Document:

EXHIBIT 10.17

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (“Agreement”) made and entered into as of this 12th day of January 2010, by and between the
CHICAGO BOARD OPTIONS EXCHANGE, INC. (“Employer”) and EDWARD J. JOYCE (“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 dated September 16, 2003, and subsequently
amended June 2, 2006, January 23, 2007, December 22, 2008, and May 1,
2009 (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 Employer
and its affiliates and Employee desires to continue such employment with
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 Employer’s business plan;

 

WHEREAS, in the course
of employment with Employer, Employee has had and will continue to have access
to certain Secret or Confidential Information that relates to or will relate to
the business of 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 hereto agree as follows:

 

1.             Employment.

 

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

 

(b)           Employee agrees to devote his full
business time and efforts to the affairs of Employer and to the performance of
his duties as its President.  In doing
so, he agrees

 

 

to conduct himself at all times in a manner consistent
with the excellent reputation of Employer.

 

(c)           Employee agrees not to accept any
membership on the board of directors of any private or public corporation
without the prior written approval of the Board.  The Board will grant such approval if, in its
discretion, such membership will present no conflict of interest or
interference with Employee’s duties as President of Employer.

 

2.             Term.  This Agreement shall commence on the
Effective Date and shall expire on December 31, 2011 (the “Initial Term”),
unless terminated earlier pursuant to the provisions of Sections 5, 6, 7 or 8
hereof.  The term of employment shall be
renewed automatically for successive periods of one (1) year each (a “Renewal
Term”) after the expiration of the Initial Term, unless Employer provides
Employee, or Employee provides Employer, 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.”  If either Employer or Employee elect not to
renew the Term of this Agreement in accordance with this Section 2 and
Employee thereafter continues in employment with Employer, Employee shall be
employed on an at-will basis and the terms of such employment and any
subsequent termination of employment shall be subject solely to the general
employment practices and policies of Employer.

 

3.             Compensation.  Employer shall pay to Employee the following
for all services to be performed by Employee during the Term:

 

(a)           A base salary (“Base Salary”) at the
rate of seven hundred fifty thousand dollars ($750,000) per annum.  Base Salary shall be payable in substantially
equal regular installments in accordance with Employer’s practices for other
senior executives, as such practices may be determined from time to time.  The Compensation Committee of the Board (the “Committee”)
shall review the rate of Base Salary in such manner and at such time as is
applicable to other senior executives, with any revised rate of salary to
become the “Base Salary” for all purposes of this Agreement.  In no event shall Employee’s Base Salary be
decreased below the Base Salary in effect as of the Effective Date.

 

(b)           In addition to the aforementioned
annual Base Salary, Employee shall be eligible to participate in any bonus or
incentive program applicable to other senior executives of Employer, other than
the Chairman and the Chief Executive Officer, during the Term.  Any bonus or incentive payment for a fiscal
year of Employer shall be payable to Employee as soon as practicable after the
end of such year, and in no event later than March 15 of the year
immediately following the year in which it was earned.

 

(c)           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 in amounts and subject to such terms as
determined by the Committee in its sole discretion; provided, however, that the
amount of options and the terms and conditions of such options 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, if any, granted
to Employee under such a plan shall vest upon 

 

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Employee’s retirement after attaining age fifty-seven
(57) and all vested options may thereafter be exercised by Employee for the
remainder of their term.  The foregoing
notwithstanding, Employer agrees that if it grants an equity based incentive or
a sale bonus to William Brodsky (“Brodsky”) or another person serving as
Employer’s chairman or chief executive officer, the value of the equity based
incentive or the dollar value of a sale bonus to be granted to Employee shall
not be less than seventy-five percent (75%) of the amount granted to Brodsky or
the chairman or chief executive officer.

 

(d)           All payments under this Agreement of
Base Salary and bonus, and incentive payments and severance payments and
benefits, if any, 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)           Business Expenses.  Employer will pay or promptly reimburse
Employee for all reasonable business expenses incurred by Employee in the
performance of his duties during the Term. 
All amounts subject to reimbursement by Employer to Employee pursuant to
this paragraph (a) shall be subject to an accounting by Employee and
approval by Employer.

 

(b)           Benefit Plans.  During the Term, Employee shall be entitled
to participate in, and receive benefits under, (i) any qualified or
supplemental retirement, savings or deferred compensation plan, program or
arrangement currently made available by Employer for its senior executives, and
(ii) any such additional or substitute plan, program or arrangement that
Employer may make available in the future and during the Term for its senior
executives (“Benefit Plans”), subject to and on a basis consistent with the
terms, conditions and overall administration of each such Benefit Plan.

 

(c)           Vacations and Holidays.  Employee shall be entitled to five weeks paid
vacation during each calendar year commencing during the Term.  Employee shall also be entitled to all paid
holidays given by Employer to its other senior executives.

 

(d)           Insurance Benefits.  During the Term, 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 senior executives, and (ii) any such
additional or substitute plan or arrangement that Employer may make available
in the future and during the Term for its senior executives (“Insurance Plans”),
subject to and on a basis consistent with the terms, conditions, and overall
administration of each such Insurance Plan.

