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Atty No. 90443
Filed by the Board of Trade of the City of Chicago, Inc. (CBOT)
Subject Company -Board of Trade of the City of Chicago
Pursuant to Rule 425 under the Securities Act of 1933 File
No. 132-01854
* * * *
The following complaint is available to CBOT members and membership interest
holders at the General Counsel's Office at the CBOT.
IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS
COUNTY DEPARTMENT, CHANCERY DIVISION
_______________________________________________
)
Board of Trade of the City of Chicago, Inc. )
)
Plaintiff, ) In Chancery
) Declaratory Judgment
v. )
) Civil Action No. 00 CH 09725
Chicago Board Options Exchange, Inc., ) Judge Stephen Schiller
)
Defendant. )
_______________________________________________)
AMENDED COMPLAINT FOR DECLARATORY
JUDGMENT AND FOR INJUNCTIVE RELIEF
----------------------------------
The Board of Trade of the City of Chicago seeks a declaration by this
Court that its becoming a for-profit stock corporation pursuant to "step two" of
the CBOT's restructuring plan preserves the Exercise Right held by its Full
Members in accordance with the contract between the CBOT and the Chicago Board
Options Exchange, Inc., dated September 1, 1992. This action is ripe for
decision because, by letter dated June 20, 2000, the CBOE declared its intent to
breach the 1992 contract if the CBOT implements its planned restructuring
initiatives.
Plaintiff, the CBOT, complains against defendant, the CBOE, as
follows:
INTRODUCTION
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1. When the Chicago Board of Trade created the Chicago Board Options
Exchange in 1972, the CBOE's Certificate of Incorporation provided that CBOT
members would be entitled to become members of the CBOE at no additional cost.
That entitlement is known to Chicago Board of Trade members as the Exercise
Right, and has significant value to CBOT's Full Members. By exercising that
right, CBOT members become eligible to have membership privileges on both the
CBOT and the Chicago Board Options Exchange.
2. After the creation of the Exercise Right, the CBOT and CBOE had a
series of disputes about its definition and scope. Those disputes were resolved
under a contract executed by the parties in 1992. That contract specifically
delineates the Exercise Right and limits that right to the 1,402 Full
Memberships of the Chicago Board of Trade. The 1992 contract also specifically
provides that both parties have the right to bring suit under Illinois law to
enforce the terms of the agreement and to recover damages for any breach of the
agreement.
3. The parties' 1992 contract contemplated that at some point in the
future, the Chicago Board of Trade might opt to merge, consolidate or
restructure in some way, and the agreement therefore included specific
provisions allowing the CBOT to pursue different structural alternatives while
preserving the Exercise Right for its 1,402 Full Members.
4. The Chicago Board of Trade is now in the midst of such a
restructuring - critical to its long term viability - to enhance its open outcry
futures trading while also benefitting from the dramatic growth of electronic
trading. The strategy for the CBOT's restructuring has been carefully planned
to comport with the terms of the 1992 Agreement and thus preserve the Exercise
Right.
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5. The CBOT's current restructuring effort involves two overall
"steps." Step one, approved by the Chicago Board of Trade's members on June 28,
2000, resulted in the CBOT becoming a Delaware non-stock, not-for-profit
corporation - the same corporate structure as the Chicago Board Options
Exchange. As part of step one, the CBOT also created a wholly owned subsidiary
(eCBOT), which is intended to run the CBOT's electronic trading business.
6. Prior to the implementation of step one, the CBOE declared that
it would breach the 1992 contract if the CBOT changed its state of incorporation
to Delaware. The CBOT filed a Complaint seeking a declaratory judgment and
injunctive relief in this Court on June 30, 2000. At the August 3, 2000 hearing
on the CBOE's motion to dismiss the CBOT's Complaint, the CBOE reversed course
and agreed that it would take no action to extinguish the Exercise Right solely
as a result of step one. This Court proceeded to dismiss the Complaint on the
ground that, given CBOE's judicial admission, there was no justiciable
controversy.
