S&P, and S&P and BARRA,
respectively, through the application of methods and standards of judgment used
and developed through the expenditure of considerable work, time and money. CME
agrees that it will take such security measures as are reasonably necessary in
order to prevent any unauthorized use of the information provided to it
concerning the selection, coordination, arrangement and preparation of the S&P
Stock Indices, including the S&P/BARRA Indices.

(b) Obligations of Confidentiality. Each party shall treat as confidential,
and shall not disclose or transmit to any third party: (1) any documentation or
other materials that are marked as "Confidential and Proprietary" by the
providing party; or (2) the terms of this Agreement ("Confidential
Information"). Confidential Information as described in clause (1) of the
preceding sentence shall not include: (A) any information that is available to
the public or to the receiving party hereunder from sources other than the
providing party (provided that such source is not subject to a confidentiality
agreement with regard to such information); or (B) any information that is

-15-
<PAGE>

independently developed by the receiving party without use of or reference to
information from the providing party. Notwithstanding the foregoing, either
party may reveal Confidential Information to any regulatory agency or court of
competent jurisdiction if such information to be disclosed is: (i) approved for
disclosure in writing by the providing party or (ii) required by law,
regulatory agency or court order to be disclosed by the receiving party,
provided, however, that if permitted by law, prior written notice of such
required disclosure shall be given to the providing party and further provided,
however, that the receiving party shall cooperate with the providing party to
limit the extent of such disclosure.

13. REPRESENTATIONS, WARRANTIES, DISCLAIMERS.
-----------------------------------------

(a) Rights to Grant Licenses. S&P represents and warrants that S&P is the
owner of, or has the right to license CME to use, the S&P Stock Indices and S&P
Marks, as provided herein. S&P hereby represents and warrants to CME that BARRA
has consented to S&P's entry into this Agreement with CME. If at any time during
the term of this Agreement, BARRA ceases participating in the compilation and
publication of the S&P/BARRA Indices, whether as a result of the termination of
the S&P/BARRA Agreement or for any other reason, S&P covenants and agrees that
it shall, without interruption, itself compile and publish substantially similar
substitute indices for CME's use under the terms of this Agreement, and S&P
shall have no liability to CME hereunder. In such event, the parties agree that
such substitute indices shall replace the S&P/BARRA Indices under this Agreement
and that new trademarks will be designated to replace the S&P/BARRA Marks. It is
understood that the licensing of any such substitute indices shall be evidenced
by a written amendment to this Agreement, executed by S&P and CME.

(b) Responsibilities for Errors and Omissions. S&P shall promptly correct,
or instruct its agent to correct, any errors made in S&P's computations of the
S&P Stock Indices that are brought to S&P's attention by CME; provided,
however, that nothing in this Section 13 shall give CME the right to exercise
any judgment or require any changes with respect to S&P's method of composing,
calculating or determining the S&P Stock Indices; and, further provided,
however, that nothing in this Section 13(b) shall be deemed to modify the other
provisions of this Section 13.

(c) Limitation of Liability. S&P shall obtain information for inclusion in
or for use in the calculation of the S&P Stock Indices from sources that S&P
considers reliable, but S&P accepts no responsibility for, and shall have no
liability for, any errors, omissions or interruptions therein. S&P does not
guarantee the accuracy and/or the completeness of the S&P Stock Indices or any
data included therein in connection with the trading of the Indexed Contracts,
or any other use. S&P makes no warranty, express or implied, as to results to be
obtained by any person or any entity from the use of the S&P Stock Indices or
any data included therein. S&P makes no express or implied

-16-
<PAGE>

warranties and expressly disclaims all warranties of merchantability or fitness
for a particular purpose or use with respect to the S&P Stock Indices or any
data included therein.

(d) No Special Damages. Neither party shall have any liability for lost
profits or indirect, punitive, special, or consequential damages (including lost
profits) arising out of this Agreement, even if notified of the possibility of
such damages.

