Nominating Committtee Charter

(EFFECTIVE OCTOBER 18, 2005)

 

     This is the Charter of the Nominating Committee (the “Committee”) of the Board of Directors (the “Board”) of CBOT Holdings, Inc. (the “Corporation”).

 

    Purpose

 

     The primary purpose of the Committee is to review the qualifications of potential candidates for the Board and for standing board committees, including the audit, compensation, and executive committees as well as the Committee, and to propose and recommend to the Board, for its review, consideration and approval, nominees for election as directors and members of standing board committees, as applicable, for directorships or committee memberships which are vacant or expected to be vacant in connection with the expiration of their terms at each annual meeting of the stockholders of the Corporation.

 

     In addition, the Committee shall periodically review the corporate governance guidelines applicable to the Corporation and propose any appropriate modifications thereto for consideration by the Board.  In performing its duties, the Committee shall seek to maintain an effective working relationship with the Board and the management of the Corporation.  Although the Committee will recommend to the Board nominees for election as directors and members of standing board committees, the Board shall exercise its own judgment in approving nominees for election or appointment as directors and board committee members.

 

     Membership and Qualification

 

     The Committee will be composed of at least three members of the Board.  The Committee will recommend to our Board nominees for membership on the Committee.  The chairperson of the Committee, as well as all Committee members, shall be appointed, removed or replaced by a majority vote of the Board.  A majority of the Committee members shall constitute a quorum for the transaction of business.  It is the responsibility of the chairperson of the Committee to schedule meetings and provide the Committee with a written agenda for all meetings.

 

     Each member of the Committee shall be free of any relationship that, as determined by the Board, would interfere with his of her individual exercise of independent judgment and all members of the Committee shall be “independent” within the meaning provided below.

 

     Independenceof Committee Members

 

           All members of the Committee must be independent directors under the New York Stock Exchange (“NYSE”) rules and the requirements set forth in the Corporation’s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws.  To be considered independent under the NYSE rules, the Board must affirmatively determine that a director does not have any direct or indirect material relationship with the Corporation.  To assist it in determining director independence in accordance with the NYSE rules, the Board has established that an individual meeting one of the following criteria shall not be considered an independent director:

 

a person who is, or was within the previous three years, an employee, or person whose immediate family member is an executive officer officer, of the Corporation;

a person who receives, or has received in the three prior years, or whose immediate family member receives, or has received in the three prior years, more than $100,000 per year in direct compensation from the Corporation, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued services);

a person who is, or was within the three prior years, affiliated with or employed by, or whose immediate family member is, or was within the three prior years, affiliated with or employed in a professional capacity by, a present or former internal or external auditor of the Corporation;

a person who is, or was within the three prior years, employed , or whose immediate family member is, or was within the three prior years, employed, as an executive officer of another Corporation where any of the Corporation's present executives serve on that Corporation's compensation committee; or

a person who is, or was within the three prior years, an executive officer or an employee, or whose immediate family member is, or was an executive officer of a Corporation that makes payments to, or receives payments from, the Corporation for property or services in an amount which, in any single fiscal year, exceeds the greater of $1 million, or 2% of such other Corporation's consolidated gross revenues.

            For purposes of these independence standards, the term “the Corporation” includes any subsidiary and the term “immediate family member” includes a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law and anyone (other than domestic employees) who shares such person’s home.

 

            For relationships not covered by the independence standards above, the determination of whether a relationship is material, and therefore whether the director is independent, will be made by the directors who satisfy the independence standards set forth above and the basis for the determination will be explained in the Corporation’s annual proxy statement. Any determination by the Board that a director is independent despite the fact that the director does not meet the independence standards set forth above will also be explained in the Corporation’s annual proxy statement.

 

            Each member of the Committee will notify the Board as soon as practical in the event that his or her circumstances change in any manner that may affect the Board’s independence determination.

 

     Meetings and Other Actions

 

     The Committee shall meet at least quarterly and as often as it determines appropriate to carry out its obligations under this Charter.  The Committee shall periodically report on its activities to the Board and make such recommendations and findings as it deems appropriate.

 

     Meetings of the Committee may be held in person or by telephone.  Action may also be taken by the Committee without a meeting if all members thereof consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of the proceedings of the Committee.

 

     The Committee shall keep a separate book of minutes of their proceedings and actions.  All meetings shall be at the call of the chairperson.  The Committee shall elect a Secretary to the Committee who shall give notice personally or by mail, telephone, facsimile or electronically to each member of the Committee of all meetings, not later than 12 noon, Central time, of the day before the meeting, unless all of the members of the Committee in office waive notice thereof in writing at or before the meeting, in which case the meeting may be held without the aforesaid advance notice.  A majority of the members of the Committee shall constitute a quorum for the transaction of business.

 

     Goals, Responsibilities, and Authority

 

the Committee shall make recommendations to the Board, for its review and approval, of nominees for election as directors and members of board committees, as applicable, for directorships or committee memberships that are vacant or expected to be vacant in connection with the expiration of their terms at each annual meeting of the stockholders of the Corporation  (As part of its process, the Committee should review and, to the extent appropriate, consider all nominees submitted to the Committee for its consideration by stockholders of the Corporation.);

 

the Committee should seek to develop a Board that consists of individuals from diverse backgrounds and perspectives who combine a broad spectrum of experience and expertise with a reputation for integrity;

 

the Committee shall review with the Board the desired experience, mix of skills and other qualities to assure appropriate Board composition, taking into account the current Board members and the specific needs of the Corporation.

 

the Committee should conduct appropriate inquiries into the background and qualifications of potential nominees;

 

in assessing potential nominees, the Committee should consider, among other criteria, the character, background and professional experience of candidates (Prior experience and familiarity with the derivatives industry are among the relevant criteria. Each nominee should possess good judgment and an inquiring and independent mind. Each nominee should also possess a reputation for the highest personal and professional ethics, integrity and values.);

 

the Committee should also carefully consider any potential conflicts of interest associated with each nominee that it is aware of;

 

the Committee shall have the sole authority to retain and terminate any search firm to be used to identify candidates for election or appointment as directors, including sole authority to approve such search firm’s fees and other retention terms.

 

subject to the approval of the Board, the Committee may hire other specialists, including independent counsel, in the performance of its functions (The Committee may, within limits set by the Board, approve the fees and retention terms applicable to such other specialists and advisors);

 

the Committee should periodically review and develop criteria for the selection of new directors and nominees for vacancies on the Board, including procedures for reviewing potential nominees proposed by stockholders;

 

the Committee should consider questions and make recommendations to the Board regarding determinations of the independence of the members of the Board;

 

the chairperson of the Committee should make reports to the Board as appropriate;

 

the Committee shall confer with management of the Corporation to the extent it may deem necessary or appropriate to fulfill its duties; and

 

the Committee shall, at least annually, evaluate its own performance and report to the Board on such evaluation.

 

 

 

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