Board of Trade of the City of Chicago Inc – ‘425’ on 9/25/01 re: Board of Trade of the City of Chicago Inc

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Business-Combination Transaction Communication   —   Rule 425
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 425         Business-Combination Transaction Communication         9     28K 

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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. 333-54370                                                              

* * * * 

The following communication was distributed to CBOT members on September 25,    
2001.                                                                           

The Board of Directors of the Chicago Board of Trade at its meeting Monday,     
September 24, 2001, took the actions summarized below.                          

. . . 

Rejected a proposal to submit, for membership vote, propositions to reduce the  
size of the CBOT(R) Board of Directors from 18 members to 9 members in          
connection with the December 2001 Annual Election, to clarify that Board        
meetings may occur at such times as the Board may determine, and to make other  
conforming changes. These propositions had been proposed for submission to      
membership vote in advance of the anticipated membership vote on CBOT           
restructuring. (Although it is anticipated that a membership vote on            
restructuring may occur before the end of this year, this timing cannot be      
assured in view of the necessary regulatory approvals.)                         

The propositions to reduce the size of the Board were rejected by a vote of 5   
"Aye" and 9 "Nay", recorded as follows:                                         

Director      Canhman       Nay    Director      McMillin         Nay           
   Cashman       Nay                  Niciforo         Nay
   Cermak        Nay                  Thompson         Aye
   Corvino       Nay                  Wallace          Aye
   Filipowski    Nay                  Walter           Nay
   Kurzydlo      Aye                  Weems            Aye
Levin         Nay                                   
                               Vice Chairman
                                              Carey    Aye

Accordingly, the elective offices to be filled in the December 2001 Annual      
Election remain unchanged, as specified in the current CBOT Charter and Bylaws. 

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                                                                        09/24/01

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Further information regarding the 2001 nomination and annual election process   
will be forthcoming.                                                            

The proposed downsizing of the Board to nine members remains an element of the  
CBOT restructuring proposal as it is anticipated to be submitted to membership  
vote.                                                                           

. . . 

Considered proposed technical refinements to the CBOT restructuring proposal    
which originally was approved by the Board in January 2001.                     

To allow additional time for review of this matter, the Board voted 8 "Aye" to 6
"Nay" to defer a decision on the proposed refinements for a period of           
approximately one week.                                                         

While the Board of Trade of the City of Chicago, Inc. (CBOT) has filed a        
Registration Statement on Form S-4, including a preliminary proxy statement and 
prospectus, regarding the restructuring transactions with the SEC, it has not   
yet become effective, which means it is not yet final. CBOT members are urged to
read the final Registration Statement on Form S-4, including the final proxy    
statement and prospectus, regarding the restructuring transactions referred to  
above, when it is finalized and distributed to members, as well as the other    
documents which the CBOT has filed or will file with the SEC, because they      
contain or will contain important information for making an informed investment 
decision. Members may obtain a free copy of the final prospectus, when it       
becomes available, and other documents filed by the CBOT at the SEC's web site  
at www.sec.gov. 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 of 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.           

. . . 

Approved policy and regulation changes which are designed to improve the        
delivery of customer order flow to the Exchange Floor and to a/c/e. These       
changes will allow electronic connectivity to the Floor API and the a/c/e       
platform for all market participants who are customers and therefore guaranteed 
by a CBOT clearing member firm.                                                 

Further details will be forthcoming.                                            

. . . 

Approved regulation changes to allow for average pricing between open outcry and
a/c/e transactions.                                                             

-MORE-
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Approved a new regulation which will allow clearing firms to offset economically
equivalent positions in CBOT(R) mini-sized Dow(SM) and CBOT(R) DJIA(SM) futures 
contracts. This regulation will be implemented as of September 30, 2001 with the
launch of CBOT mini-sized Dow(SM) futures.                                      

Further details will be forthcoming.                                            