(e) Limitation on Damages. Without diminishing the disclaimers and
limitations set forth in this Section 13, in no event shall the cumulative
liability of S&P to CME exceed the license fees actually paid to S&P hereunder
over the one-year period preceding the date on which S&P is found liable to CME.
The parties agree that this limitation on liability is reasonable under the
circumstances.

14. INDEMNIFICATION.
----------------

(a) CME's Indemnification of S&P. Except as provided in Subsection (b)
below, CME shall indemnify and hold harmless S&P, its affiliates and their
officers, directors, employees and agents against any and all judgments,
damages, costs or losses of any kind (including reasonable attorneys' and
experts' fees) as a result of any claim, action, or proceeding that arises out
of or relates to: (1) this Agreement (other than a breach by S&P of its
representations, warranties and agreements hereunder); or (2) the Indexed
Contracts; provided, however, that S&P notifies CME promptly of any such claim,
action or proceeding. CME shall periodically reimburse S&P for its expenses
incurred under this Section 14. S&P shall have the right, at its own expense, to
participate in the defense of any claim, action or proceeding against which it
is indemnified hereunder; provided, however, it shall have no right to control
the defense, consent or judgment, or agree to settle any such claim, action or
proceeding without the written consent of CME without waiving the indemnity
hereunder. CME, in the defense of any such claim action or proceeding, except
with the written consent of S&P, shall not agree to entry of any judgment or
enter into any settlement which either does not include, as an unconditional
term, the grant by the claimant to S&P of a release of all liabilities in
respect of such claims or which otherwise adversely affects the rights of S&P.

(b) Exclusion from CME's Indemnification Obligation. CME's indemnification
obligations under Subsection (a) above shall not apply to: (1) the willful or
intentional misconduct of any of S&P's officers, directors, employees, or
agents; (2) [*] in the S&P Stock Indices or any data included therein originated
by S&P; or (3) any breach by S&P of its representations, warranties, or
agreements made in this Agreement.

-17-
<PAGE>

(c) No Third Party Beneficiaries. These indemnification provisions are
solely for the benefit of CME and S&P and are not intended to, and do not
create, any rights or causes of actions on behalf of any third party.

15. FORCE MAJEURE
-------------

Neither S&P nor CME shall bear responsibility or liability for any
losses arising out of any delay in or interruptions of their respective
performance of their obligations under this Agreement due to any act of God, act
of governmental authority or act of public enemy or due to war, the outbreak or
escalation of hostilities, riot, fire, flood, civil commotion, insurrection,
labor difficulty (including, without limitation, any strike, or other work
stoppage or slow down), severe or adverse weather conditions, power failure,
communications line failure, or other similar cause beyond the reasonable
control of the party so affected.

16. INJUNCTIVE RELIEF
-----------------

In the event of a material breach by one party of provisions of this
Agreement relating to the Confidential Information of the other party, the
parties acknowledge and agree that damages would be an inadequate remedy and
that the non-breaching party shall be entitled to preliminary and permanent
injunctive relief to preserve such confidentiality or limit improper disclosure
of such Confidential Information, but nothing herein shall preclude the non-
breaching party from pursuing any other action or remedy for any breach or
threatened breach of this Agreement. In the event of a material breach by CME of
provisions of this Agreement relating to dissemination of the S&P Stock Indices,
CME acknowledges and agrees that damages would be an inadequate remedy to S&P
and that S&P shall be entitled to preliminary and permanent injunctive relief to
enforce the provisions hereof, but nothing herein shall preclude S&P from
pursuing any other action or remedy for any breach or threatened breach of this
Agreement. All remedies hereunder shall be cumulative.

17. GENERAL PROVISIONS.
-------------------

(a) Assignment and Delegation. This Agreement is solely and exclusively
between the parties hereto and shall not be assigned or transferred, nor shall
any duty hereunder be delegated, by either party, without the prior written
consent of the other party, and any attempt to so assign or transfer this
Agreement or delegate any duty hereunder without such written consent shall be
null and void. This Agreement shall be valid and binding on the parties hereto
and their successors and permitted assigns.

