EXHIBIT 10.20


 


CBOE


Chicago Board of Options
Exchange


 


December 22, 2008


 


Mr. Alan J. Dean


8037 West 174th Place


Tinley Park, IL 60477


 


Dear Alan,


 


This Amended and Restated
Letter of Agreement (“Agreement”) serves to amend and restate the Letter of
Agreement previously entered into between you and CBOE, dated December 1,
2005 and subsequently amended January 23, 2007 (the “Prior Agreement”).  This Agreement is not a contract of
employment and should not be relied upon as such.  As an employee of CBOE, you have the right to
voluntarily terminate your employment at any time for any reason or no reason
at all, and likewise, CBOE may terminate your employment at any time for any
reason or no reason at all and without prior notice.


 


1)                                      Termination Without Cause: 
CBOE may terminate your employment without Cause, at any time.  In such event, CBOE shall pay you (a) your
base salary (based upon the annual rate in effect on the date of termination)
and prorated targeted bonus through the date of your termination of employment;
(b) twenty-four (24) months of base salary continuation (at the rate
determined by using the greater of (1) the annual pay rate in effect on
the effective date of this Agreement or (2) the annual pay rate in effect
on the date of your termination of employment); and (c) an amount equal to
two (2) times your target annual bonus (as determined by the Board of
Directors of CBOE) for the year in which your employment terminates
(collectively, such base salary and bonus amounts to be referred to herein as
the “Severance Payments”).  Subject to
the terms of Paragraph 8 and Paragraph 11 of this Agreement, the Severance
Payments shall be payable in one single sum within 30 days following the date
of your termination of employment.  CBOE
shall also pay your COBRA premiums (sufficient to cover full family healthcare)
for a period of eighteen (18) months following the termination of your
employment if you elect such COBRA coverage and, at the end of such period, if
you are eligible and elect to enroll in CBOE’s retiree medical plan, if any,
CBOE shall pay your premiums for such coverage for a period of six (6) months,
provided, that any payments or reimbursements for retiree medical plan premiums
will be made in accordance with Treasury Regulation § 1.409A-3(i)(1)(iv) (or
any similar or successor provisions). 
The foregoing notwithstanding, CBOE’s obligation to pay the COBRA and
retiree medical insurance premiums described in the preceding sentence
(collectively, the “Insurance Premiums”) shall cease on the date you and your
dependents become eligible for coverage under another group health plan that
does not impose pre-existing condition limitations on your and your dependents’
coverage.  Nothing herein shall be
construed to extend the period of time over which COBRA continuation coverage
may be provided to you or your dependents beyond the period of time mandated by
law.  CBOE shall also pay you for your
unpaid business


 

















 


expenses incurred prior to the termination of your
employment in accordance with the terms of CBOE’s expense reimbursement policy,
and accrued but unused vacation, through the date your employment terminates,
and any other benefits mandated under the terms of any CBOE plans and programs
in which you are a participant (excluding, however, any other CBOE severance
plan or program); provided that such payments and reimbursements, to the extent
subject to Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), will be made in accordance with Treasury Regulation
§ 1.409A-3(i)(1)(iv) (or any similar or successor provisions).


 


2)                                      Termination for Good Reason: 
You may terminate your employment at any time during the term of this
Agreement for “Good Reason,” such termination to be effective as of a date at
least 30 days after the date a written notice of such termination is delivered
by you to CBOE but within two years after the initial existence of the
condition constituting Good Reason, unless the condition constituting Good
Reason is fully corrected within 30 days after you give CBOE written notice
thereof.  For purposes of this Agreement,
“Good Reason” shall be deemed to exist if, and only if, without your express
written consent:


 


a.                                       CBOE shall assign to you authorities
(including officer titles), duties or responsibilities that are inconsistent in
any material and adverse respect with your current authorities, duties or
responsibilities with CBOE (including any material and adverse diminution of
such authorities, duties or responsibilities);


 


b.                                      CBOE shall reduce your base salary or
materially reduce your base compensation and benefits package;


 


c.                                       CBOE shall require you to relocate your
principal business office or your principal place of residence more than thirty
(30) miles from 400 S. LaSalle Street, Chicago, Illinois, or assign to you
duties that would reasonably require such relocation;


 


d.                                      CBOE shall terminate, reduce or limit
your participation in any bonus or incentive arrangement, benefit plan or
insurance plan relative to the level of participation of other senior executives
of similar rank, based upon an arbitrary decision of CBOE rather than a
decision reasonably related to the level of your job performance, provided,
however, that such action with respect to your participation shall only
constitute Good Reason under this Agreement if the action results in materially
reducing the aggregate value of your incentive compensation and benefits below
their aggregate value as of the date hereof; or


 


e.                                       CBOE shall materially breach any of the
terms of this Agreement.