*"Dow Jones(SM)", "The Dow(SM)", "Dow Jones Industrial Average(SM)", "Dow Jones 
Transportation Average(SM)", "Dow Jones Utility Average(SM)", "Dow Jones        
Composite Average(SM)", "DJIA(SM)", "DJTA(SM)", "DJUA(SM)", and "DJCA(SM)" are  
service marks of Dow Jones & Company, Inc. and have been licensed for use for   
certain purposes by the Board of Trade of the City of Chicago ("CBOT(R)"). The  
CBOT's futures and futures options contracts based on the Dow Jones Industrial  
Average(SM), Dow Jones Transportation Average(SM), Dow Jones Utility Average(SM)
and Dow Jones Composite Average(SM) are not sponsored, endorsed, sold or        
promoted by Dow Jones, and Dow Jones makes no representation regarding the      
advisability of trading in such product(s).                                     

. . . 

Approved an October 26, 2001 target launch date for CBOT 10-Year Interest Rate  
Swap futures (a/c/e and open outcry trading).                                   

Also approved contract revisions for CBOT 10-Year and 5-Year Interest Rate Swap 
contracts as follows:                                                           

-  Round the final futures settlement prices to the nearest one quarter of one  
32nd instead of the nearest dollar, and                                   

-  Widen the minimum trading increment for futures to one 32nd ($31.25) from    
  quarter of one 32nd ($7.8125), and the minimum trading increment for options
to one 64th ($15.625) from one quarter of one 32nd ($7.8125).             

Further details will be forthcoming.                                            

. . . 

Confirmed the postponement of the conversion of MidAmerica Commodity Exchange   
(MidAm) Eurodollar futures to a CBOT mini-sized contract to be traded           
exclusively on a/c/e.                                                           

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Accordingly, MidAm Eurodollar futures will continue to trade by open outcry on  
the MidAm until further notice.                                                 

. . . 

Approved various revised contract specifications, a 3-month member transaction  
fee waiver, and an October 29, 2001 target launch date for CBOT Dow Jones AIG   
Commodity Index(SM) futures.                                                    

Complete details concerning this contract will be forthcoming.                  

"Dow Jones," AIG (R)" Dow Jones-AIG Commodity Index(SM)," and "DJ-AIGCI(SM)" are
service marks of Dow Jones & Company, Inc. and American International Group,    
Inc., as the case may be, and have been licensed for use for certain purposes by
the CBOT. The CBOT Dow Jones- AIG Commodity Index futures and futures options   
are not sponsored, endorsed or sold by Dow Jones, AIG, American International   
Group, or any of their respective subsidiaries or affiliates, and none of Dow   
Jones, AIG, American International Group, or any of their respective            
subsidiaries or affiliates, makes any representation regarding the advisability 
of investing in such product(s)."                                               

. . . 

Modified the holiday trading schedule for a/c/e to change the standard pre-     
holiday "early close" time for Financial and Metals contracts on a/c/e from     
12:00 noon to 12:30 p.m. Central Time.                                          

Further details on the Exchange holiday schedule for the remainder of 2001 are  
available from the Secretary's Office.                                          

. . . 

Established 1:45 p.m. Central Time as the standard closing time for the CBOT(R) 
mini-sized New York Silver and New York Gold futures contracts which are to be  
traded exclusively on a/c/e as of September 30, 2001.                           

. . . 

Approved "position accountability" provisions in lieu of position limits for the
CBOT mini-sized Treasury Bond and 10-year Treasury Note futures which are to be 
traded exclusively on a/c/e as of September 30, 2001.                           

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To equate the mini-sized contracts with the full-sized CBOT contracts, the      
position accountability levels are 20,000 contracts in CBOT mini-sized Treasury 
Bond futures and 15,000 contracts in CBOT mini-sized 10-year Treasury Note      
futures. Position accountability levels in the CBOT mini-sized Treasury Bond and
Treasury Note futures will also be aggregated with any positions in the         
corresponding CBOT full-sized contracts.                                        

. . . 

To facilitate the transition from pit trading to a/c/e trading in CBOT metals   
contracts, established an early (12:00 noon) close time for pit trading in      
CBOT(R) metals contracts on September 28, 2001.                                 

. . . 

Approved amendments to Regulation 450.04, which presently specifies that        
Exchange Service Fee adjustments for overpayments and underpayments may be      
required for periods of up to 5 years in the past.                              