-18-
<PAGE>

(b) Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to its subject matter. This Agreement supersedes
the Prior License Agreements and all other previous agreements between the
parties, if any, with respect to the subject matter of this Agreement. There are
no oral or written collateral representations, agreements, or understandings
except as provided herein.

(c) Non-Waiver and Amendments. No waiver, modification, or amendment of
any of the terms and conditions hereof shall be valid or binding, unless such
waiver, modification, or amendment is in writing and signed by a duly authorized
officer of each of the parties hereto.

(d) Effect of Breach. No breach, default or threatened breach or default
of this Agreement by S&P shall relieve CME of its obligations under this
Agreement with respect to the protection of the property or proprietary nature
of any property which is the subject matter of this Agreement.

(e) Notices. All notices and other communications under this Agreement
shall be: (1) in writing; (2) delivered by hand, by registered or certified
mail, return receipt requested, or by facsimile transmission to the address or
facsimile number set forth below or such address or facsimile number as either
party shall specify by a written notice to the other; and (3) deemed given
upon receipt.

Notice to S&P:
--------------
Standard & Poor's
65 Broadway
New York, New York 10006
Attention: John C. Zwingli
Group Vice President
Facsimile No: 212/770-0270

With a copy to:
---------------
David B. Stafford
Associate General Counsel
The McGraw-Hill Companies
1221 Avenue of the Americas
New York, NY 10020
Facsimile No: 212/512-6769

-19-
<PAGE>

Notice to CME:
--------------
Chicago Mercantile Exchange
30 South Wacker Drive
Chicago, IL 60606
Attention: T. Eric Kilcollin, President
Facsimile No: 312/648-3625

With a copy to:
---------------
Paul O'Kelly
Senior Vice President and General Counsel
Chicago Mercantile Exchange
30 South Wacker Drive
Chicago, Illinois 60606
Facsimile No: 312/930-3323

(f) Governing Law. This Agreement shall be interpreted, construed and
enforced in accordance with the laws of the State of New York.

(g) Choice of Jurisdiction. Each party agrees that in connection with any
legal action or proceeding arising with respect to this Agreement, such action
or proceeding shall be brought only in the United States District Court for the
Southern District of New York or in the Supreme Court of the State of New York
in and for the First Judicial Department, and each party agrees to submit to the
jurisdiction of those courts and venue in those courts and to waive any claim
that either court is an inconvenient forum.

(h) Survival. Section 12, Section 13 and Section 14 shall survive the
expiration or termination of this Agreement.

-20-
<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first set forth above.

STANDARD & POOR'S

By: /s/ John C. Zwingli
------------------------
John C. Zwingli
Group Vice President

CHICAGO MERCANTILE EXCHANGE

By: /s/ John F. Sandner
------------------------
John F. Sandner
Chairman of the Board

By: /s/ T. Eric Kilcollin
------------------------
T. Eric Kilcollin
President and CEO

-21-
<PAGE>

APPENDIX I
----------

The S&P Stock Indices collectively covered by and referred to in this Agreement
are the following:

1. S&P 500 Stock Price Index

2. S&P 100 Stock Price Index

3. S&P MidCap 400 Index

4. S&P SmallCap 600 Index

5. S&P 500/BARRA Growth Index

6. S&P 500/BARRA Value Index

7. S&P Energy Stock Price Index

8. S&P Financial Stock Price Index

9. S&P High Technology Stock Price Index

10. S&P Public Utility Stock Price Index

11. S&P Consumer Staple Stock Price Index

12. S&P Transportation Stock Price Index
<PAGE>

APPENDIX 2
----------

The S&P Marks collectively covered by and referred to in this Agreement are the
following:

