CHICAGO MERCANTILE EXCHANGE HOLDINGS INC

Transcription

1 CHICAGO MERCANTILE EXCHANGE HOLDINGS INC FORM PRE 4A (Proxy Statement - Notice of Shareholders Meeting (preliminary)) Filed 3//2002 For Period Ending 4/7/2002 Address 20 S. WACKER DR. CHICAGO, Illinois Telephone CIK Fiscal Year 2/3

2 QuickLinks -- Click here to rapidly navigate through this document Filed by the Registrant /X/ Filed by a Party other than the Registrant SCHEDULE 4A (Rule 4a-0) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 4A INFORMATION Proxy Statement Pursuant to Section 4(a) of the Securities Exchange Act of 934 (Amendment No. ) Check the appropriate box: /X/ Preliminary Proxy Statement Confidential, For Use of the Commission Only (as permitted by Rule 4a-6(e)(2)) Definitive Proxy Statement Definitive Additional Materials Soliciting Material Under Rule 4a-2 Chicago Mercantile Exchange Holdings Inc. (Name of Registrant as Specified in Its Charter) (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) Payment of Filing Fee (Check the appropriate box): /X/ No fee required. Fee computed on table below per Exchange Act Rules 4a-6(i)(4) and 0-. () Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0- (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: Fee paid previously with preliminary materials: Check box if any part of the fee is offset as provided by Exchange Act Rule 0-(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. () Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed:

3 30 South Wacker Drive Chicago, Illinois March, 2002 Dear Shareholder: You are cordially invited to attend the 2002 Annual Meeting of Shareholders of Chicago Mercantile Exchange Holdings Inc. The meeting will be held at 4:00 p.m., Central time, on April 7, 2002, in the Grand Ballroom of The Westin Chicago River North Hotel, located at 320 North Dearborn, Chicago, Illinois. This solicitation is being made on behalf of the Board of Directors of Chicago Mercantile Exchange Holdings Inc. This letter and the accompanying proxy statement, proxy card and Annual Report are first being mailed to shareholders on or about March, Your vote is very important. We urge you to vote by signing, dating and mailing the enclosed proxy card before the meeting, even if you plan to attend the meeting. You also may vote by telephone or over the Internet by following the instructions on the enclosed proxy card. We look forward to seeing you at the meeting. Sincerely, Scott Gordon Chairman of the Board James J. McNulty President and Chief Executive Officer 30 South Wacker Drive Chicago, Illinois Notice of Annual Meeting of Shareholders April 7, 2002 The Annual Meeting of Shareholders of Chicago Mercantile Exchange Holdings Inc. will be held at 4:00 p.m., Central time, on April 7, 2002, in the Grand Ballroom of The Westin Chicago River North Hotel, located at 320 North Dearborn, Chicago, Illinois, for the following purposes:. to elect seven Equity Directors (elected by Class A and Class B shareholders voting together as a single class); 2. to elect two Class B- Directors and one Class B-2 Director;

4 3. to elect five members of the Class B- Nominating Committee, five members of the Class B-2 Nominating Committee and five members of the Class B-3 Nominating Committee; 4. to vote on a proposed charter amendment that would increase the maximum number of persons who may serve as directors from 9 to 20 by adding one additional Equity Director; 5. to vote on the ratification of the appointment of Arthur Andersen LLP as our independent public accountants for the 2002 fiscal year; and 6. to transact any other business that properly comes before the meeting. You are entitled to notice of and to vote at the Annual Meeting if you were a shareholder of record of Chicago Mercantile Exchange Holdings Inc. Class A or Class B common stock at the close of business on February 20, An alphabetical list of those shareholders, their addresses and the number of shares owned by each will be on display for all purposes germane to the meeting at our Shareholder Relations and Member Services Department during normal business hours from April 5, 2002 to April 6, This list will also be on display at the meeting. We hope that you will be present at the meeting. If you cannot attend, we urge you to vote your shares by dating, signing and mailing the enclosed proxy card in the envelope provided. The envelope requires no postage if it is mailed in the United States. You also can cast your vote by telephone by calling the number on your proxy card or electronically over the Internet by going to the Web site designated on your proxy card. By Order of the Board of Directors, March, 2002 Chicago, Illinois Ann M. Cresce Corporate Secretary CHICAGO MERCANTILE EXCHANGE HOLDINGS INC. 30 South Wacker Drive Chicago, Illinois Proxy Statement When and where is the Annual Meeting? GENERAL INFORMATION The Annual Meeting of Shareholders of Chicago Mercantile Exchange Holdings Inc. will be held on Wednesday, April 7, 2002, at 4:00 p.m., Central time, in the Grand Ballroom of The Westin Chicago River North Hotel, located at 320 North Dearborn, Chicago, Illinois. In this proxy statement, we refer to Chicago Mercantile Exchange Holdings Inc. as "CME Holdings" and to Chicago Mercantile Exchange Inc. as "CME." In November 200, the shareholders of CME approved the merger of CME with a subsidiary of CME Holdings. As a result of the merger, which was completed in December 200, CME became a wholly owned subsidiary of CME Holdings, and the shareholders of CME became shareholders of CME Holdings. In this proxy statement, the terms "we," "us" and "our" refer to CME Holdings and CME. All holders of record of our Class A and Class B common stock on February 20, 2002, the record date for the Annual Meeting, are invited to attend the Annual Meeting. If you attend, you may be asked to present valid picture identification, such as a driver's license or passport. Cameras, recording devices and other electronic devices will not be permitted at the meeting.