7. The CBOE did not, however, agree that the CBOT's merger with and
into a Delaware not-for-profit corporation did not violate the 1992 Agreement.
They simply agreed that they would take no action to extinguish the Exercise
Right based on implementation of step one alone. Thus, the CBOE continues to
maintain that step one "result[ed] in the disappearance of the Illinois
corporation that is now the Board of Trade . . . [and] "when the Illinois Board
of Trade disappears, the exercise right disappears with it." (June 20, 2000
information circular, Ex. A) According to the CBOE, once the CBOT takes any
other step towards restructuring, the move to Delaware pursuant to step one
constitutes a basis upon which to extinguish the Exercise Right.
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8. Step two of the CBOT's restructuring will result in another
change in the CBOT's corporate structure. The CBOT, now a Delaware not-for-
profit corporation, will become a Delaware for-profit stock corporation. The
current CBOT membership will become member stockholders in the for-profit
corporation.
9. In its June 20, 2000 information circular issued to its
membership and sent to the CBOT, the CBOE declared that step two also violates
the 1992 Agreement. First, the CBOE claims that "[a]s a stock corporation, the
CBOT would no longer have members but instead would have stockholders, and thus
would not satisfy the requirements of clauses (ii) and (iii) of Section 3(d)."
(Ex. A at 3) Second, the CBOE claims that creation of an electronic trading
subsidiary violates the Agreement because it "would be extremely dilutive of
CBOE trading rights, since CBOT members would for the first time be able to
trade all products now traded on CBOT (via access to the new electronic
exchange) even if they have exercised their rights to become members of CBOE."
(Ex. A at 2)
10. At every turn, the CBOE has sought to prevent the CBOT's
restructuring, arguing that the Chicago Board of Trade will violate the 1992
Agreement and extinguish the Exercise Right if it acts to (i) change its state
of incorporation by merging with and into a Delaware not-for-profit corporation;
(ii) become a for-profit corporation; or (iii) create an electronic trading
subsidiary. The CBOT has completed actions (i) and (iii) and is in the process
of completing action (ii). Judicial resolution of this contract is ripe now.
PARTIES
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11. Plaintiff, the CBOT, is a futures exchange with its principal
place of business at 141 West Jackson Boulevard, Chicago, Illinois. The CBOT is
a Delaware non-stock, not-for-profit corporation.
12. Defendant, the CBOE, is an options exchange with its principal
place of business at 400 South LaSalle Street, Chicago, Illinois. The CBOE is a
Delaware non-stock, not-for-profit corporation.
JURISDICTION AND VENUE
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13. This Court has subject matter jurisdiction over this matter and
personal jurisdiction over the parties under the common law of the State of
Illinois and 735 ILCS 5/2-209 by virtue of their acts within the State of
Illinois.
14. Venue is proper in this Court under 735 ILCS 5/2-101 and 735 ILCS
5/2-102 as the CBOE has its principal place of business in Cook County,
Illinois.
BACKGROUND
THE CBOT TODAY
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15. The CBOT was organized in 1848 as a voluntary, unincorporated
association. In 1859, the Illinois General Assembly granted the association a
special charter that incorporated the CBOT. On August 8, 2000, the CBOT became a
Delaware non-stock not-for-profit corporation, owned and operated by its
members.
16. The Chicago Board of Trade is the largest futures and options
exchange in the United States, providing facilities for the trading of a wide
variety of futures and options contracts ranging from contracts on corn, wheat
and soybeans to contracts on U.S. Treasury Securities and the Dow Jones
Industrial Average.
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17. Trading in CBOT contracts is currently conducted in two ways -
open outcry trading in a trading pit and via an electronic trading system, most
of which is conducted by the Ceres Trading Limited Partnership formed in 1992.
Today, most trading at the CBOT occurs by open outcry.
18. Ceres was designed to operate different new business ventures for
the benefit of the CBOT members, including an electronic trading division. With
respect to Ceres, the CBOT is the general partner and holds a ten percent
interest. Chicago Board of Trade clearing members own 20% of the partnership
interests as limited partners, and individual Chicago Board of Trade members own
the remaining 70% as limited partners.
