EXHIBIT 10.1

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), effective as
of the 25th day of May 2004, by and between CHICAGO MERCANTILE EXCHANGE INC.
(“Employer” or “CME”), a Delaware Business Corporation, having its principal
place of business at 20 South Wacker Drive, Chicago, Illinois, and David G.
Gomach (“Employee”).

 

R E C I T A L S:

 

WHEREAS, Employer wishes to retain the services of Employee in the capacity of
Managing Director, Chief Financial Officer, upon the terms and conditions
hereinafter set forth and Employee wishes to accept such employment;

 

NOW, THEREFORE, in consideration of the mutual promises contained herein, the
parties mutually agree as follows:

 

1. Employment. Subject to the terms of the Agreement, Employer hereby agrees to
employ Employee during the Agreement Term (as defined in Section 2 below) as
Managing Director, Chief Financial Officer, and Employee hereby accepts such
employment. Employee shall report to Employer’s Chief Executive Officer. The
duties of Employee shall include, but not be limited to, the performance of all
duties associated with executive oversight and management of Employer’s Finance
Division.

 

On Tuesdays, Wednesdays and Thursdays of each work week during the Agreement
Term, Employee shall perform his duties hereunder at Employer’s principal place
of business in Chicago, Illinois or at such other place as business travel
dictates; provided, however, that Employee may work from his home (or other
suitable locations) on such days in the event he cannot travel to Chicago due to
inclement weather or personal issues that make travel impracticable. On Mondays
and Fridays of each work week during the Agreement Term, Employee shall perform
his duties hereunder at mutually convenient times from his home (or other
suitable locations) as necessary to fulfill his duties as Chief Financial
Officer. Subject to the foregoing, Employee shall devote his business time,
ability and attention to the business of Employer during the Agreement Term, as
directed by the Chief Executive Officer.

 

Notwithstanding anything to the contrary contained herein, nothing in the
Agreement shall preclude Employee from participating in the affairs of any
governmental, educational or other charitable institution, engaging in
professional speaking and writing activities, and serving as a member of the
board of directors of a publicly held corporation (except for a competitor of
Employer), provided Employee notifies Employer’s Board of Directors (“Board”)
prior to his participating in any such activities and as long as the Board does
not determine that any such activities interfere with or diminish Employee’s
obligations under the Agreement. Employee shall be entitled to retain all fees,
royalties and other

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compensation derived from such activities, in addition to the compensation and
other benefits payable to him under the Agreement, but shall disclose such fees
to Employer.

 

2. Agreement Term. Employee shall be employed hereunder for a term commencing on
May 24, 2004 and ending on December 31, 2005, unless sooner terminated in
accordance with Section 6 below (“Agreement Term”).

 

3. Compensation.

 

  (a) Base Salary. During the Agreement Term, Employer shall pay to Employee a
base salary at a rate of not less than $320,000 per annum (“Base Salary”)
payable in accordance with Employer’s normal payment schedule.

 

  (b) Bonuses. Subject to this Section 3(b) and Section 6, Employee shall be
entitled to receive an annual bonus for 2004 (the “2004 Annual Bonus”). Employee
shall be paid the 2004 Annual Bonus so long as he is employed by Employer on
November 1, 2004; provided, however, that Employee shall nonetheless be entitled
to receive the 2004 Annual Bonus if at anytime (x) Employee’s employment is
terminated by Employer without Cause or (y) Employee terminates his employment
for Good Reason (each as defined in Section 6 below). If Employee is employed on
the date Employer customarily pays 2004 bonuses, he shall receive the 2004
Annual Bonus at such time. The amount of the 2004 Annual Bonus for which the
Employee is eligible shall be determined by multiplying $370,673 by a fraction,
where the numerator is the number of days elapsed from January 1, 2004 to the
last day of the Employee’s employment with Employer (the “Termination Date”) and
the denominator is 365 (in no case shall the fraction exceed 1). The 2004 Annual
Bonus shall in no case be paid to Employee later than 30 days following the
Termination Date and shall in all cases be paid in a single lump sum in cash.
For 2005 and years thereafter, Employee shall be eligible to receive bonuses at
the sole discretion of Employer.

 

  (c) Equity Awards. Subject to this Section 3(c) and Section 6, Employee shall
be entitled, with respect to each equity award which has been granted to
Employee prior to the date hereof which is not fully vested upon the Termination
Date, to receive pro rata vesting on the Termination Date of a portion of the
shares subject to such award that is subject to vesting during the vesting
period in which the Termination Date occurs (the “Current Tranche”) so long as
he is employed by Employer on November 1, 2004; provided, however, that Employee
shall nonetheless be entitled to receive the pro rata vesting of each Current
Tranche if Employee’s employment is terminated at anytime (x) by Employer
without Cause or (y) Employee terminates his employment for Good Reason (each as
defined in Section 6 below). Subject to this Section 3(c), Employee shall be
entitled to a

 

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number of shares of each Current Tranche (and no other tranche) that would have
vested following the Termination Date on the next vesting date for such tranche
equal to the number of shares subject to the Current Tranche multiplied by a
fraction, the numerator of which shall be the number of days elapsed to the
Termination Date since the date the previous tranche of the award vested and the
denominator of which shall be 365 (e.g., certain stock options vested on May 7,
2004 and the next tranche of such award shall vest on May 7, 2005. If Employee’s
Termination Date was January 1, 2005, the numerator would be the number of days
elapsed from May 7, 2004 to January 1, 2005 and the denominator would be 365).
The terms and conditions of any additional equity grants made to Employee after
the date hereof shall be detailed in the applicable award agreement. For the
avoidance of doubt, Exhibit A hereto lists each equity grant held by Employee
which is not fully vested as of the date hereof, the vesting dates for such
grants and the applicable tranches.