5 What proposals are we being asked to vote on? Holders of all classes of Class A and Class B common stock of CME Holdings are being asked to vote on the following: the election of seven Equity Directors (elected by Class A and Class B shareholders voting together as a single class) to the Board of Directors; a proposal to amend our Amended and Restated Certificate of Incorporation to increase the maximum number of persons who may serve as directors from 9 to 20 by adding one additional Equity Director (in this proxy statement, we refer to this proposal as the "Charter Amendment"); and the ratification of our selection of Arthur Andersen LLP to serve as our independent public accountants for the 2002 fiscal year. Holders of Class B- shares are also being asked to vote on the election of two Class B- directors from a slate of five candidates for those positions. Holders of Class B-2 shares are also being asked to vote on the election of one Class B-2 director from a slate of two candidates for that position. In addition, holders of Class B-, B-2 and B-3 shares will vote on the election of five members of the Nominating Committee for their respective class, each from a slate of 0 candidates. 3 Who is entitled to vote? You may vote if you owned shares of Class A or Class B common stock of CME Holdings as of the close of business on February 20, 2002, the record date for the Annual Meeting. The table below shows how many shares of each class of our common stock were outstanding on that date and the number of votes to which each share is entitled on the proposals on which shareholders will vote at the Annual Meeting: Number of Votes Per Share Allowed on Proposal Class of Common Stock Number of Outstanding Shares Election of Equity Directors Election of Class B Director Election of Class B Nominating Committee Charter Amendment Ratification of Independent Public Accountants Class A 0 N/A N/A Class A- 7,222,776 N/A N/A Class 7,222,776 N/A N/A Class 7,222,574 N/A N/A Class 7,29,436 N/A N/A Class B- 625 Class B-2 83 Class B-3,287 N/A Class B-4 43 N/A N/A Why is this proxy statement being sent to me? We sent you these proxy materials because our Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting. This proxy statement summarizes the information you need to vote at the Annual Meeting. On March, 2002, we began mailing these proxy materials to all of our holders of record of each class of Class A and Class B common stock, as of the close of business on February 20, How do I vote? You may vote in person at the Annual Meeting or by proxy. If you want to vote by proxy, please complete, sign and date the enclosed proxy card and return it promptly in the enclosed postage-prepaid envelope, or promptly cast your vote by telephone or over the Internet. If you plan to attend the meeting and vote in person, we will give you a ballot when you arrive. If you vote by proxy, the individuals named on the proxy card (your proxies) will vote your shares in the manner you indicate. You may specify whether your shares should be voted for all, some or none of the nominees for Equity Directors and, if applicable, Class B directors or Nominating Committee members, and whether your shares should be voted for or against the other proposals. Your vote is important. Whether or not you plan to attend the Annual Meeting, we urge you to vote your shares by completing, signing, dating and mailing the enclosed proxy card in the accompanying envelope. You also can cast your vote by telephone by calling the number on

6 your proxy card or electronically over the Internet by going to the Web site designated on your proxy card. Voting by proxy will not affect your right to attend the meeting and vote your shares in person. 4 What if I return my proxy card but do not provide voting instructions? If you sign, date and return the proxy card without indicating your instructions on how to vote your shares, the proxies will vote your shares as follows: "FOR" the election of the seven nominees for Equity Directors; "FOR" the Charter Amendment; "FOR" ratification of the appointment of Arthur Andersen LLP as our independent public accountants for the 2002 fiscal year; "ABSTAIN" from voting for Class B directors, if applicable; and "ABSTAIN" from voting for Class B Nominating Committee members, if applicable. If any other matter is presented at the Annual Meeting, your proxies will vote in accordance with their best judgment. At the time this proxy statement went to press, we knew of no matters to be addressed at the Annual Meeting beyond those described in this proxy statement. Can I change my mind after I vote? Yes, you may change your vote at any time before the voting closes at the meeting. If you give a proxy, you may revoke it at any time before it is exercised. You may revoke your proxy in the following ways: You may sign and deliver another proxy with a later date; You can vote by telephone or over the Internet at a later date; You may send a written revocation to our Corporate Secretary, Ann M. Cresce, before the Annual Meeting; or You may attend the meeting and vote in person. Your most current vote is the one that is counted. Simply attending the meeting will not automatically revoke your proxy. You must vote in person at the meeting in order to revoke your proxy. Is my vote confidential? All proxies, ballots and tabulations that identify the vote of a particular shareholder will be kept confidential, except as necessary to allow the inspectors of election to certify the voting results or to meet legal requirements. Representatives of Mellon Investor Services LLC, our transfer agent, will act as the inspectors of election and will count the votes. Comments written on proxy cards or ballots may be provided to our Corporate Secretary, Ann M. Cresce, with the name and address of the shareholder. Each comment will be provided without reference to the vote of the shareholder, unless the vote is mentioned in the comment or unless disclosure of the vote is necessary in order to understand the comment. At our request, the inspectors of election may provide us with a list of shareholders who have not voted and periodic status reports on the aggregate vote. These status reports may include breakdowns of vote totals by different types of shareholders, although it is expected that we will not be able to determine how individual shareholders voted. 5 How many votes must be present to hold the Annual Meeting? Your shares will be counted as present at the Annual Meeting if you attend the meeting and vote in person or if you properly return a proxy card or vote by telephone or over the Internet before the start of the meeting. In order for us to conduct the meeting, shareholders possessing at least one-third of the votes entitled to be cast on the particular proposal as of February 20, 2002 must be present. This is referred to as a quorum. A quorum will exist for each of the proposals to be voted on at the Annual Meeting if the following holders are present, either

7 in person or by proxy: Proposal Election of Equity Directors Election of each Class B director Election of Class B Nominating Committee members Charter Amendment Ratification of Arthur Andersen LLP as independent public accountants Quorum: Presence in Person or by Proxy Required Holders of at least one-third of the total number of votes entitled to be cast by all classes of Class A shares and all classes of Class B shares Holders of at least one-third of the total number of votes entitled to be cast by the applicable class of Class B shares Holders of at least one-third of the total number of votes entitled to be cast by the applicable class of Class B shares Holders of at least one-third of the total number of votes entitled to be cast by all classes of Class A shares and all classes of Class B shares Holders of at least one-third of the total number of votes entitled to be cast by all classes of Class A shares and all classes of Class B shares Proxies marked "withhold" or "abstain" are counted as present for establishing a quorum. To ensure that there will be a quorum for each of the proposals to be voted on, please vote before the Annual Meeting and allow your shares to be represented at the meeting by your proxies. Voting before the Annual Meeting will not prevent you from voting in person at the meeting. If you vote in person at the meeting, your previous vote will be revoked automatically. 6 How many votes are needed to approve the various proposals? Each of the proposals presented at the Annual Meeting will be considered separately. Assuming that a quorum is present for the particular proposal, the following votes are required to approve the proposal: Proposal Election of Equity Directors Election of each Class B director Election of Class B Nominating Committee members Charter Amendment Ratification of Arthur Andersen LLP as our independent public accountants Vote Required to Approve Seven nominees receiving the highest number of "FOR" votes from all classes of Class A and Class B common stock, voting together as a single class, will be elected Two Class B- nominees and one Class B-2 nominee receiving the highest number of "FOR" votes in his or her class will be elected as a Class B director for that class Five nominees receiving the highest number of "FOR" votes in their class will be elected to the Class B Nominating Committee for that class Must receive a "FOR" vote from holders of a majority of the outstanding shares of all classes of Class A and Class B common stock, voting together as a single class Must receive a "FOR" vote from holders of a majority of the votes present at the meeting Proxies marked "withhold" or "abstain" will have the same effect as a vote against the election of the nominee or a vote against any other matter. 7 PROPOSAL ELECTION OF DIRECTORS The size of our Board, and the manner in which our directors are elected, changed as the result of our demutualization, which occurred on November 3, 2000, and our reorganization into a holding company structure, which occurred on December 3, 200. The number of positions on our Board will be reduced in conjunction with the Annual Meeting from 29 directors to 9. If the Charter Amendment is approved by our

