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Exhibit 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
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 110,004,892 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
4,892 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.
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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.
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Division B
Common Stock
Subdivision 1: General Provisions
(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;
(C) pursuant to the conversion of shares of the Series B-5
Stock; or
(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
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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 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;
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(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
exercise any of the trading rights or privileges inherent in any
series of Class B Common Stock.
"Effectiveness Date" means the date of acceptance by the Delaware
Secretary of State of the filing of this Amended and Restated
Certificate.
"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.
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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, conveyed, 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, conveyed, sold or otherwise
disposed; and any shares so permitted to be transferred shall not
thereafter be subject to any restrictions under this Section 3 except
for the restriction applicable to clearing members under clause (f) of
this Section 3. In addition, such holder may transfer, convey, 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
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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, conveyed, sold or otherwise
disposed; and any shares so permitted to be transferred shall not
thereafter be subject to any restrictions under this Section 3 except
for the restriction applicable to clearing members under clause (f) of
this Section 3. In addition, such holder may transfer, convey, 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, conveyed, sold or otherwise
disposed; and any shares so permitted to be transferred shall not
thereafter be subject to any restrictions under this Section 3 except
for the restriction applicable to clearing members under clause (f) of
this Section 3. In addition, such holder may transfer, convey, 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 except for the restriction applicable to clearing
members under clause (f) of this Section 3.
(f) Shares of Class A Common Stock owned by a clearing member of
the Chicago Mercantile Exchange shall at all times be subject to Rule
913, and any other applicable provisions, of the corporation's rules.
Notwithstanding the foregoing provisions of this Section 3, the Board of
Directors may remove some or all of the foregoing restrictions on transfer if it
determines, in its sole discretion, that such removal is appropriate.
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 five 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"),
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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
1,700 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.
(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.
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(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 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 exercise any of the trading
rights in respect of a series of Class B Common Stock 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
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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 lease of the trading privilege component of any series of
Class B Common Stock shall be valid and binding on the corporation
unless and until (x) the lessee 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 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.
(d) Any transfer, conveyance, sale or other disposition of shares
of Class B Common Stock shall be subject to (i) Rule 110, and any
other applicable provisions, of the corporation's rules and (ii)
Section 6.4, and any other applicable provisions, of the corporation's
by-laws.
(6) Adjustments to Applicable Equivalent Amounts For Dilutive Issues.
(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:
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(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;
(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
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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 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
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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) 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
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(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 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 April 18,
2001, to convert such shares of Series
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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 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
recapitalization contemplated by Subdivision 4 of this Article, 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
April 19, 2001.
(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.
Subdivision 4: Recapitalization
Upon the filing of this Amended and Restated Certificate of Incorporation
with the Secretary of State of Delaware:
(1) Each of the then outstanding shares of the corporation's CME
Class Common Stock, $0.01 par value, authorized immediately prior to the
effectiveness of such filing, shall be converted into (i) 16,200 shares of
Class A Common Stock, $0.01 par value, and (ii) one share of Class B Common
Stock, Series B-1, $0.01 par value.
(2) Each of the then outstanding shares of the corporation's IMM
Class Common Stock, $0.01 par value, authorized immediately prior to the
effectiveness of such filing, shall be converted into (i) 10,800 shares of
Class A Common Stock, $0.01 par value, and (ii) one share of Class B Common
Stock, Series B-2, $0.01 par value.
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(3) Each of the then outstanding shares of the corporation's IOM
Class Common Stock, $0.01 par value, authorized immediately prior to the
effectiveness of such filing, shall be converted into (i) 5,400 shares of
Class A Common Stock, $0.01 par value, and (ii) one share of Class B Common
Stock, Series B-3, $0.01 par value.
(4) Each of the then outstanding shares of the corporation's GEM Class
Common Stock, $0.01 par value, authorized immediately prior to the
effectiveness of such filing, shall be converted into one share of Class B
Common Stock, Series B-4, $0.01 par value.
(5) Each of the then outstanding shares of the corporation's
Fractional GEM Class Common Stock, $0.01 par value per share, authorized
immediately prior to the effectiveness of such filing, shall be converted
into one share of Class B Common Stock, Series B-5, $0.01 par value.
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 April 2001, and the terms of the remaining
twenty-one directors shall expire at the annual meeting of the stockholders held
in April 2002.
(B) At the annual meeting of stockholders held in April 2001, 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 April 2002, 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
(3) One director shall be elected by the holders of Series B-2 Stock.
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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;
(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;
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(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 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.
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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.
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