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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 letter was distributed to CBOT members and membership interest
holders on December 1, 2000 and is currently available on the CBOT's intranet
site, MemberNet.
December 1, 2000
Dear Fellow Members:
Yesterday, the Board of Directors approved a streamlined and efficient budget
for 2001 that provides a blueprint by which the CBOT can begin to return to an
acceptable level of financial stability. First Vice Chairman Charlie Carey, the
members of the Finance Committee, and senior management are to be commended for
their work.
Although sacrifices were made, this budget allows us to continue to pursue our
business strategy of providing both an open outcry and electronic trading
marketplace that leaves the choice of market to the customer. The budget also
allows the CBOT to meet all of its financial obligations and increase its cash
position, without an assessment on the membership. This is made possible by
continued reductions in spending and employment levels, and by charging annual
dues in January.
The Finance Committee established a budgeted volume of 800,000 contracts per day
with the assumption that 15% of those contracts will be traded on the a/c/e
platform. The 2001 budget does not provide funding for the version 2.0 software
on the a/c/e platform. Nor does it provide funding for a major rewrite of the
order routing data base software. There is little else aside from the operating
costs of the two venues. Cash management will continue to be closely monitored,
especially in the first half of the year when the majority of the debt
obligations are owed.
This budget does provide a plan to strengthen the CBOT's financial position.
Cash flow from the day-to-day operations of the Exchange has been and continues
to be positive. Keep in mind that over the past several years the CBOT has spent
$63 million in equity on a new trading facility, repaid $22.5 million of debt on
that facility, $20 million on the a/c/e alliance prior to the first membership
vote, and $50 million installing the new a/c/e platform.
The Board of Directors is confident the 2001 budget positions your Exchange for
future growth and success as we move to complete our restructuring strategy.
Sincerely,
/s/David P. Brennan
David P. Brennan
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The CBOT urges its members and membership interest holders to read the
Registration Statement(s) on Form S-4, including the proxy statement/prospectus
contained within the Registration Statements, regarding the CBOT restructuring
referred to herein or in connection herewith, when they become 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, 141 W. Jackson Blvd., Chicago, Illinois 606-4-
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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