8 shareholders at the Annual Meeting, that number will be increased to 20 immediately following the Annual Meeting, as described in this proxy statement under the caption "PROPOSAL 3 APPROVAL OF CHARTER AMENDMENT." Directors are elected to serve two-year terms. Ten directors will be elected at the Annual Meeting, consisting of seven who will be elected by all shareholders voting together as a single class (in this proxy statement we refer to these directors as "Equity Directors"), two who will be elected by the holders of Class B- shares and one who will be elected by the holders of Class B-2 shares. Each of the nominees presented in this proxy statement is currently a director. If reelected, each director's term will last until the 2004 Annual Meeting or until he or she is succeeded by another qualified director who has been elected. The ages of nominees set forth below are as of February 20, Nominees for Equity Directors (Class A and Class B Shares Voting Together) Can Vote "For" or "Withhold" for Each Candidate Name and Age For a Term Expiring Background Timothy R. Brennan, 60 April 2004 Director of CME Holdings since its formation in August 200, director of CME since 990 and a member of CME for more than 26 years. Floor broker and trader since 974 and Executive Vice President of RB&H Financial Services, L.P., one of our clearing member firms, for more than six years. Martin J. Gepsman, 49 April 2004 Director of CME Holdings and Secretary of the Board since its formation in August 200, Secretary of CME's Board since 998, a director of CME since 994 and a member of CME for more than 7 years. Independent floor broker and trader since 985. Scott Gordon, 49 April 2004 Chairman of CME Holdings' Board since its formation in August 200, Chairman of CME's Board since 998, a director of CME since 982 and a member of CME for more than 24 years. Served as Vice Chairman of CME from 995 to 997 and Secretary from 984 to 985 and 988 to 994. President, Chief Operating Officer and director since 999 of Tokyo- Mitsubishi Futures (USA), Inc., a clearing member firm wholly owned by the Bank of Tokyo-Mitsubishi, Ltd.; previously served as that firm's Executive Vice President and director. Member of the Commodity Futures Trading Commission's Global Markets Advisory Committee and the Advisory Committee to the Illinois Institute of Technology Center for the Study of Law and Financial Markets. Director of the National Futures Association and of the Futures Industry Institute. 8 Leo Melamed, 69 April 2004 Chairman Emeritus, Senior Policy Advisor and non-voting member of CME Holdings' Board since its formation in August 200. Previously an elected and appointed CME Board member for 26 years. Chairman of CME from 969 until 972 and founding Chairman of the International Monetary Market from 972 until its merger with CME in 976. Special Counsel to the Board from 977 until 99 and Chairman of CME's Executive Committee from 985 until 99. Member of CME for more than 45 years. From 993 to 200, Chairman and CEO of Sakura Dellsher, Inc., a former clearing member of CME; and currently Chairman and CEO of Melamed & Associates, a global consulting group. John D. Newhouse, 56 April 2004 Director of CME Holdings since its formation in August 200, director of CME since 996 and previously a director of CME from 980 to 985 and 987 to 988. Member of CME for more than 26 years. Floor broker and trader since 975. Currently President of John F. Newhouse & Company and formerly President of Euro Spread Brokers, a broker association filling orders in Eurodollars, from 98 to Currently trades for his own account. Director of John F. Newhouse & Company and Gator Trading Company.

9 Myron S. Scholes, 60 April 2004 Director of CME Holdings since its formation in August 200 and director of CME since Chairman of Oak Hill Platinum Partners and managing partner of Oak Hill Capital Management for more than five years. Frank E. Buck Professor of Finance, Emeritus, at Stanford University's Graduate School of Business and a 997 Nobel Laureate in Economics. Director of Dimensional Fund Advisors Mutual Funds, the American Century Mutual Funds and Intelligent Markets. William R. Shepard, 55 April 2004 Director of CME Holdings since its formation in August 200, director of CME since 997 and a member of CME for more than 28 years. Founder and President of Shepard International, Inc., a futures commission merchant, since 984. Your proxies will vote for each of the seven nominees for Equity Directors set forth above unless you specifically withhold authority to vote for a particular nominee. We have no reason to believe that any of the nominees listed above will be unable or unwilling to serve, if elected. However, if any nominee should become unable or unwilling to serve for any reason, the Board may substitute another nominee upon recommendation of our Nominating Committee. OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE SEVEN NOMINEES DESCRIBED ABOVE. 9 Nominees for Class B- Directors (Class B- Shares Only) Must Select Two of Five Candidates Name and Age For a Term Expiring Background Leslie Henner Burns, 46 April 2004 Director of CME Holdings since its formation in August 200, director of CME since 2000 and a member of CME for more than 24 years. Selfemployed floor trader since 978 and President of Leslie A. Henner, Inc., a floor brokerage business, from 98 until 999. Robert L. "Buck" Haworth, 54 April 2004 Director of CME Holdings and Treasurer of the Board since its formation in August 200 and Treasurer of CME's Board since April 2000, a director of CME since 998 and a member of CME for more than 2 years. Previously served as CME's Treasurer in 998 and Assistant Vice President of the CME Audit Department in 979. Self-employed floor trader since 979; certified public accountant and a member of both the American Institute of Certified Public Accountants and the Illinois CPA Society. Bruce F. Johnson, 59 April 2004 Director of CME Holdings since its formation in August 200, director of CME since 998 and a member of CME for more than 30 years. President, director and part owner of Packers Trading Company, Inc., a futures commission merchant and former clearing member firm, since 969. Director of Eco Technology Inc., Nettle Creek Standard Bred Farm, Inc. and Smoke Rise Ranch Co. Howard J. Siegel, 45 April 2004 Director of CME Holdings since its formation in August 200, director of CME since 2000 and a member of CME for more than 24 years. Floor trader since 977. Jeffrey L. Silverman, 55 April 2004 Director of CME Holdings since its formation in August 200, director of CME since 994, Secretary of CME in 995 and a member of CME for more than 2 years. Floor trader since 979. Nominated by holders of Class B- shares.

