Document:

Exhibit 10.31

 

FORM OF SEVERANCE AND CHANGE OF CONTROL AGREEMENT WITH VICE PRESIDENTS

 

This
Agreement (the “Agreement”) is entered into as of the      
day of       ,       
by and between Synta Pharmaceuticals Corp., a Delaware corporation (the “Company”),
and                                      
(the “Executive”).

 

WHEREAS Executive is employed by the Company, and because
of such employment, possesses detailed knowledge of the Company and its
business and operations;

 

WHEREAS Executive’s continued service to the Company is
very important to the future success of the Company;

 

WHEREAS the Company desires to enter into this Agreement to
provide Executive with certain financial protection in the event that Executive’s
employment terminates under certain circumstances, and thereby to provide
Executive with incentives to remain with the Company; and

 

WHEREAS the Board of Directors of the Company (the “Board”)
acting through the Compensation Committee has determined that it is in the best
interests of the Company to enter into this Agreement.

 

NOW THEREFORE for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Executive agree as follows:

 

1.                                      Definitions.

 

(a)                                  Cause.  As used herein, “Cause” shall include (and is
not limited to): (i) dishonesty with respect to the Company or any
affiliate, parent or subsidiary of the Company; (ii) insubordination; (iii) substantial
malfeasance or nonfeasance of duty; (iv) unauthorized disclosure of
confidential information; (v) Executive’s breach of any material provision
of any employment, consulting, advisory, non-disclosure, invention assignment,
non-competition, or similar agreement between Executive and the Company; or (vi) conduct
substantially prejudicial to the business of the Company or any affiliate,
parent or subsidiary of the Company.  The
Board shall have sole discretion to determine the existence of “Cause,” and its
determination will be conclusive on Executive and the Company; provided that
the Board may delegate its power to act under this paragraph (a) to a
committee of the Board in which case the determination of such committee shall
be conclusive.  “Cause” is not limited to
events which have occurred prior to the termination of Executive’s service, nor
is it necessary that the Board’s finding of “Cause” occur prior to such
termination.  If the Board determines,
subsequent to Executive’s termination of service, that either prior or
subsequent to Executive’s termination Executive engaged in conduct which would
constitute “Cause,” then Executive shall have no right to any benefit or
compensation under this Agreement.

 

(b)                                 Change Of Control.  As used herein, a “Change of Control” shall
mean the occurrence of any of the
following events:

 

(i)                                     Ownership.  Any “Person”
(as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becomes the “Beneficial Owner” (as defined in
Rule 13d-3 under said Act), directly or

 

 

indirectly,
of securities of the Company representing fifty percent (50%) or more of the
total voting power represented by the Company’s then outstanding voting
securities (excluding for this purpose any such voting securities held by the
Company, or any affiliate, parent or subsidiary of the Company, or by any employee
benefit plan of the Company) pursuant to a transaction or a series of related
transactions which the Board does not approve; or

 

(ii)           Merger/Sale of Assets.  (A) A
merger or consolidation of the Company whether or not approved by the Board,
other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or the parent of such corporation) at least
fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or parent of such
corporation, as the case may be, outstanding immediately after such merger or
consolidation; (B) or the stockholders of the Company approve an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets; or

 

(iii)          Change in Board Composition.  A change in the composition of the Board, as
a result of which fewer than a majority of the directors are Incumbent
Directors.  “Incumbent Directors” shall
mean directors who either (A) are directors of the Company as of the date
of this Agreement, or (B) are elected, or nominated for election, to the
Board with the affirmative votes of at least a majority of the Incumbent
Directors, or by a committee of the Board made up of at least a majority of the
Incumbent Directors, at the time of such election or nomination (but shall not
include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company).

 

(c)                                  Good Reason.  As used herein, a “Good Reason” shall mean: (i) Executive,
as a condition of remaining an employee of the Company, is required to change
the principal location where Executive renders services to the Company to a
location more than fifty (50) miles from Executive’s then-current location of
employment; (ii) there occurs a material adverse change in Executive’s
duties, authority or responsibilities which causes Executive’s position with
the Company to become of significantly less responsibility or authority than
Executive’s position is on the date hereof; or (iii) there occurs a
material reduction in Executive’s base salary from Executive’s base salary
received on the date hereof, provided that
any notice of termination by Executive for Good Reason shall be given by
Executive within fifteen (15) days of Executive’s becoming aware of the
occurrence of the facts giving rise to such Good Reason.  For purposes of this Agreement, “Good
Reason” shall be interpreted in a manner, and limited to the extent necessary,
so that it will not cause adverse tax consequences for either party with
respect to Section

 

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409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”),
and any successor statute, regulation and guidance thereto.

 

(d)                                 Base Salary.  As used herein, “Base Salary” shall mean Executive’s
annual base salary, excluding reimbursements, bonuses, benefits, and amounts
attributable to stock options and other non-cash compensation.

 

2.                                      Severance
for Termination by the Company Other than For Cause or by Executive for Good
Reason.  In the event
that (i) Executive’s employment is terminated by action of the Company
other than for Cause, or (ii) Executive terminates Executive’s employment
for Good Reason, then Executive shall receive the following (subject to
Executive’s execution of a release of claims as described in Section 7):

 

(a)                                  Severance
Payments. 
Continuation of payments in an amount equal to Executive’s then-current
Base Salary for a three (3) month period less all customary and required
taxes and employment-related deductions, in accordance with the Company’s normal payroll practices
(provided such payments will be made at least monthly.)

 

(b)                                 Equity
Acceleration. 
Acceleration of vesting of any and all outstanding stock option awards
that would have vested during the period commencing on Executive’s date of
termination through and including the date that is three (3) months
following Executive’s date of termination.

 

(c)                                  COBRA Payments.  Upon completion of the appropriate COBRA(1) forms,
and subject to all the requirements of COBRA, the Company shall continue
Executive’s participation in the
Company’s health and dental insurance plans at the Company’s cost
(except for Executive’s co-pay, if any, which shall be deducted from Executive’s
severance compensation) for the three (3) months following Executive’s
date of termination, to the same extent that such insurance is provided to
similarly situated Company executives, provided that
this benefit will cease and the Company will be under no obligation to provide
it if Executive has become eligible for coverage under another employer’s group
coverage, and Executive hereby agrees to notify the Company promptly and in
writing should that occur.

 

(d)                                 No Duplication.  In the event that Executive is eligible for
the severance payments and benefits under Section 3 below,
Executive shall not be eligible for and shall not receive any of the severance
payments and benefits as provided in this Section 2.

 

3.                                      Change
Of Control Severance.  In the event that a Change of Control occurs
and within a period of one (1) year following the Change of Control,
either: (i) Executive’s employment is terminated other than for Cause, or (ii) Executive
terminates Executive’s employment for Good Reason, then Executive shall receive
the following (subject to Executive’s execution of a release of claims, as
described in Section 7):

 

(1)                                  “COBRA”
is the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

 

3

 

(a)                                  Lump Sum
Severance Payment.  Within
thirty (30) days following Executive’s termination, payment of an amount equal
to twelve (12) months of Executive’s then-current Base Salary less all
customary and required taxes and employment-related deductions.