 

  (d) Stock Option Exercise Period and Exercise Methods. Notwithstanding
anything to the contrary in any Employer plan or any underlying stock option
agreement, Employee shall have 2 years from the Termination Date to exercise any
vested CME stock options he then holds (including stock options that vest
pursuant to Section 3(c)); provided, however, that in no case shall such
extension extend the maximum term of any CME stock option. Employer shall permit
Employee to exercise vested CME stock options by tendering previously acquired
CME shares (so long as such shares have been held by Employee for at least six
months if such shares were acquired from CME) or by having Employer withhold CME
shares otherwise issuable in respect of such awards. Similarly, the Employee
shall be permitted to satisfy the minimum statutorily required tax withholding
obligations in respect of CME stock options and CME restricted stock by
tendering previously acquired CME shares (so long as such shares have been held
by Employee for at least six months if such shares were acquired from CME) or by
having Employer withhold CME shares otherwise issuable in respect of such
awards.

 

4. Benefits.

 

  (a) Employee shall be entitled to insurance, vacation and other employee
benefits commensurate with his position in accordance with Employer’s policies
for executives in effect from time to time.

 

  (b) Between May 24, 2004 and December 31, 2004, Employee shall be entitled to
four (4) work weeks (i.e., 12 days) of vacation time in addition to any
otherwise accrued but unused vacation time, three (3) weeks of which may be used
during the period from June 21, 2004 to July 16, 2004; provided that Employee
shall be reasonably available during those three (3) weeks to assist Employer
with closing the books for the fiscal quarter

 

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ending June 30, 2004, releasing its earnings report, meeting with Employer’s
audit committee and preparing for Employer’s earnings conference call.

 

5. Expense Reimbursement.

 

  (a) During the Agreement Term, Employer shall reimburse Employee, in
accordance with Employer’s policies and procedures, for all proper expenses
incurred by him in the performance of his duties hereunder.

 

  (b) During the Agreement Term, Employer will pay directly or reimburse
Employee for (i) round trip airfare between Appleton, Wisconsin and Chicago,
Illinois in connection with Employee’s weekly commute (which currently costs
approximately $260.00 per roundtrip) and ground transportation costs between the
airport and Employer’s Chicago office; or (ii) use of his personal car in
connection with his weekly commute from Appleton, Wisconsin to Chicago, Illinois
at the Internal Revenue Service allowable rate, which is currently 37.5 cents
per mile, and costs for parking at Employer’s headquarters.

 

  (c) Commencing as of July 1, 2004 and continuing until the end of the
Agreement Term, Employer will pay directly or reimburse Employee, up to a total
of $3000.00 per month, for the rental of a furnished one bedroom apartment in
the Chicago metropolitan area, including parking (or other similar
accommodations). Prior to executing a lease for any such apartment, Employee
shall provide a copy of the lease to Employer for its consent which will not be
unreasonably withheld.

 

  (d) Employer shall provide Employee with a full tax gross-up to make him whole
to the extent that expenses paid to Employee pursuant to this Section 5 are
taxable to him.

 

6. Termination.

 

  (a) Death. Upon the death of Employee, this Agreement shall automatically
terminate and all rights of Employee and his heirs, executors and administrators
to compensation and other benefits under this Agreement shall cease, except for
compensation which shall have accrued to the date of death, including accrued
Base Salary, and other employee benefits to which Employee is entitled upon his
death, in accordance with the terms of the plans and programs of CME. In the
event Employee’s employment terminates pursuant to this Section 6(a) after
September 1, 2004, his estate or beneficiary shall also be entitled to the bonus
and award vesting specified in Section 3(b) and 3(c) of this Agreement.

 

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  (b) Disability. Employer may, at its option, terminate this Agreement upon
written notice to Employee if Employee, because of physical or mental incapacity
or disability, fails to perform the essential functions of his position required
of him hereunder for a continuous period of 90 days or any 120 days within any
12-month period. The date of such notice shall be the Termination Date. Upon
such termination, all obligations of Employer hereunder shall cease, except for
payment of accrued Base Salary, and other employee benefits to which Employee is
entitled upon his termination hereunder, in accordance with the terms of the
plans and programs of CME. In the event of any dispute regarding the existence
of Employee’s disability hereunder, the matter shall be resolved as follows: (i)
by the determination of a physician selected by the Chief Executive Officer of
Employer; (ii) Employee shall have the right to challenge that determination by
presenting a contrary determination from a physician of his choice; (iii) in
such event, a physician selected by agreement of the Employee and the Chief
Executive Officer of Employer will make the final determination. The Employee
shall submit to appropriate medical examinations for purposes of making the
medical determinations hereunder. In the event Employee’s employment terminates
pursuant to this Section 6(b) after September 1, 2004, he shall also be entitled
to the bonus and award vesting specified in Section 3(b) and 3(c) of this
Agreement.

 

  (c) Cause. Employer may, at its option, terminate Employee’s employment under
this Agreement for Cause. As used in this Agreement, the term “Cause” shall mean
any one or more of the following:

 

  (i) any refusal by Employee to perform his duties and responsibilities under
this Agreement, as determined after investigation by the Board. Employee, after
having been given written notice by Employer, shall have seven (7) days to cure
such refusal;

 

  (ii) any intentional act of fraud, embezzlement, theft or misappropriation of
Employer’s funds by Employee, as determined after investigation by the Board, or
Employee’s admission or conviction of a felony or of any crime involving moral
turpitude, fraud, embezzlement, theft or misrepresentation;

 

  (iii) any gross negligence or willful misconduct of Employee resulting in a
financial loss or liability to Employer or damage to the reputation of Employer,
as determined after investigation by the Board;

 

  (iv) any breach by Employee of any one or more of the covenants contained in
Section 7 (including Exhibit C hereto) and 8 hereof;

 

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  (v) any violation of any rule, regulation or guideline imposed by CME or a
regulatory or self regulatory body having jurisdiction over Employer, as
determined after investigation by the Board.