10 0 Nominees for Class B-2 Director (Class B-2 Shares Only) Must Select One of Two Candidates Name and Age For a Term Expiring Background Patrick B. Lynch, 36 April 2004 Director of CME Holdings since its formation in August 200, director of CME since 2000 and a member of CME for more than 2 years. Independent floor trader since 990. Patrick J. Mulchrone, 44 April 2004 Director of CME Holdings since its formation in August 200, director of CME since 998 and a member of CME for more than 2 years. Previously a director of CME from 99 to 997 and served as CME's Second Vice Chairman from 993 to 997. President and owner of P.J. Mulchrone Co. and a floor broker and trader since 979. Director of Standard Bank & Trust of Hickory Hills, Illinois. Members of the Board Not Standing for Election This Year Set forth below is information about our directors who are not standing for election at the Annual Meeting. The ages of the directors set forth below are as of February 20, Name and Age Term Expires Background John W. Croghan, 7 April 2003 Director of CME Holdings since its formation in August 200, director of CME since 200 and member of CME for more than one year. Director of Republic Services, Inc. and Schwarz Paper Co. Previously Founder and Chairman of Lincoln Capital Management and President of Lincoln Partners. Terrence A. Duffy, 43 April 2003 Vice Chairman of CME Holdings' Board since its formation in August 200 and of CME's Board since 998, a director of CME since 995 and a member of CME for more than 20 years. President of T.D.A. Trading, Inc. since 98. Daniel R. Glickman, 57 April 2003 Director of CME Holdings since its formation in August 200 and director of CME since 200. Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld since February 200. Previously, U.S. Secretary of Agriculture from March 995 through January 200 and member of the United States Congress, representing a district in Kansas, from January 977 through January 995. Yra G. Harris, 48 April 2003 Director of CME Holdings since its formation in August 200, director of CME since 997 and a member of CME for more than 23 years. Independent floor trader since 977. Gary M. Katler, 55 April 2003 Director of CME Holdings since its formation in August 200 and director of CME since 993. Head of the Professional Trading Group of Fimat USA since November Previously, Senior Vice President of ING Barings Futures and Options Inc. from 994 through 2000.

11 James E. Oliff, 53 April 2003 Second Vice Chairman of CME Holdings' Board since its formation in August 200 and of CME's Board since 998, a director of CME since 994 and a member of CME for more than 24 years. Previously served on CME's Board from 982 to 992. President and Chief Executive Officer of FFast Trade U.S., LLC, since December 200, Chief Operating Officer of the U.S. operations of FFastFill, Inc. since December 200, Executive Director of International Futures and Options Associates since 996, President of FILO Corp., a floor brokerage business, since 982 and President of LST Commodities, LLC (an introducing broker) from 999 until January Visiting lecturer in financial market ethics at the Lemberg School of International Finance and Economics at Brandeis University, Waltham, Massachusetts. William G. Salatich, Jr., 50 April 2003 Director of CME Holdings since its formation in August 200, director of CME since 997 and a member of CME for more than 26 years. Independent floor broker and trader since 975. John F. Sandner, 60 April 2003 Special Policy Advisor and a director of CME Holdings since its formation in August 200 and Special Policy Advisor to CME since 998, a director of CME since 977 and a member of CME for more than 28 years. Previously Chairman of CME's Board for 3 years. President and CEO of RB&H Financial Services, L.P., a futures commission merchant and one of our clearing member firms, since 985 and Chairman and CEO of FreeDrive.com, an Internet business, from 998 until 200. Verne O. Sedlacek, 47 April 2003 Director of CME Holdings since its formation in August 200 and director of CME since 997. Executive Vice President and Chief Operating Officer of Commonfund Group since January Previously, President and Chief Operating Officer of John W. Henry & Company, Inc., a commodity trading advisor, from 998 through January Executive Vice President and Chief Financial Officer of the Harvard Management Company, Inc., a 50(c) (3) investment advisor and a wholly owned subsidiary of Harvard University, from 983 to 998. Director of the Futures Industry Association and Common Fund Capital Inc. Member of the Global Markets Advisory Committee of the Commodity Futures Trading Commission. 2 MEETINGS OF THE BOARD AND BOARD COMMITTEES Our Board and the Board of our predecessor company, CME, held 5 meetings during 200. In addition to meetings of the full Board, some directors also attended meetings of Board committees on which they serve. Each incumbent director attended at least 75% of the Board meetings and meetings of committees of which he or she was a member during the 200 fiscal year, except for Messrs. Glickman and Scholes. The Board of Directors has a standing Executive Committee, Audit Committee, Compensation Committee and Nominating Committee. Set forth below is a brief summary of each committee, its members and the number of meetings that it held during 200. Name of Committee and Members Committee Functions Number of Meetings During 200 Executive Scott Gordon, Chairman H. Jack Bouroudjian Timothy R. Brennan Terrence A. Duffy Martin J. Gepsman Robert L. Haworth Leo Melamed Patrick J. Mulchrone James E. Oliff John F. Sandner William R. Shepard Jeffrey L. Silverman Exercises the authority of Board between Board meetings, except in cases where action of the entire Board is required by our charter, bylaws or applicable law. 0 Audit Robert L. Haworth, Chairman John W. Croghan Paul Kimball William P. Miller II Verne O. Sedlacek Recommends to the Board the selection of the independent public accountants. Reviews the quarterly and annual financial 8