<S> <C> <C>
1. S&P 15. S&P Energy Stock Price Index

2. Standard & Poor's 16. Standard & Poor's Energy Stock Price Index

3. Standard & Poor's 500 17. Standard & Poor's Financial Stock Price Index

4. 500 18. S&P High Technology Stock Price Index

5. S&P 100 19. Standard & Poor's High Technology Stock Price Index

6. Standard & Poor's 100 20. S&P Public Utility Stock Price Index

7. S&P MidCap 400 Index 21. Standard & Poor's Public Utility Stock Price Index

8. Standard & Poor's 100 22. S&P Consumer Staple Stock Price Index

9. S&P SmallCap 600 Index 23. Standard & Poor's Consumer Staple Stock Price Index

10. Standard & Poor's 24. S&P Transportation Stock Index

11. S&P 500/BARRA Growth Index 25. Standard & Poor's Transportation Stock Price Index

12. Standard & Poor's 500/BARRA Growth Index 26. Mini S&P 500*

13. S&P 500/BARRA Value Index 27. E-Mini S&P 500*

14. Standard & Poor's 500/BARRA Value Index
</TABLE>

*Should this be a protectable mark

<PAGE>

APPENDIX 3
----------

The Prior License Agreements between S&P and CME are the following:

1. The License Agreement dated February 28, 1980, as amended on January 27,
1983, and July 29, 1985. (Expiration date: October 21, 1998).

2. The License Agreement dated January 27, 1983, as amended on July 13, 1983,
and July 29, 1985 (Expiration date: [October 21, 1998, for exclusivity;
otherwise license continues until terminated]).

3. The License Agreement dated October 17, 1991, pertaining to the S&P MidCap
400 Index. (Expiration date: October 17, 1996 [but extended for 5 years if
CME's trading volume in contracts based on the Index for the first 6 months
of the 12-month period ending October 17, 1996, averages at least 7,500
contracts per trading day]).

4. The License Agreement dated July 27, 1995, pertaining to the S&P SmallCap,
600 Index. (Expiration date: June 30, 2000 [but extended for 5 years if
CME's trading volume in contracts based on the Index for the first 6 months
of the 12-month period ending June 30, 2000, averages at least 7,500
contracts per trading day]).

5. The License Agreement dated July 27, 1995, pertaining to the S&P/BARRA
Indices. (Expiration date: June 30, 2000 [but extended for 5 years if CME's
trading volume in contracts based on the Index for the first 6 months of
the 12-month period ending June 30, 2000, averages at least 7,500 contracts
per trading day]).
<PAGE>

APPENDIX 4
----------

Limitation of Standard & Poor's Liability
- -----------------------------------------

Rule __. Standard & Poor's, a division of The McGraw-Hill Companies, Inc.
("S&P"), licenses the Exchange to use various S&P stock indices
("S&P Stock Indices") in connection with the trading of futures
contracts and options on futures contracts based upon such indices.
S&P shall have no liability for any damages, claims, losses or
expenses caused by any errors or delays in calculating or
disseminating the S&P Stock Indices.

S&P Disclaimer
- --------------

Rule __. Standard & Poor's, a division of The McGraw-Hill Companies, Inc.
("S&P"), does not guarantee the accuracy and/or completeness of the
S&P Stock Indices or any data included therein. S&P makes no
warranty, express or implied, as to the results to be obtained by
any person or any entity from the use of the S&P Stock Indices or
any data included therein in connection with the trading of futures
contracts, options on futures contracts or any other use. S&P makes
no express or implied warranties, and expressly disclaims all
warranties of merchantability or fitness for a particular purpose
or use with respect to the S&P Stock Indices or any data included
therein. Without limiting any of the foregoing, in no event shall
S&P have any liability for any special, punitive, indirect, or
consequential damages (including lost profits), even if notified of
the possibility of such damages.

<PAGE>

APPENDIX 5
----------

Calculation Methodology Example

Initial Conditions:
1/1/00: S&P 500 contract multiplier of [*] reduced to [*] (i.e.
by a factor of [*]);
1/1/95-1/1/00: Average [*] volume of [*] contracts traded;
1/1/00-1/1/01: License fee of [*] based on actual volume and adjusted
rate [*].
1/1/01-1/1/02: License fee of [*] based on actual volume and adjusted
rate [*].
1/1/02-1/1/03: License fee of [*] based on actual volume and adjusted
rate [*].

