SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
NYMEX HOLDINGS, INC.
--------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) 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 0-11 (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
0-11(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.
(1) Amount Previously Paid:
-----------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------------
NYMEX HOLDINGS, INC.
ONE NORTH END AVENUE, WORLD FINANCIAL CENTER
NEW YORK, NEW YORK 10282-1101
(212) 299-2000
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF NYMEX HOLDINGS, INC.
TO BE HELD TUESDAY, MARCH 16, 2004
To the Stockholders of NYMEX Holdings, Inc.:
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders of NYMEX
Holdings, Inc., (the "Company") a Delaware corporation, will be held on Tuesday,
March 16, 2004, at 3:00 p.m., (New York Time), at One North End Avenue,
Boardroom 1016, New York, New York 10282-1101 for the following purposes:
ELECTION OF DIRECTORS
- To elect one (1) Chairman director whose term ends in the year 2007;
- To elect one (1) Floor Broker director whose term ends in the year 2007;
- To elect one (1) Futures Commission Merchant director whose term ends in
the year 2007;
- To elect one (1) Local director whose term ends in the year 2007;
- To elect one (1) Trade director whose term ends in the year 2007;
- To elect one (1) At Large director whose term ends in the year 2007;
- To elect one (1) Equity Holder director whose term ends in the year 2007;
and
- To elect two (2) Public directors whose terms end in the year 2007.
Other Business
- Any other business that may properly come before the meeting.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice, which you are encouraged to read carefully.
Only Stockholders of record at the close of business on February 27, 2004
are entitled to notice of and to vote at the Annual Meeting of Stockholders.
All Stockholders are invited to attend the Annual Meeting in person.
However, to ensure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy card and proxy envelope in the
postage-prepaid envelope enclosed for that purpose in accordance with the voting
instructions contained within the Proxy Statement. Any Stockholder attending the
Annual Meeting of Stockholders may vote in person even if such person has
previously returned a proxy.
The Board of Directors of New York Mercantile Exchange, Inc., a subsidiary
of NYMEX Holdings, Inc. will also be elected at the Annual Meeting of
Stockholders of the Company as both boards are presently comprised of the same
directors that are elected at the Annual Meeting.
A Proxy Statement, proxy card, proxy envelope and return envelope accompany
this notice.
By Order of the Board of Directors of
NYMEX Holdings, Inc.
GARY RIZZI
Corporate Secretary
Dated: March 5, 2004
NYMEX HOLDINGS, INC.
ONE NORTH END AVENUE
WORLD FINANCIAL CENTER
NEW YORK, NEW YORK 10282-1101
(212) 299-2000
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, MARCH 16, 2004 AT:
ONE NORTH END AVENUE, BOARDROOM 1016
NEW YORK, NEW YORK 10282-1101
PROXY STATEMENT FOR AN ANNUAL MEETING OF
STOCKHOLDERS
The enclosed Proxy is solicited on behalf of NYMEX Holdings, Inc. (the
"Company") for use at the Annual Meeting of Stockholders (the "Annual Meeting")
to be held on Tuesday, March 16, 2004 at 3:00 p.m., (New York Time), and at any
adjournment(s) thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting. The Annual Meeting will be held at One
North End Avenue, Boardroom 1016, New York, New York 10282-1101.
All shares of common stock represented by proxy will be voted in the manner
indicated on the proxy card. Your presence at the Annual Meeting will not revoke
your proxy, but if you vote at the meeting, that vote will revoke your proxy as
to the matter on which your vote is cast at the meeting.
The Company anticipates that the proxy solicitation materials will be
mailed on or about March 5, 2004 to all Stockholders entitled to vote at the
Annual Meeting. Only Stockholders of record as of the close of business on
February 27, 2004 are entitled to notice of and to vote at the Annual Meeting or
any adjournment of the meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD AND PROXY
ENVELOPE PROVIDED.
QUESTIONS AND ANSWERS
Q: WHAT IS THE RECORD DATE FOR THE ANNUAL MEETING?
A:The holders of record of voting stock at the close of business on February 27,
2004, are entitled to notice of and to cast their vote at the Annual Meeting.
At the Record Date, the Company's voting stock included 816 shares of issued
and outstanding common stock with a par value of $0.01 per share.
Q: WHAT AM I VOTING ON IN THE ELECTION?
A:As a stockholder of NYMEX Holdings, Inc. you will cast your vote(s) for:
Election of Directors
- To elect one (1) Chairman director whose term ends in the year 2007;
- To elect one (1) Floor Broker director whose term ends in the year
2007;
- To elect one (1) Futures Commission Merchant director whose term ends
in the year 2007;
- To elect one (1) Local director whose term ends in the year 2007;
- To elect one (1) Trade director whose term ends in the year 2007;
- To elect one (1) At Large director whose term ends in the year 2007;
- To elect one (1) Equity Holder director whose term ends in the year
2007; and
- To elect two (2) Public directors whose terms end in the year 2007.
Other Business
- Any other business that may properly come before the meeting.
Q: WHO CAN VOTE?
A:The holders of record of voting stock at the close of business on February 27,
2004 (the Record Date) are entitled to notice of and to vote at the Annual
Meeting. Each share of common stock is entitled to one vote.
Q: HOW DO I CAST MY VOTE IN THE ELECTION?
A:You may cast your vote in person at the annual meeting or by your signed,
written proxy. You have been provided with the number of proxy cards and proxy
envelopes equal to the number of shares of common stock held by you, which
corresponds to the number of NYMEX Exchange seats that you own or that are
registered in your name under an ABC Agreement as of the Record Date.
Stockholders shall follow the following procedures for voting by proxy:
1. Complete the proxy card indicating your vote with respect to the
election of directors by marking an "X" next to the name of each individual
within a particular category of directors for whom you are voting in favor
of becoming a director. YOU MAY NOT VOTE FOR MORE THAN THE NUMBER OF OPEN
POSITIONS STATED IN THE DIRECTIONS FOR EACH CATEGORY OF DIRECTORS.
2. Insert the proxy card into the proxy envelope, sign the proxy and
seal the proxy envelope. Make certain that you complete the proxy printed
on the back of the proxy envelope. Please note that the date must be
inserted, and you must sign and print your name on the proxy envelope where
indicated. If the proxy envelope and proxy card are not properly filled
out, each will be null and void.
3. Only one proxy card may be inserted into each proxy envelope. If
more than one proxy card is inserted into a proxy envelope, all such votes
will be null and void. Any proxy card received by the Office of the
Corporate Secretary without the enclosed proxy envelope will be null and
void.
4. If the number of proxy cards submitted by a Stockholder exceeds the
number of shares of common stock owned or registered to him by virtue of an
ABC Agreement, the proxy(ies) bearing the latest date(s) shall be presumed
to revoke all proxy(ies) bearing earlier dates.