19. Over the years, the CBOT has formed various membership classes.
The original class, known as a Full Membership, entitles anyone holding that
class of membership to trade as principal and broker any and all futures or
options contracts traded at the CBOT. There are 1,402 Full Memberships at the
CBOT. These memberships may be sold, leased or registered for the benefit of a
member firm.
20. The other classes of membership have less trading, voting and
liquidation rights than Full Memberships. Associate Memberships, created in
1979, for example, may trade only in options contracts and financial futures
contracts and have voting and liquidation rights equal to 1/6 of those of Full
Memberships. IDEM (Index, Debt and Energy Market) Membership Interests allow
holders to trade a limited number of specific contracts, including Dow futures
and Municipal bonds. COM (Commodities Market) Membership Interests allow holders
to trade only in options contracts. The IDEM and COM Membership Interests,
created in 1982, have no
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voting rights, and have liquidation rights equal to one-half of one percent of
those of Full Members.
21. Only the 1,402 holders of Full Memberships hold the CBOE Exercise
Right that is at the heart of this dispute. (At the time of CBOE's formation,
the CBOT had 1,402 members, and the 1992 Agreement specifically limits the
Exercise Right to those 1,402 Full Memberships.)
THE CBOE "EXERCISE RIGHT"
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22. The Chicago Board Options Exchange was created in 1972, in order
to provide a market for stock options trading. The CBOE's Certificate of
Incorporation specifically recognized the "special contribution made to the
organization and development of the Corporation by the members of the Board of
Trade of the City of Chicago." (Exhibit B)
23. In part to recognize the special contribution made by the members
of the CBOT, and in part to promote growth and liquidity of the CBOE, Article
Fifth (b) of the CBOE's Certificate of Incorporation provides that every present
and future member of the CBOT would be entitled to become a member of the CBOE
at no additional cost. The ability of a Chicago Board of Trade Full Member to
exercise this right to become a member at the CBOE is referred to as the
Exercise Right.
24. Following the CBOE's incorporation, the two exchanges disputed
the scope of the Exercise Right, including whether a Chicago Board of Trade
member was entitled to lease the trading rights and privileges associated with
CBOT membership and CBOE membership independently.
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THE 1992 AGREEMENT
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25. On September 1, 1992, the exchanges entered into an agreement to
resolve those ongoing disputes. (Exhibit C)
26. In Section 3(c) of the 1992 Agreement, the CBOE agreed that "any
eligible CBOT Full Member or Eligible CBOT Full Member Delegate is entitled to
become an Exerciser Member [of the CBOE] pursuant to Article Fifth (b), provided
such individual qualifies to be a CBOE Regular Member in accordance with the
rules of the CBOE applicable generally to CBOE Regular Membership."
27. Under the 1992 Agreement, an "Eligible CBOT Full Member" is
defined as "an individual who at the time is the holder of one of the One
Thousand Four Hundred Two (1,402) existing CBOT full memberships and who is in
possession of all trading rights and privileges appurtenant to such CBOT Full
Membership." (Section 1(a)) Thus, pursuant to the contract between the
exchanges, the Exercise Right is restricted to the 1,402 Full Memberships
currently existing at the CBOT.
28. Section 1(c) further defined the "trading rights and privileges
appurtenant to such CBOT Full Membership" as (i) the rights and privileges that
entitle a holder to trade as principal and broker for others in all contracts on
the CBOT (regardless of whether by open outcry, by electronic means or
otherwise); and (ii) every trading right or privilege granted, assigned or
issued by the CBOT to holders of Full Memberships as a class, excluding rights
or privileges that are the subject of an option not exercised by the Full
Member. Thus, under the contract, the Exercise Right attaches to each of the
1,402 Full Memberships, so long as those Full
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Memberships entitle holders to trade all contracts traded on the CBOT and to
every trading right or privilege associated with Full Membership.