 

(b)                                 Separation
Bonus.  Within thirty (30) days following
Executive’s termination, payment of a separation bonus in an amount equal to
the target annual bonus to which Executive may have been entitled for the year
in which Executive is terminated, prorated for the portion of the year in which
Executive was employed.

 

(c)                                  Equity
Acceleration.  Full
acceleration as of the date of termination of vesting of any and all equity
awards outstanding immediately prior to termination.

 

(d)                                 COBRA Payments.  Upon completion of the appropriate COBRA
forms, and subject to all the requirements of COBRA, the Company shall continue
Executive’s participation in the
Company’s health and dental insurance plans at the Company’s cost
(except for Executive’s co-pay, if any, which shall be deducted from Executive’s
severance compensation) for the twelve (12) months following Executive’s date
of termination, to the same extent that such insurance is provided to similarly
situated Company executives,  provided that this benefit will cease and the Company will
be under no obligation to provide it if Executive has become eligible for
coverage under another employer’s group coverage, and Executive hereby agrees
to notify the Company promptly and in writing should that occur.

 

(e)                                  No Duplication.  In the event that Executive is eligible for
the severance payments and benefits under Section 2 above,
Executive shall not be eligible for and shall not receive any of the severance
payments and benefits as provided in this Section 3.

 

4.                                      No
Severance.  In the event that Executive’s employment is
terminated for any reason other than those outlined in Sections 2 or 3,
then Executive shall have no right to any of the severance payments and
benefits provided under this Agreement.

 

5.                                      Distribution
Limitation.  If any payment or benefit Executive would
receive under this Agreement, when combined with any other payment or benefit
Executive receives pursuant to a Change of Control (for purposes of this
section, a “Payment”) would: (i) constitute a “parachute payment”
within the meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”); and (ii) but for this sentence, be subject
to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”),
then such Payment shall be either: (x) the full amount of such Payment; or
(y) such lesser amount (with cash payments being reduced before stock
option compensation) as would result in no portion of the Payment being subject
to the Excise Tax, whichever of the foregoing amounts, taking into account the
applicable federal, state and local employments taxes, income taxes, and the
Excise Tax, results in Executive’s receipt, on an after-tax basis, of the
greater amount of the Payment notwithstanding that all or some portion of the
Payment may be subject to the Excise Tax.

 

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6.                                      Timing
Of Payments.  Notwithstanding
any other provision with respect to the timing of payments under Sections 2
or 3, if, at the time of Executive’s termination, Executive is
deemed to be a “specified employee” of the Company (within the meaning of Code Section 409A(a)(2)(B)(i) and
any successor statute, regulation and guidance thereto (“Code Section 409A”)),
then limited only to the extent necessary to comply with the requirements of
Code Section 409A, any payments to which Executive may become entitled
under Sections 2 or 3 which are subject to Code Section 409A
(and not otherwise exempt from its application) will be withheld until the
first (1st) business day of the seventh (7th) month following the termination
of Executive’s employment, at which time Executive shall be paid an
aggregate amount equal to the accumulated, but unpaid, payments otherwise due
to Executive under the terms of Sections 2 or 3.

 

7.                                      Release
of Claims.  The Company shall not be obligated to pay
Executive any of the compensation set forth in Sections 2 and 3
unless and until Executive has executed a timely full and general release of
all claims against the Company and any affiliate, parent or subsidiary, and its
and their officers, directors, employees, and agents, in a form satisfactory to
the Company.

 

8.                                      No
Impact On Employment Status.  This Agreement is not intended to confer, and
shall not be interpreted as conferring, any additional employment rights on
Executive, and has no impact on either party’s right to terminate Executive’s
employment under contract or applicable law.

 

9.                                      Enforceability;
Reduction.  If any
provision of this Agreement shall be deemed invalid or unenforceable as
written, this Agreement shall be construed, to the greatest extent possible, or
modified, to the extent allowable by law, in a manner which shall render it
valid and enforceable and any limitation on the scope or duration of any
provision necessary to make it valid and enforceable shall be deemed to be a
part thereof.  No invalidity or
unenforceability of any provision contained herein shall affect any other
portion of this Agreement.

 

10.                               Notices.

 

(a)                                  All notices,
requests, consents and other communications hereunder shall be in writing,
shall be addressed to the receiving party’s address set forth below or to such
other address as a party may designate by notice hereunder, and shall be either
(i) delivered by hand, (ii) made by telex, telecopy or facsimile
transmission, (iii) sent by overnight courier, or (iv) sent by registered
or certified mail, return receipt requested, postage prepaid.

 

If to the Company:

 

President
and Chief Executive Officer

Synta
Pharmaceuticals Corp.

45
Hartwell Avenue

Lexington,
MA 02421

 

5

 

With a copy to:

 

General
Counsel

Synta
Pharmaceuticals Corp.

45
Hartwell Avenue

Lexington,
MA 02421

 

If to Executive:

 

[ADDRESS]

 

(b)                                 All notices,
requests, consents and other communications hereunder shall be deemed to have
been given either (i) if by hand, at the time of the delivery thereof to
the receiving party at the address of such party set forth above, (ii) if
made by telex, telecopy or facsimile transmission, at the time that receipt
thereof has been acknowledged by electronic confirmation or otherwise, (iii) if
sent by overnight courier, on the next business day following the day such
notice is delivered to the courier service, or (iv) if sent by registered
or certified mail, on the fifth (5th) business day following the day such
mailing is made.

 

11.                               Entire
Agreement / No Duplication of Compensation or Benefits.  This Agreement embodies the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof including, but not limited to, any offer
letter or employment agreement previously entered into between the Executive
and the Company.  No statement,
representation, warranty, covenant or agreement of any kind not expressly set
forth in this Agreement shall affect, or be used to interpret, change or
restrict, the express terms and provisions of this Agreement.  The terms of Sections 2 and 3
above shall replace any agreement, policy or practice which otherwise would
obligate the Company to provide any severance compensation and/or benefits to
Executive, provided that this provision shall not
be construed to otherwise limit Executive’s rights to payments or benefits
provided under any pension plan (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended), deferred
compensation, stock, stock option or similar plan sponsored by the Company.

 

12.                               Modifications
and Amendments.  The terms and provisions of this Agreement may
be modified or amended only by written agreement executed by all parties
hereto. Any such amendment shall comply with the requirements of Code Section 409A,
if applicable.

 

13.                               Waivers
and Consents.  The terms and provisions of this Agreement
may be waived, or consent for the departure therefrom granted, only by written
document executed by the party entitled to the benefits of such terms or
provisions.  No such waiver or consent
shall be deemed to be or shall constitute a waiver or consent with respect to
any other terms or provisions of this Agreement, whether 

 

6

 

or
not similar.  Each such waiver or consent
shall be effective only in the specific instance and for the purpose for which
it was given, and shall not constitute a continuing waiver or consent.

 

14.                               Assignment.  The rights and obligations under this
Agreement may be assigned by the Company.

 

15.                               Benefit.  All statements, representations, warranties,
covenants and agreements in this Agreement shall be binding on the parties
hereto and shall inure to the benefit of the respective successors and
permitted assigns of each party hereto. 
Nothing in this Agreement shall be construed to create any rights or
obligations except among the parties hereto, and no person or entity shall be
regarded as a third-party beneficiary of this Agreement.