 

(e)           Retiree Medical Coverage.  Employer shall maintain retiree medical
coverage for Employee, his Spouse and Dependent for a period commencing on the
date of his termination of employment with Employer and ending on (i) with
respect to Employee and his Spouse, the date of death of the survivor of
Employee and his Spouse, 

 

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and (ii) with respect to his Dependent, the
earlier of the date his Dependent dies or ceases to be eligible for coverage
under the terms of the retiree medical plan (as described in the next
sentence).  Such retiree medical coverage
shall provide medical coverage for Employee, his Spouse and Dependent as part
of or equivalent to that provided to active executives of Employer, their
spouses and minor children under the group health plan of Employer from time to
time in effect.  The amount of such retiree
medical coverage for Employee, his Spouse and Dependent shall be reduced by the
amount of any medical coverage available to Employee and/or his Spouse or
Dependent from time to time from any subsequent employer and from Medicare,
whether or not Employee or his Spouse or Dependent are actually enrolled in
such coverage.  Employee, his Spouse and
Dependent shall pay the cost of such retiree medical coverage, and shall be
reimbursed by Employer for the cost of such coverage, on an after tax basis,
within thirty (30) days after the end of each calendar year.  For purposes of this Agreement, the term “Spouse”
shall mean Employee’s spouse, and the term “Dependent” shall mean Employee’s
child who is eligible for coverage under the terms of the Employer’s retiree
medical plan, each as of the Effective Date.

 

(f)            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.             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 such 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, may terminate the employment of Employee with Employer at any time
during the Term for “Cause”.  For
purposes of this Agreement, “Cause” shall be deemed to exist if, and only if:

 

(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 that result in material harm to Employer;

 

(ii)           Employee shall intentionally disobey
or disregard a lawful and proper direction of the Board or Employer; 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 thirty (30) days following receipt by
Employee of written notice from 

 

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Employer specifying the nature of the breach and
demanding the cure thereof.  For purposes
of this clause (iii), a material breach of this Agreement that 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 termination 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 its 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
Employee reasonably believed to be in, and not opposed to, the best interest of
Employer, and Employee has 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 thirty (30) days prior written notice to Employee
specifying in detail the reason or reasons for Employee’s termination.  If the employment of Employee is terminated
by Employer for Cause, Employee’s accrued but unpaid Base Salary (based upon
the annual rate in effect on the date of termination), shall be paid to Employee
through the date of his termination, and, except as otherwise provided in any
Benefit Plan or Insurance Plan, Employer shall have no further obligation,
including any obligation for Severance Benefits, to Employee under this
Agreement.  Such termination shall have
no effect upon Employee’s rights under the Benefit Plans, the Insurance Plans
and other employee policies and practices of Employer applicable to such
termination.

 

(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, as of a date at least thirty (30) days after the date a written notice of
such termination is delivered by Employer to Employee.  In such event, Employer shall pay to Employee
(i) his accrued but unpaid Base Salary (based upon the annual rate in
effect on the date of termination) through the date of termination, (ii) a
pro-rated bonus (the “Pro-Rated Bonus”) equal to 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 three hundred sixty-five
(365), (iii) a lump sum cash severance payment (the “Severance Payment”)
in an amount equal to the sum of (A) two (2) times Employee’s annual
rate of Base Salary in effect on the date of termination and (B) two (2) times
the target bonus for the year in which Employee’s employment is terminated, and
(iv) a lump sum cash payment (the “Benefit Plan Payment”) in an amount
equal to 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 Benefit Plans:  (A) Chicago
Board Options Exchange SMART Plan; (B) Chicago Board Options Exchange
Supplemental Executive Retirement Plan; and (C) Chicago Board Options
Exchange Executive Retirement Plan, or in each case any successor plan (the
Pro-Rated Bonus, Severance Payment, and Benefit Plan Payment shall be referred
to herein collectively as the “Severance 

 

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Benefits”). 
Subject to Section 12 and Section 21 of this Agreement, the
Severance Benefits shall be paid within thirty (30) days following the
termination of Employee’s employment. 
Except as otherwise provided in this Section 5(b), and in any
Benefit Plan or Insurance Plan of Employer, Employer shall have no further
obligation to Employee under this Agreement following the date his employment
is terminated without Cause.

 

(c)           Termination for Good Reason.  Employee may terminate his employment at any
time during the Term for Good Reason as of a date at least thirty (30) days
after the date a written notice of such termination is delivered by Employee to
Employer but within two (2) years after the initial existence of the
condition constituting Good Reason, unless the condition constituting Good
Reason is fully corrected within thirty (30) 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:

 

(i)            Employer shall assign to Employee
authorities (including officer titles), duties or responsibilities that are
inconsistent in any material and adverse respect with Employee’s current
authorities, duties or responsibilities with Employer (including any material
and adverse diminution of such authorities, duties or responsibilities);

 

(ii)           Employer shall materially reduce the
base compensation and benefits package of Employee;

 

(iii)          Employer 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;

 

(iv)          Employer shall terminate, reduce or
limit Employee’s 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 Employer rather
than a decision reasonably related to the level of job performance of Employee;
provided, however, that such action with respect to Employee’s participation
shall only constitute Good Reason under this Agreement if the action results in
materially reducing the aggregate value of Employee’s incentive compensation
and benefits below their aggregate value as of the date hereof; or

 

(v)           Employer shall materially breach any
of the terms of this Agreement.

 

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 that constitutes Good Reason
and the specific provisions of this Agreement on which Employee relies.  Notwithstanding anything herein to the
contrary, if Employee shall terminate his employment for Good Reason, Employer
shall pay to Employee his 

 

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accrued but unpaid Base
Salary (based upon the annual rate in effect on the date of termination or the
date immediately prior to Employer’s actions described in subsections (ii) and
(iv) above, whichever is greater) through the date of termination and the
Severance Benefits on the same terms and subject to the same conditions as
described in Section 5(b) hereof. 
Except as otherwise provided in this Section 5(c), and in any
Benefit Plan or Insurance Plan of Employer, Employer shall have no further
obligation to Employee under this Agreement following the date he terminates
his employment for Good Reason.