1
5. If the number of proxy cards submitted by a Stockholder exceeds the
number of shares of common stock owned or registered to a Stockholder by
virtue of an ABC Agreement and such proxy(ies) each bear the latest date, all
proxy(ies) signed by the Stockholder shall be null and void.
6. A Stockholder who personally attends and casts a vote at the Annual
Meeting shall be presumed to have revoked all proxy(ies) previously issued by
the Stockholder as to the matter on which such vote is cast.
7. In order to be accepted, proxy card(s) must be received by the Office
of the Corporate Secretary located at NYMEX Holdings, Inc., One North End
Avenue, Suite 1548, New York, New York 10282-1101, Attention: Donna Talamo,
telephone number (212) 299-2372, no later than 3:00 p.m. (New York Time) on
Tuesday, March 16, 2004. Proxy card(s) received after 3:00 p.m. (New York
Time) on Tuesday, March 16, 2004 will not be counted. For your convenience, a
self-addressed, postage-paid envelope is enclosed. Please include ONLY ONE
completed proxy envelope in ONE self-addressed, postage-paid envelope(s).
8. Stockholders may vote by facsimile. The fax number is (212) 301-4645.
In order to vote by fax, your fax must be received by 3:00 p.m. (New York
Time) on Tuesday, March 16, 2004 and must be in the form of the enclosed
proxy card and proxy envelope. A Stockholder with more than one share of
common stock who wishes to vote via fax must submit a separate proxy card and
proxy envelope for each share owned or held by virtue of an ABC Agreement in
his name.
The death or incapacity of a person who gives a proxy will not revoke the
proxy, unless the fiduciary who has control of the shares represented by the
proxy notifies the Office of the Corporate Secretary in writing of such death
or incapacity.
Q: CAN I CHANGE MY VOTE?
A:Yes. Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Office of the
Corporate Secretary of the Company at or before the taking of the vote at the
Annual Meeting, a written notice of revocation or a duly executed proxy
bearing a later date or by attending the Annual Meeting and voting in person.
Q: HOW MANY VOTES CAN I CAST IN THE ELECTION?
A:Each share of common stock is entitled to one vote on all matters presented at
the Annual Meeting. Stockholders do not have the right to cumulate their votes
in the election of directors. Shares of common stock represented by properly
executed proxy(ies) will, unless such proxy(ies) has been previously revoked,
be voted in accordance with the instructions indicated thereon. The Company
will bear the cost of soliciting proxies but will not bear the cost of
solicitation by Stockholders. The Company is soliciting proxies by mail.
Directors and Stockholders may solicit proxies personally, by facsimile or by
telephone.
ANY QUESTIONS OR REQUESTS FOR ASSISTANCE REGARDING THE ANNUAL MEETING OF
STOCKHOLDERS, THIS PROXY STATEMENT, THE ENCLOSED PROXY CARD OR PROXY ENVELOPE
MAY BE DIRECTED TO: OFFICE OF THE CORPORATE SECRETARY -- NYMEX HOLDINGS, INC.,
ONE NORTH END AVENUE, SUITE 1548, NEW YORK, NEW YORK 10282-1101, ATTENTION:
DONNA TALAMO, TELEPHONE: (212) 299-2372, FAX: (212) 301-4645.
QUORUM; REQUIRED VOTE; ABSTENTIONS; NON-VOTES -- NYMEX HOLDINGS, INC.
(THE "COMPANY")
The presence in person or by proxy of the holders of one-third of the
outstanding shares of the Company's common stock is necessary to constitute a
quorum for the transaction of business at the Annual Meeting of Stockholders.
Elections of directors shall be determined by a plurality of the votes cast.
Shares that are voted "FOR" or "AGAINST" a matter are treated as being present
at the meeting for purposes of establishing a quorum. Abstentions and non-votes
will also be counted for purposes of determining the presence or absence of a
quorum, but they will not be counted as votes cast.
2
PROPOSAL
ELECTION OF DIRECTORS
NOMINEES
The Certificate of Incorporation and bylaws of the Company provide for a
Board of Directors of twenty-five (25) directors. At present, there are nine (9)
expiring director positions. In each category other than the Public Director
category, there is one position to be filled for a term expiring in 2007. There
are two (2) positions to be filled in the Public Director category, each to
expire in 2007.
The name of each nominee, together with his respective category, is set forth
below:
CHAIRMAN
(ONE three-year term)
MITCHELL STEINHAUSE Vice Chairman Age 56
Director since 1992
Member since 1975
Mr. Steinhause was elected Vice Chairman of the Board in March 2000. He is
presently a local trader. He has previously served as Corporate Secretary from
1996 to 1998 and has been a member of NYMEX Exchange since 1975 as both a floor
broker and a local trader.
FLOOR BROKER
(ONE three-year term)
GORDON RUTLEDGE Director since 2001 Age 50
Member since 1981
Mr. Rutledge began his career as the commodity newswire editor at Merrill Lynch
& Co. in 1976. He became a broker in 1981. In 1991, Mr. Rutledge started Onyx
Brokerage Inc. He has been a Vice President of AAA Capital Management since
December 1997.
FUTURES COMMISSION MERCHANT
(ONE three-year term)
GARY RIZZI Secretary Age 49
Director since 1995
Member since 1983
Mr. Rizzi has been the Company's Secretary since 2001. Mr. Rizzi is currently a
Vice President of A.G. Edwards & Sons, Inc. He has been a director since 1995.
Mr. Rizzi has been Vice President of AGE Commodity Clearing Corp. since 2001 and
was an Associate Vice President since 1985. Mr. Rizzi has served on the
Executive Committee since 2000. He is also a member of the COMEX Division and
both divisions of the New York Board of Trade.
LOCAL
(ONE three-year term)
DANIEL DICKER Member since 1990 Age 43
Daniel Dicker has been a local on the New York Mercantile Exchange for his
entire 22-year career. He was involved in developing the new NYMEX Division PJM
electricity futures contracts. Mr. Dicker has served on various committees,
including the Electricity Steering and Advisory Committee as well as the Floor
Broker
3
Advisory Committee. He has also participated as part of the Exchange team for
the past six years in the Swim Across America, a charitable event that raises
hundreds of thousands of dollars for cancer research.
MICHAEL MCCALLION Member since 1982 Age 59
Mr. McCallion, who has been trading for his own account since 1990, began his
career as a COMEX clerk for Dean Witter Reynolds and became Vice President of
its energy floor operation. He also spent two years in the U. S. Armed Forces.
Mr. McCallion is a member of the Arbitration, Facilities, Finance, Project
Management, Membership, Members' Benefit and Food Services Committees.
Additionally, he was the only non-board member to serve on the project
management committee for the development of the Exchange headquarters.
MITCHELL STERN Member since 1991 Age 47
Mr. Stern has worked on the floor of the Exchange for more than 25 years. He has
been a member of COMEX since 1982 and a member of the New York Mercantile
Exchange since 1991. Mr. Stern has been an independent trader since 1986 and is
presently a Settlement Committee member.
