UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

 

Filed by the Registrant x

Filed by a Party other than the Registrant o

Check the appropriate box:

o  Definitive Additional Materials

o  Soliciting Material Pursuant to §240.14a-12

 

NYSE Euronext

(Name of Registrant as Specified in its Charter)

 

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (check the appropriate box):

 

 

 

11 WALL STREET

NEW YORK, NEW YORK 10005

APRIL 29, 2010, 8:00 A.M., NEW YORK TIME

 

March 22, 2010

 

Dear NYSE Euronext Stockholder:

 

You are cordially invited to attend the 2010 annual meeting of stockholders of NYSE Euronext (the “Annual Meeting”) scheduled for Thursday, April 29, 2010, at 8:00 a.m., New York time, at 11 Wall Street, New York, New York 10005. The Board of Directors and management look forward to greeting you.

 

We enclose our proxy statement, our annual report on Form 10-K for the fiscal year ended December 31, 2009 and a proxy card. Please review these documents carefully.

 

Your vote is very important to us. Whether or not you plan to attend the meeting in person, your shares should be represented and voted.

 

After reading the proxy statement, please submit your proxy through the Internet or by touch-tone telephone, or complete, sign, date and promptly return the proxy card by mail in the enclosed self-addressed envelope. We must receive votes submitted via mail, the Internet or by touch-tone telephone by 11:59 p.m., New York time, on April 28, 2010 in order for them to be counted at the Annual Meeting. We encourage you to vote via the Internet using the control number that appears on the front of your proxy card and to choose to view future mailings electronically rather than receiving them on paper.

 

On behalf of the Board of Directors, thank you for your continued support.

 

 

NYSE EURONEXT
11 Wall Street
New York, New York 10005

 

 

Notice of 2010 Annual Meeting of Stockholders

 

 

 

Important Notice Regarding the Availability of Proxy Materials for the Annual
Meeting of Stockholders to be Held on April 29, 2010. The Proxy Statement and our 2009 Annual Report
on Form 10-K are available at http://materials.proxyvote.com/629491.

 

By Order of the Board of Directors:

 

Jan-Michiel Hessels

Chairman of the Board of Directors

 

New York, New York

March 22, 2010

 

 

TABLE OF CONTENTS

 

 

 

 

 

NYSE EURONEXT
11 Wall Street
New York, New York 10005

 

 

PROXY STATEMENT

 

 

March 22, 2010

 

We are sending you this proxy statement and the accompanying proxy card in connection with the solicitation of proxies by our Board of Directors for the 2010 annual meeting of stockholders (the “Annual Meeting”) scheduled for Thursday, April 29, 2010, at 8:00 a.m., New York time, at 11 Wall Street, New York, New York 10005. We are mailing this proxy statement and the accompanying proxy card to stockholders on or about March 22, 2010. In this proxy statement, we refer to NYSE Euronext as the “Company,” “we,” “our,” or “us” and the Board of Directors as the “Board.” Whenever we refer in this proxy statement to the “Annual Meeting,” we are also referring to any meeting that results from any postponement or adjournment of the April 29, 2010 meeting.

 

We are pleased to offer a webcast of the Annual Meeting. If you choose to view the webcast, go to www.nyseeuronext.com under the heading Investor Relations—Calendar & Presentations shortly before the meeting time, and follow the instructions provided. If you miss the meeting, you can view a replay of the webcast on that site shortly after the Annual Meeting. Please note that you will not be able to vote your shares via the webcast or ask questions via the webcast. If you plan to view the webcast, please submit your vote using one of the methods described in these materials.

 

Information on how you may vote at the Annual Meeting (such as granting a proxy that directs how your shares should be voted, or attending the Annual Meeting in person), as well as how you can revoke a proxy, are discussed in this proxy statement below under Voting Instructions and Information.

 

You may vote your shares at the Annual Meeting only if you were a stockholder of record at the close of business on March 1, 2010. On that date, 260,574,584 shares of our common stock were outstanding, and we had no other class of equity securities issued and outstanding. Subject to the voting limitations described below under What are the voting and ownership limitations?, you are entitled to one vote for each share of common stock you own for each matter to be voted on at the Annual Meeting. The number of shares you own (and may vote) is listed on the proxy card.

 

There are two proposals from NYSE Euronext to be considered and voted on at the meeting:

 

 

In addition, there are two proposals from stockholders to be considered and voted on at the meeting:

 

 

You may also vote on any other business that properly comes before the Annual Meeting.

 

Our Board of Directors unanimously recommends that you vote:

 

 

During the ten days prior to the Annual Meeting, a list of the stockholders of record as of March 1, 2010 will be available for inspection as described below under How can I view the stockholders list?.

 

 

If you are a stockholder of record, these proxy materials are being sent to you directly. If you hold shares in street name, these materials are being sent to you by the bank, broker or similar institution through which you hold your shares.

 

A list of the stockholders of record as of March 1, 2010 will be available for inspection during ordinary business hours at our offices located at NYSE Euronext, 11 Wall Street, New York, New York 10005, for ten days prior to the Annual Meeting, as well as at the Annual Meeting. To make arrangements to review the list prior to the Annual Meeting, stockholders should contact our corporate secretary at +1 (212) 656-3000. In accordance with our security procedures, all persons requesting to inspect the stockholder list, either at our offices or at the location of the Annual Meeting, must wear proper attire and present an acceptable form of photo identification, such as a passport or driver’s license, and submit to screening by metal detector and x-ray examination of all packages, bags and luggage.

 

Stockholders in the U.S., Puerto Rico or Canada:

 

You may submit your proxy with voting instructions in one of four ways:

 

 

If you are a U.S., Puerto Rican or Canadian stockholder, you may contact NYSE Euronext’s U.S. solicitation agent, MacKenzie Partners, Inc. (telephone: +1 (800) 322-2885 or +1 (212) 929-5500; email: proxy@mackenziepartners.com) with any questions.

 

All Other Stockholders:

 

If you are a stockholder other than a U.S., Puerto Rican or Canadian stockholder, you may contact NYSE Euronext’s proxy solicitor, MacKenzie Partners, Inc. (London office) (telephone: +44 (0) 203 178 8057; facsimile +44 (0) 207 504 8665; email: proxy@mackenziepartners.com) or NYSE Euronext Investor Relations—Paris (telephone: +33 1 4927 1512; facsimile: +33 1 4927 1113) for specific information on how to vote your shares or how to attend the Annual Meeting. Please also note that your completed form must be received by your account holder or financial intermediary in sufficient time to ensure that it will be received by NYSE Euronext’s proxy solicitor no later than 11:59 p.m., New York time, on April 28, 2010.

 

You may also attend the Annual Meeting and vote your shares in person by ballot. If you plan to attend the Annual Meeting in person you will need to bring proof of your ownership of NYSE Euronext common stock as of the close of business on March 1, 2010.

 

If you hold shares in “street name” (that is, through a bank, broker or other nominee) and would like to attend the Annual Meeting and vote in person, you will need to bring an account statement or other acceptable

evidence of ownership of NYSE Euronext common stock as of the close of business on March 1, 2010. Alternatively, in order to vote at the meeting, you may contact the person in whose name your shares are registered and obtain a proxy from that person and bring it to the Annual Meeting.

 

In accordance with our security procedures, all persons attending the Annual Meeting must wear proper attire and present an acceptable form of photo identification, such as a passport or driver’s license, and submit to screening by metal detector and x-ray examination of all packages, bags and luggage.

 

Attending the Annual Meeting will not automatically revoke a proxy that was submitted through the Internet or by telephone or mail.

 

You can revoke your proxy or substitute a new proxy at any time before your proxy is voted at the Annual Meeting as described below.

 

For a Proxy Submitted by Internet or Telephone:

 

 

For a Proxy Submitted by Mail:

 

 

If you properly submit your proxy by one of these methods, and you do not subsequently revoke your proxy, your shares will be voted in accordance with your instructions.

 

If you sign, date and return your proxy card but do not give voting instructions, your shares will be voted as follows: FOR the election of NYSE Euronext’s director nominees, FOR the ratification of the appointment of PricewaterhouseCoopers LLP as NYSE Euronext’s independent registered public accounting firm for our fiscal year ending December 31, 2010, ABSTAIN from the stockholder proposal to adopt simple majority voting in our charter and bylaws, AGAINST the stockholder proposal relating to certificated shares and otherwise in accordance with the judgment of the persons voting the proxy on any other matter properly brought before the Annual Meeting.

 

Under the New York Stock Exchange (the “NYSE”) member rules, a member broker (i.e., a member of the New York Stock Exchange) who holds shares in street name for customers generally has the authority to vote on certain “routine” or “discretionary” proposals if it has transmitted proxy soliciting materials to the beneficial owner but has not received instructions from that owner. Therefore, if your broker holds shares in your name and delivers this proxy statement to you, the broker is entitled to vote your shares for the ratification of the appointment of our independent auditors even if the broker does not receive voting instructions from you. However, certain member brokers will only vote uninstructed shares in the same proportion as the instructions received from their other stockholders. Starting this year, the election of

directors is not a “routine” or “discretionary” proposal; therefore, if you do not instruct your broker how to vote with respect to the election of directors, your shares will not count and will be treated as “broker non-votes.” These procedures will not apply to stockholders who hold their shares through non-U.S. financial intermediaries.

