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Filed by Board of Trade of the City of Chicago, Inc. (CBOT)
Subject Company -- Board of Trade of the City of Chicago, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
File No. 132-01854
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The following memorandum was made available to CBOT employees on the CBOT's
intranet site, OnBoard, on October 9, 2000.
October 9, 2000
To: All Employees
From: Dennis Dutterer
Re: Enhanced Severance Status Update
Let me start by saying I still believe there will be a role for many of you as
the CBOT moves forward with its restructuring strategy. However, senior
management has been working to improve the enhanced severance package that we
originally discussed with you earlier this year, and today I am providing you
with details of such a package employees would receive in the event they do not
have roles in the restructured company.
For your information, the enhanced severance package continues to include:
- Outplacement services, designed to help employees find new employment
opportunities,
- COBRA coverage (to be paid for three months), and
- A waiver of the payback clause in the tuition reimbursement guidelines (i.e.,
employees would not have to pay back tuition monies owed the CBOT as stated in
the Tuition Reimbursement Policy).
The enhanced severance package also will include extra severance pay in addition
to what employees would receive under the regular Severance Plan. In my June 6
memo, I communicated that most employees would receive a minimum of eight
additional weeks of severance pay should they be affected. We now have improved
the package so that the majority of employees would receive a minimum of an
extra 10 weeks of severance pay in addition to what they would receive through
the regular Severance Plan. (The regular Severance Plan provides employees with
one week of severance pay, plus one week of severance pay for each full year of
service, up to 52 weeks.)
Initially, I had communicated that employees would receive enhanced severance
pay at one of three levels depending on the "criticality" of their jobs to
either of the two new entities being formed as a result of our restructuring
strategy. I have since decided that it is not feasible to make such fine
distinctions between levels of criticality, particularly since our business
direction has changed towards becoming a Delaware for-profit corporation with an
electronic trading unit as a wholly owned subsidiary (instead of two separate
entities). In the event that we face staff reductions, enhanced severance will
be paid out at one level to a great majority of employees, with a few officers
and senior level employees receiving a slightly greater amount of enhanced
severance pay. We will follow the guidelines of the enhanced severance package
through March 31, 2001, which I currently anticipate will be shortly after the
completion of the major restructuring activities.
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The enhanced severance package will be paid out according to the conditions
listed below as discussed in my June 6 memo:
- If employees are laid off as a result of the restructuring, operational
changes, or changes in strategic business direction, they would receive
enhanced severance; employees who quit voluntarily do not receive severance
under the CBOT's current severance policy.
- If a function is outsourced and a current employee is given the option to work
in the company to whom the function is outsourced in a comparable position
with comparable pay and benefits, the employee would not receive severance.
- If an employee is terminated for performance issues, s/he would not receive
enhanced severance; rather, s/he would be eligible to receive regular
severance pay under the CBOT's current policy. If an employee is terminated
for cause, as stated in the Employee Benefits Manual, s/he will not receive
any type of severance pay.
I thank you for your patience with this process and apologize for the delay in
forwarding this information to you. You can expect to hear from your department
head or manager soon, and they will confirm the level of enhanced severance you
would receive (in the event that severance becomes necessary).
I hope you welcome the improvements to our enhanced severance package. Chairman
Brennan and the Board of Directors share my view that there are exciting times
ahead for the Chicago Board of Trade, and there will be significant
opportunities with the exchange in the future.
As always, if you have questions regarding the direction of the Exchange, feel
free to contact me at x3602 or ddut72.
We urge CBOT members and membership interest holders to read the Registration
Statement on Form S-4, including the proxy statement/prospectus contained within
the Registration Statement, regarding the CBOT restructuring referred to herein
or in connection herewith, when it becomes available, as well as the other
documents that the CBOT has filed or will file with the Securities and Exchange
Commission, because they contain or will contain important information. CBOT
members and membership interest holders may obtain a free copy of the proxy
statement/prospectus, when it becomes available, and other documents filed by
the CBOT at the Commission's web site at www.sec.gov, or from the CBOT by
directing such request in writing or by telephone to: Board of Trade of the City
of Chicago, Inc., 141 W. Jackson Blvd., Chicago, Illinois 60604-2994, Attention:
Office of the Secretary, Telephone: (312) 435-3605, Facsimile: (312) 347-3827.
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of securities in any state in which
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state. No offering of
securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended.
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