 

16.                           Arbitration.  Any controversy, dispute or claim arising out
of or in connection with this Agreement will be settled by final and binding
arbitration to be conducted in Boston, Massachusetts pursuant to the national rules for
the resolution of employment disputes of the American Arbitration Association
then in effect.  The decision or award in
any such arbitration will be final and binding upon the parties, and judgment
upon such decision or award may be entered in any court of competent
jurisdiction, or application may be made to any such court for judicial
acceptance of such decision or award and an order of enforcement.  In the event that any procedural matter is
not covered by the aforesaid rules, the procedural law of Massachusetts will
govern.  Any disagreement as to whether a
particular dispute is arbitrable under this Agreement shall itself be subject
to arbitration in accordance with the procedures set forth herein. Notwithstanding
the foregoing, any right or obligation arising out of or concerning any
separate contract or agreement between the parties (including but not limited
to any employee, non-competition, non-solicitation, non-disclosure and
invention agreement) shall be decided in accordance with the dispute resolution
mechanism provided for by such contract or agreement.

 

17.                               Governing
Law / Jurisdiction / Service of Process.  This Agreement and the
rights and obligations of the parties hereunder shall be construed in
accordance with and governed by the law of the Commonwealth of Massachusetts,
without giving effect to the conflict of law principles thereof.  Any legal action or proceeding with respect
to this Agreement that is not subject to arbitration pursuant to Section 16
will be brought in the courts of the Commonwealth of Massachusetts in Middlesex
County or of the United States of America for the District of Massachusetts,
sitting in Boston.  By execution and
delivery of this Agreement, each of the parties hereto accepts for itself and
in respect of its property, generally and unconditionally, the exclusive
jurisdiction of the aforesaid courts. 
Each of the parties hereto irrevocably consents to the service of process
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by certified mail, postage prepaid, to the party at
its address set forth in Section 10.

 

18.                               Counterparts.  This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

 

	
   

  	
  SYNTA
  PHARMACEUTICALS CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Safi
  R. Bahcall, Ph.D.

  
	
   

  	
   

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name]

  
	
   

  	
   

  
	
   

  	
   

  

 

8EXHIBIT 10.16

 

AMENDED
AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (“Agreement”) made and entered into as of this 13th day of January 2010, by and between the
CHICAGO BOARD OPTIONS EXCHANGE, INC. (“Employer”) and WILLIAM J. BRODSKY
(“Employee”) to become effective December 31, 2009 (the “Effective
Date”), is an amendment and restatement of the employment agreement
previously entered into between Employer and Employee entered into effective as
of January 1, 2007, and subsequently amended effective as of December 9,
2008 (the “Prior Agreement”).

 

WITNESSETH:

 

WHEREAS, Employer and
Employee desire to amend, revise and restate the Prior Agreement;

 

WHEREAS, Employer
desires that Employee continue to provide services for the benefit of the
Employer and its affiliates and Employee desires to continue such employment
with the Employer;

 

WHEREAS, Employer and
Employee acknowledge that Employee will continue to be a member of the senior
management team of Employer and, as such, will continue to participate in
implementing the Employer’s business plan;

 

WHEREAS, in the course
of employment with the Employer, Employee has had and will continue to have
access to certain confidential information that relates to or will relate to
the business of the Employer and its affiliates; and

 

WHEREAS, Employer
desires that any such information not be disclosed to other parties or
otherwise used for unauthorized purposes.

 

NOW, THEREFORE, in
consideration of the mutual covenants and promises contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

 

1.                                       Employment.

 

(a)                                  Employer shall continue to employ
Employee on the terms hereinafter set forth. 
Except as set forth in Section 2 below, Employee shall continue to
be employed as Chairman and Chief Executive Officer for the term of this
Agreement.  Employee shall perform such
duties as may be prescribed for such offices in the Constitution and Rules of
Employer and those, consistent with the offices of Chairman and Chief Executive
Officer, that may be assigned to him from time to time by the Board of
Directors of Employer (“Board”).

 

 

(b)                                 Employee agrees to continue to devote his
full business time and efforts to the affairs of Employer and to the
performance of his duties as its Chairman and/or Chief Executive Officer.  In doing so, he agrees to conduct himself at
all times in a manner consistent with the reputation of Employer.

 

(c)                                  Employee agrees not to accept any
membership on the board of directors of any private or public corporation
(other than a non-business, not-for-profit, corporation) without the prior
written approval of the Board.  Employer
agrees to grant such approval if, in the discretion of the Board, such
membership will present no conflict of interest or interference with Employee’s
duties as Chairman and/or Chief Executive Officer of Employer, or any other
duties assigned to him pursuant to Section 2.  Employee will be entitled to retain all fees
received in connection with membership on any such board of directors.

 

2.                                       Term.  The term of
this Agreement shall commence on the Effective Date and shall, unless earlier
terminated in accordance with Section 6 hereof or extended as hereinafter
provided, expire on December 31, 2011 at 5 P.M. (C.S.T.).  The term of this Agreement shall be extended,
without further action by Employer or Employee, on the date (the “Extension
Effective Date”) that is one (1) year before December 31, 2011,
and on the date (also an “Extension Effective Date”) that is one (1) year
before each subsequent December 31, for successive periods of one (1) year
each, unless Employer provides Employee, or Employee provides Employer, with
written notice to the contrary at least one (1) year prior to the
Extension Effective Date in question.

 

During the last calendar year of the term of this
Agreement, Employer may employ a successor to Employee.  In anticipation of or because of such event,
during such last calendar year, Employee’s title and duties may be changed by
the Board, provided such changed duties shall not be of the type described in Section 6(c)(iii) below.  Any such change in the title and duties of
Employee may be made whether or not a successor to Employee is employed during
such last calendar year, and shall not in any way affect any other provision of
this Agreement.  Such change shall not
constitute Good Reason under paragraph (c) of Section 6 or Section 9.

 

3.                                       Compensation. 
Employer shall pay to Employee for all services to be performed by
Employee during the term of this Agreement:

 

(a)                                  A base salary (“Base Salary”) at
the rate of $1,400,000, per annum ($1,500,000, per annum, effective January 1,
2010), payable in substantially equal regular installments in accordance with
Employer’s practices for other executives, as such practices may be determined
from time to time.

 

(b)                                 In addition to the aforementioned annual
Base Salary, Employee may, for each calendar year of the term, be entitled to
an annual bonus (“Bonus”) to reflect the value of his services during
the applicable calendar year.  Each such
annual Bonus shall be a cash amount, as determined by the Board in its sole
discretion, based upon the recommendation of the Compensation Committee of the
Board (“Committee”).  The Bonus
for each calendar year shall be payable to Employee as soon as practicable
after 

 

2

 

the end of such calendar year, and in any event no
later than March 15 of the year immediately following the calendar year
for which it was earned.

 

(c)                                  All payments of Base Salary and Bonus
shall be subject to such deductions as may be required to be made pursuant to
law, government regulation or order, or by agreement with, or consent of,
Employee.