 

A majority of all outstanding shares entitled to vote at the Annual Meeting constitutes a quorum (i.e., the minimum number of shares that must be present or represented by proxy at the Annual Meeting in order to transact business). Subject to the rules regarding the votes necessary to adopt the proposals discussed below, abstentions and broker non-votes will be counted for purposes of determining whether a quorum is present. “Broker non-votes” are proxies returned by brokerage firms for which no voting instructions have been received from beneficial owners and discretionary votes were not cast. Once a share is represented for any purpose at the Annual Meeting, it will be deemed present for quorum purposes for the remainder of the meeting (including any meeting resulting from an adjournment or postponement of the Annual Meeting, unless a new record date is set).

 

Election of Directors

 

Under our bylaws, a plurality of the votes cast by stockholders entitled to vote at the Annual Meeting is required for the election of directors. Accordingly, the directorships to be filled at the Annual Meeting will be filled by the nominees receiving the highest number of votes. In the election of directors, votes may be cast in favor of or withheld with respect to any or all nominees. However, despite our bylaw provisions, we have adopted corporate governance guidelines that include a majority vote policy for the election of directors. Under this policy, in non-contested elections, if a director nominee receives a greater number of “withheld” or “against” votes than “for” votes, the director must immediately tender his or her resignation from the Board, and the Board will decide, through a process managed by the Nominating and Governance Committee and excluding the nominee in question, whether to accept the resignation. The NYSE Euronext Corporate Governance Guidelines are available on our website at www.nyseeuronext.com under the heading Investor Relations—Corporate Governance—Governance. As mentioned above, starting this year, if you do not instruct your broker how to vote with respect to this item, your broker may not vote your shares with respect to this proposal.

 

Ratification of the selection of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm

 

The affirmative vote of a majority of the votes cast by stockholders entitled to vote at the Annual Meeting is required to ratify the appointment of our independent auditors. An abstention from voting on this matter will be treated as “present” for quorum purposes. However, since an abstention is not treated as a “vote” for or against the matter, it will have no effect on the outcome of the vote.

 

Stockholder Proposals

 

The affirmative vote of a majority of the votes cast by stockholders entitled to vote at the Annual Meeting is required to approve each stockholder proposal. An abstention from voting on either matter will be treated as “present” for quorum purposes. However, since an abstention is not treated as a “vote” for or against the matter, it will have no effect on the outcome of the vote.

 

Broker Non-Votes

 

Because directors are elected by a plurality of the votes cast, an abstention, broker non-vote or withheld vote will have no impact on the election, although a director who receives more votes “withheld” than “for” his or her election will be required to submit his or her resignation as described above under Election of Directors.

In the case of ratification of the appointment of PricewaterhouseCoopers LLP and the stockholder proposals, only votes cast “for” or “against” the approval or ratification will be considered; abstentions and broker non-votes will not be treated as a vote “for” or “against” the ratification or approval and therefore will have no effect on the vote.

 

Our charter places certain ownership and voting limits on the holders of our common stock. Capitalized terms used below are defined in Annex A to this proxy statement. Under our charter:

 

 

In the event that a Person, either alone or together with its Related Persons, beneficially owns shares of our common stock representing more than 20% of the total number of votes entitled to be cast on any matter, such Person and its Related Persons shall be obligated to sell promptly, and NYSE Euronext shall be obligated to purchase promptly, at a price equal to the par value of such shares of stock and to the extent that funds are legally available for such purchase, that number of shares of our common stock necessary so that such Person, together with its Related Persons, shall beneficially own shares of our common stock representing in the aggregate no more than 20% of the total number of votes entitled to be cast on any matter, after taking into account that such repurchased shares shall become treasury shares and shall no longer be deemed to be outstanding.

 

In the event that a Person, either alone or together with its Related Persons, possesses more than 10% of the total number of votes entitled to be cast on any matter (including if it possesses this voting power by virtue of agreements entered into by other persons not to vote shares of our outstanding capital stock), then such Person, either alone or together with its Related Persons, will not be entitled to vote or cause the voting of these shares of our capital stock to the extent that such shares represent in the aggregate more than 10% of the total number of votes entitled to be cast on any matter, and NYSE Euronext shall disregard any such votes purported to be cast in excess of this percentage.

 

The voting limitations do not apply to a solicitation of a revocable proxy by or on behalf of NYSE Euronext or by any officer or director of NYSE Euronext acting on behalf of NYSE Euronext or to a solicitation of a revocable proxy by a NYSE Euronext stockholder in accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This exception, however, does not apply to certain solicitations by a stockholder pursuant to Rule 14a-2(b)(2) under the Exchange Act, which permits a solicitation made otherwise than on behalf of NYSE Euronext where the total number of persons solicited is not more than ten.

 

Our Board of Directors may waive the provisions regarding ownership and voting limits by a resolution expressly permitting this ownership or voting (which resolution must be filed with and approved by the Securities and Exchange Commission (the “SEC”) and all required European regulators prior to being effective), subject to a determination of the Board that:

 

 

 

 

 

In making these determinations, our Board of Directors may impose conditions and restrictions on the relevant stockholder or its Related Persons that it deems necessary, appropriate or desirable in furtherance of the objectives of the Exchange Act, the European exchange regulations and the governance of NYSE Euronext.

 

For purposes of these provisions, a “European market subsidiary” means a “market operator,” as defined by the European Directive on Markets in Financial Instruments, that:

 

 

Our charter also provides that our Board of Directors has the right to require any Person and its Related Persons that our Board reasonably believes to be subject to the voting or ownership restrictions summarized above, and any stockholder (including Related Persons) that at any time beneficially owns 5% or more of our outstanding capital stock, to provide to us, upon our Board’s request, complete information as to all shares of our capital stock that such stockholder beneficially owns, as well as any other information relating to the applicability to such stockholder of the voting and ownership requirements outlined above.

 

If you are a Related Person with another holder of our common stock where either: (i) you (either alone or with your Related Person) may vote shares of common stock representing more than 10% of the then outstanding votes entitled to vote at the Annual Meeting, or (ii) you have entered into an

agreement not to vote shares of our common stock, the effect of which agreement would be to enable any Person, either alone or with its Related Persons, to vote or cause the voting of shares of our common stock that represent in the aggregate more than 10% of the then outstanding votes entitled to be cast at the Annual Meeting, then please so notify the Company by either including that information (including each Related Person’s complete name) on your proxy card or by contacting the corporate secretary by mail at NYSE Euronext, 11 Wall Street, New York, New York 10005, or by phone at +1 (212) 656-3000.

 

We will bear the cost of soliciting proxies. Our directors, officers and employees may solicit proxies on behalf of the Board through regular and electronic mail, telephone, fax and personal contact. MacKenzie Partners, Inc. has been retained to assist in soliciting proxies at a fee of $12,000, plus distribution costs and other expenses. Directors, officers and employees of the Company will receive no additional compensation for soliciting proxies. We will reimburse certain brokerage firms, banks, custodians and other fiduciaries for the reasonable mailing and other expenses they incur in forwarding proxy materials to the beneficial owners of our stock that those brokerage firms, banks, custodians and fiduciaries hold of record.

 

We are required to file annual, quarterly and current reports, proxy statements and other reports with the SEC and the Autorité des Marchés Financiers (the French securities regulator known as “AMF”). Copies of these filings are available through our Internet website at www.nyseeuronext.com and, in the case of SEC filings, also on the SEC’s website at www.sec.gov. We will furnish copies of our SEC filings (without exhibits), including our annual report on Form 10-K for the fiscal year ended December 31, 2009, without charge to any stockholder upon written or oral request to our Investor Relations Department at NYSE Euronext, 11 Wall Street, New York, New York 10005, +1 (212) 656-5700 or InvestorRelations@nyx.com.

 

Householding of Annual Meeting materials

 

Some banks, brokers and other nominee record holders may participate in the practice of “householding” proxy statements and their accompanying documents. This means that only one copy of our proxy statement and our Form 10-K are sent to multiple stockholders sharing the same address. We will promptly deliver a separate copy of these documents to you upon written or oral request to our Investor Relations Department at NYSE Euronext, 11 Wall Street, New York, New York 10005, +1 (212) 656-5700 or InvestorRelations@nyx.com. If you want to receive separate copies of the proxy statement and our Form 10-K in the future, or if you are receiving multiple copies and would like to receive only one copy per household, you should contact your bank, broker or other nominee record holder, or you may contact our Investor Relations Department at the above address and phone number.