29. The right embedded in their Full Membership to trade at the CBOE
is a major source of value to Chicago Board of Trade Full Members. This Exercise
Right gives Eligible Full Members and Eligible Full Member Delegates access to
two exchanges. In addition, since a Full Member has the right to lease his Board
of Trade membership (along with the Exercise Right) to parties known as
Delegates, members continue to benefit from the value of the Exercise Right even
after they retire from active trading. Currently, nearly half of the CBOT's Full
Members or their delegates have exercised their right to trade at the Chicago
Board Options Exchange.
30. At the time they entered into the 1992 Agreement, both parties
--
recognized and acknowledged the possibility that the Chicago Board of Trade
might in the future reorganize or change its structure. The Agreement therefore
included provisions allowing the CBOT to change its structure while still
maintaining the Exercise Right for its Full Members. (See Exhibit C (P) 3(d)).
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Notably, the Agreement does not restrict the Chicago Board of Trade from (i)
---
changing its state of incorporation pursuant to step one; (ii) becoming a for-
profit corporation; or (iii) forming a wholly-owned electronic trading
subsidiary intended to take over Ceres' electronic trading operations.
THE CBOT'S RESTRUCTURING PLAN
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31. The industry served by the CBOT has undergone significant
changes over the last several years. Electronic trading has emerged as the
dominant form of trading in Europe
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and Asia, is becoming a more popular form of trading in U.S. markets, and poses
a competitive threat to traditional open outcry exchanges. Since the mid-1990's,
electronic trading has grown dramatically, whereas traditional open outcry
trading, which is the hallmark of the current CBOT, has declined. In 1999, the
all-electronic Eurex exchange, a foreign exchange, overtook the CBOT to become
the world's most active exchange.
32. The advance of technology, along with increased consumer demand
for cost-efficient and effective forms of trading, among other things, has
fueled the need for exchanges such as the CBOT to change how they operate.
Restructuring in the industry is already underway. The Chicago Mercantile
Exchange has approved and begun to implement a restructuring plan involving
demutualization, and the New York Mercantile Exchange has already approved a
demutualization plan.
33. The Chicago Board of Trade's current mutual, not-for-profit
structure is oriented towards supporting member opportunities, and has
occasionally made it difficult for the exchange to efficiently make necessary
business decisions focused on technology investments and operational economy.
34. In addition, the Board of Trade faces pressure from a variety of
potential electronic trading competitors. Cantor/eSpeed has already introduced
an electronic trading platform for CBOT products such as U.S. Treasury futures,
and numerous electronic communication networks already exist for trading
financial products worldwide.
35. The CBOT is threatened by the changes in the industry. Its Board
of Directors has concluded that restructuring is essential to its ability to
preserve a viable open
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outcry exchange capable of competing in the new economy while at the same time
capturing the growth of electronic trading.
36. Step one of the restructuring, now complete, resulted in the CBOT
becoming a Delaware not-for-profit corporation (as opposed to its former status
as a specially chartered Illinois not-for-profit corporation). As part of step
one, the CBOT also formed eCBOT, a wholly-owned subsidiary incorporated in
Delaware intended to operate the CBOT's electronic trading business, most of
which is currently operated not by the CBOT but by Ceres, of which the CBOT is
---
the sole general partner. The rights and privileges of Chicago Board of Trade
members, including their trading rights and privileges, were not affected by the
move to Delaware or the formation of the wholly-owned subsidiary. Today, Full
Members are able to trade all CBOT products via open outcry (in the trading
pits) or electronically through the a/c/e(TM) System (the electronic trading
system of the Alliance/Chicago Board of Trade/Eurex).
37. Step two of the proposed restructuring, which will require
another membership vote, calls for the Chicago Board of Trade to become a for-
profit Delaware corporation. The current CBOT membership will become member
stockholders in the for-profit corporation. The 1,402 Full Members will be
issued a special class of shares that will continue to allow the holder to trade
as principal and broker for others in all Chicago Board of Trade contracts.