 

4.                                       Additional Benefits.

 

(a)                                  Benefit Plans. 
Employee shall be entitled to participate in, and receive benefits
under, (i) any qualified or supplemental retirement plan, program or
arrangement currently made available by Employer for its executives, and (ii) any
such additional or substitute plan, program or arrangement that Employer may
make available in the future and during the term of this Agreement for its
executives (“Benefit Plans”), subject to and on a basis consistent with
the terms, conditions and overall administration of each such Benefit
Plan.  If Employee’s employment with
Employer, whether before, at, or after the expiration of the term hereof,
terminates prior to Employee’s full vesting of benefits under any Benefit Plan,
and provided Employee’s employment is not terminated for “Cause” as defined in Section 6
below, Employee’s rights thereunder shall not be subject to any forfeiture, but
shall be treated as if fully vested under the Benefit Plan, and Employee shall
receive fully vested benefits from either the Benefit Plan, Employer or both,
based upon the Benefit Plan’s then current benefit formula and limited to
Employee’s actual service with Employer and his average earnings at the date of
termination of employment.  If Employee
shall be terminated for Cause, whether before, at, or after the expiration of
the term hereof, prior to Employee’s full vesting of benefits under any Benefit
Plan, Employee shall be entitled only to his vested benefit under such Benefit
Plan based upon the terms thereof.  Employer
shall make a contribution on behalf of Employee under the Executive Retirement
Plan of Employer, or any successor or substitute plan, pursuant to the terms
thereof, for any calendar year ending during the term hereof, in an amount, if
any, as designated by the Board in its sole discretion; provided, however, that
such contribution shall be consistent with the contributions made for other
senior executives of Employer.

 

Contributions made with respect to Employee pursuant
to the Supplemental Retirement Plan of Employer, the Executive Retirement Plan
of Employer, or any other nonqualified Benefit Plan at any time during the term
hereof maintained by Employer, shall continue to be contributed by Employer to
a trust agreement established by Employer. 
Designated officers of Employer are the co-trustees of such trust
agreement and have investment authority with respect to trust assets; provided
that the trustees shall give consideration to investment guidelines made
available by Employee from time to time. 
Trust assets attributable to contributions made with respect to Employee
and earnings thereon are subject to creditors of Employer, but are otherwise
available only to pay benefits to Employee and his beneficiaries pursuant to
the terms of the applicable Benefit Plans of Employer and the terms of this
Agreement.  Contributions to the trust
agreement for each calendar year shall be made as soon as practicable after the
end of such calendar year, and in any event within 90 days after the end of
such calendar year.

 

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(b)                                 Business Expenses. 
Employer will pay or promptly reimburse Employee for all reasonable
business expenses, including automobile expenses, incurred by Employee in the
performance of his duties hereunder.

 

(c)                                  Administrative Support. 
If Employee is employed by Employer on December 31 of the last
calendar year of the term of this Agreement, then for a period not to exceed
twelve (12) months thereafter, Employer shall at its expense provide Employee
with (i) an office on the premises of Employer at its principal place of
business and (ii) reasonable administrative support staff, which office
and support staff shall be consistent with Employee’s status during the term of
this Agreement.

 

(d)                                 Accounting For Reimbursements. 
All of the aforementioned amounts subject to reimbursement by Employer
to Employee pursuant to this Section 4 shall be subject to an accounting
by Employee and approval by Employer.

 

(e)                                  Vacations and Holidays. 
Employee shall be entitled to five (5) weeks paid vacation during
each calendar year commencing or ending during the term of this Agreement.  Employee shall also be entitled to all paid
holidays given by Employer to its other executives.

 

(f)                                    Insurance Benefits. 
Employee and his dependents shall be entitled to participate in, and
receive benefits under, (i) any health and dental plan, disability plan,
accidental death and dismemberment plan, survivor income plan, and life
insurance plan or arrangement currently made available by Employer for its
executives, and (ii) any such additional or substitute plan that Employer
may make available in the future and during the term of this Agreement for its
executives (“Insurance Plans”), subject to and on a basis consistent
with the terms, conditions, and overall administration of each such Insurance
Plan.

 

(g)                                 Retiree Medical Coverage. 
Employer shall maintain retiree medical coverage for Employee and his
Spouse for a period commencing on the date of his termination of employment
with Employer and ending on the date of death of the survivor of Employee and
his Spouse on the terms and conditions set forth in this subparagraph (g).  Such retiree medical coverage shall provide
medical coverage for Employee and his Spouse equivalent to that provided to
active executives of Employer and their spouses under the group health plan of
Employer from time to time in effect. 
The amount of such retiree medical coverage for Employee and his Spouse
shall be reduced by the amount of any medical coverage available to Employee
and/or his Spouse from time to time from any subsequent employer and from
Medicare, whether or not Employee or his Spouse are actually enrolled in such
other coverage.  Employee or his Spouse shall
pay the cost of such retiree medical coverage and shall be reimbursed by
Employer, on an after-tax basis, within 30 days after the end of each calendar
year, for the cost of such coverage.  For
purposes of this Agreement, the term “Spouse” shall mean Employee’s spouse as
of the Effective Date.

 

4

 

(h)                                 Other Fringe Benefits. 
Employee shall be entitled to participate in, and take advantage of, any
other fringe benefits offered from time to time during the term hereof by
Employer to its executives.

 

(i)                                     Timing of Reimbursements. 
Except as otherwise provided herein, to the extent any reimbursements or
in-kind benefit payments hereunder are subject to Section 409A of the
Code, such reimbursements and in-kind benefit payments will be made in accordance
with Treasury Regulation § 1.409A-3(i)(1)(iv) (or any similar or successor
provisions).

 

5.                                       Conversion of Employer to a For-Profit
Corporation.  In the event that Employer becomes a
For-Profit Corporation during the term of this Agreement, Employer agrees to
negotiate with Employee in good faith with respect to: (1) the grant to
Employee of long-term incentives related to the equity of Employer as a
For-Profit Corporation consistent with such equity grants to comparable
executives made by corporations engaged in similar businesses to that of
Employer; and (2) the adjustment of the terms of this Agreement as is
appropriate as a result of Employer’s status as a For-Profit Corporation;
provided that the total compensation and other benefits available to Employee
under this Agreement are not reduced in the aggregate or adversely affected as
a result of such adjustment.  For
purposes of this Section 5, Employer shall be deemed to be a “For-Profit
Corporation” if it converts from a not-for-profit member-owned corporation
to a for-profit shareholder-owned corporation. 
Further, upon Employer’s adoption of a stock option or similar equity
incentive plan, Employer shall grant Employee options to purchase shares of its
common stock, or other equity awards, in amounts and subject to such terms as
determined by the Board in its sole discretion; provided, however, that the
amount of options, or other equity awards, and the terms and conditions of such
options, or other equity awards, shall be substantially similar to (and not
less favorable to Employee than under) the proposed equity plan that was
presented to the Board at its September 28, 2006 meeting.  Options granted to Employee under such a plan
shall provide, among other things, that options, or other equity awards, shall
vest upon Employee’s retirement after attaining age sixty-five (65), or upon
the occurrence of a Change in Control (as defined in Section 9 below), and
all vested options may thereafter be exercised by Employee for the remainder of
their term.  The provisions of the
foregoing sentence shall survive the expiration of the term of this Agreement.