 

The exercise of the right of CME to terminate this Agreement pursuant to this
Section 6(c) shall be made in writing and shall not abrogate any other rights or
remedies of CME in respect of the breach giving rise to such termination.

 

If Employer terminates Employee’s employment for Cause, Employee shall be
entitled to accrued Base Salary through the Termination Date and other employee
benefits to which Employee is then entitled, in accordance with the terms of the
plans and programs of CME. The Termination Date shall be the date of the written
notice to Employee given pursuant to the preceding paragraph. Upon termination
for Cause, Employee will forfeit any unvested or unearned compensation or
long-term incentives, unless otherwise provided herein or specified in the terms
of the plans and programs of CME.

 

  (d) Termination Without Cause. Upon 30 days prior written notice to Employee,
Employer may terminate this Agreement for any reason other than a reason set
forth in sections (a), (b) or (c) of this Section 6. If, prior to September 1,
2004, Employer terminates the employment of Employee hereunder for any reason
other than a reason set forth in subsections (a), (b) or (c) of this Section 6
and provided that, subject to subsection (g) below, Employee and Employer both
execute the release agreement in the form attached hereto as Exhibit B (the
“Release Agreement”):

 

  (i) Employee shall be entitled to receive (i) accrued Base Salary through the
Termination Date, (ii) other employee benefits to which Employee is then
entitled, in accordance with the terms of the plans and programs of Employer;
and (iii) the bonus and award vesting specified in Section 3(b) and Section 3(c)
of this Agreement; and

 

  (ii) a one time cash lump sum severance payment equal to 24 months of his Base
Salary, as defined herein, as of Termination Date.

 

If, on or after September 1, 2004, Employer terminates the employment of
Employee hereunder for any reason other than a reason set forth in subsections
(a), (b) or (c) of this Section 6, and provided that, subject to subsection (g)
below, Employee and Employer both execute the Release Agreement, then Employee
shall be entitled to receive (i) accrued Base Salary through the Termination
Date, and (ii) other employee benefits to which Employee is then entitled, in
accordance with the terms of the plans and programs of Employer. If Employer
terminates the employment of Employee pursuant to this Section 6(d), Employee
shall also be entitled to the bonus and award vesting specified in Section 3(b)
and Section 3(c) of this Agreement.

 

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  (e) Voluntary Termination. Upon 60 days prior written notice to CME (or such
shorter period as may be permitted by CME) (the end of such 60-day period or
such shorter period shall be the Termination Date), Employee may voluntarily
terminate his employment with CME prior to the end of the Agreement Term for any
reason. If Employee voluntarily terminates his employment pursuant to this
Section 6(e), and provided that, subject to subsection (g) below, Employee and
Employer both execute the Release Agreement, he shall be entitled to receive (i)
accrued Base Salary through the Termination Date; (ii) other employee benefits
to which Employee is then entitled, in accordance with the terms of the plans
and programs of CME and as otherwise set forth herein; and (iii) the bonus and
award vesting specified in Section 3(b) and Section 3(c) of this Agreement to
the extent he has satisfied the requirements thereunder.

 

  (f) Resignation with Good Reason. Employee may, at his option, resign from his
employment under this Agreement for Good Reason by written notice to the Company
without providing the 60 days prior written notice as required by Section 6(e)
at the end of the cure period referred to herein. The Termination Date shall be
the date of such notice. As used in this Agreement, the term “Good Reason” shall
mean a breach of this Agreement by Employer or a material and adverse change in
Employee’s duties and responsibilities, in either case that is not cured by
Employer within fifteen (15) days after receipt of written notice from Employee
specifying the alleged breach or change. If Employee resigns with Good Reason
and provided that, subject to subsection (g) below, Employee and Employer both
execute the Release Agreement, then Employee shall be entitled to receive (i)
accrued Base Salary through the Termination Date; (ii) other employee benefits
to which Employee is then entitled, in accordance with the terms of the plans
and programs of Employer and (iii) the bonus and award vesting specified in
Section 3(b) and Section 3(c) of this Agreement.

 

  (g) Release Agreement. Employer shall execute the Release Agreement unless
Employer reasonably believes that executing such Release Agreement would be
inconsistent with its fiduciary duties to its stockholders under applicable law.
In the event Employer executes the Release Agreement, Employee must also execute
the Release Agreement as a condition to the receipt of the bonus and award
vesting specified in Section 3(b) and Section 3(c) of this Agreement and the
amount set forth in Section 6(d)(ii) of this Agreement. In the event Employer
elects to not execute the Release Agreement, Employee shall not be required to
execute the Release Agreement and shall nonetheless be entitled, subject to the
other terms and conditions of this Agreement, to the receipt of the bonus and
award vesting specified in Section 3(b) and Section 3(c) of this Agreement and
the amount set forth in Section 6(d)(ii) of this Agreement.

 

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7. Confidentiality, Non-Competition and Non-Solicitation. Upon execution of this
Agreement, Employee shall also execute the Confidentiality, Non-Competition and
Non-Solicitation Agreement, in the form attached hereto as Exhibit C, which
shall be incorporated by reference herein and be made a part hereof.

