The Board of Directors of the Chicago Board of Trade, Inc. yesterday approved certain restructuring initiatives designed to accomplish the following objectives:
- Demutualize the CBOT® by converting the CBOT® from a nonstock, not-for-profit corporation into a stock, for-profit corporation and distributing shares of common stock of For-Profit CBOT® to the current CBOT® members;
- Modernize the CBOT®’s corporate governance structure by substantially eliminating the membership petition process, streamlining the Board of Directors and making certain other changes to improve the efficiency of the CBOT®’s corporate decision-making process while creating certain "core rights" including a member fee preference and trading pit preservation measures which cannot be altered without member approval; and
- Reorganize and consolidate the CBOT®’s electronic trading business, part of which is currently operated by Ceres, into eCbot, which would be operated as a wholly owned subsidiary of the CBOT® and, in connection with this reorganization of the CBOT®’s electronic trading business, issue shares of a convertible preferred stock of For-Profit CBOT® to the limited partners of Ceres in exchange from their limited partnership interests.
Following a period of review, it is expected that the SEC will declare the Registration Statement effective and the CBOT® will submit the restructuring transactions detailed therein to a member vote. Once the approval of the membership has been obtained and other conditions have been satisfied, the CBOT® will convert to a for-profit corporation and shares of stock in that corporation will be distributed to CBOT® members. Shortly thereafter, the Board of Directors of the CBOT®, Inc. will be reduced from 18 members to 9 members as the result of a shareholder election.
The Board’s action today represents a major milestone in a process that commenced early in 1999. In mid-2000, the CBOT® reincorporated in Delaware in order to enhance its corporate flexibility, including with respect to its restructuring initiative. The CBOT® believes that the additional restructuring transactions outlined above will enhance our competitiveness within the financial services industry including our ability to compete in both the open outcry and electronic arenas.
Sincerely,
Nickolas J. Neubauer
The CBOT® urges its 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.