TRADE
(ONE three-year term)
STEPHEN FORMAN Director since 2002 Age 48
Member since 2000
Stephen L. Forman began his career as a margin clerk for Shearson Hayden Stone
in 1974. He is a conferring member and Senior Vice President of Prudential
Financial Derivatives, LLC since 2003. Mr. Forman has served on various exchange
committees and Futures Industry operations committees, including the Board of
Directors of Futures and Options for Kids, and has been an arbitrator for the
National Futures Association since 1992. Mr. Forman is currently a member of the
COMEX Business Conduct Committee and on the board of the New York Clearing
Corporation.
AT LARGE
(ONE three-year term)
KENNETH GARLAND Director since 2001 Age 55
Member since 1981
Mr. Garland began trading on NYMEX Exchange as a local trader in 1981. In 1982
and 1983, he also acted as a floor broker. Since 1983, he has traded exclusively
as a local trader. In 1994, he was recommended by NYMEX Exchange to be a
representative on the National Futures Association membership appeals
subcommittee, a position he holds to this day.
EQUITY HOLDER
(ONE three-year term)
BRUCE FEIN Member since 1982 Age 48
In early 1981, Mr. Fein became a broker on the New York Mercantile Exchange,
working for NIVEL Commodities, an independent floor brokerage company trading
heating oil. By 1982, NIVEL Commodities became one of the largest privately
owned floor brokerage companies, with the futures commission merchant Premier
Man as a main client and Mr. Fein servicing them. In 1985, Mr. Fein was hired to
be Premier Man's first floor broker. In 1988, Mr. Fein became a local, solely
trading his own account for eight years. During his time at the Exchange, Mr.
Fein served on the Membership Committee and the Broker Training Committee.
4
HARVEY GRALLA Member since 1980 Age 60
Mr. Gralla began his career in the life insurance field and received a Chartered
Life Underwriter degree. In 1980, at 36, he changed careers, purchased a seat on
the Exchange and traded on the floor for 17 years. In addition to being an
equity holder on the Exchange, he is also currently an active off-the-floor
trader in the NYMEX Division energy complex.
MICHEL MARKS Director since 2001 Age 54
Member since 1974
Mr. Marks was Chairman of NYMEX Exchange from 1978 to 1987. He was previously
the President of Merc Oil and has been an investor since 1974. Mr. Marks is
currently a member of the Board of Directors of Argus Media, Ltd, in London,
England. Since 1987, Mr. Marks has been semi-retired. Since 1997, he has been
working as a consultant to individuals and small businesses.
RICHARD SAITTA Member since 1976 Age 54
Mr. Saitta was an independent floor broker and President of Star Futures Corp.
from 1983 until 2003. He has been a member of NYMEX Exchange since 1976 and was
a director from 1983 until 2003.
PUBLIC
(TWO three-year terms)
RONALD COMERCHERO Member until 1999 Age 51
Ronald Comerchero has been a member of the Exchange for 18 years, trading energy
futures as a local, executing orders as a floor broker, and managing a
successful futures commission merchant. In the mid-1980s, Mr. Comerchero
conceived and helped form a special committee to explore linkages to the
International Petroleum Exchange. In 1993, Mr. Comerchero was elected to the
Exchange board, on which he served for two years. For the past five years, Mr.
Comerchero has been the managing member of his own proprietary trading and asset
management firms. Mr. Comerchero has recently resigned from the Board of
Directors of TGFIN Holdings, Inc. ("TGFIN"), although he remains a minority
stockholder of that company. On January 27, 2003, a wholly-owned subsidiary of
the Company, Tradingear Acquisition LLC, entered into an Asset Purchase
Agreement with TGFIN and its operating subsidiary, TradinGear.com. Pursuant to
this agreement, TGFIN and TradinGear.com were paid $3 million for certain
assets, including certain tangible assets and software which the Company had
previously been licensing from TradinGear.com.
HARLEY LIPPMAN Public Director since 1999 Age 49
Mr. Lippman is the founder, owner and chief executive officer of the information
technology consulting company Genesis 10, which he founded in 1999. He was also
the founder and sole owner of Triad Data Inc., an information technology
consulting firm he sold in 1998. Mr. Lippman is Co-Chairman of the Dean's
Council-Columbia University School of International and Public Affairs. In
addition, Mr. Lippman is the Vice-Chair of the National Governing Council of the
American Jewish Congress, and is on the National Commission and Executive
Committee of the Anti-Defamation League.
ROBERT STEELE Public Director since 1999 Age 65
Mr. Steele was a Public director from 1988 to 1994 and was re-appointed to the
Board in 1999. A former banker, he is Vice Chairman of John Ryan Company, an
international financial services marketing firm, and is Director of the Merlin
Financial Center in Stamford, CT. Mr. Steele serves as an outside director on
four corporate boards and is Chairman of the Board of Moore Medical Corporation.
Additionally, Mr. Steele was a U.S. Congressman (Second District, CT) from
1970-1974.
5
INFORMATION REGARDING THE CURRENT BOARD OF DIRECTORS, OTHER THAN THOSE
SEEKING ELECTION
VINCENT VIOLA Chairman Age 48
Director since 2001
Member since 1982
Mr. Viola was elected Chairman in 2001. In 1985, Mr. Viola founded Pioneer
Futures, Inc., a clearing member of NYMEX Exchange, the COMEX Division and the
New York Board of Trade. In 1987, Mr. Viola formed the First Bank Group that
operates community banks in Dallas and the surrounding Texas area. From 1993 to
1996 he served as Vice Chairman of the Board of NYMEX Exchange. During his
tenure, Mr. Viola served as chairman of the strategic planning committee and was
instrumental in developing the NYMEX ACCESS(R) electronic trading platform. In
1990, he formed a proprietary futures and options trading group on NYMEX
Exchange and the International Petroleum Exchange.
RICHARD SCHAEFFER Treasurer Age 51
Director since 1990
Member since 1981
Mr. Schaeffer has been an executive of Global Energy Futures for ABN AMRO, Inc.
since 1997. Mr. Schaeffer has been the NYMEX Division's Treasurer since March
1993. From 1992 to 1997, Mr. Schaeffer had been a Senior Vice President/Director
of the Chicago Corp., which was a clearing member of both NYMEX Exchange and the
COMEX Division until its buy-out by ABN AMRO, Inc. He is also a member of the
Board of Directors of the Juvenile Diabetes Foundation.
STEPHEN ARDIZZONE Director since 2003 Age 42
Member since 1986
Stephen Ardizzone began his career as a COMEX clerk from 1981 to 1983. After
seeing the potential growth of NYMEX, he moved to crude oil where he worked for
three years as a clerk for Rafferty Associates and Smith Barney before forming
his own brokerage operation, Zone Energy. In 2002, Mr. Ardizzone and his brother
founded Bluefin Energy Trading which became a member firm. He has been active
and instrumental on various committees for the last 17 years, including
marketing, floor, facilities and control, and currently Floor Broker Advisory,
Compliance Review, Business Conduct, and By-laws/rules.