 

(d)           Voluntary Termination without Good
Reason.  Employee may terminate his
employment without Good Reason at any time during the Term as of a date at
least thirty (30) days after the date a written notice of such termination is
delivered by Employee to Employer.  If
the employment of Employee is terminated by Employee without Good Reason,
Employee’s accrued but unpaid Base Salary (based upon the annual rate in effect
on the date of termination) shall be paid to Employee through the date of his
termination, and, except as otherwise provided in any Benefit Plan or Insurance
Plan, Employer shall have no further obligation, including any obligation for
Severance Benefits, to Employee under this Agreement.  Such termination shall have no effect upon
Employee’s rights under the Benefit Plans, the Insurance Plans and other
employee policies and practices of Employer applicable to such termination.

 

6.             Death.  If Employee dies during the Term, Employer
shall pay (i) Employee’s Base Salary (based on the annual rate in effect
on the date of death) through the date of death, and (ii) within ninety
(90) days following the date of death, the Severance Benefits to his
beneficiary last designated by written instrument delivered by Employee to
Employer prior to the date of death.  If
no such designated beneficiary shall survive Employee, such payments and
benefits shall be paid and provided to Employee’s surviving Spouse, or if none,
to his lawful descendants per stirpes
then living, or if none shall survive him, to the legal representative of his
estate, or if none is appointed within ninety (90) days of the date of his
death, to his heirs at law under the laws of the state in which he is domiciled
at the date of his death.  Any Severance
Benefits payable under this Section 6 are in addition to any other
benefits due to Employee’s beneficiaries or dependents from Employer, under any
Benefit Plan or Insurance Plan.  Except
as otherwise provided in this Section 6, or in any Benefit Plan or
Insurance Plan, Employer shall have no further obligations with respect to
Employee or his beneficiaries or dependents under this Agreement following the
date of his death.

 

7.             Disability.

 

(a)           If Employee is Permanently Disabled
for a continuous period of six (6) months during the Term, Employer may
terminate Employee’s employment under this Agreement upon thirty (30) days
prior written notice to Employee.  In
such event Employer shall pay to Employee (i) his accrued but unpaid Base
Salary (based on the annual rate in effect on the date of termination) through
the date of termination, and (ii) within thirty (30) days following the
date of such termination, the Severance Benefits.

 

(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 

 

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Employer for its senior executives then in
effect.  In the absence of such a policy
or plan, the term Permanently Disabled shall have the meaning ascribed to the
term “disability” under Section 409A of the Code and the regulations and
guidance promulgated thereunder.

 

(c)           Except as otherwise provided in this Section 7,
and in any Benefit Plan or Insurance Plan of Employer, Employer shall have no
further obligation to Employee under this Agreement following the date his
employment is terminated due to him becoming Permanently Disabled.  Such termination shall have no effect upon
Employee’s rights under the Benefit Plans, the Insurance Plans and other
employee policies and practices of Employer applicable to such termination.

 

8.             Change in Control.

 

(a)           If during the eighteen (18)-month
period following a Change in Control that occurs during the Term of the
Agreement (i) Employee is terminated by Employer or a successor employer
without Cause or (ii) Employee terminates his employment with Employer for
Good Reason, in lieu of any payments to which Employee may otherwise be
entitled under Section 5 hereof, Employee shall be paid the following (the
“Sale Payment”):  (i) his accrued
but unpaid Base Salary (based upon the annual rate in effect on the date of
termination) through the date of termination, (ii) the Pro-Rated Bonus, (iii) a
lump sum severance payment in an amount equal to the sum of (A) three (3) times
Employee’s annual rate of Base Salary in effect on the date of termination and (B) three
(3) times the target bonus for the year in which Employee’s employment is
terminated, and (iv) a lump sum cash payment in an amount equal to the
aggregate amount of all Employer contributions that Employee or his account
would have received for a period equal to three years under the following
Benefit Plans:  (A) Chicago Board
Options Exchange SMART Plan; (B) Chicago Board Options Exchange
Supplemental Executive Retirement Plan; and (C) Chicago Board Options
Exchange Executive Retirement Plan, or in each case any successor plan.  The Sale Payment shall be payable on the same
terms and subject to the same conditions as described in Section 5(b) of
this Agreement for the Severance Benefits. 
For purposes of this Agreement, a “Change in Control” of Employer shall
be deemed to occur on the effective time of (i) a merger or consolidation
of Employer with one (1) or more other corporations as a result of which
holders of the 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 fifty percent (50%) of the Voting Stock of the surviving
or resulting corporation, or (ii) a transfer of all or substantially all
of the property of Employer other than to an entity of which Employer owns at
least fifty percent (50%) of the Voting Stock.

 

(b)           If there is a Change in Control of
Employer at any time 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 (the “Sale Bonus”) in an amount as determined by
the Board, which shall be not less than the value of the options described in Section 3
above based upon the Towers Perrin report delivered to the Board in 

 

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September 2006; provided, however, that such Sale
Bonus shall be reduced (but not below zero (0)) by the value of options that
vest upon the occurrence of such Change in Control.  The foregoing notwithstanding, the Sale Bonus
shall be payable only 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 Employer’s 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 12 and Section 21 hereof, the Sale Bonus shall
be payable in full within thirty (30) 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, or
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 an excise tax under the 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 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 Section 4
hereof, 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,
however, that in no event will the Excise Tax Gross-Up Payment be made later
than the end of Employee’s taxable year next following 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 Independent Tax Counsel may
reasonably request, and such counsel may engage accountants or other experts at
Employer’s expense to the extent that such counsel deems necessary or advisable
to enable it to reach a determination. 
The term “Independent Tax 

 

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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 hereto. 
It is hereby agreed that neither Employer nor Employee shall engage any
such Independent Tax Counsel as counsel for any purpose, other than to make the
determination provided for herein, for three (3) 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 8, 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 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).