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Only Full Members will have full trading rights and privileges in all CBOT
contracts.
38. Moving to a streamlined, for-profit corporate structure pursuant
to step two will allow the Chicago Board of Trade to be more cost-efficient and
to compete effectively
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in the changing environment. It will also afford the CBOT enhanced financial and
decision-making flexibility.
THE CBOT'S RESTRUCTURING PLAN
COMPORTS WITH THE AGREEMENT
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39. Understanding that the Exercise Right embedded in Full
Memberships is a significant source of value to its Full Members, the proposed
changes to the Chicago Board of Trade's corporate structure have been designed
to expressly comport with the terms of the 1992 Agreement. In fact, preserving
the Exercise Right has been one of the requirements of the restructuring plan.
40. Pursuant to Section 3(d) of the 1992 Agreement, the Chicago Board
Options Exchange agreed "that in the event the CBOT merges or consolidates with
or is acquired by or acquires another entity ('other entity')" the Exercise
Right "shall continue to apply and this Agreement shall continue in force and
effect" so long as three conditions are satisfied. None of the conditions
require that the Chicago Board of Trade either remain a specially chartered
Illinois corporation or maintain its not-for-profit status. And all three
conditions were satisfied by the CBOT's merger with and into a Delaware not-for-
profit corporation pursuant to step one, and are satisfied by the CBOT's move to
a for-profit structure pursuant to step two.
41. First, "the survivor of such merger, consolidation or acquisition
('survivor') is an exchange which provides or maintains a market in commodity
futures contracts or options, securities, or other financial instruments."
(Section 3(d)(i)) The surviving Delaware CBOT is an exchange that provides a
market in commodity futures or options, securities and other financial
instruments, and will continue to be after it becomes a for-profit corporation.
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42. Second, "the 1,402 holders of CBOT Full Memberships are granted
in such merger, consolidation or acquisition membership in the survivor
('Survivor Membership')." (Section 3(d)(ii)) All 1,402 CBOT Full Memberships
retained the rights and privileges of membership in the surviving Delaware CBOT,
and will retain all the rights and privileges of membership as member
stockholders in the for-profit corporation.
43. Third, "such Survivor Membership entitles the holder thereof to
have full trading rights and privileges in all products then or thereafter
traded on the survivor. . .." (Section 3(d)(iii)) All 1,402 Full Memberships
have full trading rights and privileges in all contracts traded on the surviving
Delaware CBOT, and will continue to possess full trading rights and privileges
in the for-profit corporation.
44. Nor does the 1992 Agreement in any way prohibit the creation of a
wholly-owned subsidiary intended to run the electronic trading business.
THE CBOE'S INTENTION TO EXTINGUISH
THE EXERCISE RIGHT IN BREACH OF THE 1992 AGREEMENT
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45. In both formal and informal communications with Chicago Board
Options Exchange representatives, the Chicago Board of Trade has confirmed that
any restructuring will comport with the 1992 Agreement and thereby preserve the
Exercise Right.
46. Despite assurances that the CBOT will abide by the conditions in
the 1992 Agreement to preserve the Exercise Right, the CBOE has made clear its
intent to breach the Agreement if the CBOT takes any more steps to implement its
restructuring.
47. On June 20, 2000, just days before the CBOT membership vote on
step one of the restructuring, the CBOE issued an Information Circular
announcing that the Chicago
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Board of Trade's restructuring plan would extinguish the Exercise Right. Among
other reasons, the CBOE declared that when the CBOT changed its state of
incorporation the Illinois CBOT would "disappear" and the "exercise right
disappears with it." (Ex. A at 1) Although the CBOE agreed before this Court to
take no action based on this step alone, it continues to maintain that if the
-----
CBOT takes any other steps toward restructuring, this change in the CBOT's state
of incorporation will allow it to breach the 1992 Agreement and unilaterally
extinguish the Exercise Right.