ERIC BOLLING Director since 2002 Age 42
Member since 1988
Mr. Bolling began his career at NYMEX as a floor broker for SHB Commodities in
1988. Previously, he worked for Mobil Oil as a marketing representative. He
currently serves on the Corporate Governance, Membership, Natural Gas Advisory,
Natural Gas Settlement Committee, Floor Committee Ring Chairman in Natural Gas
and Local Advisory Committees at the Exchange. In the past, Mr. Bolling has
served on the Adjudication, Floor and Options Advisory Committees. Additionally,
he is a seat owner and member of COMEX and NYBOT. Since 1991, Mr. Bolling has
been an independent floor trader.
JOSEPH CICCHETTI Director since 2001 Age 51
Member since 1974
Mr. Cicchetti is a member of NYMEX Exchange and the New York Board of Trade. He
has been a member of the Board of Directors since 2001. Mr. Cicchetti is
currently trading, managing and consulting with some of the larger futures and
NASDAQ day trading operations located at NYMEX Exchange. Mr. Cicchetti has
traded commodities on NYMEX Exchange as a ring trader and floor broker for more
than 27 years. He is also an educator and lecturer, conducting public and
private seminars on the art of technical trading.
6
JOHN CONHEENEY Public Director since 1996 Age 74
Mr. Conheeney retired as the CEO of Merrill Lynch Futures Inc. in 1994. Mr.
Conheeney has spent his entire career in the futures industry beginning as a
trainee with Merrill Lynch. As part of that program, he worked on the floors of
NYMEX and COMEX as a clerk. He was a member of the Board of Directors for the
Chicago Board of Trade, the Chicago Mercantile Exchange, Globex and the COMEX
Division.
JOEL FABER Director since 2001 Age 63
Member since 1978
Mr. Faber founded Faber's Futures in 1978 to trade on behalf of major oil and
gasoline companies. He was elected to the Board of Directors of NYMEX Exchange
for two consecutive terms from 1982 to 1989 and served on the Executive
Committee for three years. In 2001, he was elected to a two-year term on the
Board of Directors of the NYMEX Exchange and in 2003 he was re-elected to a
three year term. Mr. Faber has served as an arbitrator with the National
Association of Securities Dealers.
MELVYN FALIS Public Director since 2001 Age 63
Mr. Falis has been a partner in Gusrae, Kaplan & Bruno, PLLC since 1987. He had
been a public member of the Board of Directors of New York Futures Exchange and,
since 1999, has served as a public member of the Board of Directors of the
Commodity Floor Brokers and Traders Association. In addition, Mr. Falis is
currently the Chairman of the Corporate Governance Committee, Co-Chairman of the
International Advisory Committee and Co-Vice Chairman of the International
Marketing Committee. He served as General Counsel of NYMEX Exchange from 1977 to
1983 and was a principal author of the heating oil contract. Prior to serving as
NYMEX's General Counsel, he was commodities and securities counsel for
Prudential Securities.
A. GEORGE GERO Director since 1999 Age 67
Member since 1966
Mr. Gero is currently a Senior Vice President of Legg Mason Wood Walker, Inc.
Mr. Gero had been a Senior Vice President-Investments and a First Vice President
of the Futures Division of Prudential Securities Inc., since 1988. Mr. Gero had
first served as a board member of NYMEX Exchange in 1976 and has been a member
of COMEX since 1976, the American Stock Exchange since 1995 and NYMEX Exchange
since 1966. He is also the Chairman of the Commodity Floor Brokers and Traders
Association, Co-Chairman of the Government Relations committee, Vice Chairman of
the NYMEX PAC and Vice Chairman of the Corporate Governance Committee. Mr. Gero
is currently a board member of the New York Futures Exchange, International
Precious Metals Institute and FINEX, and was previously a director of the
Commodity Clearing Corporation. In addition, Mr. Gero is currently a board
member of the PBOT division of the Philadelphia Stock Exchange.
DAVID GREENBERG Director since 2000 Age 39
Member since 1990
Mr. Greenberg has been the President of Sterling Commodities Corp. since 1996.
Mr. Greenberg has been a member of NYMEX Exchange since 1990 and of the COMEX
Division since 1988. He is Chairman of the Security committee and Vice Chairman
of the Local, NYMEX ACCESS(R), Government Relations, Marketing, and Corporate
Governance Committees and Co-Chairman of the International Advisory committee.
He also serves as a member of the New York Board of Trade and as a director of
the Commodity Floor Brokers and Traders Association and the Futures and Options
for Kids charity.
E. BULKELEY GRISWOLD Public Director since 1996 Age 65
Mr. Griswold has been the Managing Director of L&L Capital Partners since 1997.
Since 1983, Mr. Griswold has been President and General Partner of Market Corp.
Ventures, a Division of Market Corp. of America. He also serves on the boards of
Southern Connecticut Advisory Board of Fleet Bank, the Trust Company of
Connecticut and Scan-Optics, Inc.
7
JESSE HARTE Director since 2000 Age 45
Member since 1983
Presently Mr. Harte is an officer of Energy Merchants, Inc. Mr. Harte was
previously employed by Duke Energy Merchants, LLC., a commodity trading firm,
from 1996 to 2003. Mr. Harte has been a member of NYMEX Exchange since 1983. He
was formerly an owner of Bay Area Petroleum, a large independent floor brokerage
operation, and a Senior Vice President of Daiwa Securities, a futures commission
merchant. Mr. Harte currently leases a membership/seat from Carr Futures.
SCOTT HESS Director since 1997 Age 46
Member since 1982
Mr. Hess has been a partner in G&H Commodities since 1987. He has been a member
of NYMEX Exchange since 1982. He is also a director of the Commodity Floor
Brokers and Traders Association.
STEVEN KARVELLAS Director since 1996 Age 44
Member since 1990
Mr. Karvellas has been an independent floor broker since 1990. Mr. Karvellas has
been a member of both NYMEX Exchange and the COMEX Division since that time. He
has been a member of the Board of Directors since 1996 and served on the
Executive Committee from 1998 to 2002. Mr. Karvellas has chaired the
Adjudication, Floor Broker Advisory, Natural Gas Advisory, and Arbitration
Committees. He has also served as the vice chairman of the Compliance Review
Committee, Marketing Committee, and the NYMEX Charitable Foundation. Mr.
Karvellas began his career as a member of COMEX in 1984, was elected to the
COMEX Board of Governors in 1987, and was elected to the Executive Committee
representing the floor group of COMEX in 1989.
KEVIN MCDONNELL Director since 1999 Age 44
Member since 1984
Mr. McDonnell has been an independent floor trader since 1985. Mr. McDonnell has
been a member of NYMEX Exchange since 1984.
JOHN MCNAMARA Director since 2001 Age 47
Member since 1991
Mr. McNamara has been a Vice President of BancOne Brokerage International
Corporation since 1999. From 1992 to 1998, he was a floor broker for ABN AMRO,
Inc. Prior to that, he worked for various future commission merchants. Mr.
