CME Group Inc.
FORM 8 (OPD)
PUBLIC OPENING POSITION DISCLOSURE BY A PARTY TO AN OFFER
Rules 8.1 and 8.2 of the Takeover Code (the "Code")
1. KEY INFORMATION
(a) Full name of discloser: |
CME Group Inc. ("CME Group") |
(b) Owner or controller of interests and short positions disclosed, if different from 1(a): The naming of nominee or vehicle companies is insufficient. For a trust, the trustee(s), settlor and beneficiaries must be named. |
|
(c) Name of offeror/offeree in relation to whose relevant securities this form relates: Use a separate form for each offeror/offeree |
CME Group Inc. |
(d) Is the discloser the offeror or the offeree? |
Offeror |
(e) Date position held: The latest practicable date prior to the disclosure |
26 March 2018 |
(f) In addition to the company in 1(c) above, is the discloser making disclosures in respect of any other party to the offer? If it is a cash offer or possible cash offer, state "N/A" |
No |
2. POSITIONS OF THE PARTY TO THE OFFER MAKING THE DISCLOSURE
If there are positions or rights to subscribe to disclose in more than one class of relevant securities of the offeror or offeree named in 1(c), copy table 2(a) or (b) (as appropriate) for each additional class of relevant security.
(a) Interests and short positions in the relevant securities of the offeror or offeree to which the disclosure relates
NONE
All interests and all short positions should be disclosed.
Details of any open stock-settled derivative positions (including traded options), or agreements to purchase or sell relevant securities, should be given on a Supplemental Form 8 (Open Positions).
Details of any securities borrowing and lending positions or financial collateral arrangements should be disclosed on a Supplemental Form 8 (SBL).
(b) Rights to subscribe for new securities
NONE
3. POSITIONS OF PERSONS ACTING IN CONCERT WITH THE PARTY TO THE OFFER MAKING THE DISCLOSURE
3.1 Advisers to CME Group
J.P. Morgan Chase Bank (Custody)
Class of relevant security: |
Class A Common Stock |
|
Interests |
Short positions |
Number |
% |
Number |
% |
(1) Relevant securities owned and/or controlled: |
79 |
0.00 |
- |
- |
(2) Derivatives (other than options): |
- |
- |
- |
- |
(3) Options and agreements to purchase/sell: |
- |
- |
- |
- |
TOTAL: |
79 |
0.00 |
- |
- |
Barclays Bank plc
Class of relevant security: |
Class A Common Stock |
|
Interests |
Short positions |
Number |
% |
Number |
% |
(1) Relevant securities owned and/or controlled: |
109,327 |
0.03 |
896 |
0.00% |
(2) Derivatives (other than options): |
- |
- |
- |
- |
(3) Options and agreements to purchase/sell: |
30,900 |
0.01% |
81,700 |
0.02% |
TOTAL: |
140,227 |
0.04% |
82,596 |
0.02% |
3.2 CME Group Directors
Name of Director |
Number of Class A Common Stock held |
Percentage of total issued Class A Common Stock (excluding treasury shares) |
Terrence A. Duffy(1) |
114,686 |
0.03% |
Jeffrey M. Bernacchi |
60,194 |
0.02% |
Timothy S. Bitsberger |
9,833 |
0.00% |
Charles P. Carey(2) |
32,339 |
0.01% |
Dennis H. Chookaszian(3) |
13,743 |
0.00% |
Elizabeth A. Cook |
20,933 |
0.01% |
Ana Dutra |
3,433 |
0.00% |
Martin J. Gepsman(4) |
43,011 |
0.01% |
Larry G. Gerdes |
32,605 |
0.01% |
Daniel R. Glickman |
15,899 |
0.00% |
Gedon Hertshten(5) |
133,600 |
0.04% |
Leo Melamed |
10,537 |
0.00% |
Ronald A. Pankau |
3,809 |
0.00% |
Alex J. Pollock(6) |
20,425 |
0.01% |
John F. Sandner |
127,383 |
0.04% |
Terry L. Savage |
15,833 |
0.00% |
William R. Shepard(7) |
193,731 |
0.06% |
Howard J. Siegel |
83,239 |
0.02% |
Dennis A. Suskind |
5,059 |
0.00% |
David J. Wescott(8) |
74,565 |
0.02% |
(1) Includes 495 shares to which Mr. Duffy shares joint ownership and has voting power. Includes 41,445 shares that remain subject to time vesting but are considered issued and outstanding. Excludes performance share awards that have been granted to Mr. Duffy which will vest based on actual performance measured based on growth in net income margin relative to the diversified financial services index of the S&P 500 (50%) and based on total shareholder return relative to the S&P 500 (50%) measured over the applicable three-year period. The next vesting date for a portion of such shares is March 2019. The aggregate number of Class A shares under the performance share opportunities awarded to Mr. Duffy at the target level is 53,708. As the performance metrics are not based on CME Group's actual share value, these are not considered derivatives of CME Group stock.