 

6.                                       Termination. 
For purposes of this Agreement, Employee’s employment with Employer
shall be deemed to be terminated when Employee has a “separation from service”
within the meaning of Section 409A of the Code, and references to
termination of employment shall be deemed to refer to a separation from
service.  Upon Employee’s separation from
service for any reason, Employee shall be deemed to have resigned as of the
date of Employee’s separation from service from all offices, directorships and
fiduciary positions with Employer, its affiliates and employee benefit plans
unless Employee is affirmatively re-appointed or re-elected to such position as
of the date of Employee’s separation from service.

 

(a)                                  Termination for Cause. 
The Board, by vote of a majority of its members at a meeting at which
Employee is present and given an opportunity to present his views, may
terminate the employment of Employee with Employer at any time for “Cause.”  For purposes of this Agreement, “Cause”
shall be deemed to exist if, and only if:

 

5

 

(i)                                     Employee shall engage, during the
performance of his duties hereunder, in acts or omissions constituting
dishonesty, intentional breach of fiduciary obligation or intentional
wrongdoing or malfeasance;

 

(ii)                                  Employee shall intentionally disobey or
disregard a lawful and proper direction of the Board; or

 

(iii)                               Employee shall materially breach this
Agreement, and such breach by its nature is incapable of being cured, or such
breach remains uncured for more than 30 days following receipt by Employee of
written notice from Employer specifying the nature of the breach and demanding
the cure thereof.  For purposes of this
clause (iii), a material breach of this Agreement which involves inattention by
Employee to his duties under this Agreement shall be deemed a breach capable of
cure.

 

Without limiting the generality of the foregoing, the
following shall not constitute Cause for the termination of the employment of
Employee or the modification or diminution of any of his authority
hereunder:  (x) any personal or
policy disagreement between Employee and Employer or any member of Employer or
the Board; or (y) any action taken by Employee in connection with his
duties hereunder, or any failure to act, if Employee acted or failed to act in
good faith and in a manner he reasonably believed to be in, and not opposed to,
the best interest of Employer, and he had no reasonable cause to believe his
conduct was unlawful.

 

Notwithstanding anything herein to the contrary, if
Employer shall terminate the employment of Employee hereunder for Cause,
Employer shall give at least 30 days prior written notice to Employee
specifying in detail the reason or reasons for Employee’s termination.  If the employment of Employee with Employer
is terminated by Employer for Cause, Employer shall pay Employee his accrued
but unpaid Base Salary (at the rate most recently determined) through the date
of termination, and, except as otherwise provided in this Agreement or in any
Benefit Plan, Insurance Plan, program or arrangement of Employer, Employer
shall have no further obligation to Employee under this Agreement.  Such termination shall have no effect upon
Employee’s rights under the Benefit Plans, the Insurance Plans and the retiree
medical coverage described in paragraph (g) of Section 4 hereof.

 

(b)                                 Termination Without Cause. 
The Board, by vote of a majority of its members, may terminate the
employment of Employee without Cause, at any time during the term of this
Agreement, as of a date at least 15 days after the date a written notice of
such termination is delivered by Employer to Employee.  In such event, Employer shall, subject to the
terms of Section 17 and Section 20 of this Agreement, within 30 days
following the date of such termination, pay to Employee:

 

(i)                                     his Base Salary (based on the annual rate
in effect on the date of termination) through the date of termination;

 

6

 

(ii)                                  a pro-rated Bonus equal to the Employee’s
annual target Bonus for the calendar year in which Employee’s employment
terminates multiplied by a fraction, the numerator of which shall equal the
number of calendar days Employee was employed by Employer for the year in which
his employment terminates and the denominator of which shall equal 365 (the “Pro-Rated
Bonus”); and

 

(iii)                               a lump sum cash severance payment in an
amount equal to the aggregate of:

 

(A)                              the greater of (1) one times
Employee’s annual rate of Base Salary in effect on the date of termination; or (2) the
aggregate amount of Base Salary (based on the annual rate in effect on the date
of termination), payable to Employee during the balance of the term of this
Agreement following Employee’s date of termination;

 

(B)                                the greater of (1) one times the
Employee’s annual target Bonus for the calendar year in which his employment
terminates, or (2) the annual target Bonus for the calendar year in which his
employment terminates, multiplied by the number of years remaining in the term
of this Agreement.  Notwithstanding the
foregoing, to the extent the annual Bonus is intended to satisfy the
requirements for “performance-based compensation” (as such term is defined in Section 162(m) of
the Code), the “annual target Bonus” described in the preceding sentence will
be the bonus that would have been paid to Employee for the calendar year in
which such termination occurs, based on the performance level actually
attained; and

 

(C)                                the aggregate amount of all Employer
contributions that Employee or his account would have received for a period
equal to the greater of one year or the remaining term of this Agreement under
the following employee benefit plans: (1) Chicago Board Options Exchange
SMART Plan; (2) Chicago Board Options Exchange Supplemental Executive
Retirement Plan; and (3) Chicago Board Options Exchange Executive
Retirement Plan, or any successor plan.

 

In the event Employee is terminated without Cause during
the term of this Agreement, except as otherwise provided in this Agreement or
in any Benefit Plan, Insurance Plan, program or arrangement of Employer,
Employer shall have no further obligation to Employee under this Agreement.  Such termination shall have no effect upon
Employee’s rights under the Benefit Plans, the Insurance Plans and the retiree
medical coverage described in paragraph (g) of Section 4 hereof.

 

(c)                                  Termination for Good Reason. 
Employee may terminate his employment at any time during the term of
this Agreement for “Good Reason” as of a date at least 30 days after the date a
written notice of such termination is delivered by Employee to Employer, unless
the condition constituting Good Reason is fully corrected within 30

 

7

 

days after Employee gives Employer written notice
thereof.  For purposes of this Agreement,
“Good Reason” shall be deemed to exist if, and only if, without Employee’s
express written consent, Employer or a successor employer:

 

(i)                                     shall change Employee’s position with
Employer or a successor employer from the position of Chairman and Chief
Executive Officer, except as provided in Section 2;

 

(ii)                                  shall assign to Employee duties of an
executive nature that are reduced from Employee’s duties as Chairman and Chief
Executive Officer, except as provided in Section 2;

 

(iii)                               shall assign to Employee duties of a
nonexecutive nature or for which Employee is not reasonably equipped by his
skills or experience;

 

(iv)                              shall reduce the Base Salary of Employee,
or materially reduce his fringe benefits and perquisites;

 

(v)                                 shall require Employee to relocate his
principal business office or his principal place of residence outside the
Chicago metropolitan area, or assign to Employee duties that would reasonably
require such relocation; or

 

(vi)                              shall terminate, reduce or limit Employee’s
bonus opportunity under any bonus or incentive arrangement, or his
participation in any Benefit Plan or Insurance Plan relative to the bonus
opportunity or level of participation of other senior executives of similar
rank, and only to such an extent as to materially reduce the aggregate value of
Employee’s incentive compensation and benefits below their aggregate value as
of the date hereof.

 

A termination of Employee’s employment for Good Reason
shall be effectuated by giving Employer written notice of the termination
within sixty (60) days of the event constituting Good Reason, setting forth in
reasonable detail the specific conduct of Employer constituting Good
Reason.  Notwithstanding anything herein
to the contrary, if Employee shall terminate his employment for Good Reason,
Employer shall pay to Employee the same amounts as are applicable with respect
to termination by Employer without Cause under paragraph (b) of this Section 6,
subject to the same terms and conditions set forth under Section 6(b).