12 statements and audit results and reports, including management comments and recommendations. Reviews the results and scope of audits and other services provided by our independent auditors. Reviews accounting and internal control procedures and policies. Reviews risk exposure of actual or threatened litigation. Reviews significant accounting policies, estimates, audit adjustments and other matters as required. Nominating Terrence A. Duffy, Chairman Yra G. Harris James E. Oliff John F. Sandner Verne O. Sedlacek Reviews qualifications of potential candidates for Equity Directors on the Board who are nominated by the Board. 4 Compensation Verne O. Sedlacek, Chairman Terrence A. Duffy Scott Gordon Robert L. Haworth Paul Kimball Recommends compensation for officers, determines employee compensation policy and administers employee benefit plans. 9 3 The Nominating Committee considers nominees recommended by shareholders 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 consent of the proposed nominee to serve as a director if elected. Recommendations should be addressed to the Nominating Committee, in care of Ms. Ann M. Cresce, Corporate Secretary, Chicago Mercantile Exchange Holdings Inc., 30 South Wacker Drive, Chicago, Illinois DIRECTORS' COMPENSATION AND BENEFITS Each director receives an annual stipend of $20,000, plus a meeting attendance fee of $,000 for each regular meeting of our Board that he or she attends, excluding special administrative meetings. Directors also receive an attendance fee of $,000 for each committee meeting. In addition, directors receive an attendance fee of $,000 for each meeting of special Board hearing committees which are appointed as needed. Effective July 200, directors also receive a $,000 fee for attendance at each functional committee meeting, including the arbitration, business conduct, market regulation oversight, membership, probable cause, pit supervision and trading floor operations committees. All committee fees are subject to a $2,000 limit, per director, per committee, per year. The limit for 200 was $6,000. Directors also receive reimbursement of expenses for travel to Board meetings. Our Chairman, Mr. Gordon, receives an annual stipend of $350,000, plus reimbursement of other Board-related expenses. The four additional Board officers, Messrs. Duffy, Oliff, Gepsman and Haworth, each receive an annual stipend of $50,000 plus reimbursement of other Board-related expenses. Our Chairman Emeritus and Senior Policy Advisor, Mr. Melamed, and our Special Policy Advisor, Mr. Sandner, each receive an annual stipend of $200,000, plus reimbursement of other Board-related expenses. EXECUTIVE OFFICERS The following table sets forth information with respect to our executive officers. Each of the executive officers holds the same position with respect to the operations of both CME and CME Holdings. The ages of the executives set forth below are as of February 20, Name and Age Position Background James J. McNulty, 50 President and Chief Executive Officer Appointed to present position with CME Holdings upon its formation in August 200 and with CME in February Previously 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 now known as UBS Warburg. General Partner with O'Connor and Associates, a futures and options trading organization and a pioneer in

13 sophisticated risk management technology, from 987 to 992. From 984 to 987, he was the founder and President of Hayes & Griffith Futures, Inc. Director of the National Futures Association and World Business Chicago. Member of the Board of Visitors of the University of Illinois at Chicago College of Liberal Arts and Sciences. 4 Craig S. Donohue, 40 Phupinder Gill, 4 David G. Gomach, 43 Scott L. Johnston, 37 James R. Krause, 53 Managing Director and Chief Administrative Officer Managing Director and President, Clearing House Division Managing Director and Chief Financial Officer Managing Director and Chief Information Officer Managing Director, Operations and Enterprise Computing Appointed to present position with CME Holdings upon its formation in August 200 and with CME in April 200. Managing Director, Business Development and Corporate/Legal Affairs of CME from March 2000 to April 200 and Senior Vice President and General Counsel of CME from October 998 to March Vice President, Division of Market Regulation from 997 to 998 and Vice President and Associate General Counsel of CME from 995 to 997. Appointed to present position with CME Holdings upon its formation in August 200 and with CME in 998. Senior Vice President, Clearing House Division of CME from May 997 to July 998 and Vice President from May 994 to May 997. Numerous other positions with CME since 988. Appointed to present position with CME Holdings upon its formation in August 200 and with CME in March Senior Vice President and Chief Financial Officer of CME from December 997 to March 2000, Vice President, Administration and Finance, and Chief Financial Officer of CME from June 997 to December 997 and Vice President, Administration and Finance of CME from December 996 to June 997. Certified public accountant. Appointed to present position with CME Holdings upon its formation in August 200 and with CME in April Managing Director in the Information Technology Division at UBS Warburg, an investment banking firm, from 998 to Also served as that firm's Executive Director in the Foreign Exchange/Interest Rate Technology Division from 996 to 997 and as Director in the Foreign Exchange Division from 994 to 996. Appointed to present position with CME Holdings upon its formation in August 200 and with CME in June 200. CME's Senior Vice President, Enterprise Computing from November 998 to June 200 and Vice President, Systems Development from December 988 to November Satish Nandapurkar, 38 Managing Director, Products and Services Appointed to present position with CME Holdings upon its formation in August 200 and with CME in April 200, when his title was changed from Managing Director, e-business of CME, which he had held since March Prior to joining CME, Head of Strategic Solutions for OptiMark Technologies. Managing Director and Global Head of Foreign Exchange Options for Bank of America in Chicago from 997 to 999, Managing Director and Head of Structured Equity Products Trading at Deutsche Bank Morgan Grenfell from 996 to 997 and Managing Director and Global Head of Exotic Options and Quantitative Methodologies for Swiss

14 Lewis C. Ting, 50 Nancy W. Goble, 48 Managing Director, Organizational Development Managing Director, Chief Accounting Officer Bank Corporation in London from 994 to 996. Appointed to present position with CME Holdings upon its formation in August 200 and with CME in March Prior to joining CME, he owned a consulting business specializing in human resources, employee development and organizational change from 996 to Prior to that, Senior Vice President for Talegen, an insurance subsidiary of Xerox's Financial Services Division. Appointed to present position with CME Holdings and CME in February Director and Controller of CME Holdings from August 200 to February 2002 and of CME from July 2000 to February Associate Director and Assistant Controller of CME from October 997 to July Senior Vice President and Chief Financial Officer with Richard Ellis Inc., a commercial real estate firm, from 993 until 997. Certified public accountant. 6 SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS The following table shows, as of February 20, 2002, the amount of common stock beneficially owned by each of our directors and by each executive officer named in the Summary Compensation Table on page of this proxy statement, and by all directors and executive officers as a group. In general, "beneficial ownership" includes those shares over which a director or executive officer has the power to vote, or the power to transfer, and stock options that are currently exercisable or will become exercisable within 60 days of February 20, Except as otherwise noted, the persons named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them. Beneficial Ownership Table Name() Number of Shares Class A Class Percent of Class Number of Shares Class B Class Percent of Class Percent of Vote as a Single Class (2) James J. McNulty(3) 25,787 25,787 25,787 25,786 Scott Gordon(4) 2,025 2,025 2,025 2,07 H. Jack Bouroudjian,500,500,500,499 Timothy R. Brennan(5) 6,025 6,025 6,025 6,022 Leslie Henner Burns(6) 9,000 9,000 9,000 8,998 John W. Croghan(7) 4,500 4,500 4,500 4,499 Terrence A. Duffy(8) 4,525 4,525 4,525 A- A- A- A- A- A- A- 2.9 % B- B-2 B-3 B-4 B- B-2 B-3 B % 2.9 % B-3 B- B-3 B-4 2 B- B- B- B-4