 


A termination of your
employment for Good Reason shall be effectuated by giving CBOE written notice
of the termination within sixty (60) days of the event constituting Good
Reason, setting forth in reasonable detail the specific conduct of CBOE
constituting Good Reason. 
Notwithstanding anything herein to the contrary, if you terminate your
employment for Good Reason, CBOE shall pay to you (i) your base salary
(based upon the annual rate in effect on the 


 


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date of termination) and
prorated targeted bonus through the date of termination and (ii) the
Severance Payments and Insurance Premiums on the same terms and subject to the
same conditions as described in Paragraph 1.


 


3)                                      Termination For Cause: 
CBOE may terminate your employment for “Cause” at any time.  If CBOE terminates your employment for cause,
the Severance Payments and Insurance Premiums will not
be payable but CBOE shall within thirty (30) days of the date of your
termination of employment (i) reimburse you for your business expenses
incurred but not paid prior to the date of termination in accordance with CBOE’s
expense reimbursement policy; and (ii) pay you your base salary earned
through the date of termination, your accrued but unused vacation through the
date of termination and accrued but unpaid bonuses earned in any year prior to
the year in which your employment terminates, and any other benefits mandated
under the terms of any CBOE plans or programs in which you are a participant.  For purposes of this agreement, “Cause” shall
be deemed to exist if, and only if:


 


a.                                       During the performance of your duties,
you are found to, in either a judicial or quasi-judicial proceeding as the case
may be, after all rights of appeal have been exhausted or waived, have
committed any deliberate act(s) or omission(s) constituting
dishonesty, intentional breach of fiduciary obligation, or intentional
wrongdoing or malfeasance which result in material harm to CBOE.  The determination of material harm to CBOE
shall be based on definite proof and not mere allegations, conjecture, or
remote possibilities; or


 


b.                                      You willfully fail to obey or refuse to
comply with a lawful and proper direction of the Board or CBOE’s Chief
Executive Officer or Chief Operating Officer, which direction is consistent
with normal business practices and relates to your performance of your duties
as Executive Vice President and which failure to obey or refusal to comply
shall remain uncured for thirty (30) days after you have received written notice
specifying the failure to obey or refusal to comply and affording you an
opportunity to be heard in connection therewith, and you either failed to
remedy such failure to obey or refusal to comply within thirty (30) days from
receipt of such written notice or failed to take all reasonable steps to that
end during such thirty (30) day period and thereafter.


 


4)                                      Change In Control: 
If there is a Change in Control at anytime during the Term of this
Letter Agreement and your employment is terminated by CBOE or a successor
employer without Cause at any time within the twelve (12) month period
following such Change in Control, or you terminate your employment for Good
Reason at any time within the twelve (12) month period following such Change in
Control, you will be entitled to the Severance Payments and the Insurance
Payments on the terms and subject to the same conditions as described in
Paragraph 1.  For purposes of this
Agreement, a “Change in Control” of CBOE shall be deemed to occur on the
effective time of (i) a merger or consolidation of (or similar form of
transaction) CBOE with one or more other corporations as a result of which
holders of the outstanding capital stock of CBOE entitled to vote for the
election of directors (“Voting Stock”) of CBOE immediately prior 


 


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to such merger hold less than 50% of the Voting Stock
of the surviving or resulting corporation, or (ii) a transfer of
substantially all of the property of CBOE other than to an entity of which CBOE
owns at least 50% of the Voting Stock.


 


5)                                      Successors; Binding Agreement; Entire
Agreement:  This Agreement shall not be terminated by any
business combination.  In the event of
any business combination, the provisions of this Agreement shall be binding
upon the surviving corporation (and the parent corporation, if any), and such
surviving corporation (and the parent corporation, if any) shall be treated as
CBOE hereunder.  This Agreement shall,
upon its effective date, supersede any and all other agreements, either oral or
in writing, between the parties hereto, with respect to the subject matter
hereof, including, but not limited to, the Prior Agreement.  No change or modification of this Agreement
shall be valid unless in writing and signed by you and CBOE.


 


6)                                      Indemnification: 
In accordance with CBOE’s Constitution, Section 9.1, to the fullest
extent permitted by law, CBOE will indemnify you against all expenses
(including attorneys’ fees), judgment, fines and amounts paid in settlement
actually and reasonably incurred by you in connection with any action, suit, or
proceeding that you are a party to by reason of the fact that you are or were
an officer of CBOE or arising in any way out of the performance of your duties
as an employee of CBOE.  This indemnification
will be paid on an “as-you-go” basis and not in arrears and shall survive your
employment at CBOE.  You will have the
right to choose and employ your own counsel. 
The foregoing shall in no way be construed as limiting the stated rights
and protections provided to you by CBOE Constitution Article IX.