Under the revised regulation, the adjustment period will be reduced to 1 year   
for firm requests for reimbursement due to overpayments, and to 3 years for     
Exchange requests for adjustments due to underpayments. (These revisions will be
implemented prospectively.)                                                     

. . . 

Approved the following change in a committee appointment:                       

Membership Committee                                                            
--------------------                                                            

Resignation:  Gregg S. Arenson                                                  

# # # 

                                                                        09/24/01

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* * * * 

The following are the prepared remarks of the Chairman of the CBOT given at a   
meeting of the CBOT membership on September 25, 2001 and currently available on 
the CBOT's intranet sites, MemberNet and OnBoard.                               

Remarks by Nickolas J. Neubauer 
CBOT Member Information Meeting 
September 25, 2001  
_____________________________ 

Thank you for attending today's Member Information Meeting, either in 
person or via Membernet.                                                        

    Before I begin my monthly review of events and information specific to the
Board of Trade, I want to take a moment to commend the leadership of my         
counterparts who run the equities and derivatives exchanges in New York, along  
with those who manage the major firms who generate business in both markets. In 
the aftermath of the catastrophic events of September 11, they have shown not   
only great compassion in comforting the families of those who died, and support 
in assisting the rescue and recovery efforts, they have demonstrated strong     
leadership and resolve in reopening that city's financial markets.              

    The Chicago Board of Trade, through its Foundation, is preparing to make a
financial contribution to the disaster recovery effort. I am happy to say that  
many of you have made contributions to the Foundation in support of this effort.
For those of you who have yet to do so, your contributions can be mailed to:    

The Chicago Board of Trade Foundation                                 
Attention:  Jill Harley, Foundation Administrator                     
141 W. Jackson Blvd., Suite 2240                                      
Chicago, IL  60604                                                    

1.   CBOT/CBOE                                                                  

At long last, the CBOT and CBOE have entered into an agreement that   
clarifies the nature and scope of the exercise right in light of the            
restructuring transactions. After seven months of negotiations and approval by  
the Board of Directors of each exchange, last week the CBOE membership voted    
775-189 to approve this fair and balanced agreement.                            

   Preservation of the exercise right and ensuring that it would not be lost
as a result of completing the restructuring was a most important priority for   
me. Thanks to the strong leadership and efforts of Bill Brodsky and Mark Duffy, 
in addition to having David Vitale as our CEO, this dispute was resolved and our
relations with the CBOE have never been better.                                 

2.   Restructuring                                                              

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With the resolution of the CBOE issues, we can move forward with      
restructuring. Our Board will vote on certain refinements to the restructuring  
plan next Tuesday. We expect that the registration statement, which will        
describe such refinements, will be filed with the SEC for their review shortly  
thereafter.                                                                     

  Once the SEC declares our registration statement effective, we expect to
have three information meetings on the restructuring proposal. I plan to answer 
your questions as to why this plan will improve our governance while maintaining
accountability, plus allow us to increase the overall value of our enterprise.  

Those of you who have concerns about loss of control or accountability
should consider this: Do you like the way the Board of Trade is being run now,  
or would you prefer going back to the way things were done in previous years? I 
believe the Board of Trade is a better place today than it was at the beginning 
of the year, and I believe our membership would agree with me.                  

  The restructuring plan is intended to ensure that the good management we
have now continues, while giving us ways, as a for profit enterprise, to make   
distributions to shareholders or otherwise increase the value of what we have.  

     Depending on when the SEC declares our registration statement effective, we
hope to have a vote by year-end.                                                

3.   Pricing Strategy                                                           

Speaking of good management and what to expect in future years in a   
restructured Board of Trade, I'd like you to consider the pricing strategy      
project led by Executive Vice President Bernie Dan.                             

 This study of overall pricing is something the Board of Trade has never
done before. Over 200 market participants have given input and a premier        
consulting firm, Boston Consulting Group, is working with us on this project.   
David Vitale and his management team will then come up with a final             
recommendation. Compare this open, comprehensive process with the way things    
were done in the past.                                                          

   Bernie is having an information meeting tomorrow at 2:30 p.m. in the bond
pit. This will be a new product update, as well as a full discussion of the     
pricing strategy study and the designated market maker (DPM) program.           