 

8. Non-Disparagement. Employee will not make any comments to any third parties
relating to Employer, or any of its officers or directors, that are critical,
derogatory or which may tend to injure the reputation or business of Employer or
any of its officers or directors. Employer will instruct its officers and
directors not to make any comments to any third parties relating to Employee
that are critical, derogatory or which may tend to injure the reputation or
business of Employee. Nothing in this Agreement shall limit in any manner
whatsoever the ability of Employer or Employee to provide truthful and complete
information as may be required by any court or requested by any governmental
agency.

 

9. Survival. To the extent necessary to effectuate the terms of this Agreement
(including Exhibits hereto), terms of this Agreement which must survive the
termination of the Executive’s employment or the termination of this Agreement
shall so survive.

 

10. Restriction on Sale of CME Securities. Until the later of December 4, 2004
or three months following his Termination Date, Employee shall not sell,
transfer, encumber, assign or otherwise dispose of, or agree to sell, transfer,
encumber, assign or otherwise dispose of, any CME equity securities or any
derivative CME equity securities. Notwithstanding the foregoing, Employee shall
be permitted to sell shares of CME common stock solely to the extent necessary
to enable him to (i) exercise CME stock options he holds and (ii) satisfy the
statutorily required minimum withholding taxes that arise in connection with any
such stock option exercise. Notwithstanding the foregoing, after December 31,
2005, Employee shall not be subject to the restrictions imposed by the first
sentence of this Section 10.

 

11. Claw Back for Violation of Restrictive Covenants. If Employee breaches
Section 7 (including Exhibit C hereto, but excluding the provisions thereof
relating to confidentiality) and 8 of this Agreement, Employee (or, if
applicable, his beneficiaries or estate) shall promptly, at Employer’s request
(i) sell back to Employer all Acquired Shares (as defined below) held by
Employee (or, if applicable, his beneficiaries or estate) as of the date of such
breach, for a per share price equal to the price paid by Employee to acquire
such shares, and (ii) to the extent such Acquired Shares have previously been
sold or otherwise disposed of by Employee, other than by reason of death (or, if
applicable, by his beneficiaries or estate), repay to Employer the excess of (x)
the aggregate fair market value of such Acquired Shares calculated based on the
applicable closing share price of the

 

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Company’s common stock on the date of such sale or disposition over (y) the
aggregate exercise price of such Acquired Shares. For purposes of this Section
11, (A) the amount of the repayment described herein shall not be affected by
whether Employee (or, if applicable, his beneficiaries or estate) actually
received such fair market value with respect to such sale or other disposition,
and (B) repayment may, without limitation, be effected, at the discretion of
Employer, by means of offset against any amount owed by Employer to Employee
(or, if applicable, his beneficiaries or estate). For purposes of this
Agreement, “Acquired Shares” shall mean shares of Company common stock that were
acquired upon exercise of any stock options granted to Employee by Employer that
became vested as a result of Section 3(c) hereof. In addition, if Employee
breaches Section 7 (including Exhibit C hereto, but excluding the provisions
thereof relating to confidentiality) and 8 of this Agreement he shall, at
Employer’s request, promptly repay the 2004 Annual Bonus.

 

12. Arbitration. Except with respect to Sections 7 (including Exhibit C hereto)
and 8, any dispute or controversy between CME and Employee, whether arising out
of or relating to this Agreement, the breach of this Agreement, or otherwise,
shall be settled by arbitration in Chicago, Illinois, in accordance with the
following:

 

  (a) Arbitration hearings will be conducted by the American Arbitration
Association (AAA). Except as modified herein, arbitration hearings will be
conducted in accordance with AAA’s rules.

 

  (b) State and federal laws contain statues of limitation which prescribe the
time frames within which parties must file a law suit to have their disputes
resolved through the court system. These same statutes of limitation will apply
in determining the time frame during which the parties must file a request for
arbitration.

 

  (c) If Employee seeks arbitration, Employee shall submit a filing fee to the
AAA in an amount equal to the lesser of the filing fee charged in the state or
federal court in Chicago, Illinois. The AAA will bill Employer for the balance
of the filing and arbitrator’s fees.

 

  (d) The arbitrator shall have the same authority to award (and shall be
limited to awarding) any remedy or relief that a court of competent jurisdiction
could award, including compensatory damages, attorney fees, punitive damages and
reinstatement. Employer and Employee may be represented by legal counsel or any
other individual at their own expense during an arbitration hearing.

 

  (e) Judgment on the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof.

 

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  (f) Except as necessary in court proceedings to enforce this arbitration
provision or an award rendered hereunder, or to obtain interim relief, neither a
party nor an arbitrator may disclose the existence, content or results of any
arbitration hereunder without the prior written consent of CME and Employee.

 

13. Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed given when (i) delivered
personally or by overnight courier to the following address of the other party
hereto (or such other address for such party as shall be specified by notice
given pursuant to this Section) or (ii) sent by facsimile to the following
facsimile number of the other party hereto (or such other facsimile number for
such party as shall be specified by notice given pursuant to this Section), with
the confirmatory copy delivered by overnight courier to the address of such
party pursuant to this Section 13:

 

If to CME, to:

 

Craig S. Donohue

President and Chief Executive Officer

Chicago Mercantile Exchange

30 S. Wacker

Chicago, IL 60606

(312) 930-8275

 

If to Employee, to:

 

David G. Gomach

600 East Carrington Lane

Appleton, WI 54913

 

14. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision of this Agreement or the
validity, legality or enforceability of such provision in any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

 

15. Withholding. Notwithstanding any other provision of this Agreement, the
Employer may withhold from amounts payable under this Agreement all amounts
authorized or required to be withheld, including, without limitation, federal,
state, local and foreign taxes.