(2) Mr. Carey owns 3,198 shares indirectly through a trust and owns 29,141 shares indirectly through a trading firm for purposes of meeting certain share requirements established by the rules of our derivatives exchanges for member fee purposes.
(3) Includes 12,934 shares held in the name of Mr. Chookaszian's spouse.
(4) Includes 495 shares to which Mr. Gepsman shares joint ownership and has voting power and includes 17,950 shares that have been used as a capital contribution to a limited liability company which is a holding company to one of our clearing firms.
(5) Mr. Hertshten owns 33,544 shares directly and 100,056 shares through a firm in which he is the owner.
(6) Includes 2,719 shares held in the name of Mr. Pollock's spouse.
(7) Includes 495 shares to which Mr. Shepard shares joint ownership and has voting power.
(8) Does not include ownership of 495 shares of which beneficial ownership is in dispute.
Name of Director |
Number of Class B-1 Common Stock held |
Percentage of total issued Class B-1 Common Stock (excluding treasury shares) |
Terrence A. Duffy |
1 |
0.16% |
Jeffrey M. Bernacchi(1) |
1 |
0.16% |
Charles P. Carey(2) |
1 |
0.16% |
Gedon Hertshten(3) |
4 |
0.64% |
John F. Sandner |
3 |
0.48% |
William R. Shepard |
5 |
0.80% |
Howard J. Siegel |
1 |
0.16% |
David J. Wescott |
1 |
0.16% |
(1) Class B-1 share is assigned to one of CME Group's member firms in connection with our exchange rules.
(2) Class B-1 share owned indirectly through a trading firm for purposes of meeting certain share requirements established by the rules of our derivatives exchanges for member fee purposes.
(3) Class B-1 shares owned through a firm of which Mr. Hertshten is the owner.
Name of Director |
Number of Class B-2 Common Stock held |
Percentage of total issued Class B-2 Common Stock (excluding treasury shares) |
Charles P. Carey(1) |
1 |
0.12% |
Gedon Hertshten(2) |
4 |
0.49% |
Leo Melamed |
1 |
0.12% |
Ronald A. Pankau(3) |
1 |
0.12% |
John F. Sandner |
2 |
0.25% |
William R. Shepard |
5 |
0.62% |
David J. Wescott |
1 |
0.12% |
(1) Class B-2 share owned indirectly through a trading firm for purposes of meeting certain share requirements established by the rules of our derivatives exchanges for member fee purposes.
(2) Class B-2 shares owned through a firm of which Mr. Hertshten is the owner.
(3) Class B-2 share assigned to one or our member firms in connection with our exchange rules.
Name of Director |
Number of Class B-3 Common Stock held |
Percentage of total issued Class B-3 Common Stock (excluding treasury shares) |
Charles P. Carey(1) |
1 |
0.08% |
Elizabeth A. Cook |
1 |
0.08% |
Martin J. Gepsman |
1 |
0.08% |
Gedon Hertshten(2) |
4 |
0.31% |
John F. Sandner |
4 |
0.31% |
William R. Shepard |
2 |
0.16% |
Howard J. Siegel |
1 |
0.08% |
David J. Wescott |
3 |
0.23% |
(1) Class B-3 share owned indirectly through a trading firm for purposes of meeting certain share requirements established by the rules of our derivatives exchanges for member fee purposes.
(2) Class B-3 shares owned through a firm of which Mr. Hertshten is the owner.
Name of Director |
Number of Class B-4 Common Stock held |
Percentage of total issued Class B-4 Common Stock (excluding treasury shares) |
Terrence A. Duffy(1) |
1 |
0.24% |
Charles P. Carey(2) |
1 |
0.24% |
Martin J. Gepsman(3) |
1 |
0.24% |
Gedon Hertshten(4) |
2 |
0.48% |
John F. Sandner |
1 |
0.24% |
William R. Shepard(5) |
1 |
0.24% |
David J. Wescott |
1 |
0.24% |
(1) Mr. Duffy shares joint ownership and had voting power for the Class B-4 share.