48. The CBOE also declared that CBOT's becoming a for-profit stock
corporation would invalidate the 1992 Agreement: "[a]s a stock corporation, CBOT
would no longer have members, but instead would have stockholders, and thus
would not satisfy the requirements of clauses (ii) and (iii) of Section 3(d).
(Exhibit A, at 3) To the contrary, CBOT's 1,402 Full Members will continue to be
member stockholders in the new corporation, by virtue of the fact that they will
each receive a share of Class B-1 stock which carries with it all of the trading
rights and privileges on the surviving exchange. Only the current 1,402 Full
Members will receive Class B-1 stock, and thus, like today, only those 1,402
Full Members will have full trading rights and privileges in all contracts
traded at the CBOT.
49. Finally, the CBOE made clear that in its view any action by the
CBOT that results in a "dilution" of CBOE membership rights is "entirely
inconsistent with the intent of Article FIFTH, as was made clear in the 1992
Agreement between CBOT and CBOE" and will therefore invalidate that Agreement.
(Ex. A at 2) The CBOE maintains that the CBOT's creation of an electronic
trading subsidiary "for the first time" allows CBOT Full Members to trade at the
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CBOE via the Exercise Right while continuing to trade CBOT products. CBOE
believes this dilutes the value of CBOE membership in violation of the 1992
Agreement.
50. To the contrary, nothing in the 1992 Agreement prohibits a CBOT
Full Member from exercising the right to trade at the CBOE and, at the same
time, trading CBOT's products electronically. In fact, CBOT Full Members have
been able to do just that for many years, by trading CBOT products first on
GLOBEX Systems, then on the Project A System and, since August 28, 2000, on the
a/c/e(TM) System.
COUNT I
CBOE's Breach of Section 4(d) of the 1992 Agreement
---------------------------------------------------
51. Plaintiff repeats and realleges the allegations contained in
paragraphs 1 through 50.
52. The 1992 Agreement between the parties was executed following
extensive negotiations between the two exchanges. In Section 4(d) the parties
mutually agreed that CBOE would interpret Article Fifth (b) in accordance with
the provisions of this Agreement.
53. The CBOE has stated that it reads Article Fifth (b) to mean that
the CBOT cannot (i) change its state of incorporation; (ii) become a for-profit
corporation; or (iii) form an electronic subsidiary to operate its electronic
trading business. The CBOE has therefore declared that, under its interpretation
of Article Fifth (b), the Exercise Right will be extinguished as soon as the
Chicago Board of Trade implements step two of its restructuring.
54. This tortured reading of Article Fifth (b) is inconsistent with
the meaning and spirit of the 1992 Agreement, and thus violates Section 4(d) of
that Agreement. The 1992
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Agreement specifically provided for the preservation of the Exercise Right in
the event the Chicago Board of Trade reorganized or merged with another entity,
as contemplated by the CBOT's restructuring. Nowhere does that Agreement suggest
that the Chicago Board of Trade cannot modernize its corporate structure without
endangering the Exercise Right. Section 3(d) of the 1992 Agreement does not
require the CBOT to maintain its status as an Illinois corporation, or as a not-
for-profit corporation. In fact, no provision in the 1992 Agreement imposes the
conditions CBOE would read into the Agreement to govern the Exercise Right.
COUNT II
For A Declaration that Becoming a Delaware For-Profit
Corporation and Creating a Wholly Owned Electronic Trading Subsidiary
Do Not Violate the 1992 Agreement and for An Injunction
Prohibiting the CBOE from Extinguishing the Exercise Right
----------------------------------------------------------
55. Plaintiff repeats and realleges the allegations contained in
paragraphs 1 through 54.
56. Under the terms of the 1992 Agreement, the CBOT and the CBOE
agreed that, even in the event that the CBOT "merges or consolidates with or is
acquired by or acquires another entity," the Exercise Right would continue as
long as the surviving entity meets the three requirements of the 1992 Agreement.
57. As explained above, step two of the CBOT's Restructuring Plan
will result in the CBOT becoming a Delaware for-profit stock corporation.