 

(d)                                 Voluntary Termination without Good Reason. 
Employee may voluntarily terminate his employment without Good Reason at
any time during the term of this Agreement as of a date at least 30 days after
the date a written notice of such termination is delivered by Employee to
Employer.  If the employment of Employee
is voluntarily terminated by Employee without Good Reason, Employer shall pay
to Employee the same amounts as are applicable with respect to termination by
Employer for Cause under paragraph (a) of this Section 6.

 

8

 

7.                                       Death.  Except as
otherwise provided in Section 8 below, if Employee dies during the term of
this Agreement, or thereafter but prior to receipt of any amounts to which
Employee is entitled, Employer agrees:

 

(a)                                  to pay Employee the same amounts as are
applicable with respect to termination by Employer without Cause under
paragraph (b) of Section 6, subject to the same terms and conditions
set forth under Section 6(b); and

 

(b)                                 to provide retiree medical coverage to
the surviving Spouse of Employee, if any, pursuant to the provisions of
paragraph (g) of Section 4 above.

 

8.                                       Disability.  If Employee
is “Permanently Disabled” for a continuous period of six (6) months,
Employer may terminate Employee’s employment under this Agreement upon written
notice to Employee.  In such event,
Employee shall be paid the same amounts as are applicable with respect to
termination by Employer without Cause under paragraph (b) of Section 6,
subject to the same terms and conditions set forth under Section 6(b).  For purposes of this Agreement, the term “Permanently
Disabled” shall have the meaning set forth in the long-term disability
policy or plan maintained by Employer for its executives then in effect, or if
no such policy or plan is then in effect, shall mean a condition of bodily
injury or disease or mental disorder that prevents Employee from performing the
principal duties of his employment hereunder, as determined by an independent
physician selected with the approval of both Employer and Employee.

 

9.                                       Change in Control.

 

(a)                                  If during the eighteen (18) month period
following a Change in Control that occurs during the term of this Agreement (1) Employee
is terminated by Employer or a successor employer without Cause, or (2) Employee
terminates his employment with Employer or a successor employer for Good
Reason, Employee shall receive, within 30 days following the date of such
termination and in lieu of and in complete satisfaction of any other payments
described under Sections 6(b) or (c) of this Agreement and subject to
Section 17 and Section 20 of this Agreement:

 

(i)                                     his accrued but unpaid Base Salary (based
on the annual rate in effect on the date of termination) through the date of
termination;

 

(ii)                                  the Pro-Rated Bonus; and

 

(iii)                               a lump sum cash severance payment in an
amount equal to the aggregate of:

 

(A)                              two (2) times Employee’s annual rate
of Base Salary in effect on the date of termination and two (2) times the
Employee’s annual target Bonus for the calendar year in which Employee’s
employment terminates; and

 

9

 

(B)                                the aggregate amount of all Employer
contributions that Employee or his account would have received for a period
equal to two (2) years under the following employee benefit plans: (1) Chicago
Board Options Exchange SMART Plan; (2) Chicago Board Options Exchange
Supplemental Executive Retirement Plan; and (3) Chicago Board Options
Exchange Executive Retirement Plan, or any successor plan.

 

For purposes of this Agreement, a “Change in
Control” of Employer shall be deemed to occur on the effective time of (1) a
merger or consolidation of Employer with one or more other entities or
corporations as a result of which holders of memberships, seats or outstanding
capital stock of Employer entitled to vote for the election of directors (“Voting
Stock”) of Employer immediately prior to such merger hold less than 50% of
the Voting Stock of the surviving or resulting corporation or entity, or (2) a
transfer of all or substantially all of the property of Employer other than to
a corporation or an entity of which Employer owns at least 50% of the Voting
Stock.  Payments pursuant to this Section 9
shall be in lieu of any amounts otherwise payable under Section 6.

 

(b)                                 If there is a Change in Control of
Employer at anytime while Employee is employed by Employer, or if a definitive
agreement contemplating a Change in Control is executed prior to termination of
Employee’s employment (other than a termination for Cause) and the Change in
Control contemplated by such agreement is consummated, Employee shall be
entitled to a bonus payment in an amount as determined by the Board, which
shall not be less than the value of the options described in Section 5
above based upon the Towers Perrin report delivered to the Board in September 2006
(the “Sale Bonus”), provided that such Sale Bonus shall be reduced (but
not below zero) by the value of options that vest upon the occurrence of a
Change in Control.  The foregoing
notwithstanding, the Sale Bonus shall only be payable so long as Employer has
not consummated an Initial Public Offering prior to the date of the applicable
Change in Control.  An “Initial Public
Offering” shall be deemed to occur upon the first sale of common stock by
Employer to underwriters for the account of Employer pursuant to a registration
statement under the Securities Act of 1933, as amended, filed with and declared
effective by the Securities and Exchange Commission, with minimum net proceeds
of Fifty Million Dollars ($50,000,000). 
Subject to the terms of Section 17 and Section 20 of this
Agreement, the Sale Bonus shall be payable in full within thirty days following
the Change in Control.

 

(c)                                  In the event that a Change in Control
shall occur, and a final determination is made by legislation, regulation,
ruling directed to Employee or Employer, by court decision, or by independent
tax counsel described in paragraph (d) next below, that the aggregate
amount of any payment made to Employee (1) under this Agreement, and (2) pursuant
to any Benefit Plan, Insurance Plan or plan, program or policy of Employer in
connection with, on account of, or as a result of, such Change in Control (“Total
Payments”) will be subject to the excise tax provisions of Section 4999
of the Code, or any successor section thereof, Employee shall be entitled to
receive from Employer, in addition to any other amounts payable hereunder, a
lump sum payment (the “Excise Tax Gross-Up Payment”) sufficient to cover
the full cost of such excise taxes and Employee’s federal, state and local
income and employment taxes on the Excise Tax Gross-Up

 

10

 

Payment, so that the net amount retained by Employee,
after the payment of all such excise taxes on the Total Payments, and all
federal, state and local income and employment taxes and excise taxes on the
Excise Tax Gross-Up Payment (at the highest applicable marginal rate of
taxation for the applicable calendar years), shall be equal to the Total
Payments.  Except as provided in
paragraph (g) of Section 4, the Total Payments shall be subject to
any federal, state and local income and employment taxes thereon.  The Excise Tax Gross-Up Payment shall be made
at the same time as the payments described in clauses (1) and (2) of
this paragraph (c), provided that in no event will the Excise Tax Gross-Up
Payment be made later than the end of Employee’s taxable year next following
the Employee’s taxable year in which Employee remits the related taxes, in
accordance with Section 409A of the Code and Treas. Reg. §1.409A-3(i)(1)(v) (or
any similar or successor provision).