McNamara has been an options floor trader on NYMEX Exchange since 1986. He has
been a COMEX member since 1983 where he previously traded options.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of 16 meetings,
including an Annual Meeting of Stockholders during 2003. None of the directors
attended less than 75% of the meetings. The Board has established Executive,
Audit, Compensation, Corporate Governance and certain other committees. The
Company does not have a Nominating Committee.
EXECUTIVE COMMITTEE
The Executive Committee consists of Vincent Viola, Mitchell Steinhause,
Richard Schaeffer, Gary Rizzi and Scott Hess. This Committee met 33 times in the
year 2003. The Executive Committee may exercise the authority of the Board. The
Executive Committee shall perform other duties as are specified by the Board or
as are provided in the Company's bylaws and rules.
8
AUDIT COMMITTEE
In 2003, the Audit Committee consisted of E. Bulkeley Griswold (Chairman),
John Conheeney and Robert Steele. On January 8, 2003, the Board of Directors
approved a recommendation that the members of the Audit Committee be increased
from three Public Directors to up to five Public Directors, all of whom are
independent of management of the Exchange. Melvyn Falis and Harley Lippman were
added as members of the Audit Committee. This Committee met 26 times in 2003.
The Audit Committee makes decisions concerning the engagement of public
accountants, reviews with the public accountants the scope and results of the
audit engagement, approves professional services provided by the public
accountants, reviews the independence of the public accountants, considers the
range of audit and non-audit fees and reviews the adequacy of the Company's
internal accounting controls.
COMPENSATION COMMITTEE
The Board of Directors established a Compensation Committee in 2002. The
Committee consists of the Public Directors of the Company: Robert Steele
(Chairman), E. Bulkeley Griswold, John Conheeney, Melvyn Falis and Harley
Lippman. The Compensation Committee met 10 times in the year 2003. In 2003, the
Company adopted a Compensation Committee Charter. The Compensation Committee
reviews issues related to executive compensation, such as salary and bonus
ranges and incentive compensation plans. The Compensation Committee also
determines the salary and bonus amounts for the Chairman, Vice Chairman and
President and determines annual bonus amounts for the Executive Committee of the
Board of Directors. In addition, the Compensation Committee determines salary
and bonus amounts for senior vice presidents, and reviews and approves salary
and bonus amounts for vice presidents.
CORPORATE GOVERNANCE COMMITTEE
On April 2, 2003, the Board of Directors established a Corporate Governance
Committee. The Corporate Governance Committee was initially established as a
working group. The Committee consists of Melvyn Falis (Chairman), E. Bulkeley
Griswold, Eric Bolling, John Conheeney, Joel Faber, Kenneth Garland, George
Gero, David Greenberg, Harley Lippman, Richard Schaeffer and Robert Steele. The
Corporate Governance Committee met 7 times in the year 2003. The purpose of the
Corporate Governance Committee is to develop and recommend to the Board of
Directors a set of corporate governance principles applicable to the Company and
oversee the Company's policies, practices and procedures in the area of
corporate governance.
9
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
In March 2002, the Company's stockholders approved the creation of an
Executive Compensation Committee (the "Committee"). The Committee, consisting of
five independent Public Directors of the Board of Directors, has the authority
to determine the compensation of executive officers of the Company, to
administer and review any compensation plans the Company may adopt, and to carry
out such other functions as may be lawfully delegated to it by the Board of
Directors. The Committee acts on behalf of the Board of Directors on all matters
concerning executive compensation, which includes formulation of compensation
policies, determining compensation and issuing a yearly report by the Committee
with respect to compensation matters as required by federal securities laws. On
July 9, 2003, the Board of Directors adopted a Compensation Committee Charter
which delineates the duties and responsibilities of the Compensation Committee
regarding executive compensation and other matters.
The Board of Directors adopted an Incentive Compensation Plan (the
"Incentive Plan") which the stockholders approved at their Annual Meeting in
2002, with the intent of avoiding the possibility that the deductibility for
Federal income tax purposes of bonus compensation with regard to the year ending
December 31, 2002 or future years will be limited by Section 162(m) of the
Internal Revenue Code (which under certain circumstances causes compensation to
an employee in a year in excess of $1 million not to be deductible to the
employer). Nothing precludes the Compensation Committee from making any awards
that are outside the scope of the Incentive Plan. Moreover, to maintain
flexibility, the Committee has not adopted a policy that all compensation must
be deductible.
Under the Incentive Plan, the Committee may award cash bonuses to executive
officers of the Company. Awards of incentive compensation are based upon a
percentage of the Company's consolidated earnings before interest, taxes,
depreciation and amortization, before giving effect to losses from discontinued
operations, extraordinary gains or losses, the cumulative effect of accounting
changes, liquidity incentive programs or other forms of trading rebates and any
unusual nonrecurring gain or loss ("EBITDA"). None of the Chairman, the Vice
Chairman or the President may receive a bonus award under the Incentive Plan for
any fiscal year that exceeds 3.0% of the Company's consolidated EBITDA for that
fiscal year. In addition, no other executive officer may be awarded a bonus
under the Incentive Plan for any fiscal year that exceeds 1.5% of the Company's
consolidated EBITDA for that fiscal year. Bonuses may be payable in single lump
sums, or may be payable over periods of years, and may (but will not be required
to) be made forfeitable to the extent recipients do not continue to be employed
by the Company or its subsidiaries throughout the period during which they are
payable.
During 2003, the Committee conducted ten meetings on executive
compensation. The current form of executive compensation is annual total cash
compensation. Annual total cash compensation includes base salary and bonus
awards at the end of the year. Senior management endeavors to have base salary
reflect the market value of an individual's level of responsibilities,
competencies and contributions. The Committee strives to ensure that annual
bonuses reflect the performance of the Company, as well as individual
performance.
The Chairman's base salary of $600,000 represents the annual stipend to
which the Chairman of the Exchange is entitled. This salary amount was put into
place in 2000 and the Committee did not modify this amount. The Committee
determined that the Chairman was entitled to a bonus of $1.8 million based upon
the performance of the Company as measured by EBITDA for the fiscal year 2003.
SUBMITTED BY THE COMPENSATION COMMITTEE
Robert Steele (Chairman)
John Conheeney
Melvyn Falis
E. Bulkeley Griswold
Harley Lippman
10
AUDIT COMMITTEE REPORT
The Audit Committee is comprised of five independent Public directors of
the Company, and operates under a written charter adopted by the Committee and
the Board of Directors.
Management has the primary responsibility for the Company's consolidated
financial statements and the reporting process, including the system of internal
controls. KPMG LLP, the independent public accountants for the Company, are
responsible for performing an independent audit of the Company's consolidated
financial statements in accordance with generally accepted auditing standards
and for issuing a report thereon. The Audit Committee has the authority to
retain or dismiss the accountants and to monitor the accountants' performance.