 

Under our charter and bylaws, only our Board of Directors may set the number of directors who may serve on the Board at any time. Our Board of Directors currently consists of eighteen directors, and following the Annual Meeting will consist of sixteen directors.

 

At each annual meeting of stockholders, all directors are elected for a one-year term expiring at the next annual meeting of stockholders. Each director will hold office until the director’s successor has been elected and qualified, or until the director’s earlier resignation or removal. Currently, the Board of Directors consists of Jan-Michiel Hessels (Chairman), Marshall N. Carter (Deputy Chairman), Duncan L. Niederauer (Chief Executive Officer), Ellyn L. Brown, Patricia M. Cloherty, Sir George Cox, Sylvain Hefes, Dominique Hoënn, Shirley Ann Jackson, Duncan M. McFarland, James J. McNulty, Baron Jean Peterbroeck, Alice M. Rivlin, Ricardo Salgado, Robert G. Scott, Jean-François Théodore, Rijnhard van Tets and Sir Brian Williamson. Mr. Hoënn, Dr. Jackson, Baron Peterbroeck and Dr. Rivlin are not standing for re-election at the Annual Meeting.

 

The Board proposes the election as directors of the persons named below under Nominees for Election to the Board of Directors to hold office for a one-year term expiring at the annual meeting of stockholders to be held in 2011.

 

If you sign the enclosed proxy card and return it to NYSE Euronext or submit your proxy by touch-tone telephone or via the Internet, your proxy will be voted in favor of our 16 director nominees, for one-year terms expiring at the annual meeting of stockholders to be held in 2011, unless you specifically indicate that you are withholding authority to vote for one or more of those nominees.

 

All but two of the 16 nominees, André Bergen and Jackson P. Tai, are current directors of NYSE Euronext, having been elected at the annual meeting of stockholders of NYSE Euronext on April 2, 2009 or, with respect to Mr. Scott, appointed by the Board of Directors on February 4, 2010, subject to regulatory approval. All of the nominees have been recommended for re-election (or in the case of Mr. Bergen, Mr. Scott and Mr. Tai, election) by our Nominating and Governance Committee and approved and nominated for election or re-election by the Board of Directors. Mr. Bergen and Mr. Scott were each referred to the Nominating and Corporate Governance Committee for consideration as a director nominee by one of our non-management directors, and Mr. Tai was referred to the Nominating and Corporate Governance Committee by an independent advisor to the committee. It should be noted that Mr. Bergen’s and Mr. Tai’s election (and, Mr. Scott’s initial appointment) to the Board are subject to regulatory approval. For more information on the regulatory approval required, see Corporate Governance—Requirements for Directors. All nominees have agreed to serve on the Board of Directors if they are elected. If any nominee is unable (or for whatever reason declines) to stand for election at the Annual Meeting, proxies will be voted in favor of such other person or persons who are recommended by the Nominating and Governance Committee and designated by the Board of Directors, or else the size of the Board of Directors will be reduced.

 

The Board has determined, upon the recommendation of the Nominating and Governance Committee, and in accordance with our Corporate Governance Guidelines and our Director Independence Policy, that all of our director nominees are “independent” within the meaning of the rules of the NYSE and our Director Independence Policy and have no material relationship with NYSE Euronext, its subsidiaries or its management (either directly or as a partner, stockholder or officer of an organization that has a relationship with NYSE Euronext), with the exception of Mr. Niederauer, our chief executive officer, and Mr. Théodore, our former deputy chief executive officer. For more information on the Board of Director’s independence determination, see Corporate Governance—Director Independence.

 

Additional information, including information concerning the operation of our Board as well as the security ownership and compensation of our directors, is included below in this proxy statement under Corporate Governance—Compensation of Directors and Security Ownership of Certain Beneficial Owners and Management.

 

As discussed below under Corporate Governance—Board Meetings and Committees—Nominating and Governance Committee, the Nominating and Governance Committee selects director candidates on the basis of outstanding achievement in their professional careers, broad experience, personal and professional integrity, previous board or top-level management/leadership experience and ability to make independent analytical inquiries, among other things.

 

The Nominating and Governance Committee believes that director candidates must have:

 

 

 

 

In addition to the requirements described under Corporate Governance—Requirements for Directors and Corporate Governance—Director Independence, our bylaws require that in any election of directors, the nominees who shall be elected to the Board shall be nominees who receive the highest number of votes such that, immediately after such election, (1) U.S. persons as of such election shall constitute at least half of, but no more than the smallest number of directors that will constitute a majority of, the directors on the Board and (2) European persons as of such election shall constitute the remainder of the directors on the Board.

 

A number of our Board nominees have experience as directors of the various predecessor exchanges and companies that now comprise NYSE Euronext. In addition, each of our Board nominees possesses specific experience, qualifications, attributes or skills that led the Nominating and Governance Committee to the conclusion that such person should serve as a director of NYSE Euronext, in light of our business and structure.

 

Set forth below are the name, principal occupation and certain biographical information, including specific experience, qualifications, attributes or skills, for each of the nominees for election to the Board of Directors to hold office for a one-year term expiring at the 2011 annual meeting of stockholders:

 

 

 

Our Board of Directors unanimously recommends you vote FOR the election of each of the nominees listed above to the Board.

 

We have created a governance structure that we believe reflects the highest standards of independence, oversight and transparency. Our Board regularly reviews corporate governance developments and modifies our Corporate Governance Guidelines, committee charters and practices from time to time. The charters of the Audit Committee, the Human Resources and Compensation Committee and the Nominating and Governance Committee, as well as our Corporate Governance Guidelines and the Director Independence Policy of the Board of Directors are available on our website at www.nyseeuronext.com under the heading Investor Relations—Corporate Governance.

 

In an effort to further enhance the accountability of each director to our stockholders, the Board recently approved an amendment to our bylaws, subject to regulatory approval as required, that would specify that director nominees in non-contested elections would be elected by a majority vote, rather than the current standard of a plurality vote. If approved by our regulators, this amendment will provide that each vote for a director nominee will be specifically counted “for” or “against” such director nominee’s election. An affirmative majority of the total number of votes cast “for” or “against” such director nominee will be required for election. Stockholders will also be entitled to abstain with respect to the election of any director. In accordance with Delaware law, abstentions will have no effect in determining whether the required affirmative majority vote had been obtained. Under this amendment, in an uncontested election, any director nominee who receives a greater number of votes “against” his or her election than votes “for” such election will tender his or her resignation for consideration by the Nominating and Governance Committee. The Nominating and Governance Committee will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the Nominating and Governance Committee’s recommendation and publicly disclose its decision and the rationale behind it promptly upon such decision being made and in any event within 90 days from the date of the certification of the election results.

 

Before this amendment becomes effective, however, it must be submitted to our regulated subsidiaries’ boards of directors and/or the SEC and the various European securities regulators. Specifically, any proposed amendment to our bylaws must either be (i) filed with, and approved by, the SEC and the European securities regulators or (ii) submitted to the boards of directors of our regulated subsidiaries, any of which may determine that the proposed amendment must be filed with, and approved by, the SEC or such European securities regulators. There can be no assurance that we will receive the approval of such regulators for the amendment discussed above or that we will receive any such approval within any particular time period.

 

In addition, our Board has adopted a Code of Ethics and Business Conduct that applies to our directors, chief executive officer and chief financial officer, as well as to all other employees, which is also available on our website at www.nyseeuronext.com under the heading Investor Relations—Corporate Governance—Governance. Any amendment to the NYSE Euronext Code of Ethics and Business Conduct and any waiver applicable to our directors, executive officers or senior financial officers will be posted on our website within the time period required by the SEC and the NYSE.

 

Our charter provides that no person that is subject to any statutory disqualification (as defined under Section 3(a)(39) of the Exchange Act) will be permitted to serve as a director of NYSE Euronext.

 

Each of our directors must be approved by the Chairs Committee of the College of Euronext Regulators and must pass any “fit and proper” test under applicable European laws or regulations. A finding of “fit and proper” takes into account, among other things, the integrity and competence of the individual. All of our current directors, except for Robert G. Scott, have been approved by the Chairs Committee of the College of Euronext Regulators and have been found to be “fit and proper” under applicable European laws and regulations. Mr. Scott, who was appointed to the Board on February 4, 2010, and André Bergen and

Jackson P. Tai, who are new director nominees, have filed the appropriate documents seeking such a finding and, if elected by our stockholders, upon such a finding, will be formally seated as directors on the Board.

 

NYSE Euronext common stock is listed on the NYSE as well as Euronext Paris. As a company listed on the NYSE, our Board of Directors must comply with the NYSE corporate governance requirements, including the director independence standards. Those standards require that a majority of our Board of Directors be comprised of directors that have no direct or indirect material relationship with NYSE Euronext. In April 2007, we adopted the Independence Policy of the NYSE Euronext Board of Directors (the “Independence Policy”), which was recently amended in December 2009. The Independence Policy sets forth the independence requirements that apply to the members of our Board of Directors, which include and in several respects go beyond the NYSE standards.