 

(d)                                 Employer and Employee shall mutually and
reasonably determine the amount of the Excise Tax Gross-Up Payment to be made
to Employee pursuant to the preceding paragraph (c).  Prior to the making of any such Excise Tax
Gross-Up Payment, either party may request a determination as to the amount of
such Excise Tax Gross-Up Payment.  If
such a determination is requested, it shall be made promptly, at Employer’s
expense, by independent tax counsel selected by Employee and approved by
Employer (which approval shall not be unreasonably withheld), and such determination
shall be conclusive and binding on all parties. 
Employer shall provide such information as such counsel may reasonably
request, and such counsel may engage accountants or other experts at Employer’s
expense to the extent that they deem necessary or advisable to enable them to
reach a determination.  The term “independent
tax counsel,” as used herein, shall mean a law firm of recognized expertise
in federal income tax matters that has not previously advised or represented
either party.  It is hereby agreed that
neither Employer nor Employee shall engage any such firm as counsel for any
purpose, other than to make the determination provided for herein, for three
years following such firm’s announcement of its determination.

 

(e)                                  In the event the Internal Revenue Service
subsequently adjusts the excise tax computation made pursuant to paragraphs (c) and
(d) of this Section 9, Employer shall pay to Employee, or Employee
shall pay to Employer, as the case may be, the full amount necessary to make
either Employee or Employer whole had the excise tax initially been computed as
subsequently adjusted, including the amount of any underpaid or overpaid excise
tax, and any related interest and/or penalties due to the Internal Revenue
Service.  Notwithstanding the foregoing,
in no event will the adjustment payment amount described in the preceding
sentence be made later than the end of Employee’s taxable year next following
the Employee’s taxable year in which the Internal Revenue Service makes such
adjustment, in accordance with Section 409A of the Code and Treas. Reg.
§1.409A-3(i)(1)(v) (or any similar or successor provision).

 

10.                                 Restrictive Covenant. 
Employee understands the global nature of Employer’s businesses and the
effort the Employer and its affiliates undertake to develop and protect their
business and their competitive advantage. 
Accordingly, Employee agrees that the scope and duration of the
restrictions described in this Agreement are reasonable and necessary to
protect the legitimate business interests of the Employer.  Employee further agrees that during the term 

 

11

 

of his employment and, if
Employee’s employment is terminated pursuant to Sections 6(a), 6(b), 6(c),
6(d), 8 or 9, for a period of two years following the termination of his
employment (except for non-renewal of the Agreement), Employee shall not:

 

(a)                                  singly, jointly, or in any other
capacity, in a manner that contributes to any research, technology,
development, account, trading, marketing, promotion, or sales and relates to
Employee’s service with Employer or an affiliate, directly or beneficially,
manage, join, participate in the management, operation or control of, or work
for (as an employee, consultant or independent contractor), or permit the use
of his name by, or provide financial or other assistance to, or be connected in
any manner with, any options exchange or alternative trading system that
directly competes with Employer, without the express written approval of the Board
of Employer;

 

(b)                                 provide any service or assistance which (i) is
of the general type of service or assistance provided by Employee to Employer, (ii) relates
to any technology, account, product, project or piece of work, with which
Employee was involved during his employment with Employer, and (iii) contributes
to causing an entity to come within the definition described in paragraph (a) above;

 

(c)                                  solicit or accept if offered to him, with
or without solicitation, on his own behalf or on behalf of any other person,
the services of any person who is a then current employee of Employer (or was
an employee of Employer during the year preceding such solicitation), nor
solicit any of Employer’s then current employees (or an individual who was
employed by or engaged by Employer during the year preceding such solicitation)
to terminate employment or an engagement with Employer, nor agree to hire any
then current employee (or an individual who was an employee of Employer during
the year preceding such hire) of Employer into employment with himself or any
company, individual or other entity; or

 

(d)                                 directly or indirectly divert or attempt
to divert from Employer any business in which Employer has been actively
engaged during the term hereof, nor interfere with the relationships of
Employer with its sources of business.

 

11.                                 Confidentiality. 
Employee acknowledges that Employer may disclose secret or confidential
information to Employee during the term of this Agreement to enable him to
perform his duties hereunder.  Employee
agrees that, subject to the following sentence, he shall not during the term of
this Agreement (except in connection with the proper performance of his duties
hereunder) and thereafter, without the prior written consent of Employer,
disclose to any person or entity any secret or confidential information
concerning the business of Employer that was obtained by Employee in the course
of his employment by Employer.  This
paragraph shall not be applicable if and to the extent Employee is required to
testify in a legislative, judicial or regulatory proceeding pursuant to an
order of Congress, any state or local legislature, a judge, or an
administrative law judge, or if such secret or confidential information is
required to be disclosed by Employee by any law, regulation or order of any
court or regulatory commission, department or agency.  Employee further agrees that if his
employment by Employer is terminated for any reason, he will not take with him,
but will leave with Employer, all records and papers and all matter of whatever
nature that bears secret or confidential information of 

 

12

 

Employer.  For purposes of this Agreement, the term “secret
or confidential information” shall include, but not be limited to, any and
all records, notes, memoranda, data, writings, research, personnel information,
customer information, clearing members’ information, Employer’s financial
information and plans, processes, methods, techniques, systems, formulas,
patents, models, devices, compilations or any other information of whatever
nature in the possession or control of Employer, that has not been published or
disclosed to the general public, the options industry or the commodities
futures industry; provided that such term shall not include knowledge, skills,
and information that is common to the trade or profession of Employee.  If Employee fails to comply with any
provision of this Section 11, which failure (1) is inadvertent or
unintentional, (2) occurs notwithstanding Employee’s good faith effort to
comply with this Section 11 and (3) does not, and is not likely to,
result in significant loss to Employer, then such failure shall not constitute
a violation of any provision, covenant or agreement of this Section 11 for
purposes of this Agreement, including Sections 6 and 12 hereof.

 

12.                                 Remedies.  Employee
consents and agrees that if, during the term of this Agreement, he violates any
provisions of Sections 10 or 11 of this Agreement, Employer or its successors
in interest shall be entitled, in addition to any other remedies that they may
have, including money damages, to an injunction to be issued by a court of
competent jurisdiction, restraining him from committing or continuing any
violation of Sections 10 or 11 of this Agreement.

 

If, at any time, Employee violates, to any material
extent, any of the covenants or agreements set forth in Sections 10 or 11 of
this Agreement, Employer shall have the right to terminate the employment of
Employee for Cause in accordance with the provisions of paragraph (a) of Section 6.

 

13.                                 Indemnity.  Employer
shall indemnify, protect, defend and save Employee harmless from and against
any threatened, pending, contemplated or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, in which Employee is
made a party by reason of the fact that Employee is an officer, employee or
agent of Employer, or any judgment, amount paid in settlement (with the consent
of Employer), fine, loss, expense, cost, damage and reasonable attorneys’ fees
incurred by reason of the fact that Employee is an officer, employee or agent
of Employer; provided, however, that Employee acted in good faith and in a
manner he reasonably believed to be in the best interests of Employer, and with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. 
Employer, at its expense, shall have the right to purchase and maintain
insurance or fidelity bonds on behalf of Employee against any liability
asserted against him and incurred by him in his capacity as an officer,
employee or agent of Employer.  Employee
shall also be indemnified under Employer’s Articles of Incorporation and
By-Laws, and covered by directors’ and officers’ liability insurance policies
that are the same as or equivalent to those Employer currently carries for its
other executives.

 

14.                                 Assignment.  Neither
Employee nor Employer may assign this Agreement, except that Employer’s
obligations hereunder shall be binding legal obligations of any successor to
all or substantially all of Employer’s business by purchase, merger,
consolidation, or otherwise, and Employer will require any such successor to
expressly assume and agree to perform this 

 

13

 

Agreement in the same
manner and to the same extent that Employer would be required to perform it if
no such succession had taken place.