In this context, the Audit Committee has met and held discussions with
management and the independent accountants. Management has represented to the
Audit Committee that the Company's consolidated financial statements were
prepared in accordance with accounting principles generally accepted in the
United States, and the Audit Committee has reviewed and discussed the
consolidated financial statements with management and the independent
accountants. The Audit Committee discussed with the independent accountants
matters in accordance with Statement on Auditing Standards No. 61 "Codification
of Statements on Auditing Standards."
The independent accountants provided to the Audit Committee the written
disclosures and the letter from the independent accountants as required by the
Independence Standards Board No. 1 "Independence Discussions With Audit
Committee." The Audit Committee discussed with the accountants the accountants'
independence.
The Audit Committee discussed with the Company's internal auditor and
independent accountants the plans for their respective audits. The Audit
Committee met with the internal auditors and independent accountants, with and
without management present, and discussed the results of their examinations,
their evaluations of the Company's internal controls and the quality of the
Company's financial reporting.
On June 4, 2003, the Board of Directors approved the recommendation of four
members of the Audit Committee to designate Mr. E. Bulkeley Griswold as the
Audit Committee Financial Expert in compliance with Section 407 of the
Sarbanes-Oxley Act of 2002.
On January 28, 2004, the Audit Committee established Whistleblower
Procedures for the Company which were adopted by the Board of Directors on
February 4, 2004.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended that the Board approve the consolidated financial
statements for inclusion in the Company's Annual Report on Form 10-K for the
year ended December 31, 2003, and the Board accepted the Audit Committee's
recommendation.
SUBMITTED BY THE AUDIT COMMITTEE
E. Bulkeley Griswold (Chairman)
John Conheeney
Melvyn Falis
Harley Lippman
Robert Steele
11
INDEPENDENT AUDITORS
On October 29, 2002, the Board of Directors of the Company ratified the
recommendation of the Audit Committee that the accounting firm, KPMG LLP
("KPMG"), be appointed as the independent auditor of the Company for the fiscal
year ending December 31, 2002 and thereafter, effective immediately.
Representatives from KPMG are expected to be present at the Annual Meeting, and
will have the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
During the two most recent fiscal years and the subsequent interim period
through December 31, 2003, there have been no reportable events (as defined in
Regulation S-K Item 304(a)(1)(v)) of the Company.
KPMG audited the Company's financial statements for the year ended December
31, 2003. The following table shows the fees billed to the Company by KPMG in
each of the last two fiscal years:
DESCRIPTION OF FEES 2003 2002
------------------- -------------- --------------
Audit Fees.................................................. $402,500 $250,000
Audit Related Fees(1)..................................... 84,500 84,500
Tax Fee(2)................................................ 232,450 67,000
All Other Fees.............................................. -- --
-------- --------
$719,450 $401,500
======== ========
---------------
(1) Audit-Related Fees represent amounts billed for the audits of the Company's
benefit plans, debt compliance report, and other specific reporting
requirements of the Company.
(2) Tax fees represent amounts billed for corporate tax compliance and advisory
services.
The Audit Committee has reviewed the above fees for non-audit services and
believes such fees are compatible with the independent accountants'
independence.
12
PRINCIPAL STOCKHOLDERS
The following table illustrates that (1) as of March 5, 2004, no director
or executive officer of the Company owned more than 1% of all the outstanding
shares of common stock of the Company and (2) no person is the beneficial owner
of 5% or more of the shares of common stock of the Company. The table sets forth
information in respect of directors, executive officers named in the
compensation table on page 14 and directors and executive officers as a group. A
person has beneficial ownership over shares if the person has voting or
investment power over the shares.
SHARES OF
COMMON PERCENT OF
STOCK COMMON STOCK
BENEFICIALLY BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED OWNED
------------------------ ------------ ------------
DIRECTORS
Vincent Viola............................................... 2 *
Mitchell Steinhause......................................... 1 *
Richard Schaeffer(1)........................................ 2 *
Gary Rizzi(2)............................................... 2 *
Stephen Ardizzone........................................... 1 *
Eric Bolling................................................ 2 *
Joseph Cicchetti............................................ 1 *
John Conheeney.............................................. 0
Melvyn Falis................................................ 0
Joel Faber.................................................. 4 *
Stephen Forman(3)........................................... 1 *
Kenneth Garland............................................. 1 *
Anthony George Gero......................................... 2 *
David Greenberg............................................. 1 *
E. Bulkeley Griswold........................................ 0
Jesse Harte (4)............................................. 1 *
Scott Hess.................................................. 1 *
Steven Karvellas............................................ 1 *
Harley Lippman.............................................. 0
Michel Marks................................................ 2 *
Kevin McDonnell............................................. 1 *
John McNamara(5)............................................ 1 *
Gordon Rutledge............................................. 1 *
Robert Steele............................................... 0
EXECUTIVE OFFICERS
J. Robert Collins, Jr....................................... 0
Christopher K. Bowen, Esq................................... 0
All directors and executive officers as a group............. 28 3.4%
---------------
* less than one percent
(1) Mr. Schaeffer has entered into an ABC Agreement with ABN AMRO, Inc.
(2) Mr. Rizzi has entered into an ABC Agreement with A.G. Edwards & Sons, Inc.
(3) Mr. Forman has entered into an ABC Agreement with Prudential Securities.
(4) Mr. Harte is currently leasing a membership/seat from Carr Futures, Inc. As
a lessee, Mr. Harte has no voting control or pecuniary interest in the
membership/seat.
(5) Mr. McNamara has entered into an ABC Agreement with BancOne Brokerage
International Corporation.
13
ABC AGREEMENT
An "ABC Agreement" is an agreement by which a member institution designates
an individual to exercise voting rights and other membership privileges with
respect to a membership purchased by the member institution, but does not give
the individual the power to dispose of the membership. The provisions of an ABC
Agreement also apply to the common stock of the Company shown to be beneficially
owned by each director shown as being party to an ABC Agreement.
EXECUTIVE OFFICER COMPENSATION
The Summary Compensation Table below sets forth information in respect of
the compensation of the Chairman of the Company during 2003 and the persons who
were, at December 31, 2003, the other four (4) most highly-compensated executive
officers of the Company and its subsidiaries during 2001, 2002 and 2003.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
---------------------------------------------
ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1)(2)(3)
--------------------------- ---- --------- --------- ---------------------
Vincent Viola, 2003 623,077 1,800,000
Chairman and Chief Executive Officer...... 2002 599,999 -- --
2001 456,923 850,000 --
J. Robert Collins, Jr., 2003 1,083,076 900,000 50,784
President................................. 2002 883,437 750,000 99,372
2001 338,461 350,000 --
Neal L. Wolkoff, Esq.,
Executive Vice President and 2003 515,384 250,000 391,882
Chief Operating Officer................... 2002 507,467 500,000 --
2001 500,000 359,615 --
Christopher K. Bowen, Esq., 2003 288,640 275,000 --
General Counsel and Chief Administrative
Officer................................ 2002 256,120 350,000 --
2001 248,860 93,156 --
Mitchell Steinhause, 2003 -- 450,000 112,000
Vice Chairman............................. 2002 -- 400,000 112,000
2001 -- 225,000 112,000
---------------
(1) Includes amounts deferred under the Company's 401(k) and deferred
compensation plans.