 


7)                                      Confidentiality: 
CBOE and you hereby agree to use your best efforts to maintain in
confidence the existence of this Agreement, the contents and terms of this
Agreement, and the consideration for this Agreement (“Severance and Change In
Control Information”).  CBOE and you
hereby agree to take every reasonable precaution to prevent disclosure of any
Severance and Change In Control Information to third parties, and each of us
agrees that we will not seek publicity concerning (1) any Severance and
Change In Control Information or (2) any and all disputes, claims,
complaints, grievances, charges, actions, petitions and demands that CBOE and
you may have against each other that arise or are in any way related to your
employment with CBOE or your termination of employment by CBOE.  CBOE and you hereby agree to take every
precaution to disclose Severance and Change In Control Information only to
those employees, officers, directors, attorneys, accountants, governmental
entities, and family members who have a reasonable need to know of such
Severance and Change In Control Information.


 


8)                                      Release: 
Notwithstanding anything herein to the contrary, as a condition to
receiving Severance Payments and Insurance Premiums under this Agreement, you
agree to execute a release of claims (in a form substantially similar to the
form set forth in Exhibit A, which is attached hereto and made a part
hereof) (the “Release”).  CBOE shall
deliver the Release to you within ten (10) days of your termination of
employment.  No payments under this
Agreement shall be made prior to the date that both (i) you have 


 


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delivered an original, signed Release to CBOE and (ii) the
revocability period (if any) has elapsed; provided, however, that any payments
that would otherwise have been made prior to such date but for the fact that
you had not yet delivered an original, signed Release (or the revocability
period had not yet elapsed) shall be made as soon as administratively
practicable but not later than the seventy-fourth (74th) day following your
termination of employment.  If you do not
deliver an original, signed Release to CBOE within forty-five (45) days after
receipt of the same from CBOE, (i) your rights shall be limited to those
made available to you as if you voluntarily terminated without Good Reason, and
(ii) CBOE shall otherwise have no obligation to pay or provide you any
amount or benefits described in this Agreement, or any other monies on account
of the termination of your employment.


 


9)                                      Withholding: 
The payments, if any, made hereunder shall be subject to such deductions
as may be required to be made pursuant to law, government regulation or order,
or by your consent.  All rights of this
Agreement shall at all times be entirely unfunded and no provision shall at any
time be made with respect to segregating any assets of CBOE for payment of any
amounts due hereunder.


 


10)                                Term: 
This Agreement becomes effective on December 31, 2008 and except as
otherwise provided for in this Agreement, shall expire on the earlier of your
date of termination or December 31, 2009 (“Initial Term”).  The Initial Term of the Agreement shall be
renewed automatically for successive periods of one (1) year each after
the expiration of the Initial Term (a “Renewal Term”) and any subsequent
Renewal Term, unless you provide CBOE, or CBOE provides you, with written
notice to the contrary at least one hundred eighty (180) days prior to the end
of the Initial Term or any Renewal Term. 
The Initial Term and any Renewal Terms are collectively referred to
herein as the “Term.”


 


11)                                Compliance:


 


a.                                       The payments and benefits under this
Agreement are intended to comply with or be exempt from Code Section 409A
and the interpretative guidance thereunder, including the exceptions for
short-term deferrals, separation pay arrangements, reimbursements, and in-kind
distributions, and shall be administered accordingly.  The Agreement shall be construed and
interpreted with such intent.  If any
provision of this Agreement needs to be revised to satisfy the requirements of
Code Section 409A, then such provision shall be modified or restricted to
the extent and in the manner necessary to be in compliance with such requirements
of the Code and any such modification will attempt to maintain the same
economic results as were intended under this Agreement.  CBOE cannot guarantee that the payments and
benefits that may be paid or provided pursuant to this Agreement will satisfy
all applicable provisions of Code Section 409A.  Each payment under this Agreement is intended
to be treated as one of a series of separate payment for purposes of Code Section 409A
and Treasury Regulation § 1.409A-2(b)(2)(iii) (or any similar or successor
provisions).


 


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b.                                      Notwithstanding any provision to the
contrary, to the extent you are considered a “specified employee” (as defined
in Code Section 409A and Treasury Regulation § 1.409A-1(c)(i) or any
similar or successor provision) and would be entitled to a payment during the
six month period beginning on your date of termination that is not otherwise
excluded under Code Section 409A under the exception for short-term
deferrals, separation pay arrangements, reimbursements, in-kind distributions,
or any otherwise applicable exemption, the payment will not be made to you
until the earlier of the six month anniversary of your date of termination or
your death and will be accumulated and paid on the first day of the seventh
month following the date of termination.