(2) Class B-4 share owned indirectly through a trading firm for purposes of meeting certain share requirements established by the rules of our derivatives exchanges for member fee purposes.
(3) Mr. Gepsman shares joint ownership and had voting power for the Class B-4 share.
(4) Class B-4 shares owned through a firm of which Mr. Hertshten is the owner.
(5) Mr. Shepard shares joint ownership and has voting power for the Class B-4 share.
3.3 CME Group Directors' Share Plans
In addition to the interests in Class A and Class B common stock noted above, Mr. Duffy in his role as Chairman and Chief Executive Officer participates in our broad-based Equity Program. In accordance with his employment agreement, his annual equity target is 350% of his current base salary. Mr. Duffy's next annual equity grant will be on September 14, 2018. The following table shows his equity award opportunity in CME Group Class A shares which is based 50% on performance shares and 50% on restricted stock:
Annual Equity Award Target(1) |
Estimated Performance Shares(2) |
Estimated Shares of Restricted Stock(3) |
$5,250,000 |
16,232 |
16,232 |
(1) Based on Mr. Duffy's current base salary of $1,500,000.
(2) Performance shares are granted at the target level. The September 2018 grant will vest in March 2022 based on actual achievement of the performance metrics measured over the 2019 to 2021 period. Number of shares estimated using the closing stock price of March 26, 2018 of $161.71.
(3) Shares of restricted stock vest equally over a four-year period, subject to terms of the employment agreement in place with Mr. Duffy.
CME Group's non-executive Board members as part of their compensation for their service on the Board receive shares granted under our Director Stock Plan. Individuals receive CME Group Class A shares with a value of $100,000 and have the option to elect to receive some or the entire portion of their annual $60,000 cash stipend in shares. These grants are made annually in June. The next grant date will be June 25, 2018. The following table shows the estimated equity award based on the closing stock price of March 26, 2018 of $161.71 based on the existing stock elections of our current Board members.
Name of Director |
Estimated Shares |
Jeffrey M. Bernacchi |
619 |
Timothy S. Bitsberger |
619 |
Charles P. Carey |
990 |
Dennis H. Chookaszian |
619 |
Elizabeth A. Cook |
619 |
Ana Dutra |
990 |
Martin J. Gepsman |
619 |
Larry G. Gerdes |
990 |
Daniel R. Glickman |
619 |
Gedon Hertshten |
990 |
Leo Melamed |
619 |
Ronald A. Pankau |
619 |
Alex J. Pollock |
990 |
John F. Sandner |
619 |
Terry L. Savage |
619 |
William R. Shepard |
990 |
Howard J. Siegel |
990 |
Dennis A. Suskind |
619 |
David J. Wescott |
619 |
Details of any open stock-settled derivative positions (including traded options), or agreements to purchase or sell relevant securities, should be given on a Supplemental Form 8 (Open Positions).
Details of any securities borrowing and lending positions or financial collateral arrangements should be disclosed on a Supplemental Form 8 (SBL).
4. OTHER INFORMATION
(a) Indemnity and other dealing arrangements
Details of any indemnity or option arrangement, or any agreement or understanding, formal or informal, relating to relevant securities which may be an inducement to deal or refrain from dealing entered into by the party to the offer making the disclosure or any person acting in concert with it: Irrevocable commitments and letters of intent should not be included. If there are no such agreements, arrangements or understandings, state "none" |
NONE |
(b) Agreements, arrangements or understandings relating to options or derivatives
Details of any agreement, arrangement or understanding, formal or informal, between the party to the offer making the disclosure, or any person acting in concert with it, and any other person relating to: (i) the voting rights of any relevant securities under any option; or (ii) the voting rights or future acquisition or disposal of any relevant securities to which any derivative is referenced: If there are no such agreements, arrangements or understandings, state "none" |
NONE |
(c) Attachments
Are any Supplemental Forms attached?
Supplemental Form 8 (Open Positions) |
NO |
Supplemental Form 8 (SBL) |
NO |
Date of disclosure: |
27 March 2018 |
Contact name: |
Margaret Wright |
Telephone number: |
+1 312 930 3305 |
Public disclosures under Rule 8 of the Code must be made to a Regulatory Information Service.
The Panel's Market Surveillance Unit is available for consultation in relation to the Code's disclosure requirements on +44 (0)20 7638 0129.
The Code can be viewed on the Panel's website at www.thetakeoverpanel.org.uk.