(2) Perquisites and other personal benefits aggregating the lower of $50,000 or
10% of the sum of salary and bonus are not reported.
(3) Includes an additional bonus payment of $300,000 pursuant to Mr. Wolkoff's
employment agreement because an initial public offering or private placement
of securities did not occur by December 31, 2003.
14
COMPENSATION OF DIRECTORS
Chairman: The Chairman receives an annual stipend of $600,000.
Vice Chairman: The Vice Chairman receives an annual stipend of $100,000 as
well as a fee of $1,000 for each monthly board meeting attended. In 2003, the
Vice Chairman received a year-end bonus in an amount of $450,000.
Director: Directors receive a monthly stipend of $2,500, or $30,000 a year
and an additional fee of $1,000 for each monthly board meeting attended. In
addition, directors serving on the executive committee receive a $20,000 yearly
retainer. Directors serving on the Executive Committee are also eligible to
receive a year-end bonus in an amount to be determined and approved by the
Board. In 2003, the members of the Executive Committee received the following
year-end bonus: Scott Hess $110,000; Gary Rizzi $110,000; and Richard Schaeffer
$110,000. In addition, director Madeline Boyd received a bonus of $50,000 in
recognition of her charitable efforts on behalf of the Exchange and its members
in the year 2003.
EMPLOYMENT AGREEMENTS
J. ROBERT COLLINS, JR.
The Company has an employment and compensation agreement with J. Robert
Collins, Jr., one of its executive officers through June 30, 2004. This
agreement provides for the executive to earn a salary of $1,000,000 for the
first two years and $1,200,000 beginning on the second anniversary of the
agreement through its termination. In addition to his stated salary, the
executive is entitled to an annual bonus based upon achievement of objective
performance goals as determined by the Compensation Committee and as set forth
under an Incentive Compensation Plan.
Moreover, the executive shall be entitled to 2% of the value of NYMEX
Holdings and NYMEX Exchange over $600 million, upon the occurrence of certain
triggering events, including a private placement, public offering or material
asset sale. In a private placement or public offering, a 30% transfer of the
voting power or economic interest of NYMEX Holdings or NYMEX Exchange would be
required for the executive to be entitled to the full 2% value; otherwise, the
executive would be entitled to a pro rated amount of the Incremental Value.
Incentive payment amounts will vest in 25% increments payable in four
installments beginning upon the closing of the transaction and per year for the
following three years. Under the terms of the Agreement, Mr. Collins is entitled
to a termination payment in the event he is terminated without Cause or for Good
Reason. Good Reason in the Agreement is defined as a material reassignment of
duties or reporting responsibilities, relocation greater than 50 miles, breach
or termination by NYMEX of the Agreement or, most importantly, failure by
shareholders to approve a short-term incentive plan or an equity incentive plan
in the event of a public offering, private placement or other triggering event.
In the event the executive resigns for Good Reason due to the failure by
stockholders to approve equity incentives relative to the executive, the
executive is entitled to a cash payment in lieu of such equity incentives equal
to the value of the incentives he would have received. The general severance
payment in the event of resignation for Good Cause (or termination without
cause) is two times the sum of base salary or highest annual bonus; however, as
noted above, if the payment is due to the disapproval of an equity incentive
plan by shareholders, Mr. Collins would be entitled to a larger payment.
Additionally, under the terms of the Agreement, Mr. Collins is entitled to a
payment of twelve months of base salary plus the most recent annual bonus in the
event of a non-renewal of his contract.
NEAL L. WOLKOFF, ESQ.
The Company has an employment and compensation agreement with Neal L.
Wolkoff, Esq., one of its executive officers. This agreement provides for the
named officer to earn a minimum salary of $500,000 per year through 2003. In
addition to his stated annual salary, the executive shall have the opportunity
to receive an annual bonus in an amount to be determined by the Board of
Directors, but in no event less than $250,000
15
per year. Under the terms of the Agreement, Mr. Wolkoff is entitled to a
termination payment in the event he is terminated without Cause or for Good
Reason. Good Reason in the Agreement is defined as relocation by more than 50
miles of Mr. Wolkoff's principal place of employment or a material uncured
breach by the Company. In such event, Mr. Wolkoff is entitled to a termination
payment in the amount of (A) a cash payment equal to 200% of the sum of (x)
annual salary and (y) the minimum annual bonus payable in prescribed
installments over a one-year period.
On October 27, 2003, Mr. Wolkoff entered into an Agreement and Release
which confirmed the non-renewal of his employment agreement and the end of his
service as the Executive Vice President of NYMEX Holdings, Inc. effective
December 31, 2003. Pursuant to the terms of the Agreement, Mr. Wolkoff will
receive a lump sum payment of $250,000 constituting his annual bonus for the
year 2003; an additional payment of $500,000 on March 16, 2004, as an amendment
to the original Agreement dated January 7, 2004; an additional payment of
$25,000 on March 16, 2004 in consideration for the amendment of the Agreement;
an additional payment of $500,000 on or before January 7, 2005; and become fully
vested as of his Separation Date in his 401(k) and deferred compensation
benefits.
On October 27, 2003, Mr. Wolkoff entered into a Consulting Agreement
("Consultant") with New York Mercantile Exchange, Inc. Pursuant the Agreement,
Mr. Wolkoff will be retained as a consultant for a term of 24 months commencing
January 1, 2005 and ending December 31, 2006 for a monthly consultancy fee of
$25,000. Mr. Wolkoff will be retained to provide advice and services as the
President and/or Chairman of the Company may reasonably request. Additionally,
the consultancy agreement contains restrictive covenant provisions for the
period January 1, 2005 through December 31, 2006.
SAMUEL H. GAER
The Company has an employment and compensation agreement with Samuel H.
Gaer, one of its executive officers. This agreement provides for the named
officer to earn a salary of $360,000 per year through March 31, 2006. In
addition to his stated annual salary, the executive shall have the opportunity
to receive an annual bonus in an amount to be determined by the Board of
Directors, but in no event less than $100,000 per year. Under the terms of the
Agreement, Mr. Gaer is entitled to a termination payment in the event he is
terminated without Cause or for Good Reason. Good Reason in the Agreement is
defined as relocation by more than 50 miles of Mr. Gaer's principal place of
employment or a material uncured breach by the Company. In such event, Mr. Gaer
is entitled to a termination payment in the amount of (A) a cash payment equal
to 200% of the sum of (x) annual salary and (y) the minimum annual bonus payable
in prescribed installments over a one-year period.