 


12)                                Governing Law: 
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Illinois, without reference to its conflict of law
provisions.


 


	
  /s/
  Edward J. Joyce

  	
   

  	
  December 22,
  2008

  
	
  Edward
  J. Joyce

  	
   

  	
   

  
	
  President &
  Chief Operating Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Alan J. Dean

  	
   

  	
  December 22,
  2008

  
	
  Alan
  J. Dean

  	
   

  	
   

  
	
  Executive
  Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


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ATTACHMENT 1


 


RELEASE OF CLAIMS


 


THIS RELEASE OF CLAIMS (“Release”)
is made and entered into this         
day of                     ,
20_, to be effective as of                         
(the “Effective Date”), by and between CHICAGO BOARD OPTIONS EXCHANGE,
INCORPORATED, a Delaware corporation (“CBOE”), and Alan J. Dean, a resident of
the State of Illinois (“Dean”)


 


1.                                       In consideration of CBOE’s agreement to
provide Alan J. Dean (“Dean”) with the severance pay and benefits, described in
the December 22, 2008 Letter of Agreement by and
between CBOE and Alan J Dean (the “Letter Agreement”), to which Dean
is not otherwise entitled and the sufficiency of which Dean acknowledges, Dean
does hereby fully, finally and unconditionally release and forever discharge
CBOE and CBOE’s former and current officers, directors, employees, members,
representatives and agents and all of their respective predecessors,
successors, and assigns (collectively “Released Parties”), in their personal,
corporate and representative capacities, from any and all rights, claims,
liabilities, obligations, damages, costs, expenses, attorneys’ fees, suits,
actions, and demands, of any and every kind, nature and character, known or
unknown, liquidated or unliquidated, absolute or contingent, in law and in
equity, enforceable or arising under any local, state or federal common law,
statute or ordinance relating to your past employment with CBOE or any past
actions, statements, or omissions of CBOE or any of the Released Parties
occurring prior to your execution of this Agreement, including but not limited
to all claims for defamation, wrongful termination, back pay and benefits, pain
and suffering, negligent or intentional infliction of emotional distress,
breach of contract, and interference with contractual relations, tort claims,
employment discrimination claims, and all claims arising under the Age
Discrimination in Employment Act of 1967, as amended (“ADEA”), Title VII of the
Civil Rights Act of 1964, as amended, the Civil Rights Act of 1866, as amended
by the Civil Rights Act of 1991 (42 U.S.C. § 1981), the Family and Medical
Leave Act, the Equal Pay Act, the Fair Labor Standards Act, the Americans with
Disabilities Act, the Older Workers Benefit Protection Act, the Illinois Human
Rights Act, the Workers Adjustment and Retraining Act, and the Chicago and Cook
County Human Rights Ordinances, and any other statutory, contract, implied
contract, or common law claim arising out of or involving your employment, the
termination of your employment, or any continuing effects of your employment
with CBOE.


 


2.                                       Dean agrees not to sue CBOE or any of the
Released Parties with respect to rights and claims covered by this
release.  If any government agency or
court assumes jurisdiction of any charge, complaint, or cause of action covered
by this release, Dean will not seek and will not accept any personal equitable
or monetary relief in connection with such investigation, action, suit, or
legal proceeding.


 


3.                                       Dean has forty-five (45) days (until                           )
within which to consider this Agreement, although Dean may accept it at any
time within those forty-five (45) days. 
Once Dean has signed this Agreement, Dean will still have seven (7) days
in which to revoke his acceptance of the ADEA portion of the release by
notifying CBOE, and 


 

















 


specifically, Deborah Woods, Human Resources
Department.  The ADEA portion of the
release will not be effective or enforceable until the seven (7) day
revocation period has expired.  If the
ADEA portion of the Release is revoked, the remainder of this Release shall
remain in full force and effect as to all of its terms except for the release
of claims under the ADEA, and CBOE will have three (3) business days to
rescind the entire Release by so notifying Dean.


 


4.                                       Dean agrees that he will continue to be
governed by those obligations arising under Paragraph 7 of the Letter
Agreement, which is incorporated by reference herein, shall not be released,
shall be unaffected hereby, and shall remain in full force and effect.


 


5.                                       This Release shall be binding upon and
inure to the benefit of CBOE and its successors and assigns and Dean and his
heirs, executors and administrators.


 


6.                                       This Release shall be construed and
interpreted under the laws of the State of Illinois to the extent not preempted
by applicable laws of the United States.


 


By signing this Agreement,
Dean acknowledges and understands that this release does not imply that CBOE
has done anything unlawful or wrong.


 


	
   

  	
   

  	
   

  
	
  Edward
  J. Joyce - President & Chief Operating Officer

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Alan
  J. Dean

  	
   

  	
  Date