 

9.             Restrictive Covenants.  Employee understands the global nature of
Employer’s businesses and the effort 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 Employer.  Employee further agrees that during the
period of his employment and for a period of two years following a termination
of Employee’s employment pursuant to Section 5(a), 5(b), 5(c), 5(d), 7 or
8 hereof, 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 that 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 Chief Executive
Officer and Chairman of the Board;

 

(b)           provide any service or assistance
that (1) is of the general type of service or assistance provided by
Employee to Employer, (2) relates to any technology, account, product,
project or piece of work, with which Employee was involved during his
employment with Employer, and (3) 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

 

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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, nor interfere with the relationships of
Employer with its sources of business.

 

10.           Confidentiality.  Employee acknowledges that Employer may
disclose Secret or Confidential Information to Employee during the Term to
enable him to perform his duties hereunder. 
Employee agrees that, subject to the following sentence, he shall not
during the Term (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 material or significant 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 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, however, that such term shall not include
knowledge, skills, and information that is common to the trade or profession of
Employee.

 

11.           Remedies.  Employee consents and agrees that if he
violates any provisions of Sections 9 or 10 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 9 or 10 hereof.

 

If, at any time, Employee violates or threatens to
violate, to any material extent, any of the covenants or agreements set forth
in Sections 9 or 10 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 5 hereof.

 

In the event that Employee is found to have breached
any provision set forth in Section 9 of this Agreement, the time period
provided for in that provision shall be deemed tolled (i.e.,
it will not begin to run) for so long as Employee was in violation of that
provision.

 

11

 

12.           Release.  Notwithstanding anything herein to the contrary,
as a condition to receiving any severance payments or benefits under 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 severance payments or
benefits under this Agreement shall be made or provided prior to the date that
both (i) Employee has delivered an original, signed Release to 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 Employer
within forty-five (45) days after receipt of the same from Employer, (i) Employee’s
rights shall be limited to those made available to Employee as if Employee were
terminated under Section 5(d) above, and (ii) Employer shall
otherwise have no obligation to pay or provide to Employee any severance
payments or benefits described in this Agreement, or any other monies on
account of the termination of Employee’s employment.

 

13.           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.

 

14.           Employee Assignment.  No interest of Employee or his Spouse,
dependent 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, dependent or any other beneficiary, including claims
for alimony, support, separate maintenance, and claims in bankruptcy
proceedings.

 

15.           Benefits Unfunded.  (i) All rights of Employee and his
Spouse, dependent 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; (ii) neither Employee nor his Spouse, dependent or any other
beneficiary shall have any interest in or rights against any specific assets of
Employer; and (iii) Employee and his Spouse, dependent or any other
beneficiary shall have only the rights of a general unsecured creditor of
Employer.

 

16.           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.

 

12

 

17.           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).

 

18.           Entire Agreement.  This Agreement contains the entire agreement
between Employer and Employee, and supersedes any and all other previous agreements,
written or oral, between the parties relating to the subject matter hereof,
including, without limitation, 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.

 

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

 

20.           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 (1) or more provisions in one (1) 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.

 

21.           Compliance.

 

(a)           The payments and benefits under this
Agreement are intended to comply with or be exempt from 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. 
Employer cannot guarantee that the payments and benefits that may be
paid or provided pursuant to this Agreement will satisfy all applicable
provisions of Section 409A of the Code. 
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
Treasury Regulation § 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 Treasury Regulation § 1.409A-1(c)(i) or
any similar or successor provision) and would be entitled to a payment during
the six (6)-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 

 

13

 

distributions, or any otherwise applicable exemption,
the payment will not be made to Employee until the earlier of the six (6)-month
anniversary of Employee’s date of termination or Employee’s death and all
payments delayed due to the six (6)-month delay described above will be accumulated
and paid on the first (1st) day of the seventh (7th) month following the date
of termination.

 

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

 

23.           Notices.  Notices required under this Agreement shall
be in writing and sent by personal delivery, or 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:

  
	
   

  	
   

  
	
   

  	
  Chicago
  Board Options Exchange

  
	
   

  	
  400
  S. LaSalle Street

  
	
   

  	
  Chicago,
  Illinois 60605

  
	
   

  	
  Attention:
  Chief Executive Officer and

  
	
   

  	
  Chairman of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  If
  to Employee:

  
	
   

  	
   

  
	
   

  	
  Edward
  J. Joyce

  
	
   

  	
  3555
  W. 102nd Street

  
	
   

  	
  Evergreen
  Park, Illinois 60642

  

 

24.           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 or was 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 or was 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

 

25.           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/
  William J. Brodsky

  	
   

  	
   

  	
  /s/
  Edward J. Joyce

  
	
  Title:

  	
  Chief
  Executive Officer and

  	
   

  	
  Edward J. Joyce

  
	
   

  	
  Chairman
  of the Board of Directors

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

15

 

Exhibit A

 

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, INC., a
Delaware corporation (“CBOE”), and EDWARD J. JOYCE, a resident of the State of
Illinois (“Joyce”)

 

1.             In consideration of CBOE’s payment to Joyce of the
severance pay and benefits described in the Amended and Restated Employment
Agreement by and between CBOE and Joyce (the “Employment Agreement”), to which
Joyce is not otherwise entitled and the sufficiency of which Joyce
acknowledges, Joyce 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 Joyce’s past employment with CBOE or any
past actions, statements, or omissions of CBOE or any of the Released Parties
occurring prior to Joyce’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 Joyce’s employment,
the termination of Joyce’s employment, or any continuing effects of Joyce’s
employment with CBOE.

 

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

 

3.             Joyce has forty-five (45) days (until             )
within which to consider this Release, although Joyce may accept it at any time
within those forty-five (45) days.  Once
Joyce has signed this Release, Joyce 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 

 

A-1

 

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 Joyce.