DIRECTOR NOMINATION PROCESS
The nomination process for directors of the company is managed by a
Subcommittee of the Membership Committee of the New York Mercantile Exchange,
Inc. (the "Subcommittee") To qualify for the Subcommittee, a person must have
been a member for one year prior to his or her service. The Subcommittee holds
an open meeting to accept recommendations of names for proposed nominees for the
Board of Directors. At that meeting, any stockholder may recommend a proposed
nominee for each open position. A stockholder may not recommend more than one
candidate per category. Written recommendations by stockholders proposing
candidates may be presented prior to or at this meeting. Thereafter, a list of
the recommendations of proposed nominees is compiled and immediately posted.
Additional written recommendations by stockholders for proposed nominees may be
submitted to the Subcommittee until a specified date. Thereafter, a final list
of recommended names and the categories in which they are proposed to run will
be immediately posted.
After the specified date to nominate candidates, the Subcommittee convenes
to make its determination as to the eligibility of the proposed nominees to run
in the category for which the candidate was proposed. Such determination is
immediately posted. Should the Subcommittee determine that a proposed candidate
is ineligible to run in the category for which he was recommended, written
notice thereof shall immediately be submitted to that person. To assist the
Subcommittee, stockholders may submit information regarding the
16
eligibility of a proposed nominee to the Subcommittee. All such submissions must
be received by a specified time and date at the Office of the Corporate
Secretary. In addition, a proposed nominee may appeal the Subcommittee's
categorization. Such appeal must be made by a specified time. The Subcommittee
considers the appeal and makes a final ruling by a specified date. At that time,
the Subcommittee assigns the proposed nominees to the proper categories,
regardless of the category for which the proposed nominee was originally
recommended; however, only persons who were recommended to be candidates for
Chairman are eligible to run for that office.
To be officially nominated, each proposed nominee is required to file with
the Office of Corporate Secretary a declaration which states that category in
which the person intends to stand for election. Failure to submit a declaration
by a specified date will render the proposed nominee ineligible to run in any
category.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and persons who own more than 10% of
a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company.
Directors, officers and greater than 10% shareholders are required to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company, during the fiscal year ended December 31,
2003, all Section 16(a) filing requirements applicable to its directors,
officers and greater than 10% beneficial owners were complied with except that a
Form 4 filing was not made on a timely basis to reflect a transfer of one-half
share of common stock and one-half Class A membership by Eric Bolling in January
2003 in respect of a sale of a half interest in a NYMEX Division seat to another
individual.
STOCKHOLDER PROPOSALS
Proposals that Stockholders wish be included in next year's Proxy Statement
for the Annual Meeting to be held in 2005 in accordance with Rule 14a-8 under
the Securities Exchange Act of 1934 must be received by the Office of the
Corporate Secretary at our principal offices at One North End Avenue, New York,
New York 10282-1101 no later than December 31, 2004.
OTHER MATTERS
Our management knows of no matters, other than the foregoing, that will be
presented for action at the Annual Meeting.
By Order of the Board of Directors of
NYMEX Holdings, Inc.
GARY RIZZI
Corporate Secretary
Dated: March 5, 2004
17
INSTRUCTIONS TO VOTE BY FAX
YOU MAY CAST YOUR VOTE(S) BY FACSIMILE:
THE FAX NUMBER IS (212) 301-4645.
YOUR FAX MUST BE RECEIVED BY 3:00 P.M. (NEW YORK TIME) ON TUESDAY, MARCH 16,
2004 AND MUST BE IN THE FORM OF THE ENCLOSED PROXY CARD AND PROXY ENVELOPE. A
SEPARATE PROXY CARD AND PROXY ENVELOPE MUST BE FAXED FOR EACH SHARE OWNED OR
HELD BY AN ABC AGREEMENT.
FOR FURTHER INFORMATION TO VOTE BY FAX, PLEASE REFER TO THE PROXY STATEMENT.
PROXY CARD
NYMEX HOLDINGS, INC.
One North End Avenue, World Financial Center
New York, NY 10282-1101 (212) 299-2372
March 16, 2004
Place a cross (x) next to the name of each nominee for whom you wish to vote.
--------------------------------------------------------------------------------
CHAIRMAN OF THE BOARD
(ONE three-year term to expire 2007)
VOTE FOR ONE (1)
[ ] Mitchell Steinhause (STEN)
------------------------------------------------
FLOOR BROKER
(ONE three-year term to expire 2007)
VOTE FOR ONE (1)
[ ] Gordon Rutledge (OPEC)(Incumbent)
------------------------------------------------
LOCAL
(ONE three-year term to expire 2007)
VOTE FOR ONE (1)
[ ] Daniel Dicker (DANO)
[ ] Michael McCallion (MMC)
[ ] Mitchell Stern (MJS)
------------------------------------------------
FUTURES COMMISSION MERCHANT
(ONE three-year term to expire 2007)
VOTE FOR ONE (1)
[ ] Gary Rizzi (RAZZ)(Incumbent)
TRADE
(ONE three-year term to expire 2007)
VOTE FOR ONE (1)
[ ] Stephen Forman (Incumbent)
------------------------------------------------
AT LARGE
(ONE three-year term to expire 2007)
VOTE FOR ONE (1)
[ ] Kenneth Garland (CASH)(Incumbent)
------------------------------------------------
EQUITY HOLDER
(ONE three-year term to expire 2007)
VOTE FOR ONE (1)
[ ] Bruce Fein
[ ] Harvey Gralla
[ ] Michel Marks (Incumbent)
[ ] Richard Saitta
------------------------------------------------
PUBLIC
(TWO three-year terms to expire 2007)
VOTE FOR TWO (2)
[ ] Ronald Comerchero
[ ] Harley Lippman (Incumbent)
[ ] Robert Steele (Incumbent)
--------------------------------------------------------------------------------
NYMEX HOLDINGS, INC.
FOR ENCLOSURE OF PROXY CARD ONLY
PLEASE BE SURE TO SIGN ATTACHED PROXY
Fold Here O
DO NOT DETACH .
SCHEDULE 14A (RULE 14a-101)
This proxy is solicited on behalf of the Board of Directors
of
NYMEX HOLDINGS, INC.
ONE NORTH END AVENUE
PROXY WORLD FINANCIAL CENTER PROXY
NEW YORK, NEW YORK 10282-1101
ANNUAL MEETING -- MARCH 16, 2004
I hereby constitute and appoint William Nugent and Harry Shulman, and either
of them, with full power of substitution, as my proxy or proxies, to appear for
me in my name, place and stead, to cast in accordance with my proxy card all
votes that I cast at the Annual Meeting to be held on March 16, 2004, and at any
adjournment thereof, and to act for me in my name, place and stead, in their
discretion, on any other matter which may come before the meeting. My proxy card
is enclosed.
------------------------------------------------
Signature
------------------------------------------------ ------------------------------------------------
Date Print Name
DO NOT DETACH -- IF YOU DETACH THE PROXY FROM THE ENVELOPE
IT WILL INVALIDATE THE PROXY CARD
Fold Here O