15 4,523 Martin J. Gepsman(9),525,525,525,523 A- Daniel R. Glickman 0 B-3 B-4 7 Yra G. Harris(0) 7,500 7,500 7,500 7,497 Robert L. Haworth 4,525 4,525 4,525 4,523 Bruce F. Johnson 4,525 4,525 4,525 4,523 Gary M. Katler(),500,500,500,499 Paul Kimball 0 Patrick B. Lynch 3,000 3,000 3,000 2,999 Leo Melamed 3,000 3,000 3,000 2,999 William P. Miller II 0 Patrick J. Mulchrone 9,025 9,025 9,025 9,02 John D. Newhouse(2) 0,525 0,525 0,525 0,520 James E. Oliff(3) 3,025 3,025 3,025 3,023 Mark G. Papadopoulos Robert J. Prosi(4) 6,000 6,000 6,000 5,998 William G. Salatich, Jr.(5) 4,525 4,525 4,525 4,523 A- A- A- A- A- A- A- A- A- A- A- A- 2 B-2 B-3 B- B-4 B- B-4 B-3 B-2 B-2 3 B- B-2 B-3 B-4 B-2 B-3 B-4 B-2 B-4 2 B-4 B- B-3 B- B-4 8 John F. Sandner 25,525 25,525 A- 3 2 B- B-2

16 25,525 25,55 Myron S. Scholes 0 Verne O. Sedlacek 0 William R. Shepard(6) 9,025 9,025 9,025 9,02 Howard J. Siegel 0,500 0,500 0,500 0,497 Jeffrey L. Silverman(7) 6,025 6,025 6,025 6,022 Craig S. Donohue 0 Phupinder Gill 0 Scott L. Johnston 0 James R. Krause 0 Directors and Executive Officers as a 372,62 group (37 persons)(8) 372,62 372,62 372,095 A- A- A- A % B-3 B-4 B- B-2 B-3 B-4 B- B-3 B- B-3 B-4 B- B-2 B-3 B % 5.02 % Less than %. () The address for all persons listed in the table is Chicago Mercantile Exchange Holdings Inc., 30 South Wacker Drive, Chicago, Illinois (2) Other than with respect to the election of Class B directors and some matters relating to membership interests associated with Class B shares, holders of both classes of voting common stock will vote together as a single class on all matters to be presented for a vote of shareholders, unless otherwise required by law. (3) Mr. McNulty's total represents shares that Mr. McNulty could acquire if he exercised the vested portion of an option he received in February The number of shares is presented to the nearest whole number that could be exercised. The option was vested with respect to 60% of the shares subject thereto as of February The option vests with respect to an additional 20% of the shares subject thereto in each of February 2003 and The terms of the option are described in the section of this proxy statement entitled "Executive Compensation McNulty Employment Agreement." As of February 20, 2002, Mr. McNulty had not exercised the option. (4) Includes 3,000 Class A-, 3,000 Class, 3,000 Class and 2,999 Class shares and one Class B-2 share held in a trust over which Mr. Gordon has investment and voting power. Also includes 8,025 Class A-, 8,025 Class, 8,025 Class, 8,08 Class, two Class B-, two Class B-2 and two Class B-3 shares and one Class B-4 share which are owned by Tokyo-Mitsubishi Futures (USA), Inc. over which he exercises voting power. Mr. Gordon disclaims beneficial ownership of the shares owned by Tokyo- Mitsubishi Futures (USA), Inc. (5) Includes,500 Class A-,,500 Class,,500 Class and,499 Class shares and one Class B-3 share held through Brennan Enterprises, an S Corporation of which Mr. Brennan is the 9 owner. Also includes 25 Class A-, 25 Class, 25 Class, and 24 Class shares and one Class B-4 share as to which Mr. Brennan shares joint ownership, but over which he does not have voting power. (6) Includes 4,500 Class A-, 4,500 Class, 4,500 Class and 4,499 Class shares and one Class B- share held through LEJJ Limited Partnership, over which Ms. Burns exercises voting and investment power. (7) Includes 4,500 Class A-, 4,500 Class, 4,500 Class and 4,499 Class shares and one Class B- share held in a trust over which Mr. Croghan exercises voting and investment power. (8) Includes 25 Class A-, 25 Class, 25 Class, and 24 Class shares and one Class B-4 share as to which Mr. Duffy shares joint ownership and has voting power.