 

4.             Joyce agrees that he will continue to be governed by
those obligations arising under Sections 9, 10 and 11 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 Joyce 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:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Edward
  J. Joyce

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
  CHICAGO
  BOARD OPTIONS EXCHANGE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
  Its: 

  	
   

  
							

 

A-2EXHIBIT 10.19

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (“Agreement”) made and entered into as of this 22nd day of January 2010, by and between the
CHICAGO BOARD OPTIONS EXCHANGE, INC. (“Employer”) and EDWARD TILLY (“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 effective as of August 21, 2006 and
subsequently amended effective December 31, 2008 and May 1, 2009 (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 Employer
and its affiliates and Employee desires to continue such employment with
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 Employer’s business plan;

 

WHEREAS, in the course
of employment with Employer, Employee has had and will continue to have access
to certain Secret or Confidential Information that relates to or will relate to
the business of 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 hereto agree as follows:

 

1.             Employment.

 

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

 

 

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

 

(c)           Employee agrees not to accept any
membership on the board of directors of any private or public corporation
without the prior written approval of the Board.  The Board will grant such approval if, in its
discretion, such membership will present no conflict of interest or
interference with Employee’s duties as Executive Vice Chairman of Employer.

 

2.             Term.  This Agreement shall commence on the
Effective Date and shall expire on December 31, 2010 (the “Initial Term”),
unless terminated earlier pursuant to the provisions of Sections 5, 6, 7 or 8
hereof.  The term of employment shall be
renewed automatically for successive periods of one (1) year each (a “Renewal
Term”) after the expiration of the Initial Term, unless Employer provides
Employee, or Employee provides Employer, 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.”  If either Employer or Employee elect not to
renew the Term of this Agreement in accordance with this Section 2 and
Employee thereafter continues in employment with Employer, Employee shall be
employed on an at-will basis and the terms of such employment and any
subsequent termination of employment shall be subject solely to the general
employment practices and policies of Employer.

 

3.             Compensation.  Employer shall pay to Employee the following
for all services to be performed by Employee during the Term:

 

(a)           A base salary (“Base Salary”) at the
rate of six hundred thousand dollars ($600,000) per annum.  Base Salary shall be payable in substantially
equal regular installments in accordance with Employer’s practices for other
senior executives, as such practices may be determined from time to time.  The Compensation Committee of the Board (the “Committee”)
shall review the rate of Base Salary in such manner and at such time as is
applicable to other senior executives, with any revised rate of salary to
become the “Base Salary” for all purposes of this Agreement.  In no event shall Employee’s Base Salary be
decreased below the Base Salary in effect as of the Effective Date.

 

(b)           In addition to the aforementioned
annual Base Salary, Employee shall be eligible to participate in any bonus or
incentive program applicable to other senior executives of Employer, other than
the Chairman and the Chief Executive Officer, during the Term.  Any bonus or incentive payment for a fiscal
year of Employer shall be payable to Employee as soon as practicable after the
end of such year, and in no event later than March 15 of the year
immediately following the year in which it was earned.

 

(c)           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 in amounts and subject to such terms as
determined by the Committee in its sole discretion.

 

2

 

(d)           All payments under this Agreement of
Base Salary and bonus, and incentive payments and severance payments and
benefits, if any, 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)           Business Expenses.  Employer will pay or promptly reimburse
Employee for all reasonable business expenses incurred by Employee in the
performance of his duties during the Term. 
All amounts subject to reimbursement by Employer to Employee pursuant to
this paragraph (a) shall be subject to an accounting by Employee and
approval by Employer.

 

(b)           Benefit Plans.  During the Term, Employee shall be entitled
to participate in, and receive benefits under, (i) any qualified or
supplemental retirement, savings or deferred compensation plan, program or
arrangement currently made available by Employer for its senior executives, and
(ii) any such additional or substitute plan, program or arrangement that
Employer may make available in the future and during the Term for its senior
executives (“Benefit Plans”), subject to and on a basis consistent with the
terms, conditions and overall administration of each such Benefit Plan.

 

(c)           Vacations and Holidays.  Employee shall be entitled to five weeks paid
vacation during each calendar year commencing during the Term.  Employee shall also be entitled to all paid
holidays given by Employer to its other senior executives.

 

(d)           Insurance Benefits.  During the Term, 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 senior executives, and (ii) any such
additional or substitute plan or arrangement that Employer may make available
in the future and during the Term for its senior executives (“Insurance Plans”),
subject to and on a basis consistent with the terms, conditions, and overall
administration of each such Insurance Plan.

 

(e)           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.             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 such 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.

 

3

 

(a)           Termination For Cause.  The Board, by vote of a majority of its
members, may terminate the employment of Employee with Employer at any time
during the Term for “Cause”.  For
purposes of this Agreement, “Cause” shall be deemed to exist if, and only if:

 

(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 that result in material harm to Employer;

 

(ii)           Employee shall intentionally disobey
or disregard a lawful and proper direction of the Board or Employer; 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 thirty (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 that
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 termination 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 its 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
Employee reasonably believed to be in, and not opposed to, the best interest of
Employer, and Employee has 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 thirty (30) days prior written notice to Employee
specifying in detail the reason or reasons for Employee’s termination.  If the employment of Employee is terminated
by Employer for Cause, Employee’s accrued but unpaid Base Salary (based upon
the annual rate in effect on the date of termination), shall be paid to
Employee through the date of his termination, and, except as otherwise provided
in any Benefit Plan or Insurance Plan, Employer shall have no further
obligation, including any obligation for Severance Benefits, to Employee under
this Agreement.  Such termination shall
have no effect upon Employee’s rights under the Benefit Plans, the Insurance
Plans and other employee policies and practices of Employer applicable to such
termination.