 

Under our Independence Policy, a director is independent only if the Board of Directors determines that such director does not have any material relationships with NYSE Euronext and its subsidiaries. In making independence determinations, the Board must consider the special responsibilities of a director in light of the fact that NYSE Euronext controls entities that are U.S. self-regulatory organizations subject to the supervision of the SEC, as well as entities that are European securities exchanges subject to the supervision of European regulators. A copy of our Independence Policy is attached to this proxy statement as Annex B and available on our website at www.nyseeuronext.com under the heading Investor Relations—Corporate Governance—Board of Directors.

 

In February 2010, in connection with the Annual Meeting and the election of directors, our Board of Directors reviewed the independence of each director nominee under the standards set forth in our Independence Policy. The Board considered, among other things, all transactions and relationships between each director or any member of his or her immediate family and NYSE Euronext and its subsidiaries and affiliates, as well as with members, allied members, allied persons, member organizations, as those terms are defined for purposes of the Independence Policy, and issuers of listed securities. The types of transactions and relationships that could be considered included direct commercial, industrial, banking, consulting, legal, accounting and charitable relationships as well as indirect relationships such as serving as a partner or officer, or holding shares, of an organization that has a relationship with NYSE Euronext and its subsidiaries and affiliates.

 

In February 2010, our full Board affirmatively determined that each of Jan-Michiel Hessels, Marshall N. Carter, André Bergen, Ellyn L. Brown, Patricia M. Cloherty, Sir George Cox, Sylvain Hefes, Duncan M. McFarland, James J. McNulty, Ricardo Salgado, Robert G. Scott, Jackson P. Tai, Rijnhard van Tets and Sir Brian Williamson were independent. In addition, previously our Board had affirmatively determined that Dominique Hoënn, Shirley Ann Jackson, Baron Jean Peterbroeck and Alice M. Rivlin, who served as directors during 2009 and are not standing for re-election at the Annual Meeting, William E. Ford, who served as a director during part of the 2009 fiscal year and did not stand for re-election at the 2009 annual meeting, and James S. McDonald, who served as a director until his death on September 13, 2009, were independent while they served on the Board.

 

As part of the independence review undertaken by our Board, our Board of Directors also determined that none of our independent directors had any material relationship with NYSE Euronext or its subsidiaries or management, outside of their directorships on the boards of NYSE Euronext and its subsidiaries. In making its determinations, the Board of Directors considered the various relationships and found them to be immaterial under our Independence Policy. Some of these relationships included Messrs. Hessels’, McNulty’s and Williamson’s current and former positions as directors of companies with broker-dealer affiliates that are either NYSE, NYSE Arca, Inc. or NYSE Amex LLC members.

 

Based upon the Board’s independence review, each of our Audit Committee, Human Resources and Compensation Committee and Nominating and Governance Committee are comprised entirely of directors who have been determined to be independent under the NYSE listing standards.

 

Our current Board, with the exception of Robert G. Scott, was elected on April 2, 2009. Mr. Scott was appointed to the Board on February 4, 2010, subject to regulatory approval. There were eight meetings of the Board in 2009. Our non-management directors meet regularly in executive session without management participation, as required by the NYSE listing standards. Jan-Michiel Hessels has been appointed by the Board as the director presiding at these meetings.

 

As a matter of Board policy, it is expected that each director will be available to attend substantially all of the meetings of the Board and any committees on which the director serves. Each of our directors attended at least 75% of the total number of meetings of the Board and committees on which the director served that were held while the director was a member. In addition, our policy is that all directors and nominees should attend annual meetings of stockholders. All of our current directors attended the 2009 annual meeting.

 

The Board’s standing committees include the following:

 

 

 

 

Audit Committee

 

The Audit Committee is composed of six independent directors and operates pursuant to a written charter. Our Audit Committee Charter is available on our website at www.nyseeuronext.com under the heading Investor Relations—Corporate Governance—Committees. The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Exchange Act.

 

The Board of Directors has determined that each member of the Audit Committee is financially literate and has accounting or related financial management expertise, as such qualifications are defined under the rules of the NYSE, and that Marshall N. Carter is an “audit committee financial expert” within the meaning of the rules of the SEC.

Human Resources and Compensation Committee

 

The Human Resources and Compensation Committee (“HR&CC”) is composed of four independent directors and operates pursuant to a written charter. Our HR&CC Charter is available on our website at www.nyseeuronext.com under the heading Investor Relations—Corporate Governance—Committees.

 

HR&CC Interlocks and Insider Participation

 

In 2009, our HR&CC consisted of Sir Brian Williamson, William E. Ford (until his retirement on April 2, 2009), Duncan M. McFarland, James J. McNulty (since April 2, 2009) and Ricardo Salgado. No member of the HR&CC is a current or former officer or employee of NYSE Euronext or any of its subsidiaries, with the exception of Sir Brian Williamson, who resigned as executive chairman of LIFFE, the predecessor of NYSE Liffe, in April 2003. There are no compensation committee interlocks (i.e., situations where an executive officer of NYSE Euronext serves on the board or compensation committee of another company and an executive officer of such company serves on our board or HR&CC).

 

Compensation Decision Process

 

Although executive compensation decisions are made within the HR&CC’s discretion, the committee seeks input from management and guidance from its independent compensation consultant. The HR&CC retained Watson Wyatt (now known as Towers Watson) as an independent compensation consultant to provide the committee with guidance and services relating to executive pay. The consultant provides various analyses, as directed by the committee, as well as recommendations regarding executive compensation philosophy and design, including the selection of the companies included in the comparator groups that the HR&CC uses for market compensation data. For more information, please see Compensation of Executive Officers—Compensation Discussion and Analysis—Compensation Process and Market Comparisons.

 

Role of NYSE Euronext Executives

 

None of our executives has any direct role in determining the amount of his or her compensation. However, our chief executive officer recommends compensation packages for other named executives, other than the president and deputy chief executive officer of NYSE Euronext. His assessment of each executive is based on his or her contributions to achieving the priorities and objectives outlined by the Board of Directors and the related work performed by our global head of Human Resources. Our chief executive officer also recommended for 2009 that the annual bonus pool be maintained (for constant population) at the same level as in 2008, which is 20% less than 2007 levels. For more information, please see Compensation of Executive Officers—Compensation Discussion and Analysis.

 

Nominating and Governance Committee

 

The Nominating and Governance Committee is composed of four independent directors and operates pursuant to a written charter. The Nominating and Governance Committee Charter is available on our website at www.nyseeuronext.com under the heading Investor Relations—Corporate Governance—Committees.

 

Our bylaws provide that the Nominating and Governance Committee must be composed of an equal number of U.S. domiciliaries and European domiciliaries.

 

The Nominating and Governance Committee is responsible for proposing a slate of directors for election by the stockholders. The Nominating and Governance Committee is responsible for proposing persons as candidates for the Board of Directors who, in the opinion of the committee, (1) meet the requirements related to Board composition set forth in the bylaws, (2) are committed to serving the best interests of NYSE Euronext and (3) can discharge the obligations of directors under the NYSE Euronext charter. As part of this process, the Nominating and Governance Committee reviews each incumbent director’s continued service on the Board of Directors on an annual basis.

 

The Nominating and Governance Committee considers each nominee on his or her individual merits, taking into account the needs of NYSE Euronext and the composition of the Board of Directors. Members of

the Nominating and Governance Committee discuss and evaluate director candidates and may employ outside consultants to help identify director candidates. The Nominating and Governance Committee will consider nominees recommended by stockholders and the public on the same basis as it considers any other candidates.

 

The Nominating and Governance Committee selects director candidates on the basis of outstanding achievement in their professional careers, broad experience, personal and professional integrity, previous board or top-level management/leadership experience and ability to make independent analytical inquiries. See Election of Directors—Nominees for Election to the Board of Directors. The Nominating and Governance Committee also considers the skill sets and experiences of the existing directors and actively seeks to add directors who would bring additional relevant skill sets and experiences to the Board or would replace skill sets and experience lost through a director’s retirement. Subject to a determination of the Board as set forth in the Independence Policy, directors are required to be independent from listed companies and NYSE, NYSE Arca, Inc. and NYSE Amex LLC members under the Independence Policy established by the Board. At least three-fourths of the directors also must be independent from the management of NYSE Euronext and its subsidiaries in a manner comparable to the requirements of the NYSE governance standards for listed companies. Among other things, no independent director currently may be, or within the past three years may have been, an employee of NYSE Euronext or its subsidiaries, and independent directors must have no other material relationship with NYSE Euronext and its subsidiaries. In selecting director candidates, NYSE Euronext and its subsidiaries do not discriminate on the basis of race, color, religion, sex, sexual orientation, national origin, age, people with disabilities, marital status, citizenship, genetic predisposition or carrier status or any other characteristic protected by law. Our Candidate Nomination Policy, which contains the criteria for director candidates, is available on our website at www.nyseeuronext.com under the heading Investor Relations—Corporate Governance—Board of Directors.