 

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16. Entire Agreement. This Agreement constitutes the entire Agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes and preempts any prior understandings, agreements or representations
by or between the parties, written or oral, which may have related in any manner
to the subject matter hereof, including, but not limited to, the Employment
Agreement between Employee and Employer dated as of July 10, 2003. No other
agreement or amendment to this Agreement shall be binding upon either party
including, without limitation, any agreement or amendment made hereafter unless
in writing, signed by both parties. Employee acknowledges that each of the
parties has participated in the preparation of this Agreement and for purposes
of principles of law governing the construction of the terms of this Agreement,
no party shall be deemed to be the drafter of the same.

 

17. Successors and Assigns. This Agreement shall be enforceable by Employee and
his heirs, executors, administrators and legal representatives, and by CME and
its successors and assigns.

 

18. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Illinois without
regard to principles of conflict of laws.

 

19. Acknowledgment. Employee acknowledges that he has read, understood, and
accepts the provisions of this Agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the date first written above.

 

Chicago Mercantile Exchange Inc.   David G. Gomach By:   

/s/ Craig S. Donohue

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/s/ David G. Gomach

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Date:    July 14, 2004   Date: July 14, 2004

 

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EXHIBIT A

 

UNVESTED EQUITY GRANTS

 

Stock Options

 

  • Stock Options covering 100,000 shares were granted to Employee on May 7,
2001 with a per share exercise price of $22. This stock option is fully vested
except with respect to 20,000 shares which are scheduled to vest May 7, 2005.

 

  • Stock Options covering 8,900 shares were granted to Employee on June 6, 2003
with a per share exercise price of $63.01. 1,780 shares underlying the stock
option are scheduled to vest on June 6, 2004 and on each of the next four
anniversaries of such date.

 

Restricted Stock

 

  • 1,300 shares of restricted stock were granted to Employee on June 6, 2003.
260 restricted shares are scheduled to vest on June 6, 2004 and on each of the
next four anniversaries of such date.

 

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EXHIBIT B

 

RELEASE AGREEMENT

 

For good and valuable consideration, CHICAGO MERCANTILE EXCHANGE INC. (“CME” or
the “Company”), a Delaware Business Corporation, having its principal place of
business at 20 South Wacker Drive, Chicago, Illinois, and David G. Gomach (the
“Employee”) hereby agrees to the terms of this agreement (this “Release
Agreement”) on the date indicated below:

 

1. Consideration. Subject to the Restated Employment Agreement between the
Company and the Employee, effective as of May 25, 2004 (the “Amended and
Restated Employment Agreement”) becoming effective and subject to this Release
Agreement becoming effective as set forth in Paragraph 4 below, the Employee
shall become entitled to receive the payments and benefits set forth in Sections
3(b), 3(c), 6(d) or 6(f) of the Amended and Restated Employment Agreement.

 

2. Release.

 

(a) The Employee, on behalf of himself, his heirs, executors, administrators,
successors and assigns, hereby irrevocably and unconditionally releases CME and
its parents, subsidiaries, divisions and affiliates, together with their
respective benefit plans (and their sponsors, fiduciaries and administrators),
owners, assigns, agents, directors, partners, officers, employees, attorneys and
representatives and any of their predecessors and successors and each of their
estates, heirs and assigns (collectively, the “CME Releasees”) from any and all
charges, complaints, claims, liabilities, obligations, promises, agreements,
causes of action, rights, costs, losses, debts and expenses of any nature
whatsoever, known or unknown, which the Employee or his heirs, executors,
administrators, successors or assigns ever had, now have or hereafter can, will
or may have (either directly, indirectly, derivatively or in any other
representative capacity) by reason of any matter, fact or cause whatsoever (i)
from the beginning of time to the date of this Agreement or (ii) relating to his
employment with CME or termination thereof. This release includes, without
limitation, all claims arising under any federal, state and local labor,
employment and/or anti-discrimination laws including, without limitation, the
federal Age Discrimination in Employment Act, Employee Retirement Income
Security Act, the Americans with Disabilities Act, Title VII of the Federal
Civil Rights Act, the Family and Medical Leave Act, the Illinois Human Rights
Act, the City of Chicago Human Rights Ordinance or the Cook County Human Rights
Ordinance. Nothing in this Paragraph 1(a) shall be deemed to release the
Employee’s rights to: (i) any vested benefits under any plans maintained by the
CME Releasees, (ii) indemnification as set forth in the Company’s by-laws, (iii)
enforce the terms of Sections 6(d), 6(e), 6(f) or 8 of the Amended and Restated
Employment Agreement, or (iv) enforce the terms of this Release Agreement.

 

(b) The Employee acknowledges and agrees that CME has fully satisfied any and
all obligations owed to the Employee arising out of the Employee’s employment
with CME, and no further sums are owed to the Employee by CME or by

 

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any of the other CME Releasees, except as expressly provided in Sections 6(d),
6(e) and 6(f) of the Amended and Restated Employment Agreement, to the extent
applicable, and this Release Agreement.

 

(c) The Employee represents that he currently has no complaints, charges or
lawsuits pending against CME or any of the other CME Releasees. The Employee
further covenants and agrees that neither he nor his heirs, executors,
administrators, successors or assigns will be entitled to any personal recovery
in any proceeding of any nature whatsoever against CME or any of the other CME
Releasees arising out of any of the matters released in this Paragraph 2.