 

(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, as of a date at least thirty (30) days after the date a
written notice of such termination is delivered by Employer to Employee.  In such event, Employer shall pay to Employee
(i) his accrued but unpaid Base Salary (based upon the annual rate in
effect on 

 

4

 

the date of termination) through the date of
termination, (ii) a pro-rated bonus (the “Pro-Rated Bonus”) equal to
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 three hundred sixty-five (365), (iii) a lump sum cash severance
payment (the “Severance Payment”) in an amount equal to the sum of (A) two
(2) times Employee’s annual rate of Base Salary in effect on the date of
termination and (B) two (2) times the target bonus for the year in
which Employee’s employment is terminated, and (iv) a lump sum cash
payment (the “Benefit Plan Payment”) in an amount equal to 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 Benefit Plans: (A) Chicago
Board Options Exchange SMART Plan; (B) Chicago Board Options Exchange Supplemental
Executive Retirement Plan; and (C) Chicago Board Options Exchange
Executive Retirement Plan, or in each case any successor plan.  Employer shall also pay Employee’s COBRA
premiums (or an amount equal to Employee’s COBRA premiums) (sufficient to cover
full family health care) for a period of eighteen (18) months following the
termination of his employment if Employee elects such COBRA coverage and, at
the end of such period, if Employee is eligible and elects to enroll in
Employer’s retiree medical plan that shall provide medical coverage for
Employee and his dependents as part of or equivalent to that provided to active
executives of Employer and their dependents under the group health plan of
Employer from time to time in effect, then Employer shall pay Employee’s
premiums for such coverage for a period of six (6) months; provided,
however, 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, Employer’s obligation to pay the COBRA
and retiree medical premiums described in the preceding sentence (collectively,
the “Insurance Premiums”) shall cease on the date Employee becomes eligible for
coverage under another group health plan that does not impose pre-existing
condition limitations on Employee’s coverage. 
Nothing herein shall be construed to extend the period of time over
which COBRA continuation coverage may be provided to Employee or his dependents
beyond that mandated by law.  The
Pro-Rated Bonus, Severance Payment, Benefit Plan Payments, and Insurance
Premiums described in this Section 5(b) shall be referred to herein
collectively as the “Severance Benefits.” Subject to Section 12 and Section 21
of this Agreement, the Severance Benefits shall be paid within thirty (30) days
following the date of termination of Employee’s employment.  Except as otherwise provided in this Section 5(b),
and in any Benefit Plan or Insurance Plan of Employer, Employer shall have no
further obligation to Employee under this Agreement following the date his
employment is terminated without Cause.

 

(c)           Termination for Good Reason.  Employee may terminate his employment at any
time during the Term for Good Reason as of a date at least thirty (30) days
after the date a written notice of such termination is delivered by Employee to
Employer but within two (2) years after the initial existence of the
condition constituting Good Reason, unless the condition constituting Good
Reason is fully corrected within thirty (30) days after Employee gives Employer
written notice thereof.  For purposes of
this Agreement, 

 

5

 

“Good Reason” shall be deemed to exist if, and only if,
without Employee’s express written consent:

 

(i)            Employer shall assign to Employee
authorities (including officer titles), duties or responsibilities that are
inconsistent in any material and adverse respect with Employee’s current
authorities, duties or responsibilities with Employer (including any material
and adverse diminution of such authorities, duties or responsibilities);

 

(ii)           Employer shall materially reduce the
base compensation and benefits package of Employee;

 

(iii)          Employer 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;

 

(iv)          Employer shall terminate, reduce or
limit Employee’s 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 Employer rather
than a decision reasonably related to the level of job performance of Employee;
provided, however, that such action with respect to Employee’s participation
shall only constitute Good Reason under this Agreement if the action results in
materially reducing the aggregate value of Employee’s incentive compensation
and benefits below their aggregate value as of the date hereof; or

 

(v)           Employer shall materially breach any
of the terms of this Agreement.

 

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 that constitutes Good Reason
and the specific provisions of this Agreement on which Employee relies.  Notwithstanding anything herein to the
contrary, if Employee shall terminate his employment for Good Reason, Employer
shall pay to Employee his accrued but unpaid Base Salary (based upon the annual
rate in effect on the date of termination or the date immediately prior to
Employer’s actions described in subsections (ii) and (iv) above,
whichever is greater) through the date of termination and the Severance
Benefits on the same terms and subject to the same conditions as described in Section 5(b) hereof.  Except as otherwise provided in this Section 5(c),
and in any Benefit Plan or Insurance Plan of Employer, Employer shall have no
further obligation to Employee under this Agreement following the date he
terminates his employment for Good Reason.

 

(d)           Voluntary
Termination without Good Reason. 
Employee may terminate his employment without Good Reason at any time
during the Term as of a date at least thirty (30) days after the date a written
notice of such termination is delivered by 

 

6

 

Employee to
Employer.  If the employment of Employee
is terminated by Employee without Good Reason, Employee’s accrued but unpaid
Base Salary (based upon the annual rate in effect on the date of termination)
shall be paid to Employee through the date of his termination, and, except as
otherwise provided in any Benefit Plan or Insurance Plan, Employer shall have
no further obligation, including any obligation for Severance Benefits, to
Employee under this Agreement.  Such
termination shall have no effect upon Employee’s rights under the Benefit
Plans, the Insurance Plans and other employee policies and practices of
Employer applicable to such termination.