 

Stockholders and members of the public who wish to submit candidates for consideration should submit them in accordance with the procedures described under Other Matters—Director Nominations and Other Business below.

 

Technology Committee

 

The Technology Committee is composed of four directors and operates pursuant to a written charter. The Technology Committee Charter is available on our website at www.nyseeuronext.com under the heading Investor Relations—Corporate Governance—Committees.

 

NYSE Euronext has adopted a global whistleblowing policy to enable anyone who has a good-faith complaint regarding NYSE Euronext’s accounting, internal accounting controls or auditing matters to communicate that complaint directly to the Audit Committee. Employees of NYSE Euronext may do so on a confidential or anonymous basis. Anyone with complaints regarding accounting matters, internal accounting controls or auditing matters may report them to the NYSE Euronext’s chief compliance officer or directly to the Audit Committee by mail to NYSE Euronext, 20 Broad Street, 8th Floor, New York, New York 10005 or by email to ccereporting@nyx.com or through EthicsPoint, a third-party anonymous and confidential reporting website (www.ethicspoint.com) and telephone hotline (provided on the website).

 

We have adopted procedures for communicating with our chairman, independent directors and the Board of Directors as a whole. Any person may communicate in writing to NYSE Euronext’s chief compliance officer, the chairman of our Board of Directors, our independent directors as a group or our Board of Directors via regular mail addressed to NYSE Euronext, 11 Wall Street, New York, New York 10005. You may also send an email directly to the chief compliance officer at ccereporting@nyx.com, to the corporate secretary at corpsecy@nyx.com or to the chairman of the Board of Directors at chairman@nyx.com. All written submissions that appear to be good faith efforts to communicate with Board members about matters involving the interests of NYSE Euronext and our stockholders are collected and forwarded on a periodic basis

to the Board of Directors along with a summary of our actions in response to such submissions. Communications that are not related to a director’s duties and responsibilities as a Board member may be excluded by the Office of the General Counsel. The directors to whom such information is addressed will be informed that the information has been removed and that it will be made available to such directors upon request. Matters related to regulatory functions of our U.S. securities exchanges are forwarded directly to NYSE Regulation, an indirect not-for-profit subsidiary of NYSE Euronext.

 

Non-management directors of NYSE Euronext are compensated under the director compensation plan approved by the Board, under which the chairman of our Board of Directors, Jan-Michiel Hessels, is entitled to an annual fee of $450,000, the deputy chairman of our Board of Directors, Marshall N. Carter, is entitled to an annual fee of $250,000 and the non-management directors are each entitled to an annual fee of $150,000. In each case, 50% of the annual fee is payable in restricted stock units (“RSUs”) granted under the NYSE Euronext Omnibus Incentive Plan, and 50% is payable in cash. RSUs granted to each director will be delivered upon the director’s retirement, resignation or other termination (except for cause) and pay dividend equivalents. Additional annual fees, payable entirely in cash, of (a) $25,000 are generally payable to the chairman of the Audit Committee (except when such chairman is also the chairman or deputy chairman of the Board, such as the case with Marshall N. Carter, as described below) and (b) $10,000 are payable to each of the chairmen of the Nominating and Governance Committee, the Technology Committee and the Human Resources and Compensation Committee, Alice M. Rivlin, Sir George Cox and Sir Brian Williamson, respectively, and to all members of the Audit Committee other than the chairman.

 

All cash payments are prorated to reflect changes in service or retirement. The chairman and deputy chairman of the Board do not receive additional annual fees for committee service. Our directors are also reimbursed for their out-of-pocket travel expenses. In addition, in some cases, non-management directors who also serve as directors on the boards of our subsidiaries receive additional compensation for such service. We generally provide our non-U.S. based directors with reimbursement for tax advice and preparation services primarily related to additional tax obligations resulting from their compensation as directors.

 

The following table contains compensation information about the fees and other compensation paid to the members of the NYSE Euronext Board of Directors in the fiscal year ended December 31, 2009.

 

 

 

 

 

The following table sets forth outstanding equity awards, all of which are fully vested but not delivered, held by each of our non-employee directors as of December 31, 2009:

 

 

 

 

The Nominating and Governance Committee considers diversity in identifying nominees to serve as directors of NYSE Euronext. Although the Nominating and Governance Committee does not have a formal diversity policy, our Candidate Nomination Policy states that the Nominating and Governance Committee believes that director candidates must have “[d]iversity of personal, professional and cultural experience.” As described above under Election of Directors—Nominees for Election to the Board of Directors, the committee makes an assessment of the specific experience, qualifications, attributes and skills of each director nominee, and one of the factors that the committee considers in making this assessment is the extent to which the candidate demonstrates the desired diversity of personal, professional and cultural experiences among the director nominees.

 

In addition, our Candidate Nomination Policy contains a non-discrimination provision that states that “[i]n selecting director candidates, NYSE Euronext and its subsidiaries do not discriminate on the basis of race, color, religion, sex, sexual orientation, national origin, age, people with disabilities, marital status, citizenship, genetic predisposition or carrier status, or any other characteristic protected by law.” The committee at all times abides by such non-discrimination provision in the selection and recommendation of director nominees.

 

The leadership structure of the Board of Directors is dictated, in part, by our bylaws, which require that either (1) the chairman of the Board of Directors be a U.S. person and the chief executive officer be a European person or (2) the chairman of the Board of Directors be a European person and the chief executive officer be a U.S. person. Accordingly, we have separated the role of chairman and chief executive officer. We believe that this is the best structure for a company, such as ours, which is the culmination of a merger

between two robust organizations operating in the United States and Europe to become a global, integrated company. This structure also provides for independent oversight of management at the Board leadership level.

 

The Company has a comprehensive risk management process that is ultimately overseen by the Board. The Company formed a Business Risk Group that is comprised of key individuals from across the Company’s geographic and business units. The Business Risk Group is responsible for identifying, aggregating and escalating the most significant risks across the Company for periodic discussion with the management committee and Board of Directors. In the execution of its responsibilities, the Business Risk Group looks at external and internal challenges facing the Company, including relevant strategic, operational, financial and compliance risks. Throughout this process, the Business Risk Group identifies key risk drivers and reviews the potential likelihood, possible magnitude and importance of risks. The Business Risk Group also provides suggestions on how to mitigate such risks and assigns appropriate senior executives to act as risk managers.

 

The Business Risk Group also partners with the Company’s global risk and audit services group (“RAS”) to create the proper framework and process for risk identification. RAS is led by the Company’s general auditor, who reports directly to the Audit Committee of the Company. RAS provides independent objective assurance and other services to assist management (including the Business Risk Group) and the Board in risk assessment and ensures appropriate escalation and accurate disclosure of risk matters. In addition, the Board receives reports from the general auditor regarding the risk assessment process, and the Audit Committee receives the results of reviews and internal audits of the process and underlying risk factors and monitors the appropriate disclosure of such risks to investors.

 

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership of, and transactions in, our equity securities with the SEC. Such directors, executive officers and 10% stockholders are also required to furnish us with copies of all Section 16(a) reports they file.

 

Based on our records, and written representations and other information that we received during this fiscal year, we believe that during fiscal 2009 all of such reporting persons complied with all Section 16(a) reporting requirements applicable to them, except as follows:

 

 

The following tables set forth information, as of March 1, 2010, regarding the beneficial ownership of shares of NYSE Euronext common stock by:

 

 

Unless otherwise indicated, the business address of our director and named executive officers is 11 Wall Street, New York, New York 10005. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power over securities. In accordance with SEC rules, the following includes shares that may be acquired pursuant to RSUs and employee stock options that are or will become exercisable within 60 days. Except in cases where community property laws apply or as indicated in the footnotes to this table, we believe that each stockholder identified in the table possesses sole voting and investment power over all shares of our common stock shown as beneficially owned by that stockholder. Unless otherwise indicated, no shares have been pledged as security.

 

 

 

 

 

The Human Resources and Compensation Committee of the Board (the “HR&CC”) reviewed and discussed the Compensation Discussion and Analysis (“CD&A”) with management, with Watson Wyatt (the HR&CC’s outside compensation consultant) and with counsel. Based on such review and discussions, the HR&CC recommended to the Board that the CD&A be included in this proxy statement.

 

Members of the HR&CC:

 

Sir Brian Williamson, Chair

Duncan M. McFarland

James J. McNulty

Ricardo Salgado

 

Our company is complex and unique—our historical foundation lies in the traditional exchange business, yet we are entrepreneurial and innovative and are committed to becoming a world-class technology solutions provider. We face increasing competition from a variety of sources as the methods by which capital markets can be formed and operated continue to expand and the services they require proliferate. We require a dynamic, globally integrated, technologically skilled and entrepreneurial management team to accomplish our goals.