 

(d) CME on behalf of itself and its parents, subsidiaries, divisions and
affiliates hereby irrevocably and unconditionally release the Employee, his
heirs, executors, administrators, successors and assigns (collectively, the
“Employee Releasees”) from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, causes of action, rights, costs, losses,
debts and expenses of any nature whatsoever, known or unknown, which CME and the
other CME Releasees ever had, now have or hereafter can, will or may have
(either directly or indirectly) by reason of any matter, fact or cause
whatsoever (i) from the beginning of time to the date of this Agreement or (ii)
arising out of, or relating to, the Employee’s employment and/or the end of his
employment with CME; provided, however, CME expressly does not release or
discharge the Employee from any claims, rights, demands, debts, dues, sums of
money, accounts, complaints, actions and causes of action which are based upon
acts or omissions that involve fraud or violation of applicable law.
Notwithstanding the foregoing, nothing in this Paragraph 1(d) shall impair CME’s
right to seek enforcement of this Release Agreement or the covenants set forth
in the Confidentiality, Non-Complete and Non-Solicitation Agreement attached to
the Amended and Restated Employment Agreement or Section 8, 10 or 11 of the
Amended and Restated Employment Agreement.

 

3. Consultation with Attorney/Voluntary Agreement. The Employee acknowledges
that (a) CME has advised the Employee of his right to consult with an attorney
prior to executing this Release Agreement, (b) the Employee has carefully read
and fully understands all of the provisions of this Release Agreement, and (c)
the Employee is entering into this Release Agreement, including the releases set
forth in Paragraph 1 above, knowingly, freely and voluntarily in exchange for
good and valuable consideration, including the obligations of CME under the
Agreement.

 

4. Consideration & Review & Revocation Period.

 

(a) The Employee acknowledges and agrees that he is receiving consideration, in
addition to those payments and benefits to which he is otherwise entitled, in
exchange for his consent to this Release Agreement.

 

(b) The Employee acknowledges that he has at least twenty-one (21) calendar days
to consider the terms of this Release Agreement, although he may sign it sooner.

 

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(c) The Employee will have seven (7) calendar days from the date on which he
signs this Release Agreement to revoke his consent to the terms of this Release
Agreement. Such revocation must be in writing and must be addressed as follows:
Kathleen M. Cronin, Managing Director, General Counsel and Corporate Secretary,
Chicago Mercantile Exchange Inc., 20 South Wacker Drive, Chicago, Illinois
60606. Notice of such revocation must be received within the seven (7) calendar
days referenced above. In the event of such revocation by the Employee, this
Release Agreement shall not become effective and the Employee shall not have any
rights under Sections 3(b), 3(c), 6(d) or 6(f) of the Amended and Restated
Employment Agreement.

 

(d) Provided that the Employee does not revoke this Release Agreement, this
Release Agreement shall become effective on the eighth calendar day after the
date on which the Employee signs this Release Agreement.

 

5. No Admission of Wrongdoing. Nothing herein is to be deemed to constitute an
admission of wrongdoing by CME, any of the other CME Releasees, Employee or any
of the other Employee Releasees.

 

6. Assignment. This Release Agreement is personal to the Employee and may not be
assigned by the Employee. This Release Agreement is binding on, and will inure
to the benefit of, CME and the other CME Releasees, together with their
successor and assigns.

 

7. Enforceability. In the event that any one or more of the provisions of this
Release Agreement is held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remainder hereof will not in any way be
affected or impaired thereby and any such provision or provisions will be
enforced to the fullest extent permitted by law.

 

8. Governing Law; Jurisdiction. This Release Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Illinois
without regard to principles of conflict of laws. The state courts of Cook
County, Illinois and the United States District Court for the Northern District
of Illinois shall have the exclusive jurisdiction over any and all claims,
lawsuits and litigation relating to or arising out of this Release Agreement.

 

9. Entire Agreement. This Release Agreement and the Amended and Restated
Employment Agreement set forth the entire understanding between the Employee and
CME and supersede all prior agreements, representations, discussions, and
understandings concerning their subject matter. The Employee represents that, in
executing this Release Agreement, the Employee has not relied upon any
representation or statement made by CME or any other CME Releasees, other than
those set forth herein, with regard to the subject matter, basis or effect of
this Release Agreement or otherwise.

 

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IN WITNESS WHEREOF, the Employee has executed this Release Agreement on the date
indicated below.

 

Chicago Mercantile Exchange Inc.   David G. Gomach By:  

 

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Date:  

 

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  Date:  

 

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EXHIBIT C

 

CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION AGREEMENT

 

This Confidentiality, Non-Competition and Non-Solicitation Agreement (the
“Agreement”), is made and entered into this 25th day of May 2004, by and between
David G. Gomach (“Employee”) and CHICAGO MERCANTILE EXCHANGE INC. (“Employer” or
“CME”), a Delaware Corporation, having its principal place of business at 20
South Wacker Drive, Chicago, Illinois.

 

R E C I T A L S:

 

WHEREAS, Employee is employed by CME in the capacity of Chief Financial Officer;

 

WHEREAS, in performing the job functions of Chief Financial Officer, and any
subsequent executive or managerial position, Employee has had, and will continue
to have, personal contact with CME customers, business partners, and employees,
and Employee has had, and will continue to have, access to CME confidential,
proprietary and trade secret information;

 

WHEREAS, CME has a legitimate business interest in maintaining its customer and
employee relationships and protecting its confidential, proprietary and trade
secret information from disclosure, and Employee acknowledges CME’s legitimate
interests in protecting these relationships and this information;

 

WHEREAS, Employee is eligible to receive equity in CME pursuant to the Amended
and Restated Omnibus Stock Plan and, as a condition to Employee’s continued
eligibility to receive such equity and Employee’s continued employment with CME,
Employee agrees to accept certain restrictions on Employee’s activities both
during and after employment with CME which protect CME’s legitimate interests in
its customer and employee relationships and confidential, proprietary and trade
secret information;

 

NOW, THEREFORE, in consideration of such employment, the benefits pertaining
thereto, and other mutual promises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.