Neither this change in legal status, nor the CBOT's move to Delaware pursuant to
step one, do anything to invalidate the 1992 Agreement or the right granted by
Article Fifth (b).
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58. Both Delaware and Illinois law specifically provide that in the
event of a merger, the resulting corporation possesses all the rights and
privileges of the merging corporations. Specifically, Delaware law provides that
in the event of merger or consolidation, "the constituent corporations shall
become a new corporation, or be merged into 1 of such corporations, as the case
may be, possessing all the rights, privileges, powers and franchises as well of
a public as of a private nature. . . ." 8 Del. C. (S) 259. Illinois law
similarly provides that when the merger is effected, the new or surviving
corporation "shall thereupon and thereafter possess all the rights, privileges,
immunities and franchises, of a public or private nature, of each of the merging
or consolidating corporations. . . ." 805 ILCS 105/111.50.
59. Nonetheless, the CBOE has declared that when the CBOT takes
another step in its restructuring by becoming a for-profit stock corporation,
the Exercise Right will disappear.
60. As a result of the foregoing, there exists an actual controversy
between the parties concerning the rights and obligations of the parties under
the 1992 Agreement.
61. By the terms of (S)2-701 of the Illinois Code of Civil Procedure,
735 ILCS 5/2-701, this Court has the power to construe the 1992 Agreement in
order to determine whether step two of the CBOT Restructuring Plan comports with
the 1992 Agreement, and to make a binding declaration that the 1,402 CBOT Full
Memberships will retain their Exercise Rights after the Chicago Board of Trade
becomes a Delaware for-profit stock corporation. This Court's determination of
this contractual issue will terminate the dispute between the parties and avoid
future litigation as to step two of the restructuring.
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62. If such a determination of rights under the 1992 contract is not
made by this Court, the Chicago Board of Trade and its members will suffer
irreparable harm, jeopardizing the CBOT's rights under the 1992 Agreement to
restructure while still maintaining the Exercise Right.
PRAYER FOR RELIEF
-----------------
WHEREFORE, plaintiff Board of Trade of the City of Chicago
respectfully requests that this Court enter a judgment:
a. Interpreting the 1992 Agreement and declaring that:
1. Steps one and two of the CBOT's proposed Restructuring Plan
comport with the Agreement; and
2. the 1,402 Full Memberships of the CBOT will retain their
Exercise Right after step two is implemented and the CBOT
becomes a Delaware for-profit stock corporation; and
b. Issuing an injunction that prohibits the CBOT from extinguishing
the Exercise Right as a result of the CBOT's implementation of
step two of the restructuring; and
c. Ordering such further relief as this Court may deem necessary or
appropriate.
Dated: September 1, 2000 Respectfully submitted,
/s/ Garrett B. Johnson
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Garrett B. Johnson
Emily Nicklin
Donna M. Welch
Attorney No. 90443
KIRKLAND & ELLIS
200 East Randolph Drive
Chicago, Illinois 60601
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(312) 861-2000
(312) 861-2200 (Facsimile)
ATTORNEYS FOR PLAINTIFF,
BOARD OF TRADE OF THE CITY OF CHICAGO
Carol A. Burke
Executive Vice President and General Counsel
Board of Trade of the City of Chicago, Inc.
141 West Jackson Boulevard, 6th Floor
Chicago, Illinois 60604
(312) 435-3726
(312) 341-3392 (Facsimile)
Edward T. Joyce
Edward T. Joyce & Associates PC
11 South LaSalle Street, Suite 1600
Chicago, Illinois 60603-1211
(312) 641-2600
(312) 641-0360 (Facsimile)
William J. Harte
William J. Harte, Ltd.
111 West Washington Street, Suite 1100
Chicago, Illinois 60602
(312) 726-5015
(312) 641-2445 (Facsimile)
Of Counsel
The CBOT urges its members and membership interest holders to read the
Registration Statements 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 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, 141 W. Jackson Blvd., Chicago, Illinois 60604-2994,
Attention: Office of the Secretary, Telephone: (312) 435-3605, Facsimile: (312)
347-
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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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