 

This CD&A describes the principles, policies and practices that were the foundation of our executive compensation program in 2009 and explains the application of these principles, policies and practices to seven of our executive officers: our chief executive officer, our president and deputy chief executive officer, our former deputy chief executive officer, our chief financial officer and the three other most highly compensated executives. These seven executives are named in the 2009 Summary Compensation Table that follows this CD&A, and we refer to them as our “named executives.”

 

Executive Summary

 

In 2009 we embarked on several key initiatives to help us to meet the challenges of the dynamic global exchange landscape. We successfully repositioned our overall cost structure, bringing it more in line with our revenue model. We continued to defend and grow our core franchises, embarked on several new business initiatives to diversify our revenue base, began to modernize our technology platforms and clarified our long- and medium-term business strategy with the Board. In summary, we are a company that is emerging from a real transformation and increasingly focused on more than just reducing costs, but also on growing revenue from existing businesses and pursuing new opportunities to generate revenue. Our compensation decisions in 2009 recognized these achievements within the context of the year’s business results. To that end, we took the following actions to proactively deliver our executives’ compensation:

 

 

In taking these specific actions, we did not deviate from the core fundamentals of our compensation philosophy. Specifically, we continued to tie compensation to the value of our common stock; this is a foundation of our compensation program. We believe that it is essential for our senior executives to have a stake in the Company. Equity-based compensation provides our senior executives with opportunities to participate in the success of the Company over the long-term and links the interests of our executives with those of our stockholders. In 2009, we continued to use equity to reward short-term performance under our annual incentive plan and continued to use grants of equity-based compensation with longer vesting provisions as a vehicle to reward sustained long-term performance of the Company. It is through this strategic foundation and the specific tactics taken in this challenging year that we delivered the elements of executive compensation to meet the principles of our program.

 

Objectives and Design of the Compensation Program

 

Guiding Principles

 

Our management compensation program was designed around the following guiding principles:

 

 

Elements of Executive Compensation

 

To implement our guiding principles, our annual executive compensation program for 2009 comprised three basic elements:

 

 

Each of these elements is discussed in detail below.

 

NYSE Regulation

 

To maintain the independence of our not-for-profit subsidiary, NYSE Regulation, the compensation of its executives is determined solely by its board of directors, and the executives of NYSE Regulation do not participate in some of our general compensation programs, including our equity compensation plans. The HR&CC advises and assists the NYSE Regulation board at its request concerning executive compensation policies and procedures, and we believe that the compensation philosophies of the HR&CC and the NYSE Regulation board are consistent. None of our current named executives is an executive of NYSE Regulation.

Compensation Process and Market Comparisons

 

Peer Groups

 

Annually, with the assistance of Watson Wyatt, the HR&CC reviews our competitive peer groups and ensures their continued applicability. These peer groups are used to provide the HR&CC insights into the markets within which we compete for executive talent. Results from studies of the peer groups guide, but do not dictate, the committee’s decisions regarding pay level and design and architecture. The committee believes that its approach, of not targeting a specified pay percentile but rather allowing the relative level and design of the programs to inform pay decisions, is appropriate when one considers the diverse nature of our management team.

 

The HR&CC has examined two peer groups because of the evolving nature of our company. Because of our historical foundation as a traditional exchange business, the HR&CC constructed a peer group consisting of “industry peers” described below. We are also entrepreneurial and innovative and committed to becoming a world-class technology solutions provider, so the HR&CC also constructed a peer group consisting of “global peers” discussed below.

 

In 2009 the HR&CC determined that it should continue to use the two peer groups that it had originally developed as they provide the most thorough assessment of those talent markets. As described below, however, the groups were modified in 2009. Accordingly, decisions taken in early 2009 were based on the 2008-2009 peer groups while those made in the later part of 2009 were informed by the 2009-2010 peer groups.

 

The first peer group (the “industry peers”) consists of publicly traded global marketplaces that are direct competitors of NYSE Euronext. The 2009-2010 “Global Exchange Peer Group,” and changes made from the previous year, is outlined below:

 

 

In 2009, MF Global Ltd. was removed from the 2009-2010 Global Exchange Peer Group because its relative size and business model were deemed to be an inappropriate comparison. Companies added in 2009 are indicated with an asterisk; these three additions reflect the increasing global nature of our business.

 

The second peer group (the “global peers”) consists of a blend of U.S. and non-U.S. domiciled companies that have a global reach, in addition to having characteristics such as brand name recognition, regulatory compliance obligations and a technology-dependent business component. In 2009, the HR&CC requested that this peer group be modified to reflect regulatory and other changes in the global financial services industry and NYSE Euronext’s advancement toward a technology-based business model. To that end, financial services companies in the 2008-2009 Global Peer Group whose circumstances made them no longer comparable—which include American Express, AXA, Lloyds, MetLife, Royal Bank of Scotland and Wells Fargo—were removed from the 2009-2010 Global Peer Group, as was WPP Group because its business model was no longer comparable as a labor market comparison to NYSE Euronext. Companies added in 2009 for the 2009-2010 “Global Peer Group” are indicated with an asterisk:

 

“Pay Mix”

 

We believe that the mix of cash and equity awards should provide an appropriate balance between fixed and variable, cash and equity and short- and long-term pay elements. This practice holds executives accountable for annual and longer-term performance and mitigates risk taking. Accordingly, while it does not target specified percentages, the HR&CC seeks to allocate a greater portion of compensation to variable and equity-based pay than it allocates to cash, particularly salary.

 

The HR&CC commissioned Watson Wyatt to conduct an analysis to test this premise against the two peer groups discussed above under Peer Groups. The following exhibit illustrates the relationship of the total direct compensation of the named executives versus its comparator groups, based on its 2008 bonus (paid in 2009) and its February 2009 LTI grants (against the 2008 compensation of the peers as disclosed in 2009 proxy statements). The two charts compare the mix of pay of our chief executive officer to the chief executive officers of the two peer groups and the other named executives in the aggregate. It demonstrates that our named executives received more of their compensation in the form of performance-based pay, and long-term equity pay, than the peers. The HR&CC believes that delivering pay in this manner to the senior executives in our business is a leading industry practice.

 

 

 

 

Base Salary

 

We establish base salaries at levels that we believe are commensurate with title, position and experience. For our chief executive officer, salary was set at $1,000,000, and for our president and deputy chief executive officer, salary was set at €675,000. Salaries for group executive vice presidents were set at $750,000 or €500,000. In each case, salaries are denominated in dollars or euros based on the executive’s location, and the rates were designed to be roughly equivalent in light of prevailing exchange rates.

 

The salary levels for each title were developed taking into account historic salary practices, appropriate differentiation among the titles, the desire to achieve consistency across geographic locations and general views of competitive practice.

We did not increase the salary level for any named executive in 2009 from 2008. The following table summarizes the annual salary levels for 2007, 2008 and 2009.

 

Annual Salary

 

 

 

 

Annual Performance Bonus

 

The second principal element in our compensation system is an annual bonus that is paid in a combination of cash and equity. The annual performance bonus is designed to permit discretionary variation from year to year depending on our performance, the performance of the named executive’s particular area of responsibility and the named executive’s individual performance.

 

For 2008 (bonuses paid in February 2009), the HR&CC adopted management’s recommendation that the company-wide annual performance bonus pool be generally reduced by 20% in order to balance the impact of the adverse market and economic conditions during 2008 with the accomplishments of the management team during this period. For 2009 (bonuses paid in February 2010), the HR&CC again determined, in line with management’s recommendation, to maintain the annual bonus pool (for constant population) at the same level as in 2008, which is 20% less than 2007 levels. As a result of attrition, the 2009 bonus pool in aggregate was 15% less than 2008 in a year-on-year comparison.

 

2009 Incentive Compensation Decisions

 

Our compensation decisions this year attempted to balance the challenging market and economic conditions that continued through 2009 with the accomplishments of our management team during this period.

In reaching this conclusion, the HR&CC noted in particular the following significant financial and operational results for 2009:

 

 

Management recommended that the preceding factors should be reflected in a 2009 annual bonus pool (for constant population) at the same level as in 2008, which is 20% less than 2007 levels. The HR&CC adopted this recommendation and then took individual factors into consideration with respect to any increase or decrease in individual annual bonus amounts.

 

Individual Considerations

 

Mr. Niederauer. For 2009, the HR&CC awarded Mr. Niederauer an annual performance bonus of $4,250,000, which it believed was appropriate due to a number of factors. The HR&CC determined that Mr. Niederauer was proactive in his efforts to reduce the overall cost structure (including headcount) of the Company. Additionally, Mr. Niederauer led improvements in the Company’s financial processes, enhanced our technology platform and strategically repositioned our business. The HR&CC also rewarded Mr. Niederauer’s ability to manage our culture for positive change.