 

15.                                 Employee Assignment. 
No interest of Employee or his Spouse or any other beneficiary under this
Agreement, or any right to receive any payment or distribution hereunder, shall
be subject in any manner to sale, transfer, assignment, pledge, attachment,
garnishment, or other alienation or encumbrance of any kind, nor may such
interest or right to receive a payment or distribution be taken, voluntarily or
involuntarily, for the satisfaction of the obligations or debts of, or other
claims against, Employee or his Spouse or any other beneficiary, including
claims for alimony, support, separate maintenance, and claims in bankruptcy
proceedings.

 

16.                                 Benefits Unfunded. 
Except as otherwise provided in paragraph (b) of Section 4: (1) all
rights of Employee and his Spouse or any other beneficiary under 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 Employer for payment of any
amounts due hereunder, and (2) neither Employee nor his Spouse or any
other beneficiary shall have any interest in or rights against any specific
assets of Employer, and Employee and his Spouse or any other beneficiary shall
have only the rights of a general unsecured creditor of Employer.

 

17.                                 Release.  As a
condition to receiving the payments under Sections 6, 8 and 9 of this
Agreement, Employee agrees 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”).  Employer shall deliver the Release and
schedule of severance payments or benefits to be paid pursuant to the terms of
this Agreement to Employee within ten (10) days of Employee’s termination
of employment.  No payments pursuant to Section 6,
8 or 9 shall be made prior to the date that both (i) Employee has
delivered an original, signed Release to the Employer 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
Employee 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 Employee’s
termination of employment.  If Employee
does not deliver an original, signed Release to the Employer within forty-five
(45) days after receipt of the same from the Employer, (i) Employee’s
rights shall be limited to those made available to Employee as if Employee were
terminated under Section 6(d) above, and (ii) the Employer shall
have no obligation to pay or provide to Employee any amount or benefits
described in Sections 6, 8 or 9, or any other monies on account of the
termination of Employee’s employment.

 

18.                                 Waiver.  No waiver by
either party at any time of any breach by the other party of, or compliance
with, any condition or provision of this Agreement to be performed by the other
party shall be deemed a waiver of any other provisions or conditions at the
same time or at any prior or subsequent time.

 

19.                                 Applicable Law. 
This Agreement shall be construed and interpreted pursuant to the
internal laws of the State of Illinois, without regard to principles of
conflicts of laws.  The jurisdiction and
venue for any disputes arising under, or any action brought to enforce (or
otherwise relating to), this Agreement will be exclusively in the courts in the
State of Illinois, County of Cook, including the Federal Courts located therein
(should Federal jurisdiction exist).

 

14

 

20.                                 Compliance.

 

(a)                                  This Agreement is intended to comply with
Section 409A of the Code 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 Section 409A of the Code, 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.  Each payment under this
Agreement is intended to be treated as one of a series of separate payment for
purposes of Section 409A of the Code and Treas. Reg. §1.409A-2(b)(2)(iii) (or
any similar or successor provisions).

 

(b)                                 Notwithstanding any provision to the
contrary, to the extent Employee is considered a “specified employee” (as
defined in Section 409A of the Code and Treas. Reg. §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 Employee’s date of termination that is not
otherwise excluded under Section 409A of the Code 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 Employee until the earlier of the six month anniversary of Employee’s
date of termination or Employee’s death and will be accumulated and paid on the
first day of the seventh month following the date of termination.

 

21.                                 Entire Agreement. 
This Agreement contains the entire agreement between Employer and
Employee and supersedes any and all previous agreements, written or oral,
between the parties relating to the subject matter hereof, including, but not
limited to, the Prior Agreement.  No
amendment or modification of the terms of this Agreement shall be binding upon
either of the parties hereto unless reduced to writing and signed by each of
the parties hereto.

 

22.                                 Counterparts. 
This Agreement may be executed in counterparts, each of which shall be
deemed an original.

 

23.                                 Severability. 
The parties agree that this Agreement shall be construed in a way to
make each of its provisions enforceable, but that the unenforceability of one
or more provisions in one or more instances will not make invalid the entire
Agreement or any other provisions of this Agreement as all of its provisions
are severable.  In the event a provision
may be unenforceable as written, the parties agree that it shall be partially
enforced to the extent permitted by law. 
The unenforceability of a provision in one instance shall not affect its
enforceability in other instances.

 

24.                                 Successors.  This
Agreement shall be binding upon, and inure to the benefit of, the parties
hereto and their respective heirs, representatives and successors.

 

15

 

25.                                 Notices.  Notices
required under this Agreement shall be in writing and sent by registered U.S.
mail, return receipt requested, to the following addresses or to such other
address as the party being notified may have previously furnished to the other
by written notice:

 

If to Employer:

 

Alan J. Dean, Executive Vice President
    and Chief Financial Officer

Chicago Board Options Exchange, Inc.

400 S. LaSalle Street

Chicago, Illinois 60605

 

If to Employee:

 

William J. Brodsky

1223 North Astor Street

Chicago, Illinois 60610-2314

 

With a copy to:

 

Philip L. Mowery

Vedder Price Kaufman & Kammholz

222 North LaSalle Street, Suite 2600

Chicago, Illinois 60601

 

26.                                 Headings.  The headings
contained herein are for reference purposes only and shall not in any way
affect the meaning or interpretation of any provision of this Agreement.

 

IN WITNESS WHEREOF, Employee has
hereunto set his hand, and Employer has caused these presents to be executed in
its name on its behalf, all as of the date first above written.

 

	
   

  	
   

  	
  Chicago
  Board Options Exchange, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Eugene S. Sunshine

  
	
   

  	
   

  	
   

  	
  Eugene
  S. Sunshine

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chairman
  of the Compensation

  
	
   

  	
   

  	
   

  	
   

  	
  Committee
  of the Board of Directors

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  William J. Brodsky

  
	
   

  	
   

  	
  William J. Brodsky

  

 

16

 

Exhibit A

 

RELEASE
OF CLAIMS

 

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

 

1.                                       In consideration of CBOE’s agreement to provide
Brodsky with the severance pay and benefits described in Sections 6,8, and 9 of
the attached Amended and Restated Employment Agreement by and between CBOE and
Brodsky (the “Employment Agreement”), to which Brodsky is not otherwise
entitled and the sufficiency of which Brodsky acknowledges, Brodsky 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 Brodsky’s past employment with CBOE or any past actions,
statements, or omissions of CBOE or any of the Released Parties occurring prior
to Brodsky’s execution of this Release, 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 Brodsky’s employment,
the termination of Brodsky’s employment, or any continuing effects of Brodsky’s
employment with CBOE.

 

2.                                       Brodsky 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, Brodsky will not seek and will not accept any personal equitable
or monetary relief in connection with such investigation, action, suit, or
legal proceeding.

 

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

 

A-1

 

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 Brodsky.

 

4.                                       Brodsky agrees that he will continue to
be governed by those obligations arising under Paragraphs 10, 11 and 12 of the
Employment Agreement, which are 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 Brodsky 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.

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  William J. Brodsky

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
  CHICAGO BOARD OPTIONS
  EXCHANGE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

A-2

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