1. On January 1, 2000, upon reduction in the S&P 500 contract multiplier, the
per-trade license fee paid on the S&P 500 contract is proportionately
reduced.

[*]

2. On January 1, 2001, multiply the average [*] volume in the S&P 500 contract
for the [*] prior to the reduction in the S&P 500 contract multiplier by the
unadjusted license fee in the S&P 500 Contract.

[*]

3. On January 1, 2001 and [*] thereafter, the total license fee paid to S&P by
CME in regard to the S&P 500 contract for the prior [*] is calculated. [*]

4. CME pays S&P the [*].

[*]

5. Repeat steps 3 and 4 every [*] for the remainder of the term of the
Agreement.

6. The adjustment made to S&P is capped at a per-trade rate of [*].

<PAGE>

APPENDIX 6
----------

Calculation Methodology Example
- -------------------------------

Initial Conditions:

1/1/00: CME launches Competitive Contract
1/1/95-1/1/00: Average [*] volume of [*] contracts traded;
1/1/96-1/1/01: Average [*] volume of [*] contracts traded;
1/1/00-1/1/01: [*] Volumes:
Affected Contract = [*];
Competitive Contract = [*];
1/1/01-1/1/02: [*] Volumes:
Affected Contract = [*];
Competitive Contract = [*];

1. The average [*] volume for the Affected Contract in the rolling [*]
period minus the volume for the Affected Contract in the [*] period immediately
following the rolling [*] period ("Volume Shortfall"). If Volume Shortfall is
less than 0, then, for the purposes of this calculation, Volume Shortfall shall
equal 0.

Year 1 Volume Shortfall = [*];
Year 2 Volume Shortfall = [*].

2. Multiply Volume Shortfall by the license fee paid to S&P by CME for the
Affected Contract during the [*] period immediately following the listing of
such contracts for trading ("S&P Revenue Shortfall").

Year 1 S&P Revenue Shortfall = [*]
Year 2 S&P Revenue Shortfall = [*]

<PAGE>

3. The total Normalized Volume is calculated by the following five (5) steps:

(a) The Normalization Factor is calculated:

[*]

(b) Normalized Volume is calculated:

[*]

Year 1: [*]
Year 2: [*]

(d) Sum the Normalized Volumes for all Competitive Contracts as they relate
to the Affected Contract.

Year 1: [*]
Year 2: [*]

(e) Multiply the sum from step (d) by the per-trade license fee paid for
the Affected Contract at the time this calculation is being performed. ("Total
Normalized Revenue").

Year 1: [*]
Year 2: [*]

The payment to S&P for the [*] period in question is the [*].

Year 1: [*]
Year 2: [*]

<PAGE>

Exhibit 21.1
Chicago Mercantile Exchange Inc.
Registration Statement on Form S-4

SUBSIDIARIES OF THE REGISTRANT

Jurisdiction of Incorporation
Name of Subsidiary or Organization
- ------------------ -----------------------------

GFX Corporation Illinois
P-M-T Limited Partnership Illinois

<PAGE>

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 14,249
<SECURITIES> 60,156
<RECEIVABLES> 26,534
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 176,728
<PP&E> 224,297
<DEPRECIATION> 130,766
<TOTAL-ASSETS> 301,703
<CURRENT-LIABILITIES> 109,953
<BONDS> 8,132
0
0
<COMMON> 0
<OTHER-SE> 168,663
<TOTAL-LIABILITY-AND-EQUITY> 301,703
<SALES> 0
<TOTAL-REVENUES> 208,488
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 201,844
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 780
<INCOME-PRETAX> 6,644
<INCOME-TAX> 1,855
<INCOME-CONTINUING> 2,663
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,663
<EPS-BASIC> 0
<EPS-DILUTED> 0

</TABLE>