 

Mr. Cerutti. The HR&CC awarded Mr. Cerutti an annual performance bonus of €50,000. Upon joining NYSE Euronext in 2009, Mr. Cerutti entered into an employment agreement, which provides for a maximum annual bonus of €1,000,000 for 2009 (pro rated), half of which to be paid in cash and half in the form of RSUs. Accordingly, the HR&CC awarded Mr. Cerutti a bonus in line with this level, which it believed to be appropriate given Mr. Cerutti’s previous compensation, the compensation of NYSE Euronext’s previous deputy chief executive officer and a review of peer compensation levels.

Mr. Leibowitz. The HR&CC agreed with Mr. Niederauer’s recommendation and awarded Mr. Leibowitz an annual performance bonus of $1,850,000, which represents an increase of approximately 6% from his 2008 annual performance bonus. Given Mr. Leibowitz’s oversight of a dramatic reduction in headcount and expenses in global technology and managing the successful rollout of our universal trading platform and the build-out of our two new data centers, stabilization of the U.S. equities business and growth of the U.S. options business, the Company promoted Mr. Leibowitz to chief operating officer in the first quarter of 2010 and felt a slight increase in his total compensation was merited.

 

Mr. Geltzeiler. The HR&CC agreed with Mr. Niederauer’s recommendation and awarded Mr. Geltzeiler an annual performance bonus of $900,000. Mr. Geltzeiler’s employment agreement provides that his annual bonus target must be no less than $750,000, and based on Mr. Geltzeiler’s achievements, an increase from target was warranted. The 2009 bonus reflects Mr. Geltzeiler’s achievements in overseeing a significant improvement in NYSE Euronext’s financial systems and process, which was a significant contributor to the transitioning of the business, the completion of the shared services integration in Europe and oversight of an extensive (approximately $195 million) expense reduction program in 2009.

 

Mr. Bellegarde. The HR&CC agreed with Mr. Niederauer’s recommendation and awarded Mr. Bellegarde an annual performance bonus of €600,000, which represents a decrease of approximately 14% from the 2008 level. Mr. Bellegarde oversaw a challenging year in European cash markets; however, given the stabilization of the business in the second half of the year and his role in the efficiency programs undertaken in Europe, we felt that a modest reduction in his total compensation was warranted. Mr. Bellegarde has also been instrumental in the successful early stages of our investment in Qatar.

 

Mr. Halvey. The HR&CC agreed with Mr. Niederauer’s recommendation and awarded Mr. Halvey an annual performance bonus of $1,850,000. Mr. Halvey’s employment agreement provides that his annual bonus target must be no less than $1,750,000, and based on his oversight globally of the Office of the General Counsel in addition to government affairs, the completion of eight strategic transactions in a highly effective manner, the successful conclusion of 16 litigations and an increasingly complex regulatory structure, a slight increase in his total compensation was merited.

 

Mr. Théodore. The HR&CC awarded Mr. Théodore a €1,000,000 annual performance bonus, which represents a reduction of approximately 17% from his 2008 bonus. The 2009 bonus recognized Mr. Théodore’s service to the Company and its predecessors for over 20 years. Mr. Théodore retired effective December 31, 2009.

The following table summarizes the annual performance bonuses awarded to our named executives for 2007, 2008 and 2009. Note that because of SEC rules, the portion reported in the Equity Component column appears in the Summary Compensation Table for the year following the year to which it relates.

 

Annual Performance Bonus

 

 

 

 

Additional Considerations

 

Form of 2009 Annual Bonus. Each year, the HR&CC evaluates the form of annual performance bonuses, including how the award will be allocated between cash and equity. Cash awards are paid in February of the following year.

 

For 2009, we paid half of the annual performance bonus in cash and the other half in time-vesting RSUs. We believe that this mix of cash and equity awards provides a balance to our employees’ short- and long-term performance objectives. The HR&CC believes that allocating half of the annual performance award to time-vesting equity is consistent with its goals of aligning long-term interests of senior executives and stockholders and fostering executive retention while the cash portion appropriately recognizes the executives’ current achievements.

 

The RSUs awarded will vest, and the common stock underlying the awards will become deliverable, in equal installments on the first, second and third anniversaries of the date of grant. The vesting periods of the RSUs are consistent with our prior practice and also distinguish the equity portion of the annual bonus from the long-term equity grants.

 

The delivery of the annual bonus through cash and equity ensures that our executives’ focus is properly balanced on the short- and long-term, and is an industry leading practice. Based on studies that we have

reviewed, we believe that a higher portion of our annual bonus is delivered in equity when compared to our peer groups. The table below reports the results of a competitive analysis conducted for the HR&CC by Watson Wyatt, its independent, outside executive compensation advisor. It uses information gathered from 2009 proxy statements for the Company’s two peer groups (discussed under the heading Compensation Process and Market Comparisons—Peer Groups) to assess the degree to which our peers defer executives’ annual bonus in this manner. As reported, only 3 of the 27 peers, across the two peer groups (1 of 16 in the Global Peer Group and 2 of 11 in the Global Exchange Peer Group), pay part of the bonus in equity. Further, only one of these three other companies reporting such a practice pays as much of the annual bonus in equity.

 

Peers Who Use Equity as a Component of Bonus

 

 

 

 

The HR&CC granted the RSUs earned as part of our 2009 annual bonus process at its regular meeting in early February 2010. The equity-based awards were granted effective February 10, 2010 and were in the form of a specified dollar amount. We released our 2009 fourth quarter and year-end preliminary earning results before the opening of trading on February 9, 2010, and the actual number of equity-based awards received in connection with these grants was based on the closing price of NYSE Euronext’s common stock on that date ($23.65).

 

Threshold Performance Requirement. We have established threshold performance requirements for the award of annual bonuses to our named executives under our stockholder-approved NYSE Euronext Omnibus Incentive Plan. These performance requirements are not intended as formulas for determining bonus awards but rather serve as points of reference and/or baselines for earned annual performance bonuses to aid the HR&CC in their determination of the actual amount earned, at their sole discretion.

 

For 2009, the threshold performance requirement was based on our earnings before interest, taxes, depreciation and amortization (“EBITDA”). The threshold for awards was set at EBITDA of $740 million. For amounts above the threshold, permissible funding levels of 1.0% of achieved EBITDA were established for our chief executive officer and deputy chief executive officer and 0.6% for our other named executives. Maximum permissible levels were set at EBITDA of $1,481 million, with a maximum award of $15 million for each of the chief executive officer and deputy chief executive officer.

 

2010 Changes to the Annual Performance Bonus

 

At its February 2010 meeting, the HR&CC agreed with management’s proposal that the bonus pool for 2010 would be funded through the accomplishment of a single financial measure, EBITDA. This is a core

metric of our business operation and one which is within the significant influence of our management team. Through the use of a “sharing ratio,” the Company will fund a bonus pool strictly based on the accomplishment of specified EBITDA at threshold, target and maximum performance levels. Below the threshold there will be no bonus, and at maximum the bonus will be capped. The distribution of the pool to individual executives within that range of performance potentialities will be discretionary and based on business and individual factors as in prior years.

 

The chart below illustrates our philosophy regarding the relationship between EBITDA and the bonus pool as a percent of EBITDA.

 

 

We believe that this new design is a positive step in furthering the performance orientation of our overall executive compensation programs.

 

Long-Term Incentive Plan

 

Our third primary compensation component is an LTI plan. The program currently consists of annual grants of equity awards that allow our executives to have a stake in the Company, nurture an ownership culture and enable our executives to participate in the long-term success of the Company and accumulate wealth through stock appreciation. As these grants are intended to recognize talent and reward executives for future firm-wide performance, we consider them to be prospective grants. This is in contrast to our use of equity as part of the annual bonus payment, where the equity amount reflects performance during the most recent fiscal year.

 

2009 Long Term Incentive Grants

 

From time to time, the HR&CC discusses the appropriateness of including quantitative performance features into the LTI plan. For 2009, the HR&CC determined that time-based grants were a more appropriate approach than a performance-based grant due to the volatile global economic environment and the resulting difficulty in the setting of performance goals. Long-term performance metrics based on internal financial goals were determined to be inappropriate at this time because results could be disproportionately influenced by ongoing structural change in our industry and by consolidation activity. Long-term performance metrics based on financial goals relative to peers were subject to similar concerns. As a result, grants are currently in the form of time-vested RSUs that vest on the third anniversary of the date of grant. By varying the annual award value, as described above, and tying executives’ LTI value to share price through the use of RSUs, the

HR&CC believes that these awards are performance-oriented. It is expected, however, that the HR&CC will from time-to-time evaluate the current structure.

 

We have established grant levels under our LTI plan intended to apply consistently across titles, which were based on a review of competitive data, historical grant levels at NYSE Euronext legacy companies and the desire to achieve parity across geographic locations. These award levels are reviewed annually. Award levels for grants made in February 2009 were unchanged for most executives from prior years and set at $2,000,000 for our chief executive officer, $1,500,000 for our deputy chief executive officer and between $600,000 and $1,500,000 for group executive vice presidents. Amounts are denominated in dollars for consistency.

 

The HR&CC has not delegated any of its authority to issue equity awards.