17 (9) Includes 25 Class A-, 25 Class, 25 Class, and 24 Class shares and one Class B-4 share as to which Mr. Gepsman shares joint ownership and has voting power. (0) Includes 300 Class A-, 300 Class, 300 Class, and 299 Class shares and one Class B-2 share which are not owned by Mr. Harris, but which are held in his name and over which he exercises voting power. () Includes,500 Class A-,,500 Class,,500 Class and,499 Class shares and one Class B-3 share owned by Fimat USA as to which Mr. Katler has voting power. Mr. Katler disclaims beneficial ownership of the shares owned by Fimat USA. (2) Includes 25 Class A-, 25 Class, 25 Class, and 24 Class shares and one Class B-4 share as to which Mr. Newhouse shares joint ownership and has voting power. Also includes 0,500 Class A-, 0,500 Class, 0,500 Class and 0,496 Class shares, three Class B-2 shares and one Class B-3 share owned by John F. Newhouse & Company, which is owned by Mr. Newhouse. (3) Includes 25 Class A-, 25 Class, 25 Class, and 24 Class shares and one Class B-4 share as to which Mr. Oliff shares joint ownership, but over which he does not have voting power. Excludes 4,500 Class A-, 4,500 Class, 4,500 Class and 4,499 Class shares and one Class B- share and 3,000 Class A-, 3,000 Class, 3,000 Class and 2,999 Class shares and one Class B-2 share held through two trusts in the names of each of his parents. Mr. Oliff has no voting or ownership power over these trusts, and he disclaims beneficial ownership for the shares held in trust. (4) Includes,500 Class A-,,500 Class,,500 Class and,499 Class shares and one Class B- share owned by Futuresinet as to which Mr. Prosi has voting power. Mr. Prosi disclaims beneficial ownership of the shares owned by Futuresinet. (5) Includes 25 Class A-, 25 Class, 25 Class, and 24 Class shares and one Class B-4 share as to which Mr. Salatich shares joint ownership, but over which he does not have voting power. (6) Includes 25 Class A-, 25 Class, 25 Class, and 24 Class shares and one Class B-4 share as to which Mr. Shepard shares joint ownership and has voting power. (7) Includes,500 Class A-,,500 Class,,500 Class and,499 Class shares and one Class B-3 share owned by Mr. Silverman's wife as to which he disclaims beneficial ownership. Also includes 25 Class A-, 25 Class, 25 Class, and 24 Class shares and one Class B-4 share as to which Mr. Silverman shares joint ownership and has voting power. (8) Includes options exercisable by Mr. McNulty as explained in footnote (3). 20 PROPOSAL 2 ELECTION OF NOMINATING COMMITTEES Our bylaws provide that holders of Class B shares have the right to elect the members of their respective Class B Nominating Committees. Each Class B Nominating Committee is composed of five members who serve for a term of one year. The existing Committee members are responsible for selecting 0 candidates to stand for election as members of a particular Class B Nominating Committee. At the Annual Meeting, holders of Class B- shares, holders of Class B-2 shares and holders of Class B-3 shares will be asked to vote on the election of five members to their respective Class B Nominating Committees. Nominees for Class B- Nominating Committee (Class B- Shares Only) Select Only Five of 0 Candidates Name and Age Member Since Background Jeffrey R. Carter, Independent trader and holder of Class B- and B-3 shares. Larry S. Fields, Independent trader and holder of a Class B- share. John C. Garrity, Independent floor trader and holder of Class B-, B-3 and B-4 shares. Joseph H. Gibbons, Independent floor trader and holder of a Class B- share. Donald A. Huizinga, Independent floor trader and holder of a Class B- share. Lonnie Klein, Independent trader and holder of Class B-, B-2, B-3 and B-4 shares. William F. Kulp, Independent trader and holder of Class B-, B-3 and B-4 shares. John J. McGuire, Independent floor trader and holder of Class B- shares. Steven R. Prosniewski, Independent trader and holder of Class B- and B-4 shares. Irwin Rosen, Independent floor broker and trader and holder of Class B- and B-3 shares.

18 2 Nominees for Class B-2 Nominating Committee (Class B-2 Shares Only) Select Only Five of 0 Candidates Name and Age Member Since Background Samuel T. Bailey, Independent broker and holder of a Class B-2 share. John W. Goldsberry, Principal with Man Financial Inc, a registered floor broker and qualified in the IMM division. Neal C. Pagano, Independent floor broker and holder of a Class B-2 share. Ronald A. Pankau, Independent floor broker and holder of a Class B-2 share. Steven D. Peake, Independent broker and holder of a Class B-2 share. Ronald D. Sippel, Independent trader and holder of Class B-, B-2, B-3 and B-4 shares. Scott A. Szykowny, Independent floor trader and holder of a Class B-2 share. Stuart A. Unger, Independent floor broker and holder of a Class B-2 share. Michael J. Walsh, Independent floor broker and holder of a Class B-2 share. Barry D. Ward, Independent trader and holder of a Class B-2 share. Nominees for Class B-3 Nominating Committee (Class B-3 Shares Only) Select Only Five of 0 Candidates Name and Age Member Since Background J. Kenny Carlin, Independent floor trader and holder of a Class B-3 and B-4 share. David M. Duckler, Independent floor trader and holder of a Class B-3 share. Joel P. Glickman, Independent trader and holder of a Class B-3 share. Mark O. Hinken, Independent floor broker and holder of a Class B-3 share. Dro Y. Kholamian, Independent floor trader and holder of a Class B-3 and B-4 share. Brian M. Konlon, Independent floor broker and holder of a Class B-3 share. George J. Malfas, Independent floor broker and holder of a Class B-3 share. Ronald S. Stephani, Independent floor trader and holder of a Class B-3 share. Peter D. Theodore, Independent floor trader and holder of a Class B-3 and B-4 share. Brian M. Young, Independent floor broker and holder of a Class B-3 and B-4 share. 22 Background and Reasons for the Charter Amendment PROPOSAL 3 APPROVAL OF CHARTER AMENDMENT In connection with our demutualization, our Board undertook to streamline the Board in a two-step process. The first step occurred at the Annual Meeting of Shareholders held in April 200, at which our Board was reduced from 39 directors to 30 directors. The second step will occur at this year's Annual Meeting, at which we are required, under the terms of our charter, to further reduce the size of our Board to 9 directors. This year, our Nominating Committee was charged with the formidable task of nominating candidates to our Board, in conjunction with the reduction of the Board's size to 9 directors. Under the terms of our charter, six of our 9 directors are required to be elected by only the holders of Class B shares. The remaining 3 are Equity Directors (elected by Class A and Class B shareholders voting together as a single class). Seven of the directorships open for election at this year's Annual Meeting are Equity Directors. In connection with this year's Annual Meeting, the Nominating Committee was required to fill the slate of seven Equity Directors with persons who represent a sufficiently broad and diverse set of interests at a time when the terms of 20 directors, each eminently qualified and valuable Board members, expired. In