 

6.             Death.  If Employee dies during the Term, Employer
shall pay (i) Employee’s Base Salary (based on the annual rate in effect
on the date of death) through the date of death, and (ii) within ninety
(90) days following the date of death, the Severance Benefits to his
beneficiary last designated by written instrument delivered by Employee to
Employer prior to the date of death.  If
no such designated beneficiary shall survive Employee, such payments and
benefits shall be paid and provided to Employee’s surviving Spouse, or if none,
to his lawful descendants per stirpes
then living, or if none shall survive him, to the legal representative of his
estate, or if none is appointed within ninety (90) days of the date of his
death, to his heirs at law under the laws of the state in which he is domiciled
at the date of his death.  For purposes
of this Agreement, the term “Spouse” shall mean Employee’s spouse as of the
Effective Date.  Any Severance Benefits
payable under this Section 6 are in addition to any other benefits due to
Employee’s beneficiaries or dependents from Employer, under any Benefit Plan or
Insurance Plan.  Except as otherwise
provided in this Section 6, or in any Benefit Plan or Insurance Plan,
Employer shall have no further obligations with respect to Employee or his
beneficiaries or dependents under this Agreement following the date of his
death.

 

7.             Disability.

 

(a)           If Employee is Permanently Disabled
for a continuous period of six (6) months during the Term, Employer may
terminate Employee’s employment under this Agreement upon thirty (30) days
prior written notice to Employee.  In
such event Employer shall pay to Employee (i) his accrued but unpaid Base
Salary (based on the annual rate in effect on the date of termination) through
the date of termination, and (ii) within thirty (30) days following the
date of such termination, the Severance Benefits.

 

(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 senior executives then
in effect.  In the absence of such a
policy or plan, the term Permanently Disabled shall have the meaning ascribed
to the term “disability” under Section 409A of the Code and the
regulations and guidance promulgated thereunder.

 

(c)           Except as otherwise provided in this Section 7,
and in any Benefit Plan or Insurance Plan of Employer, Employer shall have no
further obligation to Employee under this Agreement following the date his
employment is terminated due to him becoming Permanently Disabled.  Such termination shall have no effect upon
Employee’s rights under the Benefit Plans, the Insurance Plans and other
employee policies and practices of Employer applicable to such termination.

 

7

 

8.             Change in Control.

 

(a)           If during the eighteen (18)-month
period following a Change in Control that occurs during the Term of the
Agreement (i) Employee is terminated by Employer or a successor employer
without Cause or (ii) Employee terminates his employment with Employer for
Good Reason, in lieu of any payments to which Employee may otherwise be
entitled under Section 5 hereof, Employee shall be paid the following (the
“Sale Payment”): (i) his accrued but unpaid Base Salary (based upon the
annual rate in effect on the date of termination) through the date of
termination, (ii) the Pro-Rated Bonus, (iii) a lump sum severance
payment in an amount equal to the sum of (A) three (3) times Employee’s
annual rate of Base Salary in effect on the date of termination and (B) three
(3) times the target bonus for the year in which Employee’s employment is
terminated, and (iv) a lump sum cash payment in an amount equal to the
aggregate amount of all Employer contributions that Employee or his account
would have received for a period equal to three years under the following
Benefit Plans:  (A) Chicago Board
Options Exchange SMART Plan; (B) Chicago Board Options Exchange
Supplemental Executive Retirement Plan; and (C) Chicago Board Options
Exchange Executive Retirement Plan, or in each case any successor plan.  The Sale Payment shall be payable on the same
terms and subject to the same conditions as described in Section 5(b) of
this Agreement for the Pro-Rated Bonus, Severance Payment, and Benefit Plan
Payment.  In addition, Employee shall be
entitled to the Insurance Premiums on the sane terms and subject to the same
conditions as described in Section 5(b) of this Agreement; provided,
however, that Employer’s obligation to reimburse any retiree medical premiums
shall be for a period of eighteen (18) months instead of six (6) months,
subject to earlier termination on the terms as described in Section 5(b);
and provided further 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). 
For purposes of this Agreement, a “Change in Control” of Employer shall
be deemed to occur on the effective time of (i) a merger or consolidation
of Employer with one (1) or more other corporations as a result of which
holders of the 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 fifty percent (50%) of the Voting Stock of the surviving
or resulting corporation, or (ii) a transfer of all or substantially all
of the property of Employer other than to an entity of which Employer owns at
least fifty percent (50%) of the Voting Stock.

 

(b)           In the event that a Change in Control
shall occur, and a final determination is made by legislation, regulation, or
ruling directed to Employee or Employer, by court decision, or by independent
tax counsel described in paragraph (c) 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 an excise tax under the 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 

 

8

 

Gross-Up 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 Section 4
hereof, 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 (b); provided,
however, that in no event will the Excise Tax Gross-Up Payment be made later
than the end of Employee’s taxable year next following 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).

 

(c)           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 (b).  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
Independent Tax Counsel may reasonably request, and such counsel may engage
accountants or other experts at Employer’s expense to the extent that such
counsel deems necessary or advisable to enable it 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 hereto.  It is hereby agreed
that neither Employer nor Employee shall engage any such Independent Tax
Counsel as counsel for any purpose, other than to make the determination
provided for herein, for three (3) years following such firm’s
announcement of its determination.

 

(d)           In the event the Internal Revenue
Service subsequently adjusts the excise tax computation made pursuant to
paragraphs (b) and (c) of this Section 8, 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 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).

 

9.             Restrictive Covenants.  Employee understands the global nature of
Employer’s businesses and the effort 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 Employer.  Employee further agrees that during the 

 

9

 

period of his employment
and for a period of two years following a termination of Employee’s employment
pursuant to Section 5(a), 5(b), 5(c), 5(d), 7 or 8 hereof, 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 that 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
Chief Executive Officer and Chairman of the Board;

 

(b)           provide any service or assistance
that (1) is of the general type of service or assistance provided by
Employee to Employer, (2) relates to any technology, account, product,
project or piece of work, with which Employee was involved during his
employment with Employer, and (3) 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, nor interfere with the relationships of
Employer with its sources of business.