 

2009 Sign-On Equity Award

 

Mr. Cerutti received a sign-on equity award of RSUs with a value equal to €390,000 ($570,303) (22,062 shares). The HR&CC believed this amount was appropriate given the bonus compensation that Mr. Cerutti forfeited by becoming our deputy chief executive officer and head of global technology. The RSUs awarded will vest, and the common stock underlying the awards will become deliverable, in equal installments on the first, second and third anniversaries of the date of grant.

 

The following table summarizes the LTI and sign-on equity awards granted to our named executives in 2009.

 

2009 Long-Term Incentive Awards and Sign-On Equity Awards

 

 

 

 

2010 Long Term Incentive Grants

 

The HR&CC granted the RSUs as part of our 2009 LTI plan at its regular meeting in February 2010. The equity-based awards were in the form of a specified dollar amount, and the actual number of equity-based awards received in connection with these grants was based on the closing price of NYSE Euronext’s common stock on February 9, 2010 ($23.65).

 

Other Compensation Elements

 

Employment Benefits

 

We maintain the following employee benefit and perquisite programs for our named executives.

 

Welfare Benefits. We have broad-based health, dental, vision, life and disability benefit programs. We do not provide any welfare benefit plans, programs or arrangements exclusively to executives.

 

Retirement Benefits. For named executives based in the United States, Messrs. Niederauer, Leibowitz, Geltzeiler and Halvey, we provide retirement benefits through a tax-qualified retirement savings plan (401(k) savings plan) and a non-qualified arrangement, the Supplemental Executive Savings Plan (“SESP”), for contributions above 401(k) limits. Prior to January 1, 2010, we provided employer matching of executives’ contributions to the SESP equal to $1 match for $1 of contribution up to 6% of base salary in excess of $245,000 (for 2009). Effective January 1, 2010, however, we eliminated such employer matching, which resulted in a significant reduction in the executives’ total compensation.

 

Perquisites. Consistent with industry and local practice and to facilitate efficient conduct of business and promote the safety of our senior executives, we provide certain perquisites to our named executives. These benefits are in a form and amount that are typical in our industry and the principal countries in which we operate. The HR&CC intends to review these perquisites on a regular basis.

 

We provide Mr. Niederauer, and in 2009 we provided Mr. Théodore, with a company car and trained security driver. We provide Mr. Cerutti with a company car and driver and Mr. Bellegarde with a company car. This convenience is provided primarily for business purposes and commuting. With limited exceptions, the named executives do not reimburse us for the cost of their personal use of these services.

 

We provide Messrs. Leibowitz, Geltzeiler and Halvey with paid parking facilities. Consistent with Euronext’s practices before the NYSE Group/Euronext business combination transaction, we also leased a car on behalf of Mr. Théodore that was for his personal use.

 

Although we provide the preceding benefits to enhance the security and efficiency of our key executives, SEC rules require that costs of personal use be disclosed as compensation to the executives.

 

Termination and Change-in-Control Arrangements

 

We have entered into employment agreements with our named executives that provide termination benefits and change-in-control protection. In addition, we continue to provide generally applicable termination protection and change-in-control protection in some of our equity-based awards. See 2009 Compensation—Potential Payments on Termination and Change-in-Control below.

 

We believe that termination benefits are appropriate in order to attract and retain executive talent, to avoid costly and potentially protracted separation negotiations and to protect our named executives’ investment in the Company. In addition, such benefits are customary in the jurisdictions in which we do business and in which our named executives reside. Our change-in-control protection is intended to provide management stability and reduce any reluctance on the part of the named executives to pursue and negotiate potential transactions that may enhance stockholder value, despite the uncertainty of whether the culmination of such transactions may result in such executives’ employment being terminated or their positions being substantially reduced.

 

The employment arrangements we have with Mr. Théodore were in place with Euronext before the NYSE Group/Euronext business combination transaction. Mr. Théodore’s agreement does not provide for a

termination entitlement. Upon Mr. Théodore’s retirement at the end of 2009, the remaining outstanding RSUs granted to Mr. Théodore as part of his 2007 and 2008 annual performance bonuses (granted in 2008 and 2009, respectively) became fully vested in accordance with the terms of the award agreements. Mr. Théodore was not entitled to receive the unvested equity awards granted to him pursuant to the Company’s LTI program.

 

Other Factors Affecting 2009 Compensation

 

Deductibility

 

Section 162(m) of the U.S. Internal Revenue Code generally disallows publicly traded companies from deducting more than $1 million annually of compensation to each of their named executives in any fiscal year, unless the compensation plan and awards meet certain requirements. We take the effects of Section 162(m) into account in structuring our compensation arrangements for our named executives, although the HR&CC may award compensation that may not be deductible depending upon the relevant circumstances at the time. In considering the structures of our programs, the HR&CC considers the purposes and needs of our executive compensation program and balances it against potential tax cost.

 

Note Regarding Equity Grant Calculations

 

The equity portions of NYSE Euronext’s named executives’ 2009 annual performance awards were granted at the HR&CC’s February 2010 meeting. Because these awards were granted in 2010, they do not appear in the 2009 Summary Compensation Table that follows this CD&A. The equity portion of the 2009 annual performance awards will first appear in the 2010 line of next year’s Summary Compensation Table.

 

Conclusion

 

As described, NYSE Euronext’s compensation policies are designed to retain our senior executive officers, to motivate them to achieve corporate operational and strategic performance goals, to create stockholder value and ultimately to reward them for outstanding performance. The HR&CC believes that the actions it took for 2009 with respect to executive compensation implemented those policies effectively, were competitive with the overall markets for talent and were appropriate based on NYSE Euronext’s performance.

 

Since the combination of the NYSE Group and Euronext, we have continued to make progress toward implementing a more coordinated and unified global compensation program. As part of this effort, we continue to implement positive change including tying salary and long-term grant levels to a new title structure, selectively entering into employment agreements with management committee members and continuing to refine our basic pay-for-performance programs. These practices reflect to varying degrees historic practices at our predecessor organizations. We believe they will increase our ability both to attract and retain talented executives in a consolidating industry and to provide protection to NYSE Euronext over the longer-term.

 

Summary Compensation Table

 

The following tables contain information about NYSE Euronext’s chief executive officer, president and deputy chief executive officer, chief financial officer, the three other most highly paid executive officers in 2009 and our former deputy chief executive officer.

 

2009 Summary Compensation Table

 

 

 

 

 

Detail Regarding Perquisites, Benefits and All Other Compensation

 

The following table details the incremental cost of perquisites received by each of the named executives, as well as the other elements of compensation listed in the “All Other Compensation” column of the 2009 Summary Compensation Table, for 2009. The incremental cost of personal use of automobiles and drivers was based on the full cost to NYSE Euronext. Although we provide these benefits to enhance the security and efficiency of our key executives, SEC rules require that costs of commuting and other uses not directly and integrally related to our business be disclosed as compensation to the executive.

 

2009 All Other Compensation

 

 

 

 

2009 Grants of Plan-Based Awards

 

2008 Annual Performance Bonus Awards

 

Effective February 10, 2009, the HR&CC granted RSU awards to each of the named executives, except for Mr. Cerutti who was appointed effective December 31, 2009, under the NYSE Euronext Omnibus Incentive Plan as part of the 2008 annual performance bonus. Although these awards correspond to the 2008 annual performance bonus, they appear in the following table because they were granted in 2009 (once the financial results for 2008 and annual performance awards had been determined). See the Annual Performance Bonus section of the Compensation Discussion and Analysis on pages 29 to 32 of last year’s proxy statement for a discussion of the factors considered in determining these award amounts. The RSUs vest and the underlying shares are delivered ratably over a three-year period beginning on February 10, 2009.

Awards of RSUs granted as part of the 2009 annual performance bonus were granted in 2010 (once the financial results for 2009 and annual performance awards had been determined) and therefore will appear in the Grants of Plan-Based Awards table for 2010.

 

2009 LTI Plan Awards

 

Effective February 10, 2009, the HR&CC granted an additional annual award of RSUs pursuant to the LTI plan to each of the named executives, with the exception of Mr. Cerutti who was appointed effective December 31, 2009. See the Compensation Discussion and Analysis in last year’s proxy statement for a discussion of the factors considered in determining these award amounts. The RSUs were issued under the NYSE Euronext Omnibus Incentive Plan; they vest and the underlying shares are delivered, in their entirety, on February 10, 2012, subject to the named executive’s continued employment.

 

Pursuant to Mr. Cerutti’s employment agreement, Mr. Cerutti received a sign-on equity award of 22,062 RSUs on December 15, 2009. The RSUs vest and the underlying shares are delivered, in equal annual installments on December 15, 2010, December 15, 2011 and December 15, 2012, subject to Mr. Cerutti’s continued employment.

 

The preceding awards of RSUs are governed by the NYSE Euronext Omnibus Incentive Plan.

 

Grants of Plan-Based Awards for 2009