19 conducting this process, our Nominating Committee reviewed numerous candidates and concluded that creating a Board that fully and appropriately represented the broad and diverse interests of our shareholders and our corporate objectives and provided for management representation was difficult given the limitation of 3 Equity Directors contained in our charter. At its January 9, 2002 meeting, our Nominating Committee recommended that our Board approve an amendment to our charter that would increase the size of our Board to allow for one additional Equity Director. The Nominating Committee further recommended that our Board appoint Mr. McNulty, our President and Chief Executive Officer, to fill the vacancy that would be created by the new directorship. This appointment would be made following the first organizational meeting of our Board elected at the Annual Meeting. The Nominating Committee also recommended that our bylaws be amended to require that, in the future, our Nominating Committee include the Chief Executive Officer among its nominees for Equity Directors. In this proxy statement, we refer to the class of directors whose term expires at the Annual Meeting of Shareholders to be held in April 2004 as our Class I Directors. We refer to the class of directors whose term expires at the Annual Meeting of Shareholders to be held in April 2005 as our Class II Directors. Our Nominating Committee recommended that the directorship be added to the Class II Directors, in order to ensure an even division of 0 directors in each class. As described in our previous proxy statements and prospectuses, this type of classified board is designed to help ensure against an undesired change in control of our Board in any one-year period. At its January 5, 2002 meeting, our Board considered the recommendation of the Nominating Committee and the Charter Amendment, the complete text of which is attached as Exhibit A to this proxy statement. After thorough discussion of the Charter Amendment and related issues, the Board determined, based on the recommendation of the Nominating Committee, that it is desirable to cause the adoption of the Charter Amendment in order to create a Board that represents broad and diverse interests and our corporate objectives, and includes management representation. The Board further concluded that if the Charter Amendment is approved, the Board will appoint James J. McNulty, our President and Chief Executive Officer, to fill the vacancy created by the new directorship. The term of Mr. McNulty's appointment will expire at the Annual Meeting of Shareholders to be held in April 2003, at which time Mr. McNulty will stand for election along with other nominees for Class II Directors. 23 In connection with its approval of the Charter Amendment, at its January 5, 2002 meeting, our Board also approved an amendment to our bylaws that would require our Nominating Committee to include the Chief Executive Officer as a nominee for an Equity Director included among our Class II Directors. The amendment will be effective only if our shareholders approve the Charter Amendment. The complete text of the proposed Charter Amendment is attached as Exhibit A to this proxy statement. We urge you to read it carefully. AFTER CAREFUL CONSIDERATION, OUR BOARD OF DIRECTORS HAS DETERMINED THAT THE CHARTER AMENDMENT IS ADVISABLE AND IN THE BEST INTEREST OF OUR SHAREHOLDERS AND HAS ADOPTED AND APPROVED THE CHARTER AMENDMENT. OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" ADOPTION OF THE CHARTER AMENDMENT. ALL OF OUR DIRECTORS WHO CONSIDERED THE CHARTER AMENDMENT CONCUR WITH THE FOREGOING DETERMINATION AND RECOMMENDATION. PROPOSAL 4 RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS The Board, acting on the recommendation of the Audit Committee, has appointed Arthur Andersen LLP to serve as our independent public accountants for the fiscal year ending December 3, Arthur Andersen LLP served as the auditor for our financial statements for the fiscal year ended December 3, 200. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS OUR INDEPENDENT PUBLIC ACCOUNTANTS FOR THE 2002 FISCAL YEAR. Audit Fees The aggregate fees billed or expected to be billed by Arthur Andersen LLP for professional services rendered for the audit of our annual financial statements for the fiscal year ended December 3, 200 and for the review of the financial statements included in our Quarterly Reports on Form 0-Q for that fiscal year were $330,000. Financial Information Systems Design and Implementation Fees Arthur Andersen LLP did not bill us for any fees for professional services rendered for information technology services relating to financial information systems design and implementation for the fiscal year ended December 3, 200.

20 All Other Fees The aggregate fees billed by Arthur Andersen LLP for professional services rendered to us, other than the services described above under "Audit Fees" and "Financial Information Systems Design and Implementation Fees," for the fiscal year ended December 3, 200 were $728,875. Representatives of Arthur Andersen LLP will be present at the annual meeting, will be available to respond to appropriate questions and may make a statement if they so desire. If the appointment of Arthur Andersen LLP is not ratified by our shareholders, our Board of Directors will consider appointing other independent public accountants based on the recommendation of the Audit Committee. 24 REPORT OF THE AUDIT COMMITTEE The Audit Committee oversees our financial reporting process on behalf of the Board of Directors. The Audit Committee consists of five independent directors as defined in the listing standards of the New York Stock Exchange. Its duties and responsibilities are set forth in the Audit Committee Charter adopted by the Board and attached to this proxy statement as Exhibit B. As set forth in more detail in the Audit Committee Charter, the primary responsibilities of our Audit Committee fall into three broad categories: to serve as an independent and objective party to monitor our financial reporting process and internal control system; to review and appraise the audit efforts of our independent public accountants and internal auditing department; and to provide an open avenue of communication among the independent public accountants, financial and senior management, the internal auditing department and the Board of Directors. The Audit Committee, during the course of each fiscal year, devotes the attention that it deems necessary and appropriate to each of the matters assigned to it under the Audit Committee's Charter. To carry out its responsibilities, the Audit Committee met eight times during fiscal year 200 and four times during 2002 in regards to fiscal year 200. In the course of fulfilling its responsibilities, the Audit Committee has: reviewed and discussed with management and our outside accountants all financial statements prior to their issuance and any significant accounting issues and been advised by management that all financial statements were prepared in accordance with generally accepted accounting principles; drafted, reviewed and discussed with management the Audit Committee Charter; discussed with representatives of our outside auditors, Arthur Andersen LLP, the matters required to be discussed pursuant to Statement on Auditing Standards No. 6, "Communication with Audit Committees"; received the written disclosures and the letter from our outside auditors required by Independence Standards Board Standard No., "Independence Discussions with Audit Committees"; discussed with our outside auditors their independence from CME Holdings and management; and considered whether the provision by the outside auditors of non-audit services is compatible with maintaining their independence. Based on the foregoing, the Audit Committee recommended to the Board of Directors that the audited financial statements for the year ended December 3, 200 be included in the company's Annual Report on Form 0-K for that year. 25 Management is responsible for the financial reporting process, including the system of internal controls, and for the preparation of consolidated financial statements in accordance with generally accepted accounting principles. Our independent public accountants are