 

10.           Confidentiality.  Employee acknowledges that Employer may
disclose Secret or Confidential Information to Employee during the Term to
enable him to perform his duties hereunder. 
Employee agrees that, subject to the following sentence, he shall not
during the Term (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 material or significant 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 Employer.  For purposes of this Agreement, the term “Secret
or Confidential Information” shall 

 

10

 

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, however, that such term shall
not include knowledge, skills, and information that is common to the trade or
profession of Employee.

 

11.           Remedies.  Employee consents and agrees that if he
violates any provisions of Sections 9 or 10 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 9 or 10 hereof.

 

If, at any time, Employee violates or threatens to
violate, to any material extent, any of the covenants or agreements set forth
in Sections 9 or 10 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 5 hereof.

 

In the event that Employee is found to have breached
any provision set forth in Section 9 of this Agreement, the time period
provided for in that provision shall be deemed tolled (i.e.,
it will not begin to run) for so long as Employee was in violation of that
provision.

 

12.           Release.  Notwithstanding anything herein to the
contrary, as a condition to receiving any severance payments or benefits under
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 severance payments or
benefits under this Agreement shall be made or provided prior to the date that
both (i) Employee has delivered an original, signed Release to 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 Employer
within forty-five (45) days after receipt of the same from Employer, (i) Employee’s
rights shall be limited to those made available to Employee as if Employee were
terminated under Section 5(d) above, and (ii) Employer shall
otherwise have no obligation to pay or provide to Employee any severance
payments or benefits described in this Agreement, or any other monies on
account of the termination of Employee’s employment.

 

13.           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.

 

11

 

14.           Employee Assignment.  No interest of Employee or his Spouse,
dependent 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, dependent or any other beneficiary, including claims
for alimony, support, separate maintenance, and claims in bankruptcy
proceedings.

 

15.           Benefits Unfunded.  (i) All rights of Employee and his
Spouse, dependent 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; (ii) neither Employee nor his Spouse, dependent or any other
beneficiary shall have any interest in or rights against any specific assets of
Employer; and (iii) Employee and his Spouse, dependent or any other
beneficiary shall have only the rights of a general unsecured creditor of
Employer.

 

16.           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.

 

17.           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).

 

18.           Entire Agreement.  This Agreement contains the entire agreement
between Employer and Employee, and supersedes any and all other previous
agreements, written or oral, between the parties relating to the subject matter
hereof, including, without limitation, 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.

 

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

 

20.           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 (1) or more provisions in one (1) 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.

 

12

 

21.           Compliance.

 

(a)           The payments and benefits under this
Agreement are intended to comply with or be exempt from 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. 
Employer cannot guarantee that the payments and benefits that may be
paid or provided pursuant to this Agreement will satisfy all applicable
provisions of Section 409A of the Code. 
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
Treasury Regulation § 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 Treasury Regulation § 1.409A-1(c)(i) or
any similar or successor provision) and would be entitled to a payment during
the six (6)-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 (6)-month anniversary of Employee’s
date of termination or Employee’s death and all payments delayed due to the six
(6)-month delay described above will be accumulated and paid on the first (1st)
day of the seventh (7th) month following the date of termination.

 

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

 

23.           Notices.  Notices required under this Agreement shall
be in writing and sent by personal delivery, or 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:

  
	
   

  	
   

  
	
   

  	
  Chicago
  Board Options Exchange

  
	
   

  	
  400
  S. LaSalle Street

  
	
   

  	
  Chicago,
  Illinois 60605

  
	
   

  	
  Attention:
  Chief Executive Officer and

  
	
   

  	
  Chairman of the Board

  

 

13

 

	
   

  	
  If
  to Employee:

  
	
   

  	
   

  
	
   

  	
  Edward
  Tilly

  
	
   

  	
  417
  Caesar Drive

  
	
   

  	
  Barrington,
  IL 60010

  

 

24.           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 or was 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 or was 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.

 

25.           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/
  William J. Brodsky

  	
   

  	
   

  	
  /s/
  Edward Tilly

  
	
  Title:

  	
  Chief
  Executive Officer and

  	
   

  	
  Edward Tilly

  
	
   

  	
  Chairman
  of the Board of Directors

  	
   

  	
   

  
					

 

14

 

Exhibit A

 

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, INC., a
Delaware corporation (“CBOE”), and EDWARD TILLY, a resident of the State of
Illinois (“Tilly”)

 

1.             In consideration of CBOE’s payment to Tilly of the
severance pay and benefits described in the Amended and Restated Employment
Agreement by and between CBOE and Tilly (the “Employment Agreement”), to which
Tilly is not otherwise entitled and the sufficiency of which Tilly
acknowledges, Tilly 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 Tilly’s past employment with CBOE or any
past actions, statements, or omissions of CBOE or any of the Released Parties
occurring prior to Tilly’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 Tilly’s employment,
the termination of Tilly’s employment, or any continuing effects of Tilly’s
employment with CBOE.

 

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

 

3.             Tilly has forty-five (45) days (until                )
within which to consider this Release, although Tilly may accept it at any time
within those forty-five (45) days.  Once
Tilly has signed this Release, Tilly 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 

 

A-1

 

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
Tilly.

 

4.             Tilly agrees that he will continue to be governed by
those obligations arising under Sections 9, 10 and 11 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 Tilly 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:
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Edward
  Tilly

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:
  

  	
   

  	
   

  	
   

  	
  CHICAGO
  BOARD OPTIONS EXCHANGE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
  Its: 

  	
   

  
	
   

  	
   

  	
   

  
							

 

A-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}]]