Under terms of the settlement agreement, CME and CBOT will each pay $15 million to eSpeed over a five-year period. As part of the agreement, all companies will be released from the legal claims brought against each other without admitting liability on the part of any company. The settlement agreement also covers futures and options on futures on individual stocks and narrow-based stock indexes offered by OneChicago LLC, a joint venture of CME, CBOT and the Chicago Board Options Exchange.
"We made a business decision to settle the case and move on," said CME Chairman Terry Duffy. "We are now moving forward with our plans for CME and for investing in improvements to the speed, reliability and functionality of our GLOBEXÒ electronic trading platform."
CBOT Chairman Nickolas J. Neubauer added, "Litigation is time-consuming, expensive and uncertain. It was in the best interests of the parties to reach a reasonable settlement, and that is what we accomplished."
CME will recognize the entire settlement, equivalent to approximately 28 cents per diluted share, in the third quarter of 2002. CME will make an initial payment of $5 million, with five subsequent annual payments of $2 million. The CBOT will recognize the effect of the settlement in the third quarter of 2002.
Chicago Mercantile Exchange Inc. (www.cme.com) is the largest futures exchange in the United States and the second largest exchange in the world for the trading of futures and options on futures. As an international marketplace, CME brings together buyers and sellers on its trading floors and GLOBEX® around-the-clock electronic trading platform. CME offers futures and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moves about $1.5 billion per day in settlement payments and manages $27.1 billion in collateral deposits. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc.
Providing a diverse mix of financial, equity and commodity futures and options on futures products, the Chicago Board of Trade offers over 150 years of member-trader expertise, unparalleled liquidity and market integrity. Via open auction and electronic trading, the CBOT, the world's third largest derivatives marketplace, provides premier customer service to risk managers and investors worldwide. Originally a marketplace for agricultural producers to achieve price protection, today the CBOT offers more than 60 different products, including futures and option on U.S. Treasury bonds and notes, interest rate swaps, the Dow Jones Industrial Average, including an electronic mini-sized Dow, and other Dow Jones indices. For more information on the CBOT's products and markets, log onto the exchange Web site at www.cbot.com.