 

1. Confidential Information.

 

a. Employee acknowledges that the successful development and marketing of CME’s
services and products, including CME’s trading programs and systems, current and
potential customer and business relationships, and business strategies and
growth and development plans requires substantial effort and expense. Such
efforts generate for CME valuable and proprietary information (“Confidential
Information”), which gives CME a business advantage over others who do not have
such information. Confidential Information includes, but is not limited to,
trade secrets; business plans and proposals; prospect and customer lists;
trading methodologies; marketing plans, systems and programs; training
materials; research data bases; computer software; and other technical,
business, and financial information of CME not generally known to the public.
Employee further acknowledges that during Employee’s employment by the Company,

 

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Employee’s duties will expose Employee to Confidential Information, and Employee
understands and acknowledges that each and every component of the Confidential
Information constitutes a protectible business interest of the Company.

 

b. Throughout Employee’s employment with the Company and at all times
thereafter: (i) Employee will hold all Confidential Information in the strictest
confidence, take all reasonable precautions to prevent its inadvertent
disclosure to any unauthorized person, and follow all CME policies protecting
the Confidential Information; (ii) Employee will not, directly or indirectly,
utilize, disclose, or make available to any other person or entity, any of the
Confidential Information, other than in the proper performance of Employee’s
duties during Employee’s employment with CME; and (iii) if Employee learns that
any person or entity is taking or threatening to take any action which would
compromise any Confidential Information, Employee will promptly advise CME of
all facts concerning such action or threatened action.

 

c. If Employee receives any subpoena or becomes subject to any legal obligation
that might require Employee to disclose Confidential Information, Employee will
provide prompt written notice of that fact to CME, enclosing a copy of the
subpoena and any other documents describing the legal obligation. In the event
that CME objects to the disclosure of Confidential Information, by way of a
motion to quash or otherwise, Employee agrees to not disclose any Confidential
Information while any such objection is pending. If, in the absence of a
protective order or other remedy or the receipt of a waiver of compliance with
this agreement by CME, Employee is nonetheless, in the written opinion of his
counsel, legally compelled to disclose Confidential Information to any tribunal
or else stand liable for contempt or suffer other censure or penalty, Employee
may disclose to such tribunal only that portion of the Confidential Information
which such counsel advises Employee is legally required to be disclosed,
provided that Employee exercises all reasonable efforts to preserve the
confidentiality of the Confidential Information, including, without limitation,
by cooperating with CME to obtain an appropriate protective order or other
reliable assurance that confidential treatment will be afforded the Confidential
Information by such tribunal.

 

d. At the request of CME (or, without any request, upon termination of
Employee’s employment with the Company for any reason), Employee will
immediately deliver to CME (i) all property of the Employer that is then in
Employee’s possession, custody or control, including, without limitation, all
keys, access cards, credit cards, computer hardware (including but not limited
to any hard drives, diskettes, laptop computers and personal data assistants and
the contents thereof, as well as any passwords or codes needed to operate any
such hardware), computer software and programs, data, materials, papers, books,
files, documents, records, policies, client and customer information and lists,
marketing information, design information, specifications and plans, data base
information and lists, mailing lists, notes, and any other property or
information that Employee has relating to the Company (whether those materials
are in paper or computer-stored form), and (ii) any and all documents or other
items containing, summarizing, or describing any Confidential Information,
including all originals and copies.

 

2. Non-Competition. For a period of one (1) year following the termination of
Employee’s employment with CME for any reason, the Employee will not (i) be
employed in an executive or managerial capacity by, or (ii) provide, whether as
an employee, independent contractor, consultant, or otherwise, any services of
an

 

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executive or managerial nature or any services similar to those provided by the
Employee to CME during Employee’s employment with CME to, any derivatives
exchange or clearing house. Employee acknowledges that the restrictions
contained in this Paragraph 2 are necessary to protect CME’s legitimate
interests in its Confidential Information and customer relationships.

 

3. Non-Solicitation of Employees. Employee agrees that during the term of this
Agreement and for a period of one (1) year following the termination of his
employment with CME for any reason, Employee shall not employ, retain, solicit,
for employment or retention, knowingly assist in the employment or retention of,
or seek to influence or induce to leave CME’s employment or service, any person
who is employed or otherwise engaged by CME at any time during the one-year
period ending on Employee’s last day of employment with CME. Employee
acknowledges that Employer invests a substantial amount of time and money in
recruiting and training, and shares Confidential Information with, its
employees. Employee further acknowledges that the restrictions contained in this
Paragraph 3 are necessary to protect CME’s legitimate interests in its
Confidential Information and employee relationships.

 

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4. Assignment of Inventions.

 

a. During and after Employee’s employment with CME, Employee will promptly
disclose, assign and transfer to CME any right, title or interest in any
inventions, designs, discoveries, works of authorship, creations, developments,
improvements or software (collectively, “Inventions”), that Employee may have or
acquire, in whole or in part, as a result of Employee’s employment by CME. This
obligation applies to any Inventions that relate to CME’s business, whether or
not the Inventions are created, originated, developed or conceived of by
Employee solely or jointly with others, or during business hours or on personal
time, and whether or not the Inventions are protected or protectible under
applicable patent, trademark, service mark, copyright or trade secret laws.
Employee will transfer such Inventions free of all encumbrances and
restrictions, and promptly take any action, including executing and delivering
any documentation, deemed necessary by CME to effectuate the transfer or
prosecution of ownership rights in the United States and any other country as
CME may request.