I know these topics are very important to you and as many members as  
possible should attend. You will be able to find out the facts, give input and  
in general see that good management means open communication.                   

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4.   Finances                                                                   

 Those of you who regularly attend these meetings have heard me say that
"our finances are sound" again and again as well as repeat our 2001 budget goals
of 800,000 contract per day and a year end cash balance of $20 million.         

   As of September 20, we have continued to average over a million contracts
per day. Our unrestricted cash balance as of June 30 was over $29 million. The  
doom and gloom of last year, with its fear of assessments, should be over: our  
finances are sound.                                                             

     Our a/c/e platform continues to function exceedingly well, and has averaged
185,000 contracts per day so far this year. Our September average daily volume  
is 258,000 contracts per day. At these levels, we are covering our monthly out  
of pocket costs and seeing a return on our overall investment.                  

5.   Security                                                                   

Those members on the floor know we have made changes to enhance the   
security of our buildings. Phil Hannigan, Kevin Lennon and John Pappas are in   
charge of this. They are also getting input from an outside consultant, as well 
as from members and employees. We will be constantly evaluating the security    
measures we have in place so as to balance the security needs of our members,   
employees and tenants without limiting the freedoms we have enjoyed.            

6.   Lessor Pool                                                                

   C. C. Odom, the Chairman of our Lessor Committee, is working on a plan to
help our lessors. Many of our lessors are retired members who no longer have    
close ties with the trading community. C. C. is looking into how our Member     
Services Department could help in matching lessors with lessees and otherwise   
improve the leasing environment.                                                

Right now the Member Services Department simply has a bulletin board  
approach. C. C. is thinking that many lessors would welcome a more active       
approach, perhaps a managed leasing pool.                                       

  Under this approach, seat owners could contribute their seats to a pool.
The pool manager would actively seek out lessees, in exchange for an            
administrative fee, collect the monthly lease payments, and then make payouts to
the seat owners participating on a pro rata basis.                              

C. C. will be discussing this at his October 3 meeting of the Lessor  
Committee. He is also going to review other aspects of the leasing process, such
as whether pricing                                                              

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should go to a percentage of seat price basis as is common at the CBOE. He      
welcomes your input.                                                            

Let me summarize by repeating a few important points:                 

     Our recent disputes with the CBOE are over and the exercise right should be
preserved in connection with the restructuring transactions.          

     After the SEC declares our registration statement effective, we will submit
    our Restructuring Plan to you and hold three information meetings to fully
inform you prior to a vote.                                           

   Bernie Dan is holding an information meeting tomorrow at 2:30 in the bond
  pit and I invite you to attend to see how open communication and working
together will be part of a restructured CBOT.                         

    Now let's hear from David Vitale, and then discuss the CBOT in response to
your questions.                                                                 

While the Board of Trade of the City of Chicago, Inc. (CBOT/R/) has filed a     
Registration Statement on Form S-4, including a preliminary proxy statement and 
prospectus, regarding the restructuring transactions with the SEC, it has not   
yet become effective, which means it is not yet final. CBOT/R/ members are urged
to read the final Registration Statement on Form S-4, including the final proxy 
statement and prospectus, regarding the restructuring transactions referred to  
above, when it is finalized and distributed to members, as well as the other    
documents which the CBOT/R/ has filed or will file with the SEC, because they   
contain or will contain important information for making an informed investment 
decision. Members may obtain a free copy of the final prospectus, when it       
becomes available, and other documents filed by the CBOT/R/ at the SEC's web    
site at www.sec.gov. 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.           

#  #  #  #  

Dates Referenced Herein

				Referenced-On Page
This ‘425’ Filing		Date		First		Last			Other Filings
		10/29/01		4					None on these Dates
		10/26/01		3
		9/30/01		3		4
		9/28/01		5
Filed on:		9/25/01		1		6
		9/24/01		1
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