 

b. Notwithstanding anything else in this Agreement, Employee understands that
Paragraph 4.a. shall not apply to general know how or to an invention for which
no equipment, supplies, facility or trade secret information of CME was used and
which was developed entirely on Employee’s own time, unless the invention (i)
relates to the business of CME or CME’s actual or demonstrably anticipated
research or development or (ii) results from any work Employee performs or has
performed for CME.

 

c. Employee acknowledges that any computer programs, documentation, works of
authorship or other copyrightable works that Employee creates in whole or in
part during Employee’s employment with CME shall: (i) be considered “works made
for hire” under Section 101 of the U.S. Copyright Act, 17 U.S.C. § 101; (ii) be
considered part of the Confidential Information; and (iii) be covered by
Paragraph 1 above.

 

5. Enforcement.

 

a. Employee agrees that given the nature of CME’s business, the scope and
duration of the restrictions contained Paragraphs 1 through 5 of this Agreement
are reasonable and necessary to protect the legitimate business interests of CME
and do not unduly interfere with Employee’s career or economic pursuits.
Employee recognizes and agrees that any breach or threatened or anticipated
breach of any part of Paragraphs 1 through 4 of this Agreement will result in
irreparable harm and continuing damage to CME, and that the remedy at law for
any such breach or threatened or anticipated breach will be inadequate.
Accordingly, in addition to any other legal or equitable remedies that may be
available to CME, Employee agrees that CME shall be entitled to seek and obtain
an injunction or injunctions, without bond or other security, to prevent any
breach or threatened or anticipated breach of any such section. Employee agrees
to reimburse CME for all costs and expenses, including reasonable attorney’s
fees and costs, incurred by CME in connection with the enforcement of its rights
under this Agreement.

 

b. If any part of this Agreement is held void, illegal, or unenforceable, or in
conflict with any applicable law, every other term of this Agreement shall
remain valid and fully enforceable. If any court refuses to enforce any part of
this Agreement as written, the court shall modify that part to the minimum
extent necessary to make it enforceable under applicable law, and shall enforce
it as so modified. CME and

 

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Employee recognize and agree that this Agreement is not intended to restrict
Employee’s activities in violation of Rule 5.6 of the Illinois Rules of
Professional Conduct or any similar rule of another state or court, and if any
court refuses to enforce any part of this Agreement as written because that part
is deemed to violate Rule 5.6 or any such similar rule, the court shall modify
that part to the minimum extent necessary to make it fully enforceable as to any
and all activities not covered by such rule.

 

6. Notices. All notices and other communications required or permitted hereunder
shall be in writing and shall be deemed given when (i) delivered personally or
by overnight courier to the following address of the other party hereto (or such
other address for such party as shall be specified by notice given pursuant to
this Paragraph 6) or (ii) sent by facsimile to the following facsimile number of
the other party hereto (or such other facsimile number for such party as shall
be specified by notice given pursuant to this Paragraph 6), with the
confirmatory copy delivered by overnight courier to the address of such party
pursuant to this Paragraph 6:

 

If to CME, to:

 

Craig S. Donohue

Chief Executive Officer

Chicago Mercantile Exchange Inc.

20 South Wacker Drive

Chicago, IL 60606

(312) 930-8275

 

With a copy to:

 

Kathleen M. Cronin

Managing Director, General Counsel and Corporate Secretary

Chicago Mercantile Exchange Inc.

20 South Wacker Drive

Chicago, IL 60606

(312) 930-3488

 

If to Employee, to:

 

David G. Gomach

600 East Carrington Lane

Appleton, WI 54913

(920) 731-0537

 

7. Entire Agreement. This Agreement, together with Section 11 of the Amended and
Rested Employment Agreement between Employee and Employer, dated as of May 25,
2004, constitutes the entire Agreement and understanding between the parties
with respect to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or between the parties, written
or oral, which may have related in any manner to the subject matter hereof. No
other agreement or amendment to this Agreement shall be binding upon either
party including, without limitation, any agreement or amendment made hereafter
unless in writing, signed by both parties.

 

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8. Successors and Assigns. This Agreement shall be enforceable by CME and its
successors and assigns.

 

9. Governing Law and Jurisdiction. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Illinois
without regard to principles of conflict of laws. The state courts of Cook
County, Illinois and the United States District Court for the Northern District
of Illinois shall have the exclusive jurisdiction over any and all claims,
lawsuits and litigation relating to or arising out of this Agreement.

 

10. Waivers. The failure of Employer at any time or times to enforce this
Agreement shall in no manner affect its right at a later time to enforce the
same. No waiver by Employer of any provision or of any breach of any covenant in
this Agreement shall be effective unless in writing signed by the Chief
Executive Officer of CME, and no waiver in any one or more instances shall be
deemed to be a further or continuing waiver of any such provision or breach in
other instances or a waiver of any other provision or breach of any other
provision or covenant.

 

11. Waiver of Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY
IN ANY DISPUTE RELATING TO OR ARISING OUT OF THIS AGREEMENT, AND AGREES TO TAKE
ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.

 

12. Acknowledgment. Employee acknowledges that he has read, understood, and
accepts the provisions of this Agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

Chicago Mercantile Exchange Inc.   David G. Gomach By:  

 

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Its:  

 

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        Date:  

 

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